Author Topic: Reader Case Study – Finding middle ground (Super Duper Long)  (Read 6997 times)

engineerjourney

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Seriously, it's long, please read the whole thing before replying!  Thanks!

Family: Me, DH (both 27), and three cats that can’t seem to keep a job

Income:
Me $79.1K
Take Home - $1748.92 every two weeks
Him $71.8K
Take Home - $1371.82 every two weeks (medical/HSA out of his)
Per month take home (average the ‘extra’ paychecks) $ 6,761.6

Current Expenses: Based on actual numbers from Mint (averages per month)

Home Related Costs:
Main home Mortgage (Principal, Interest and Taxes) $2,126.59
Home Insurance (for above) $69
Lake home Mortgage (Principal, Interest, Insurance and Taxes) $1,195.25
Home Improvement $200 <- Consider this hobby $$ also, already done some large renos ourselves and saved a ton of $$ by DIY, should/could be less soon though

Food Related Costs: This is the most epic fail ever, mostly caused by being lazy after work, was doing well at meal planning then completely fell off the band wagon, but I am being entirely truthful about it here
Groceries (includes misc toiletries or anything bought at our local warehouse store (BJs.. get your mind out of the gutter!)) $536
Restaurants $200 <- Our weekly go out with friends and support our local business for a great meal with lots of drinks is $136/month (been doing it for over a year), the rest could definitely go
His Lunches $252 <-  I have paid for a work lunch only ten times in the last year since finding MMM, still looking for a way to get him to join..
Alcohol $202 <-  Includes gifts to people… but this also should go down now that I got him to agree to not get a bottle of nice burbon every 2-3 weeks, he tried to grow his own hops and barley for making beer but hasn’t ever brewed.. he tends to get ahead of himself
His Coffee (DD) $60 <-  He once worked at starbucks, he only likes iced coffee and says its difficult to make correctly for just one drink… he is the expert, have only pushed a little on this
Lazy eating $60 <- this is stupid and needs to stop, includes a weekend lunch at Panera while running errands, etc

Car Related Costs:
Car Payment $400 <- His truck, my car is paid off
Gas (auto) $242 <- our daily commute is only 8 miles each way, I have biked some, him once, we try to carpool but we also do quite a few driving trips (to the airport, to support friends at events, to participate in athletic events) that seem to pop up every month
Car Insurance (two cars) $85.25 <- just lowered it by upping deductibles.. still have collision and comprehensive because of value of cars.. because of deer I may always keep comprehensive, they suck
Car Regs $33
Car Property Tax (get most back on tax return) $57.5 <- Because our state sucks, though it is going down every year with devaluation of the cars
Car Maintenance (oil changes only so far) $5

Utilities/bills:
Electric (two houses) $90
Oil (heating, two houses) $300  <- averaged over the year, I hate oil heating, thermostat at 64 at main house, 50 at other house in winter
Sewer (one house on septic) $28
Water (one house on well) $20
Internet $57
Phones (two cells and home phone) $26 (thanks IP Daley!)
Netflix $8
Hulu $8

Other:
Pets $80 <- Good food/litter for three amazing cats plus a little extra for vet care
Weddings/gifts $50 <- We have two many friends, 9 weddings last year, 3 this year, 7 already scheduled for next year
Travel (multiple weddings every year, one vacation, one visit to his parents and one to mine) $350
Clothing $10 <- replacing work shirts and underwear mostly

TOTAL: $6750.59 <- HORRIBLE!

ER Expenses:
Hopefully way less, will FIRE with paid off housing but still working out the details as seen above

Assets:
Emergency Fund $20K
Savings (home improvement funds/monthly savings toward annual expenses) $7K
Checking $XX (amount to carry the monthly bills)
HSA #1 (no longer contributing to) $8K
HSA #2 (contributing max family) $4K
Main House $290K (guesstimate)
Lake House $220K (guesstimate)
My 401K(contributing max +5% match) $55.4K
His 401K (contributing max +5% match) $25.2K
My Roth IRA (contributing max) $12K
His Roth IRA (contributing max) $12K
Taxable $20.7K
Not really assets: His Truck- $27K, my car $12K
Total (not including cars): $674.3K

Liabilities:
His Truck loan $13K at 3%, less than 3 years left
Main Mortgage$200K, 2.79%, 12 year loan, little over 11 years left
Lake Mortgage $147.7K, 4.75%, 30 year loan, less than 29 years left
Total: $360.7K

Net worth: $313.6K

Before the frenzy of face punching commences, I know what we need to improve on, they are pretty obvious.  I have also been really detailed and included everything we spend on.  I cut his hair and just learned to cut my own so we don’t have that expense.  Haven’t had cable in 4 years.  Only use credit cards for rewards points.  No more student loans.  There are some obvious big problems if we want to live a life less wasteful.   We do max out 401Ks, ROTH IRAs, and our HSA every year (starting this year), which is why our take home is so ‘small’ compared to our salary. 

