Author Topic: We may never reach that financial freedom. Here's why. [Case Study]  (Read 37129 times)

DavidDoes

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UPDATE

I want to thank everyone that has helped out. Since posting this, we've paid off our Discover debt, and have decided to do public school. Also, we've opened up Capital One 360 Checking and Savings accounts, with Checking earning .20% and Savings earning .75%. This will add ~$40/mo in free money, depending on balances of course.

We are now focusing on getting to six months of expenses saved (~$15,500), which should take roughly one year to do. Then we will start focusing on investing.



I'm really feeling the pressure lately. Last year, I left my career that paid $48,000. I now make around half that doing something I really enjoy. I currently work in coffee, where I really could build a career, and would someday like to own a shop with my wife, whom is also a barista.

Case Study:
Life Situation: 28 m, 26 f, 5 f. Seattle, WA.

Gross Salary/Wages: $54,000

Pre-tax deductions: n/a :( (wife's health coverage starts next month)

Taxes:
Fed: $476
State: $0
SS: $279.50
Med: $65.37

Current expenses:
Code: [Select]

$1,745.00 Rent & Util
$15.00 Seattle City Light
$121.33 Phones
$60.00 Internet (Wave G)
$832.00 Waldorf
$100.00 Discover Card
$400.00 Groceries
$30.00 Household
$30.00 Health & Beauty
$40.00 Pets
$20.00 Activities
$8.25 Amazon Prime
$10.42 Renters Insurance
$3.00 Harry's
$500.00 Emergency Savings
$0.00 HBO Now
$16.41 Spotify Premium
$10.95 Adobe CC

I have any non-monthly subscriptions broken down into monthly installments, and those get budgeted every month in the software we use, YNAB. The EF contribution hasn't happened in a few months due to massive overspending (just moved).

Recently canceled HBO Now. We still have Spotify Premium. Adobe CC is used for my photography hobby. That Activities budget of $20/month is regularly overspent. We definitely have an issue with spending money outside of the home, on dining ventures. Not fancy stuff. Things like coffee shops, ice cream, etc. But a lot of little $10 outings adds up!

Assets: $2,500 EF

Liabilities: Discover Card payment of $100. This was an amount left-over when we filed bankruptcy in 2014.

---

How do we do it? I would love recommendations here. I feel like we don't have enough food, despite making everything from scratch except things like bread and cereal. I feel like we're not going to ever be in a situation where we could afford to take time off work, much less get injured/fired or retire... Granted, there are plenty of advancements in our future, but it seems pretty dire right now.

The $1,800 we pay in rent includes utilities and pet rent. We actually only pay 53% of our unit's market rent value because of Seattle's MFTE program that allows us to pay based on our income level. This $1,800 unit is a 2x2, something unheard of in Seattle. It's location allows us to live a car-free lifestyle.

The $832/month is for our daughter's Waldorf school. She is now old enough to go to Public, but she wanted to do one more year of kindergarten at Waldorf, then start Public in first grade (Waldorf does two years of kindergarten). The school gives us 50% tuition aid (normally $1,664).

It feels as though we may never reach financial freedom. How does one buy a house in this city without being rich first?
« Last Edit: August 18, 2016, 11:56:23 AM by DavidDoes »

rothwem

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #1 on: August 11, 2016, 01:11:54 PM »
True, with that attitude, you're probably never going to reach financial freedom.  However, it seems like you've put so much effort into proving why you're fucked...how about you put that same effort into figuring out how NOT to be fucked?

You've got to spend less than you earn, and there's a whole wealth of information on this website on how to do that. 

okits

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #2 on: August 11, 2016, 01:12:41 PM »
At first glance it seems like you and your wife earn LCOLA-level income but live in a HCOLA.  $800 a month for elective kindergarten tuition is totally brutalizing your finances. 

Could you do the same work and earn the same income but live someplace much, much less expensive?

If not and you love what you do, perhaps that enjoyment is the payoff for low earnings (and possibly foregoing FIRE)... 

bridget

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #3 on: August 11, 2016, 01:15:17 PM »
Things really aren't that dire; you're on a tight budget, but a doable one.

You save $500/month for an emergency fund. How big of an emergency fund are you hoping to have? You already have $2500. Let's say you want a $5000 EF; you'll finish funding that in 5 months. After that, you can start putting that $500 toward your discover card debt, and once that's gone, into an IRA or another long-term savings investment vehicle.

