Trying to make the change, but it feels like I'm turning an aircraft carrier

[MickeyMoustache]

Hello Mustachians, first post here.

I'm a new reader of MMM, and I've been binge reading my way through the posts from post #1 the past few days.  For the most part, I like the idea of financial independence and early retirement, but I struggle to wrap my head around 10 year plans.  All my life I have managed 1-3 year plans and it is difficult for me to see beyond that.  Maybe the more experienced Mustachians can help guide me?

A little about myself: I'm 32, married with 2 kids and make a good living in a cheaper part of the country.  I have all debts but my mortgage paid off and a strong income.  I do have face-punchingly expensive cars, but because they are already paid off (and getting old @ 2008, 2009), I have no plans to sell these... yet.  There might be fuel cost advantages and what not, but it's hard for me to get past the fact that I like my cars (hooray for emotional attachments!).  After reading MMM a bit, I've gotten my act together enough to open up a vanguard index fund and looked at all of my monthly spend (wife keeps a *very* detailed spreadsheet of our spending).

After looking at expenses, it's crazy to think we save so little when we take home so much.  The major expenses are daycare for 2 kids, the mortgage, and groceries.  The minor expenses don't seem so bad with me being fairly Mustachian looking back on certain things (pack lunch to work, DIY type of guy, home gym, etc).  But we've definitely splurged in incredibly non-Mustachian ways on many things that we shouldn't have including our used but still expensive cars (~$25k/ea) a new deck (DIY, but with composite so still $$$), my home gym wasn't from craigslist (new), fancy computer, etc.  This is a clear area where we need to cut back and probably sell certain things (putting my pool table on craigs list this week).   Hell, I'm pretty sure MMM would tell me I could retire in 2-3 years if I really wanted to.

But overall, there are so many areas of our lives that can be improved and it feels overwhelming.  It feels like a monumental task to stop the flood gates.  How did you go about it?  I am debating doing a full out case study post but it feels borderline asinine when I compare my issues to other's issues.

[MDM]

I do have face-punchingly expensive cars, but because they are already paid off (and getting old @ 2008, 2009)

Welcome to the forum Mickey.  By the way, that's not old - with reasonable maintenance you should be good with those for many (at least another 10) years.

I've gotten my act together enough to open up a vanguard index fund and looked at all of my monthly spend (wife keeps a *very* detailed spreadsheet of our spending).

Excellent!  Knowing your current situation is a necessary first step.

After looking at expenses, it's crazy to think we save so little when we take home so much. ... I am debating doing a full out case study post but it feels borderline asinine when I compare my issues to other's issues.

Up to you of course, but you might go through all the mechanics of the case study so the two of you can see your situation more clearly.  Then decide whether to post for comments or not.  In any case, good luck!

[MickeyMoustache]

I do have face-punchingly expensive cars, but because they are already paid off (and getting old @ 2008, 2009)

Welcome to the forum Mickey.  By the way, that's not old - with reasonable maintenance you should be good with those for many (at least another 10) years.

I've gotten my act together enough to open up a vanguard index fund and looked at all of my monthly spend (wife keeps a *very* detailed spreadsheet of our spending).

Excellent!  Knowing you current situation is a necessary first step.

After looking at expenses, it's crazy to think we save so little when we take home so much. ... I am debating doing a full out case study post but it feels borderline asinine when I compare my issues to other's issues.

Up to you of course, but you might go through all the mechanics of the case study so the two of you can see your situation more clearly.  Then decide whether to post for comments or not.  In any case, good luck!

Good advice.  We've gone through our spending spreadsheet together a few times but maybe laying everything out will help.

Thanks for the well wishes!

[Sibley]

Regarding the 10 year plan - human beings are not good with long term planning. Why do you think so many people are woefully unprepared for retirement? So don't beat yourself up too much!

I've found that it's sometimes easier to pick one particular thing to improve, do it, then move to the next. For example, I improved my student loan. Then insurance. Then my phone bill. That makes it less overwhelming, especially since everyday life continues.

[MickeyMoustache]

Narrow your focus.  Start by looking at the Big Three:

Housing, transportation, and food

Regarding the 10 year plan - human beings are not good with long term planning. Why do you think so many people are woefully unprepared for retirement? So don't beat yourself up too much!

I've found that it's sometimes easier to pick one particular thing to improve, do it, then move to the next. For example, I improved my student loan. Then insurance. Then my phone bill. That makes it less overwhelming, especially since everyday life continues.

Both good advice.  I suppose a bit of my issue is not having to really focus on debt one at a time, but spending.  Debt feels so much more finite and easy for me to wrap my head around, spending... not so much.

[swick]

Hubby and I have been adapting the "One sheet to rule them all" Spreadsheet. The really neat thing about it is it has a dashboard with networth, time to FI, investments etc. It is a really handy snapshot of your money that allows you AT A GLANCE to see the progress you have made.

Until we did this it was all kinda nebulous, seeing everything in black and white (well the charts and graphs are in pretty colour) it really made us see how the small things make a big difference and made saving easier and more fun.

http://forum.mrmoneymustache.com/share-your-badassity/one-sheet-to-rule-them-all/msg694651/#msg694651

Welcome to the forums :)

[Goldielocks]

I would suggest that you take a breath, and take it a bit easier on yourself.   You and wife are 32 and have 2 (or more) children.   You likely have invested in transportation and housing as once in a decade costs, and were hopefully reasonably frugal about your choices vs benefits of it, all while not being in your top income earning potential, with a lot of financial "drag" from the kids and a LACK OF TIME to be totally bad ass about your financials (with both working, especially.   Families your age that do this well tend to have a SAHP that is on board with MMM).