What is driving this case study:  I dream of FIRE while DH can’t imagine it.  I do all our financial stuff and he really has no drive to learn about it, which is great sometimes (I can change our 401K withholdings and he doesn’t care) and also sucks (because he doesn’t see how much we waste and only recently realized how much money I have saved for us so far).  Since I haven’t found a motivation for him yet I have only been able to change the behind the scenes things (like 401K) easily while trying to stop life style inflation (cars/houses bought pre-MMM).   We are talking about having kids soon and he is very much excited to start that part of our lives.  I want to use this opportunity (a motivation for him) to get rid of our problem areas before a sleep-reducing, brain-less-money-spending-inducing being enters our lives.  I already know most of our problem is laziness so add less sleep and another being to take care of and we could get into trouble easily (though the silver lining is we would be much less likely to go out to eat!). 

Specific Questions:
1.    I know our big problem areas are: the 2nd house, his truck, and food.  Holy crap food. 
-The truck is not likely to change anytime soon though I could pay off the loan. 
- I have started thinking of selling the 2nd house (most of the equity is the down payment) as it does not provide us income, only great memories with friends.  I have brought it up and I believe it will take having a baby for him to be on the same page (since I doubt we will be able to use it as much as we currently do.)  For now, hard to be on the same page as we go every weekend and have only had it for a year(30 mins away from main house, super small cabin on a lake).   
- I want and need your help with food.  What can I do to help him spend less?  I actually printed him out our food costs and sat him down and said it had to go way down before having a kid.  He agreed but I haven’t seen much change.  I have tried to get him to buy lunch things while at the grocery store but he can’t seem to figure out what he wants.  Should I just start making him lunches?  He goes with his group to get lunches: subway, Mexican, Chinese, etc so he does like a variety.  I eat soups in the winter and salads in the summer with leftovers sprinkled in, same soup/salad for a week then a different one.  He is also the main cook in the family but doesn’t seem to look for sales like I do so I guess I need to take over meal planning and just figure out how to cook better than him!

2.   Those of you that have a larger income, max out tax advantaged accounts, higher networth for your age, how do you push to keep spending less?  I am not talking keeping up the Jones, I am saying you are doing sooo much better than the Jones at saving, what do you do to keep motivated at spending less and not letting inflation set in?  I was perfectly happy as a graduate student with enough money to party with my friends and eat decent food while renting a small place, I only had to work two day a week as an intern to maintain that lifestyle… well that’s changed.  I would like to work less and spend my time with my future family and all the hobbies that interest me.  So I found my motivation to spend less, do I just need to keep asking him what he wants to motivate him?

3.   Do you see anything besides the main three we could work on?  I call Comcast to lower the internet every year.  The oil heating could use some work (which selling the cabin would help, or maybe we winterize it this winter…) but I am not sure the best plan for that as the main house isn’t very old and does seem to be decently insulated and not huge (1300 sq ft plus a basement). 

4.   Any tricks for motivating a spouse not picturing FIRE?  I have tried to talk to him about how he pictures the future and tell him how great it could be but he is not one of those people that plans ahead.  I have always been the one who thinks ahead while he lives in the moment, which is one of the things I usually love about him (he rarely ever has a bad attitude or gets stressed).  While we are both engineers I am more of the typical personality while he is definitely way more of the creative, see what happens type. 

As you can probably see from my questions this isn’t necessarily a “what can I cut” case study, more of a “how can I cut, what actions can I take” when I am not the only person in control.  Thanks to anyone who made it through this, told you it was long.

4alpacas

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #1 on: August 18, 2014, 01:14:45 PM »
For all of my advice, please note that my DH is not on board.  He's happy with our current spending levels and current lifestyle, but I have sold the dream yet. 

-The truck is not likely to change anytime soon though I could pay off the loan. 
Could you sell the truck as difficult to get a carseat/baby into and out of?  My brother-in-law downsized because the car seat issue was annoying. 

- I have started thinking of selling the 2nd house (most of the equity is the down payment)
Research the cost of daycare (if you're planning to keep working) or the loss of your income, start by showing how a few large cuts would be able to make up for the loss of income or increased daycare spending without affecting your day-to-day lifestyle.

- I want and need your help with food.  What can I do to help him spend less?   Should I just start making him lunches?  He goes with his group to get lunches: subway, Mexican, Chinese, etc so he does like a variety.
My DH buys lunch EVERY day.  I look forward to reading the advice of other mustachians. 
He is also the main cook in the family but doesn’t seem to look for sales like I do so I guess I need to take over meal planning and just figure out how to cook better than him!

I've had to learn how to cook to make a serious dent in our grocery budget.  We have our groceries delivered, so I have veto power over things he throws into the cart (some are ridiculous, like cheese sauce...ew).  Bulk cooking has been my savior.  I cook a lot of food on the weekends, and I freeze individual portions.  I use them for my lunches and make sure to have one defrosting for dinner.  I also keep around his favorite comfort foods to keep us from going out when we're feeling lazy--frozen pizzas and Velveeta shells & cheese. 