Your daughter is only in kindergarten for another year (honestly, I'd seriously reconsider that expense in your current position; she's five, and will be going to public school next year and making friends, she will be able to handle the transition now just fine). After that year (or now), you'll have $832/month to again, put toward debt and then savings.

You're right that it might be a long time before you can buy a house in Seattle, which is an expensive city, but that's not exactly the same thing as financial freedom. If you start measuring success as "could buy a house in HCOL right now on two baristas' salaries," you're in trouble. Start measuring it in slow and steady savings, combined with a frugal lifestyle. You'll see gains.

If your gross salary at your job you enjoy is really $24,000, and you have no concrete plans to switch that for another one, I hate to break it to you but you probably need to get a side hustle. 

How much is the total discover card debt, and what is the interest rate? If it were me, I would probably plow every penny of that $500/month saving into getting rid of that debt ASAP. That money is FAR more valuable doing that than chilling in a savings account in case something goes wrong. Something has already gone wrong - you have outstanding credit card debt.

therethere

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #4 on: August 11, 2016, 01:21:48 PM »
Not to be a debbie downer but you can't have it all. Excess money doesn't just appear out of nowhere. Let me get this straight. You want to have the best place to live, downtown, private kindergarten, have a job you love and enjoy, AND retire early? Maybe if your dream job paid more it would be possible. You have to prioritize. What's your reasoning towards shooting for FIRE if you have a job you thoroughly enjoy? If your dream is to open a coffee shop or roaster a small business owner is never retired.

Are you really just trying to get to the point where you are saving money (not necessarily FI)? That's a different question altogether.

Also, why are you letting your 4 year old make a decision that takes up 20% of your income????? It sounds absurd when put that way doesn't it? Its 10k a year after taxes. Imagine if you put that money aside for their college instead? I think that $832 a month to a 529 is much more defendable and reasonable than towards a kindergarten.
« Last Edit: August 11, 2016, 01:52:04 PM by therethere »

tonysemail

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #5 on: August 11, 2016, 01:27:55 PM »
welcome to the forums.

Yup, you have hair on fire emergency.
suspend discretionary spending until you can wipe that out.

I agree there's no point in paying for another year of Kinder.
But if you pulled your kid out of private school, how much would you pay for after school care?
I pay over $500 in another HCOL area, which could partially offset the private school tuition.

I would cut the phone and food categories in addition.

Kwill

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #6 on: August 11, 2016, 01:30:43 PM »
Looks like you could save money on the phones by switching carriers, depending on your contract terms. I'd also drop Spotify Premium and consider letting go of Adobe CC if there's another way you could work on the photography. Or can you turn the photography into a side job?

What do you use Amazon Prime for? When I had it, I found it was encouraging me to spend more at Amazon than I otherwise would have. Also, sometimes the free fast shipping tempted me to pay a little more for the new book even when a used one was available.

Try sending the extra to the credit card -- what's the actual balance? And maybe get a tub of store-brand ice cream and some sprinkles to have ice cream at home.

frugaliknowit

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #7 on: August 11, 2016, 01:38:41 PM »
Certainly no offense intended.

There are SO MANY jobs that pay more than what you and your wife earn (nothing against being a barista).  I think you should consider one or both of you exploring other career options.  For example, my brother (retired) earns $17/hr as a "security officer" (without a gun).  A lower cost of living area is another consideration.  To get any real traction, your rent should be 25% of take home pay (or lower; though it is great that you have a car free lifestyle).

Frankies Girl

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #8 on: August 11, 2016, 01:44:21 PM »
It is absolutely up there as one of the most insane things I've ever heard of paying almost 1K a month for private kindergarten when you have that low income to debt ratio. You are seriously delusional if you think this is a wise decision. Your child is FIVE and it's not going to matter if they went to private kinder at any point ever. NO SCHOOL is so fan-freaking-tastic that you need to pay for it at that age. They are learning the basics at that in kinder and they are all little sponges - they'll soak up anything and everything whether it's in a fancypants school or not.

Serious disconnect there. Complain all you like about your low salary or high cost of living, but when you're the one chopping away on your arm with the rusty saw and then complaining about the pain? Damnest thing I've seen lately.

I'm a graphic designer/fine artist (that is how I made my living for the last 20+ years) and don't even have a subscription to Photoshop right now. And I can afford it. Spending money on a hobby that is not paying for any of the hobby expenses when you're drowning? Again, put down the rusty saw and back away until you can dig out of the mess.