I had too had only a 1-2% net savings rate at the same point of life and was very worried, too.   But I realize now that I worked on my MMM muscles, and constant optimization habits.   So much, that it is natural now, with kids as teenagers, that we are saving at least 40% last year, and looking to go to 50% next year.   The low savings rate lasted less than 4 years and was due to the car purchases.

How about you?  Likely to get pay increases?   Will you be purchasing cars every 4 years?  will the kids always need the expensive daycare or private school?   Anything likely to change in future for the better?


Instead of planning 10 years, maybe try to optimize/learn just one more small thing every month.   lowest insurance?  shop around.  Calculate your marginal tax rate.  Do you own taxes.  Determine your bank fees.  Change your own oil.  Don't buy clothes for a month.  Reduce food bill by 5% by using a cash only system. Plan free (and different) entertainment days as a family.  Ride a bike to work or store.  Call a friend or relative on the phone..

Above all, enjoy your time together! Happy time spent together is worth a huge amount of future money, so invest in family and relationships with your attention and time.

[nereo]

FWIW, here's my advice on "how to wrap your head around 10 year plans".  Don't.  It's largely irrelevant anyway, as people's life situations are typically VASTLY different than what they expected 10 years prior.

So... what to do?  Just try to optimize your life and your finances both monthly and annually.  For motivation, just play with all the compound-interest calculators and see what saving $1k, $2k or $3k/month will look like after 10, 20 and 30 years.  But actual planning?  About as useful as trying to figure out now who will be president in 2022 or who will win the Super Bowl that same year.

The journey has to be worthwhile *now* in order for it to be worth it. 

[MickeyMoustache]

Thanks Mustachians, all good advice.  I'm going to mess around with that dashboard spreadsheet for sure.

Goldielocks, very much appreciate the perspective.  I get excited sometimes when I see things that I find interseting, MMM has been no different! :)

[vagon]

Most worthwhile things are hard, otherwise everyone would be doing it.
Revel in the struggle, scratch and claw your way there, it just makes the destination even better.

[epipenguin]

Some things are harder than others to tackle immediately. For example, when I first found MMM I was only half way through my 2-year fancy phone contract. Although I might have come out ahead to pull the plug and deal with any early termination fees if I really wanted to do everything at once, I decided to just put that on the back burner and work on other things first. But I did every now and then do some researching and planning so I knew which lower cost phone plan I wanted to switch to. Then when my contract was finally done, I jumped ship to the cheaper plan and didn't look back.

Also, with some things it's painful to change behavior from wasteful spending to Mustachian. Take clothing, for instance. I used to spend way too much on that. Now, if I was in debt in a hair-on-fire situation, I should have just gone cold turkey on clothes shopping probably, but I wanted any changes to be really sustainable and to become a way of life. So I initially gave myself a monthly budget. Then a smaller monthly budget and a 2-item per month limit. Then a 1-item per month limit. For me, adopting a stair step approach to ratchet down spending in that area really helped.

I don't have any sort of 10 year plan. Maybe I'll be retired in 10 years, maybe not. But each year I'm just working on optimizing my spending, and increasing my saving.

[MickeyMoustache]

More great points.  I definitely feel better about things even if only after a couple of days.  This week I still had some excessive spend, but I've been thinking about my purchases more seriously before making them and really justifying them.  I've also started to tone down the noise, turning off things that drive consumer products in front of me (massdrop anyone?) and focusing on getting off my ass more.  I managed my FIRST EVER (in 32 years!) workout before work.  It was amazing, but it required I go to bed early.. which I did and all told, it had some interesting affects on me.  One of which was taking a shorter shower because I was already wide awake, I wasn't spending my first 20 minutes waking up in the shower.  Good stuff!

One step at a time.

[La Bibliotecaria Feroz]

Welcome to the forum!

Just wanted to throw in on more thing--sounds like you are still paying for daycare? So when each kid starts kindergarten* and the cost goes down, make sure that take that money and save it. Every penny. It is often said that's what you should do when you get a raise--and it's like you have a big raise coming up when the tots start full-time school :-).

*Or first grade as the case may be. Here in Denver, we actually have to pay for full-day kindergarten. Only the morning is free.

[expectopatronum]

I like Nereo's advice, but also: don't beat yourself up. I think at first it's tempting to look at the past as full of missed opportunities - if I'd only found MMM when I was 30, or 25, or 22...Don't. Just look at where you're going to go from here, and consider them lessons in what you wouldn't splurge on again.

Also advise not thinking of it as "should" or "shouldn't" purchase. Thinking of it as constant optimization helps me. Does this purchase make me feel guilty? If yes, why - because I feel like I shouldn't spend $20, or because it's $20 on something that's not worth it?

While housing, food, & transport will be the biggest impact...making the small changes can help, mentally. So, if you want to work "backwards" - dropping things like cable, starting to cook in more immediately, and refraining from purchasing more clothes/furnishings this month can feel like some really good changes, and you'll see results right away. Plus, you'll begin shifting your frame of mind to make these permanent changes in lifestyle. (What I mean by that is, housing and type of car are certainly part of your lifestyle, but they're not choices you make every day. Whether you bike to work and you cook your dinner are daily choices that can require some practice.) Changing up the house and car can take awhile, if it involves selling/moving/trading in.

I really like your post title. I hope you post a case study!