Those of you that have a larger income, max out tax advantaged accounts, higher networth for your age, how do you push to keep spending less?
I've let him keep the majority of things that matter to him.  He loves cable, so it has stayed.  We've cutback in areas that don't offer value to either of us.  We moved from a two bedroom apartment to a one bedroom apartment in a much better location.  DH wasn't willing to get rid of his stuff, so we have a storage locker in the apartment complex.  We're saving $550/month in rent and spending $50 on a storage locker.   DH commented that he really likes our smaller space. 

Do you see anything besides the main three we could work on? 
You know the areas that you need to work on.  Since your DH isn't totally on board, I would make the transition slowly.  I've read too many threads about spouses upset when a mustachian tries to change their lifestyle too quickly.   

Any tricks for motivating a spouse not picturing FIRE?
Find what matters to him and exploit it.  My DH works a lot and likes to spend time at home "relaxing."  I've been able to use his priority to cut back on eating out, expensive outings, and groceries (if I cook). 

If you're trying to sell FIRE, it might be helpful for your DH to meet someone that retired early. 

As you can probably see from my questions this isn’t necessarily a “what can I cut” case study, more of a “how can I cut, what actions can I take” when I am not the only person in control. I look forward to the comments on this thread because I struggle with many of the same issues. 

engineerjourney

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #2 on: August 18, 2014, 01:24:02 PM »
Thanks 4alpacas!  I remember you posting on my journal and commiserating with me on the spousal motivation a while back.  So glad you commented here too.  Hopefully someone on here can help us out!  I figure some people have figured out certain aspects so hopefully together we can get some good ideas!  Everyone is different but hopefully we can find some similarities and help each other out!

I already researched day care which is not as bad as I thought it would be here, about $800/month/per kid.  Definitely going to try to get that $$ from the house/food budget somehow!

MsSindy

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #3 on: August 18, 2014, 01:36:03 PM »
First, kudos on your net worth at 27!  That's awesome.

At 27 it would be hard to convince someone on early retirement, especially if he doesn't mind his job and he gets to have some toys (truck, lake house, eat/drinking out).  He's just not motivated - life is pretty good as it is for him.  However, you're at a crucial time in your life when you have the opportunity to do some planning BEFORE you have kids - so make the most of that.  Do you want to stay home or work - either way what does that do to your financial plans?  Talk about what it means to have kids and what he wants for them - if he's talking lessons and trips and fancy colleges, then you should probably wait until you guys get on the same financial page (does he balk at the idea of hand-me-downs for kids?)  What will you do for daycare?  All these things are best to discuss and figure out (and agree on) BEFORE you have kids.  And then, once you determine what needs to happen financially before kids, set that as your goal and the joint motivation to save more / spend less.  I'd position it as more about family security and spending time with the family, than actually using the term 'early retirement' - that may resonnate with him better.

Specifically to your questions:
1) Don't have a baby thinking that he'll give up the lake house afterward - the argument will be more like, "we'll have awesome family memories here, we'll teach little junior(ette) to swim and fish......"  Sell the house first - or build it into your overall retirement plan
As for food, take control.  Make Tue & Thur your night to cook....or something like that.  Don't make it a competition, or you'll get caught up in a bunch of fancy ingredients to impress each other.  Make meals that are thrifty, simple, tasty, and have leftovers.  Go one step further and volunteer to make lunches.  And yes, you can do the meal planning, even if he does the actual cooking.  "Honey, I totally scored on these chicken thighs, so you can make your signature dish"....or whatever.  Buy enough so your freezer is full of things to choose from - all bought on sale so he doesn't have to go to the store (and buy stuff you guys don't need)

2) This is a toughy.  Unless you're just wired to be frugal, it is really tough not to spend money on things when it is only a small percentage of your total income.  $100 dinner out doesn't have the same impact on a $300k salary as it does on a $40k salary.  Focus on the big things (the lake house??).  Set your savings on automatic.  Use tactics like, "Hey, we already went out twice this month, and I want to eat healthy this weekend, so can we just grill at home, or invite your friends over".  The biggest thing is don't incur any more inflation.....and this is going to be tough if you have kids and you're not aligned.

3) Nope, no tricks!  It takes communication and talking about how you see the future and how you guys can compromise to get there - you may have 2 different visions of what your future life should look like. Would you be willing to FIRE without him? or maybe semi-FIRE? Something to consider.


Note: My DH is not MMMesque, but we have come to an agreement about our visions of the future (they are slightly different), and we agree on the big things to get there, and let the little things roll.  That being said, we are high-earners so the little things aren't that impactful long term.  And yes, I will probably FIRE without my DH (I think he's just chicken....I mean too cautious).  His job isn't horrible and he likes to spend money on his hobbies, so we have an understanding that he'll work longer.....'cuz I sure the hell am not going to work longer so he can have toys  :)      .....and as much as I'd like to FIRE together, it is what it is, we have different ideas on 'fun'.   However, I think when he sees me FIRE, he'll come around pretty damn quick!

theonethatgotaway

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #4 on: August 18, 2014, 02:47:27 PM »
What's your FI number?