I get you're really in the dumps but some of this is really just common sense. It can be hard to see that when you're buried, but some of your expenses are literally no-brainers to get rid of completely or reduce.

bridget

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #9 on: August 11, 2016, 01:49:30 PM »

I get you're really in the dumps but some of this is really just common sense. It can be hard to see that when you're buried, but some of your expenses are literally no-brainers to get rid of completely or reduce.

+1. Particularly when the main no-brainer (kindergarten) is your second largest expense after housing! You can give yourself a HUGE amount of breathing room all in one fell swoop, with essentially zero pain (or at least the exact same amount of pain you seem fine with enduring when she goes to public first grade in one year). This is the low-hanging fruit, my friend. An ice cream here and there can be cut out, but it's a drop in the bucket compared to the completely unnecessary kindergarten costs. It's like the equivalent of a second job without having to lift a finger.

Jack

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #10 on: August 11, 2016, 01:58:21 PM »
You have an emergency fund and a "$100 Discover card" minimum payment (implying a large balance you're paying interest on at a ridiculous rate)? WTF! That is exactly the kind of emergency an emergency fund is for, so dump that $2500 and $500/month* directly into the credit card balance until it is gone. Then start building up an emergency fund again if you want.

Replace the Photoshop subscription with Krita or GIMP (or Gimphoto?). Ditch Amazon Prime and Spotify. You have no excuse for unnecessary subscriptions in your current financial situation!

(FYI, like Frankies Girl, my wife is also a professional graphic designer and does not have an Adobe subscription.)

I'm aware that (parts of?) Seattle have a reputation for having slow and/or expensive Internet access, but $60 is unreasonable. Cut it down by half, even if that means the speed is <1Mbps. Ditto with phones: there's no reason for them to cost more than $30/person/month (i.e., $60 total since your daughter should not have one), and even that is high by I.P. Daley's standards.

And ditch the private kindergarten, obviously!

(* Actually, $500 plus the savings freed up by all the other changes -- so really more like $1500/month after you ditch the kindergarten etc.)

Bruinguy

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #11 on: August 11, 2016, 02:03:46 PM »
How does one buy a house in this city without being rich first?

It's probably cheaper to rent than buy.  Especially considering your current rent situation.  How much would it cost to buy a condo like the place that you are living? Then think about taxes and upkeep.  It sounds like you have an exceptional living situation right now and I'd look on the bright side of that instead of feeling down about not owning a house.

little_brown_dog

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #12 on: August 11, 2016, 02:08:31 PM »
FI is harder on really low salaries. It is doable but generally much more difficult as even the most frugal can only lower their expenses so much. But the basic truth of FI holds true regardless of whether you make 50k or 50 million: you must spend significantly less than you make. How you attempt to do it is up to you – most people seem to find success in trying to maximize income while also reducing expenses simultaneously.

I agree with the others…Waldorf kindergarten is the type of silly rich person splurge you see on reality TV. Sure, it's fine for people who have tons of money and no where else better to put it. But for you, it’s probably just a waste of money that could be used to actually do something truly beneficial for the child (aka stabilize her parents’ finances). I highly doubt she is going to have a better life because she spent 2 years in Waldorf kindergarten before going public. You on the other hand could immediately use that money to shore up your finances so she grows up in a financially stable family where mom and dad have options. Stop this madness. Now. The public school sock puppets and ABC songs will teach her the exact same stuff without the $800 bill.

tonysemail

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #13 on: August 11, 2016, 02:20:48 PM »
in my district, open enrollment is in Jan.
By Aug, you'd be put on a waitlist to your neighborhood school.
So if someone moves, then your kid can get in.
otherwise, you're resigned to shuttling your kid to the overflow school, which can be a shitty addition to the commute.
I would hurry over and get myself waitlisted asap.
« Last Edit: August 11, 2016, 02:28:01 PM by tonysemail »

Tester

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #14 on: August 11, 2016, 02:25:17 PM »

Current expenses:
Code: [Select]

$1,745.00 Rent & Util
$15.00 Seattle City Light
[b]$121.33 Phones[/b]
$60.00 Internet (Wave G)
[b]$832.00 Waldorf[/b]
$100.00 Discover Card
$400.00 Groceries
$30.00 Household
$30.00 Health & Beauty
$40.00 Pets
$20.00 Activities
[b]$8.25 Amazon Prime[/b]
$10.42 Renters Insurance
$3.00 Harry's
$500.00 Emergency Savings
$0.00 HBO Now
[b]$16.41 Spotify Premium[/b]
[b]$10.95 Adobe CC[/b]

Recently canceled HBO Now. We still have Spotify Premium. Adobe CC is used for my photography hobby. That Activities budget of $20/month is regularly overspent. We definitely have an issue with spending money outside of the home, on dining ventures. Not fancy stuff. Things like coffee shops, ice cream, etc. But a lot of little $10 outings adds up!

