One thing I did when I was in your position of finding MMM for the first time was to work backwards and reverse engineer things.
I didn't start by making a financial plan. I started by thinking about what I wanted my life to be like, both now and in the future. I asked my wife lots of questions about she'd like these next 18 years of raising kids too look like. And what she'd envision an ideal life together to consist of once the kiddos are a bit older.
These thoughts and conversations were incredibly fun and exciting for both of us. Here's a very overly simplified account of some things we discussed:
- We want to never NEED to work past 48 years old. (we were 31/32 when we realized this)
- As our kids grow, we want to be able to travel with them. We want to spend lots of time with them, especially during the summers. We want to pay for half of their college expenses.
- When they are out of the house, we want to be able to travel together. We want to be active and social.
Then, I started digging into what it would take financially at each step along the way to make our "ideal life" happen. Here's a very overgeneralized account of what the financial decisions we made together two years ago:
- For the next 16 years, we would live off no more than half our income
- We would refinance to a 15 year mortgage so our house would be paid off at age 47...right before retirement
- We would buy 5 years so we'd hit our pension at 48
- We would invest about half our income each paycheck into VTSAX
Then we had to LEARN, because we didn't know how to do this stuff:) We had to cut auto expenses, food/restaurant expenses, clothing, tv, etc.
We had to learn about investing, how fees work, how 403's and Roths, and Traditional IRA's, and so on. We had to learn how to do all the paperwork to move money around.
We had to not get too pissed at ourselves as we continually realized how sub-optimal we had been living and how f@#$ing rich we could be right now had we just started this right out of college:)
And gradually, as each month progressed, we got closer and closer. It's now two years into our new way of living. We are at about a 55% savings rate. We are meeting or exceeding every one of our goals.
Hopefully this gives you some ideas. If you check out my journal, you can see how I track my monthly net worth, and you can get a more in-depth look at the nuts and bolts.
Welcome and good luck!!!