You could calculate how long it would take to reach, leaving most of this spending the same and see if you're willing to compromise if it's not as soon as you wished.

As for kids, you could easily wait a few more years (they will take up much more of your time than you can predict) and save.

Would you trust your husband to do the finances? Perhaps all these new little changes you are doing will help him see that things can be even better than what you already have.

I'm not sure about getting rid of the vacation house. You use it frequently.

I mean you could in theory do a 180, sell the cars get rid of the extra house, but I'm not sure that would be great for the relationship- right now at least.

I haven't come across any 20 somethings with a lake house so that's really out of my scope. What brought you to buy it?

Rika Non

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #5 on: August 18, 2014, 03:14:25 PM »
To answer about the motivation when you are already not competing with the Jones.  One way is to just compete with yourself.  Track your spending and make a goal of I'll spend 10% less next year.  Rinse & repeat. After a few years you will get to the goal of I spent X last year, I will only spend X this year.  Track & repeat.  This works great especially since your income will probably be growing, so cutting or holding spending will just keep accelerating your savings.  If your husband is happy with the current life, maybe you can just sell him on holding this baseline instead of cutting.  If you focus on fighting the lifestyle creep over cutting your earnings should keep climbing so as long as you hold the line at some point you will keep gaining after that.

As for spouses.  I'm one of those that doesn't have a clue on how to sell the dream, let me know if you figure it out.

backyardfeast

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #6 on: August 18, 2014, 03:16:33 PM »
I read your case study with interest and lots of sympathy.  Our incomes are similar to yours, so I was doing a kind of mental comparison with each of your expenses.  We're in Canada, so our grocery expenses are not far off yours, our (primary) house expenses are a little less, we don't have pets, but our insurance costs are higher, etc. 

Here's what jumps out at me: a) it doesn't look like you are saving at all from your income - expenses? How have you managed to accumulate the savings that you have?  b) the lakehouse is sucking all of your $$.  And I mean all.

It looks to me like you have about 10$/mo wiggle room in your monthly cash flow.  Yes, you could trim a few hundred dollars by really tightening up.  But the lakehouse is costing you about $1500/mo!  Is it worth nickel and diming on other expenses?!

You mention that the lakehouse is only 30 mins away.  Would you consider moving into it and renting out your other home?  Yes, you'd be commuting.  But you wouldn't be doing $1000 worth of commuting!  You could also rent out the lakehouse when you're not using it, or suggest that you rent it out for these years so that you can own it and use it in retirement, or when you're in better financial shape.  In other words, if you really want to keep it, is there a way to mitigate the costs to you significantly?

As for your conversations with DH, this obviously isn't easy.  But it seems to me the numbers you've presented speak for themselves.  You have zero room to reduce your income, let alone stay at home with children, and saving $10/mo isn't going to get you there at any point.  It's time to look at the big picture together and set some priorities.  Have a frank discussion about your anxiety level and your goals, and be willing to hear and accept his.  But try to be creative and patient about the stalemates you might come to.  Some couples seperate finances, some have personal funds that they use without question.  While there's nothing wrong with you tackling some of the low-hanging fruit on your own and letting the results bring him around, don't let him abdicate responsibility for his share of family security.  He doesn't need to feel invested in ER.  He does need to feel invested in family financial stability and having options in the future for the inevitable shocks that will come your way.

I mean all this with huge sympathy.  Our financial situation currently drives me crazy.  We don't have a lakehouse.  But we do have a sailboat.  It is DH's passion, is used constantly, represents his stress relief and community.  It also costs us $500+ a month.  And we have a serious homestead garden, a house with upkeep costs, and long commutes, and a truck payment.  But without the lakehouse, in a similar budget, we have $1000/mo in wiggle room.  I want more!  But it's a start.

Good luck to you!!

bearman

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #7 on: August 18, 2014, 03:55:49 PM »
To me, this sounds like an overly complicated life. I'd encourage you to talk with your spouse about simplification and what that means to you. Simplifying things will lead you to ER earlier. The good news is you have a lot to work with :) Based on your post, I would suggest something like:

--Sell your main house and move into the lake house. It's close enough, and it's obviously important to you both. It sounds like a great place to raise kids. "Normal" houses are easy to come by if you ever need to change in the future. Great little lake houses are not easy to come by. This will cut a lot of your housing expenses and presumably help with some dining out expenses (as you're not as close to restaurants, etc).
--Focus on "creating" at home. With that lake house, you'll have the canvas to do some wonderful things - fishing, grilling, boat meals, etc. Purchase items in bulk as possible, make as many meals at home as you can. We've found that watching less TV per night translates to having more mindspace for making food, enjoying dinner together, talking, games, painting, woodworking, etc.

In my opinion, if you take these two steps, much of the rest will fall into place. This will give you the cash excess each month to also have fun and not sweat the small stuff (nice dinners out occasionally, etc).