Assets: $2,500 EF

Liabilities: Discover Card payment of $100. This was an amount left-over when we filed bankruptcy in 2014.

---

How do we do it? I would love recommendations here. I feel like we don't have enough food, despite making everything from scratch except things like bread and cereal. I feel like we're not going to ever be in a situation where we could afford to take time off work, much less get injured/fired or retire... Granted, there are plenty of advancements in our future, but it seems pretty dire right now.

The $1,800 we pay in rent includes utilities and pet rent. We actually only pay 53% of our unit's market rent value because of Seattle's MFTE program that allows us to pay based on our income level. This $1,800 unit is a 2x2, something unheard of in Seattle. It's location allows us to live a car-free lifestyle.

The $832/month is for our daughter's Waldorf school. She is now old enough to go to Public, but she wanted to do one more year of kindergarten at Waldorf, then start Public in first grade (Waldorf does two years of kindergarten). The school gives us 50% tuition aid (normally $1,664).

It feels as though we may never reach financial freedom. How does one buy a house in this city without being rich first?

Warning: long post
I hope I will be able to help at least a little.

1. Change your attitude.
I know it is hard at your age to see the light. But I was not dreaming of a future at your age - although I was starting to see that I am "lucky". I considered that if I do my part as good as I can things will work out. I can say things worked out. Although I am 38 and just started really saving last year, I think I am fine. And just to give some details on how lucky I was: at 25 years of age I worked in a computer store with low wage - one year later as a Junior developer/tester, one more year later to another company as a Tester (still living with my parents because the income was too low). Now, after 13 years, I have a family, a house (not living in it, it is in my native country), earning good, moved to Seattle one year ago (to the same company above).
I would say that if you like what you do your "luck" will come too.
And I admit that until 30-33 I was more interested in parties and going out than savings - part because the income was so low that I did not see "the light".
Don't pass on having fun, just make sure your having fun does not screw you on the long term. So have fun without destroying your health.

2.I made some of your expenses bold, will start with the easy ones.

Phones:
he last year I had Republic Wireless - 35 USD for two phones. I finally got fed up with them trying to call only over wireless and switched to TMobile - 98 USD for two phones. You can save between 90 and 30 USD/month there. You could look at Republic Wireless, now they have more phone options and they are out of the hardware of the phones. I would go to Republic/other cheap option for at least one year (the good thing is that you are not locked in) if I were you - 90 USD/month difference is a lot I think. It is almost your Discover card payment.

Amazon Prime + Spotify Premium:
- Get rid of at least one. Amazon also has music and movies, could you just use that?
Or even better, get rid of both if that makes you buy less.
One thing to keep in mind: make sure that Prime membership does not trick you into buying things.
Getting rid of both: 36 USD/month
Getting rid of the Premium part of Spotify: 17 USD/month.

Adobe CC:
If you like the stuff you are doing with it look into getting something out of it too.
Part time photography? I see a lot of people coming to the Discovery park with photographs - some have newborn babies, some are newly wed people, some are just people who want some better pictures?


Waldorf:
This is the hardest one to shut down for me as I want the best for my kid too.
But: we have our kid in a co-op preschool and we are very happy with this - we paid 200 USD/month last year, now will pay 400 USD/month as we will go one more day /week.
It is only 3 hours/day 3 days/week, so I don't know if this suits you as you both work.
It forced my wife to socialize, work for the co-op and it allowed us to integrate quicker.
The education part is very good too from our opinion - my wife should be able to tell, she has a B.SC in Psychology focused on teaching kids with mental disabilities, went to a highschool to become a teacher (don't know the name for this type of school in the USA), worked for 10 years as a preschool teacher in our country.
I don't think this is a problem for you if you are born in this country, but I thought I should mention this :).
In the end this is only for one more year - although it adds up to a nice amount.
Would those 9,000 USD help you do something else and still have a good start for your kid?


