TL;DR: We're semi-mustachian parents in our mid-30's trying to figure out if it makes sense to suck it up and deal with Seattle's increasingly high COL, or to uproot our lives and head for possibly greener pastures.
Life Situation:Married couple in early- to mid-30s, one toddler, potentially another baby in a year or two. Living in Seattle.
Gross Salary/Wages:Me: $124,000/yr
Her: $45,000/yr
Total: $169,000/yr
Pre-tax Deductions:403(b): $18,000/yr (her job does not offer a retirement plan)
Health insurance: $1,677/yr (family is on my insurance; ins. not offered by her employer)
Dental insurance: $403/yr (same situation as health insurance)
Health FSA: $1,000/yr
Dependent Care FSA: $5,000/yr
Total: $26,080/yr
AGI: $142,920/yr
Taxes:Me: $19,669/yr
Her: $7,469/yr
Total: $27,138/yr
Income After Taxes: $115,782
Current Expenses:Rent: $1,416/mo
Electric: $70/mo (rough average)
Water/sewer/garbage: $140/mo
Internet: $75/mo
Cell phone service: $97/mo
Daycare: $1,810/mo (infant 5 days/wk)
Groceries: $600/mo
Restaurants: $125/mo
Gas: $80/mo
Cat food/supplies: $40/mo (we have 2 cats)
Auto/renter/life insurance: $170/mo
Home supplies: $80/mo
Entertainment (Netflix, movies etc.): $50/mo
Baby stuff (diapers etc.): $100/mo
Gifts: $25/mo
Charity: $100/mo
Vacation/travel saving: $125/mo
"Allowances": $900/mo ($450/mo for each of us to spend or save however we like)
Total Expenses: $6,003/mo
Monthly Saving:Roth IRAs: $917/mo
Emergency fund: $100/mo
House fund: whatever's left over (usually around $2,700/mo)
Total Saving: $3,717/mo
Assets:Investments: $761,000 across retirement and brokerage accounts. Roughly 80% domestic equities, 12% international equities, and 8% bonds.
House/down payment fund: $155,000 in savings account earning 0.75%
Emergency fund: $6,700 in savings account earning 0.75%
Checking: $9,500
Car (2007 Honda Civic): $8,000
Total Assets: $940,700
Liabilities:None (we have credit cards that we pay off in full each month)
Specific Questions:Objectively, we're doing just fine, although there is certainly room for some face punches (groceries, internet/cellphones, allowances, etc.). We're well on our way to FIRE, but the cost of living (housing specifically) in Seattle is really bothering me.
We've been trying to rent as cheaply as possible ever since we moved here so we could pay off our debts (success!) and save for a 20% down payment on a house. We currently live in a 2bed/1bath unit in a 1950's triplex in so-so condition. It's okay for us now (although the slow plumbing, single pane aluminum windows and draftiness drive us crazy), but things will really start to get tight once we have another kid. The location is also so-so: it takes me 45 minutes to bus or bike to work (I never drive) and anywhere from 20 to 45 minutes for my wife to drive to her job (she tried busing but has to transfer downtown, and the ridiculous rush hour gridlock and sheer unpredictability drove her over the edge). So we don't see our current living situation as a viable long-term option.
We've been looking at houses in north Seattle mainly because of the schools and proximity to my job (which generates most of our income). Mid-century 3bed/1+bath houses in mostly original condition routinely sell for north of $600k around here. Things get cheaper as you head further away from the city center, but commutes generally get worse as well. There are actually several locations north of Seattle that I could bike in from relatively easily, but the commute would be really rough for my wife (she works south of downtown). She's already feels like she doesn't spend as much time with our daughter as she'd like, and I'd like to avoid exacerbating that situation if at all possible.
So we're torn between a few options, all with significant drawbacks:
- Buy an expensive, close-in home and accept the potentially significant FIRE delay.
- Buy a home further out and accept the negative commute impact.
- Find a different place to rent (may be a tough proposition due to Seattle's skyrocketing rents and the fact that we have 2 cats. Our current rent is significantly below market.)
- Move somewhere else entirely and accept the risk/uncertainty and the fact that we'd be starting over socially.
We've spun through these options in our heads so many times, and without any productive conclusions, that we're starting to get burnt out. I'm not coming to you guys expecting a magical solution where there are no tradeoffs to be made, as this is obviously one of those situations with no single perfect answer. I also debated framing the question as a Reader Case Study, but I guess I wanted to get some outside input on the decision in the context of our financial situation as a whole. Any other advice re: optimizing our finances would be appreciated as well.
So there it is, O Mustachian Ones...what would you do if you were in our shoes?