Jennifer in Ottawa

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #8 on: August 18, 2014, 05:55:01 PM »
I have no experience in having to persuade an off-board spouse as mine is completely on-board.  However, we are older and DH wants to retire from the military in 7 years, so we don't have as much time to play around.

You two, on the other hand, are very young and can make decisions now that will either be a curse or a huge gift to your forty-something selves.  Sure, retirement may seem a completely foreign concept to your husband today.  Afterall, you're just starting out, you have great incomes, two homes, no real debts and no kids.  So, try this approach and tell him this:

In ten years your situation will likely be completely different.  Ten years from that it will be different again. Further complicating matters is the fact that you don't own a crystal ball.  You have absolutely no idea whether your future will be rosy or grey.  Either of you could find yourselves unemployed.  It could turn out to be a chronic situation.  Interest rates could rise through the roof and hit 20% again.  You could become chronically ill or disabled.  You could give birth to children with serious birth defects or diseases.  Your property values could fall and stay low for decades.  One of you could become clinically depressed and unable to work.

I don't want to be all doom and gloom, but you two are building a life under the assumption that just because you are young and healthy and wealthy today so too will you be tomorrow and the day after that and the day after that.  Shit happens in life, and not always only to other people.

If, on the other hand, you choose not buy into the "We have lots of money so it's ok if we treat ourselves" trap, not only will you be able to build yourselves a huge buffer against the nastiness that life sometimes brings, but you will also give the forty year old you a huge gift: the gift of choice.

Maybe you will work till 55 or 60 or 65 and then retire to the French Riviera on your yacht, but maybe, just maybe, at 40 you will want to get off the merry-go-round and go live at your lakehouse year round, or spend summers there and winters in Florida, or spend a month of each year in a different country, or whatever.

The important thing is that you realize that every dollar you spend on things you think you 'need' such as ridiculously priced iced drinks or crappy lunches at national chain restaurants is another dollar which denies the future you a choice.

One little story to close out this long-winded post:

My grandparents were not educated.  They didn't earn high salaries.  Grandma returned to work as a secretary only when their two sons were both in school full time.  Grandpa worked in construction, then for the local water board, a decidedly blue collar job.

When they retired (in their late fifties), they sold their home and moved into an apartment.  They then embarked on a six month tour of the south pacific including New Zealand, Australia and Fiji. Yes, six months.  Once back home, they then took to spending winters (mid October to late March) in Arizona, and took at least one European vacation each summer for around a month.  They did this for around 15 years until the cost of the Blue Cross Insurance was more than the cost of the rest of the holiday.  Grandpa lived to 86 and Grandma lived to 88.  When they had both passed and their estate was settled, their assets were still north of 250k.

Now how on earth did a couple who never earned high salaries manage to own their own home, raise two children and spoil six grandchildren, travel the world for months on end during retirement, and still leave assets to their family?

It's quite simple.  They did it by not seeing every want as a need.  They did it by not giving a hoot what the Jones' were up to, let alone worrying about keeping up with them.  They did it by living off of one paycheque and banking the other.

Do the future you a favour and (a) realize that indulging today's WANTS may well jeopardize your ability to address tomorrows NEEDS, and (b) don't paint yourself into a corner today that will restrict your choices later .

Best wishes, and good luck.

HopetoFIRE

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #9 on: August 18, 2014, 11:03:16 PM »

Specific Questions:
1.    I know our big problem areas are: the 2nd house, his truck, and food.  Holy crap food. 

I agree... your biggest problem is the lake house.  You simply cannot afford it.  Our take home is about 4x yours, after maxing out 401k and IRAs, and we don't feel that we can afford a vacation home.  Our expenses are close to yours but we do have additional daycare costs plus college savings and activities for our 2 kids.  So, your expenses definitely won't get any smaller with kids.  It is best to work on them now (i.e. sell the lake house).  Food wise, it will take your DH some time to adjust to the changes.  My DH is the same... he enjoys eating out.  Not just for variety, but also the social aspect of it.  So, I've pretty much said that we each can eat out 2x a week for lunch ($10 max/lunch) and once a week as a family ($50 max).  If he wants coffee and other snacks, that comes out of his lunch budget too.  I don't usually use up my lunch budget since I am too lazy to go out to lunch and rather bring my own anyway. 

2.   Those of you that have a larger income, max out tax advantaged accounts, higher networth for your age, how do you push to keep spending less? 

I think my motivation comes from wanting to RE and spend more time with my kids.  We are truly blessed to earn very good money and sometimes I feel like I'm on borrowed time for the amount we are earning.  My other motivation is that I do not want to end up like my parents, who have no money to retire and who we probably will be supporting in the near future.  We are not mustachians by any mean, but save about 70% of our net income.  It also helps that I grew up lower middle class, so whatever we have now appears to be overly luxurious to me. 