So, the easy ones to cut (for me at least) above go to more than 100 USD/month.
If you can also cut the kid tuition you get even more.
Put everything to pay the Discover card and after you pay it off you can save this money.
I would even put more from the monthly emergency fund toward the Discovery card. If something happens you still have the card and you can put some expenses on it, but at least you don't pay interest.

EDIT: Forgot to address one more important thing.
You ask about buying a house in Seattle. Don't do it. Forget about it.
I did the same in my country when I started to earn more (thanks to my "luck"). I got a mortgage and built a house.
As the plans did not match the expenses for the house it added to some work related stress - and I am 99% sure that some of the health problems I have now are from that stress.
So don't think about buying a house now.
Get into a comfortable state financially/mentally. And when you will have enough you get a house too.


Last:
The fact that you posted here is a good sign for you - you will get advice on fixing things.
Use that advice.
« Last Edit: August 11, 2016, 02:36:04 PM by Tester »

1967mama

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #15 on: August 11, 2016, 02:30:45 PM »
Posting to follow...

ETA: Thanks to other posters here, I've just cancelled our Amazon Prime membership. Glad I went and checked right away ... It was set to renew October 3/16!!
« Last Edit: August 11, 2016, 02:53:03 PM by 1967mama »

Jack

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #16 on: August 11, 2016, 02:31:29 PM »
How does one buy a house in this city without being rich first?

It's probably cheaper to rent than buy.  Especially considering your current rent situation.  How much would it cost to buy a condo like the place that you are living? Then think about taxes and upkeep.  It sounds like you have an exceptional living situation right now and I'd look on the bright side of that instead of feeling down about not owning a house.

Yep. In a HCOL, the answer to "how do I buy a house?" is simple: don't.

First of all, unless you have a time machine and can buy at 20-years-ago prices, renting is almost invariably cheaper. Second, the high prices are probably a bubble anyway, so buying now would be stupid. (Granted, the bubble could continue to inflate for a long time, but still...)

Instead, if you have a burning desire to own real estate, buy investment property in some other market -- one in which it's actually a good investment -- while continuing to rent the place you live in.

ketchup

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #17 on: August 11, 2016, 02:44:28 PM »
At first glance it seems like you and your wife earn LCOLA-level income but live in a HCOLA.  $800 a month for elective kindergarten tuition is totally brutalizing your finances. 

Could you do the same work and earn the same income but live someplace much, much less expensive?

If not and you love what you do, perhaps that enjoyment is the payoff for low earnings (and possibly foregoing FIRE)...
These are your fundamental problems.  If you insist on living in a high-cost area without the high-income salary to accompany it, you can make it happen but something's gotta give.

Cut the phone bill at least in half (read I.P. Daley's guide).  Nobody needs that kind of phone service unless you're making money with it.  $60/mo saved here conservatively.
$60/mo might be the best you can do for internet, but it also might not be.  Look into that.  Even if it's "slow."  Again, unless you're making money on it, get the slowest/cheapest internet service you can find.
$400/mo for groceries is plenty.  I'm not sure how you can spend that much and not think you have enough food.  And quit buying cereal, it's crazy expensive.  If you want grains in the morning, eat oatmeal.
Cut Prime and Spotify.  You don't need that.  $23/mo more.
I don't know what Harry's is.
My GF is a pro photographer and she *does* pay for Adobe CC (just to be the contrarian here...).  But you don't need it.  And if you have fancy photography gear, sell it (you can always re-buy when you can truly afford it).  $10.95 down.

All that plus dumping the Ivy League kindergarten (which is your real problem apart from low-income-plus-high-cost-area) puts you almost a grand ahead. 

That plus your $500/mo savings puts you at about $1500/mo in savings, which works out to about a 38% savings rate.  Which is actually *freaking great* considering your income. 

Take that $1500/mo, channel it first at whatever your Discover balance is to kill that to death, then you'll have $1600/mo in savings which bumps you back above 40%.

Then, now that your hair will no longer be on fire, maybe add back in Adobe if you enjoy your photography hobby that much (and re-buy equipment if you sold it).

Now, consult the book of MMM: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

40% savings rate then puts you at 22 years to retirement.  You'll be 50, she'll be 48.  On barista pay.  In Seattle.  Seriously.  You could make that happen.

Even better, find some way to earn an extra four grand a year on the side (~$350/mo).  Anybody can make that happen.  That bumps you up to a 45% savings rate and retirement three years earlier.  If you somehow increase your income a lot (opportunities exist for that Seattle or else nobody could afford rent), those numbers only get rosier.

You're not screwed.  Re-frame this situation and you're set up for financial success.  You're doing enough right apart from the kindergarten situation that a few extra tweaks puts you way way ahead.

And buying is a house is no measure of wealth (only a measure of spending like ownership of anything else), and buying a house in a high-cost-of-living area is probably the wrong choice anyway (renting is generally a better deal).

Seriously, you can right this ship.  You get less of a tolerance for error when you're making less, and even less when also in a high-cost area, but if you do everything right (and you're close), things are looking pretty great.

ysette9

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #18 on: August 11, 2016, 02:47:25 PM »
Other people have already said it but I will reiterate: You need to bring more money in. (right, right, easier said that done). Honestly I think you have a decent handle on your expenses. We can debate paying for Kindergarten all day long, but your kid will be out of kindergarten and into public school before that debate is settled. On the other hand bringing in more money will have a compounding positive effect years into the future. Can your wife look for a higher-paying job? Just as a quick example, Costco pays around 17$/hr for cashiers in Seattle, WA. If she has any education/training then she should be able to find something ever more remunerative. I definitely understand the importance of working a job you enjoy, but you took an enormous pay cut to get that. You need to be seriously looking at ways to bump your salary up, whether that be getting more skills, negotiating for more, or finding a different job. Best of luck to you.

cats

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #19 on: August 11, 2016, 02:53:53 PM »
How does one buy a house in this city without being rich first?

It's probably cheaper to rent than buy.  Especially considering your current rent situation.  How much would it cost to buy a condo like the place that you are living? Then think about taxes and upkeep.  It sounds like you have an exceptional living situation right now and I'd look on the bright side of that instead of feeling down about not owning a house.

Agree.  My husband and I currently rent in another HCOL area, and anytime we feel like we maybe ought to be buying a house, a quick calculation of what taxes and mortgage interest would be brings us back to earth pretty quickly.  It actually makes no financial sense for us to buy a house right now.  Given your great rent situation, I would put aspirations of home ownership on a very far back burner and focus more on things like the credit card debt and getting yourselves more breathing room through implementing some of the other suggestions here.

I am curious about the Amazon Prime membership.  From the rest of your budget, it looks like you aren't really buying much stuff on Amazon (perhaps $100/month if all your household, health & beauty, and pet purchases are via Amazon), unless you get a lot of your food there?  So I don't see that you have a huge need for 2-day shipping.  For movies/TV shows, you might want to check out the local library...I know ours has tons of great DVDs so anytime we want a movie or TV night we can usually find something there to fit the bill.

As someone who is currently spending an embarrassing amount of money on childcare each month, I can't fault you too much for wanting to let your daughter stay at the Waldorf school, but I would at least consider whether or not it's really the best choice.  If she were to go to public kindergarten this year, would she then continue onto first grade at the same school?  If so, it might be better for her to go ahead and start kindergarten at the public school, rather than come in a year later when other kids have already started to form friendships and social groups.

slappy

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #20 on: August 11, 2016, 03:17:24 PM »
Other people have already said it but I will reiterate: You need to bring more money in. (right, right, easier said that done). Honestly I think you have a decent handle on your expenses. We can debate paying for Kindergarten all day long, but your kid will be out of kindergarten and into public school before that debate is settled. On the other hand bringing in more money will have a compounding positive effect years into the future. Can your wife look for a higher-paying job? Just as a quick example, Costco pays around 17$/hr for cashiers in Seattle, WA. If she has any education/training then she should be able to find something ever more remunerative. I definitely understand the importance of working a job you enjoy, but you took an enormous pay cut to get that. You need to be seriously looking at ways to bump your salary up, whether that be getting more skills, negotiating for more, or finding a different job. Best of luck to you.

What I don't understand is why OP took the lower paying job to begin with, when they clearly can't afford it at this point. It seems to me like people sometimes feel entitled to a job that they love.  With double the salary, this conversation would be much different. What type of planning went into changing jobs? I guess it doesn't really matter at this point, just something I wonder about in general when I see these types of posts. However, like another poster mentioned, maybe OP would consider getting a higher paying job or a second job temporarily until the debt is paid off and the EF is where they want it. If paying for preschool is that important, the second job or higher paying job could make it feasible. Although, as another person commented, I'd be interested in hearing what the after school care costs would be if they did cut the Waldorf school.

cloudsail

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #21 on: August 11, 2016, 03:31:15 PM »
Our household income is many times what the OP's is. We have a Waldorf school very near our house. I took a look at their tuition and thought: "WTF???! People have got to be out of their F'ing MINDS! There is no way in HELL I am paying that kind of money to educate my child!!!"