It was definitely harder to convince DH.  We have very different outlook and experiences when it comes to money.  His parents were frugal, but he knew they had money.  He grew up in the upper middle class neighborhood with friends who had way too many things.  He always felt like he didn't have what they had although his parents could have afforded it.  So, I guess he feels that this is his time to make it up somewhat.  I know that going into our marriage, he thought both of us will work until our 60s and we'll have millions of $$$ to spend on whatever we like.  I guess that was what I thought too, until I had kids.  All I want to do now is to be home with them.  He didn't quite get that.  He got pretty upset when I brought it up to him initially.  He thought I was being unfair and trying to control all of our money decisions (although I was the one making most of the decisions anyway).  I had to explain to him that I am not trying to just do this for me.  It was for our family. It was so that he and I can spend more time together and so that the kids can spend more time with us as well.  I also told him that if he wishes to have all the extras in life, I am not stopping him.  However, I will not be the one working to support that lifestyle.  If he wishes, he can work a few years longer to achieve that goal.  He has come around a bit recently.  He started talking about being able to travel in the summer with the kids and maybe going for a job he would not go for if we were not FI.  FYI, we are in our mid 30s, so it may take your DH a few more years and a couple kids for the idea to sink in. 

3.   Do you see anything besides the main three we could work on?

I think you got the big three covered.

4.   Any tricks for motivating a spouse not picturing FIRE?  I have tried to talk to him about how he pictures the future and tell him how great it could be but he is not one of those people that plans ahead.  I have always been the one who thinks ahead while he lives in the moment. 

See my answer above.  I like to plan as well and DH is go-with-the-flow type.  I love him, but it drives me nuts!  Another thing you can bring up is how much time he'll have doing things he enjoys.  I think many people have visions of retirees not doing anything.  I told DH that he can golf more than he can now and work out whenever he wants.  That peaked his interest quite a bit.



waltworks

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #10 on: August 18, 2014, 11:49:19 PM »
You have too much house(s). Sell one. Simple as that. You can get plenty of smaller chunks of savings from a variety of sources (food, cars, etc) but they are all small potatoes compared to the houses. You're paying close to half your take home pay towards mortgages!

Honestly, you can be FI very quickly with a small amount of effort and one less house. But DH has to be onboard or you'll just come off as a shrill cheapskate (don't ask me how I know this...) so your real problem is getting on the same page. And if it's going to create genuine unhappiness all around to fight about this - then don't do a damn thing, because at the rate you're going, you'll be FI by 40 or 45 anyway. Do YOU want the financial independence/security so much quicker that you're willing to really push him? If so, do it. If not, then make some small cuts where you can and enjoy your life.

-W

engineerjourney

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #11 on: August 19, 2014, 04:26:58 AM »
I knew I wouldn’t regret posting this!

At 27 it would be hard to convince someone on early retirement, especially if he doesn't mind his job and he gets to have some toys (truck, lake house, eat/drinking out).  He's just not motivated - life is pretty good as it is for him.  However, you're at a crucial time in your life when you have the opportunity to do some planning BEFORE you have kids - so make the most of that.  Do you want to stay home or work - either way what does that do to your financial plans?  Talk about what it means to have kids and what he wants for them - if he's talking lessons and trips and fancy colleges, then you should probably wait until you guys get on the same financial page (does he balk at the idea of hand-me-downs for kids?)  What will you do for daycare?  All these things are best to discuss and figure out (and agree on) BEFORE you have kids.  And then, once you determine what needs to happen financially before kids, set that as your goal and the joint motivation to save more / spend less.  I'd position it as more about family security and spending time with the family, than actually using the term 'early retirement' - that may resonnate with him better.
 

Thanks for all your input but especially this!  DH and I have always been on the same page, I can literally count on one hand the amount of times we have had an argument longer than a couple minutes, so I have been trying to think of different ways to bring this up.  I am a firm believer that people communicate in different ways so I just have to keep approaching it from different sides until it clicks for him like it clicks for us! I would love to have this figured out before kids come along (good thing I have time!).  I like the specific items you brought up about the kids. 

I don't have, nor do we plan on having, kids.  So please look into it...but I think daycare costs can vary based on the age.  Source: coworkers complaining about the cost of daycare for new baby vs. toddler.

You're brave for posting a case study.  I've considered it, but I worry I will receive a chorus of "cut the cable", "no lunches out", and "sell the car."  While I would love to do all of those things, I'm not willing to upset our matrimonial harmony to save $500/month when we're already saving >60% of post-tax income. 

Yeah $200/week is for infant and its $175/week for toddler (3+) which seems like a great price compared to some on this forum.  I was surprised since we are in a pretty high cost of living area.  And thanks for the encouragement, it definitely took some courage for me to post though I tried to write it so it could be useful to me instead of just the chorus of cut things, since I already know what needs to go if I want super early retirement. 

What's your FI number?

You could calculate how long it would take to reach, leaving most of this spending the same and see if you're willing to compromise if it's not as soon as you wished.
…Snip…
I mean you could in theory do a 180, sell the cars get rid of the extra house, but I'm not sure that would be great for the relationship- right now at least.

I haven't come across any 20 somethings with a lake house so that's really out of my scope. What brought you to buy it?

I think this is what I am struggling with.  Maintaining this lifestyle will not delay FI that much, I mean it will, but we can still easily retire in our later 40s or at least by 50.  I have already talked to DH about owning two houses and we have decided that we will in the next couple years sell both of them and buy just one, in which location will be the most important factor. (still hoping to up the timeline for selling the lake house though) As for what brought us to buy it, I ‘luckily’ inherited some money when my grandpa passed (hands down would rather have had more time with him) and it allowed us to pay off all of our student loans, of which my DH’s were significant (grad school for both of us! Though I had a ton of scholarships).  With the money left over (this was pre-MMM) I thought it would be fitting to buy more real estate as that is how my grandpa had made most of his money (renting out rooms and paying off houses early then having great timing while selling in hot markets).  At the time I didn’t know buying a house wasn’t automatically ‘investing’ (dang RE brainwashing), should have bought a multi-family!  The dream of owning a place near water has been with us for a while so we jumped at the chance thinking of all the memories we would make.  We also were not maxing out our 401K at the time so we were bringing home almost $2,000 more a month!  We could easily afford it (to regular American standards!). 

If your husband is happy with the current life, maybe you can just sell him on holding this baseline instead of cutting.  If you focus on fighting the lifestyle creep over cutting your earnings should keep climbing so as long as you hold the line at some point you will keep gaining after that.
 

I am going to try cutting first but it definitely isn’t worth my marriage to accelerate FIRE a couple years if we both can’t be happy.  He has said before that he wouldn’t mind working while I didn’t so we will see if that rings true in the future!

Here's what jumps out at me: a) it doesn't look like you are saving at all from your income - expenses? How have you managed to accumulate the savings that you have?  b) the lakehouse is sucking all of your $$.  And I mean all.

Thanks backyardfeast, your post helps a lot.  As for not saving at all, well its all before our paycheck right now!  $35K (401K) + $7.5K (401K employer match) + $ 6.5K (HSA) + $11K (Roth IRA) is around $60K a year of savings automatically.  Either my DH or I also end up working some overtime each month so we usually have some more wiggle room but I agree that its tight!  I have also been a saver my entire life and literally used savings from high school for the downpayment on our main house because homeownership has been important to me since high school.  We also didn’t have this huge lifestyle inflation until recently, we didn’t own any cars for 5.5yrs, owned only one car for over a year but then bought a 2nd car and a 2nd house!  But because we could carry all the ‘good debt’ it was never a big deal, well my eyes have opened on that one! 

To me, this sounds like an overly complicated life. I'd encourage you to talk with your spouse about simplification and what that means to you. Simplifying things will lead you to ER earlier.

You are completely right!  If I was single it would be an easy change but the most important person in my life also needs to be on board with what we do. 

If, on the other hand, you choose not buy into the "We have lots of money so it's ok if we treat ourselves" trap, not only will you be able to build yourselves a huge buffer against the nastiness that life sometimes brings, but you will also give the forty year old you a huge gift: the gift of choice.
 

Thank you Jennifer!  I am definitely the worrier and planner in my relationship so these are things I already think about!  Before I found MMM I was not worried about our monthly expenditures or the lake house, because we were saving and not spending more than we made which was what I thought successful people did.  Upping our 401K contributions started to make our take home a lot tighter and I have cut the easy things down, so now we have to decide what to do about the big ones.

I agree... your biggest problem is the lake house.  You simply cannot afford it.  Our take home is about 4x yours, after maxing out 401k and IRAs, and we don't feel that we can afford a vacation home.  Our expenses are close to yours but we do have additional daycare costs plus college savings and activities for our 2 kids.  So, your expenses definitely won't get any smaller with kids.  It is best to work on them now (i.e. sell the lake house).  Food wise, it will take your DH some time to adjust to the changes.  My DH is the same... he enjoys eating out.  Not just for variety, but also the social aspect of it.  So, I've pretty much said that we each can eat out 2x a week for lunch ($10 max/lunch) and once a week as a family ($50 max).  If he wants coffee and other snacks, that comes out of his lunch budget too.  I don't usually use up my lunch budget since I am too lazy to go out to lunch and rather bring my own anyway.
…snip…
I think my motivation comes from wanting to RE and spend more time with my kids. 

Thanks HopetoFIRE!  Of course now I agree that we shouldn’t have the lake house but compared to mainstream America we were so good when we bought it.  I think it is hard for my DH to picture RE since we don’t have kids yet.  I can see him realizing simplifying our life would be a great idea to spend more time with kids. 

You have too much house(s). Sell one. Simple as that. You can get plenty of smaller chunks of savings from a variety of sources (food, cars, etc) but they are all small potatoes compared to the houses. You're paying close to half your take home pay towards mortgages!

Honestly, you can be FI very quickly with a small amount of effort and one less house. But DH has to be onboard or you'll just come off as a shrill cheapskate (don't ask me how I know this...) so your real problem is getting on the same page. And if it's going to create genuine unhappiness all around to fight about this - then don't do a damn thing, because at the rate you're going, you'll be FI by 40 or 45 anyway. Do YOU want the financial independence/security so much quicker that you're willing to really push him? If so, do it. If not, then make some small cuts where you can and enjoy your life.

-W

You have really hit the nail on the head.  I know by maintaining this lifestyle we will retire early, not as early as we could if we cut, but definitely early.  Having a 12 year mortgage on the main house upped the monthly cost but makes it easy to get rid of a house payment quickly and allows for over $1,400/month toward principal which makes our savings rate amazing if counted (some do, some don’t count mortgage principal).  If I find the right motivation then I think we could make some drastic changes, unfortunately I am still looking for that motivation for him.  It is scary to make such big changes in mind-set and I love him more than I love an extra few years of retirement.  As I said above, he has also mentioned he wouldn’t mind working while I didn’t so I have to keep in mind that there are other ways to compromise. 

former player

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #12 on: August 19, 2014, 09:03:09 AM »
Gross income $150k plus overtime.  $60k tax-advantaged savings, $80.5K apprx take-home, $16.8K in mortgage principal.  You actually have a pretty decent savings rate of about 50% of gross, your budget just looks tight because you (rightly) do most of the saving pre-tax.

Kids, including the possibility of going down to one income, will make things tighter in reality.  Moving to one house in a great location plus the other changes you have already thought of won't make for a complete Mustachian make-over, but should still put you in a decent position for the kids coming along.  Congrats.



Neustache

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #13 on: August 19, 2014, 09:29:28 AM »
Let's talk about the lake house for a minute....could you rent it out over the summer?  Or winter?  Wondering if there's a potential income stream from tourists or people just wanting to get away for the week.  Just a thought.

Neustache

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #14 on: August 19, 2014, 09:36:10 AM »
Sorry, going to be obnoxious and post twice.  You all are actually doing great.  I mean, shoot, I love real estate.  I'd rather sell his truck, get less of a car for him, cut down on eating out, and potentially have real estate income in the future (or now with the lake house).  Just me though, I'm a sucker for real estate.  LOL.


backyardfeast

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #15 on: August 19, 2014, 10:39:32 AM »
Thanks for the clarification about all the pre-tax savings!  Ok.  Then I have a possible alternative perspective (again, one that I'm mulling over for myself).  Given your history, is it possible that you two were doing great financially, and that you made a financial choice about what to do with your surplus cash, and that now you just need to adjust to that new reality?  In other words, you were used to seeing surplus cash go into savings (or onto student loans or whatever), and now it's going into your investment--the lakehouse?  In that kind of investment, you don't see the appreciation right away, so it feels like a suck and that there's no money left over and so something's wrong.  But really, you've just given a big chunk of your cashflow a new job.

If you're actually saving 50% of your income, and your intention is to choose 1 location to live in a couple of years, or rent out one house, in fact, you could be doing great.  It may just be a matter of recognizing that you ARE ok.  There are places you could tighten up, and those few hundred dollars a month could make room for kids when you're ready, especially if you then make another housing decision.

Consider the possibility that everything is just fine? :)

(I say this because when we switched to using YNAB, and gave EVERY dollar a job, I suddenly felt like I was broke all the time!  Panic! WHERE WAS ALL MY EXTRA MONEY?!  I really just needed the psychological shift of...oh! there it is, it's in the savings account for x,y,z...)

BCBiker

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Re: Reader Case Study – Finding middle ground (Super Duper Long)
« Reply #16 on: August 20, 2014, 12:56:40 PM »
If you live in a high-cost area, you should easily be able to rent your lake house (on weekends/weekdays you are not using it) and make the payments on the mortgage, utilities, etc for your lake house.  I've never used Home Away (homeaway.com) but I understand it is very popular and a good way to fill up a 2nd property at near-or-greater-than hotel rates.  Imagine getting an extra $150 per day with very little effort.

I would try this out now.  It potentially could give you some serious tax-write offs when it is not profitable and some serious extra income when it is profitable.  Hell! You might find that it is so profitable you buy the lake house next to it. 

If real estate is your potential calling, join Bigger Pockets (biggerpockets.com) now! You could potentially convert you IRAs to self-directed IRAs and purchase some properties with much better ROI than stocks, etc. 

I recommend getting rid of the truck.  The world in general could use much fewer of those.

Also, both of you could get a nice used bicycle and commute to work if practical (<20 miles each direction).  Bicycle commuting will do wonders for your budget.  You will get into exceptional shape without the price of a gym membership.  In my experience, I eat better and generally less expensive foods.  If you are working that hard and getting in great shape, you mentally refuse to eat junk and fast food is never even a consideration.  I also tend to drink less alcohol... I don't have an explanation for that but if it is true for you guys that could have a dramatic effect on you budget. Oh, and you don't burn gasoline and you can get the least expensive insurance.

Do all of these things and you (and potentially both of you) will be FI before the baby comes around you will laugh about thinking about the cost of daycare.