Jack

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #22 on: August 11, 2016, 03:35:33 PM »
What I don't understand is why OP took the lower paying job to begin with, when they clearly can't afford it at this point. It seems to me like people sometimes feel entitled to a job that they love.

I read the sentence where the OP considers working "in coffee" to be some kind aspirational career (and barista as something other than a dead-end job???), shook my head and sighed, and moved on. I can only assume Seattle is weird in ways I can't begin to understand.

[MOD NOTE: This thread has been flagged for several different response posts denigrating the OP's choice.  Just because you can't see a future "in coffee" doesn't mean the OP can't grow a business.  Let's have some manners, here.  Criticize, if you wish, but save the hyperbole and insult.]
« Last Edit: August 12, 2016, 12:38:10 PM by FrugalToque »

Midwest

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #23 on: August 11, 2016, 03:58:28 PM »
What do you see your future prospects as?  You quit a higher paying job for a lower one.  You need more income.

Why the private kindergarten?

Why do you need to live in a HCOL for low wages?

redbird

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #24 on: August 11, 2016, 04:15:08 PM »
I'm going to ignore your expenses, because others are really discussing those and have very valid points.

Instead, I'm going to talk about other things. You seem to have 3 major financial goals in life:

1) Become financially independent one day
2) To own a house
3) To maybe start your own coffee shop business

I don't think you have the tools for that right now. You don't say what your education level is or what your previous job/career was. But for your goals, you need these things:

1) Money. Starting a business also requires money, so you don't even just need it for becoming FI or buying a house or even just to have more breathing room in your life.
2) Credit. If you just claimed bankruptcy 2 years ago, you're not going to be able to get a mortgage or a small business loan right now even if you had more money to your name. You need to, over time, build that financial trustworthyness so banks will loan to you.
3) Education. Running a coffee shop business doesn't just mean you know how to make a good cup of coffee or provide good customer service. Actually serving coffee will probably be a small part of your job if you truly become a business owner in the future.
4) Experience. I'll get more to that later though.

Here are my starting suggestions for getting those things:

- Can you get back into the previous field you were in? I don't care if it's not something you love. You need more income right now. Money is a tool. You need more money to get the things you want.

- I suggest dropping your daughter's schooling and instead use that money to go back to school yourself. Get some sort of business bachelor's degree, or if you have a bachelor's, then get an MBA. Even if your bachelor's isn't in business, you will be able to take some catch-up courses so the college/university will allow you in the MBA program. You don't have to go to school full-time. You could go part-time after work and/or on weekends. The reason I suggest this is it'll give you more education on business matters, but it'll also help you look more promising.

- Use that education to help you get a higher paying job *while you are working towards* building up your own business eventually. You can probably also get some good experience out of it that will give you MORE knowledge you will need when you open up that coffee shop. More income also means it's easier to buy a house and easier to save more money so you can become financially independent. DO NOT see more income as permission to start buying fancy cars and other unnecessary things that'll get you in debt. That would be throwing away a tool, and you don't want that.

This is going to take time. You must be patient. The goals you want to achieve are not achievable for you immediately. It'll take several years minimum working toward it. But it's not impossible.

seattlecyclone

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #25 on: August 11, 2016, 04:50:23 PM »
Agreed with many of the previous commenters.

Use your emergency fund to pay off the credit card. That's what an emergency fund is for. If another emergency happens while your emergency fund has a low balance, you may have to run up a credit card balance again, but in that case you'll be no worse off than you are now. In the more likely case where no emergency happens in the near future, paying off the high-rate credit card debt is much better. Once that debt is gone, you'll have an extra $100/month to put toward savings, forever.

If you want to increase your savings rate, the lowest-hanging fruit is the private kindergarten. Finding a way to increase your income will also be important because your budget looks mostly pretty reasonable.

Market-rate homeownership anywhere close to the city center is probably out of reach for you, unless you increase your income and/or we allow enough new housing to be built that the supply actually gets out ahead of the hordes moving to town. However you may as well apply for subsidized options such as Habitat for Humanity or a community land trust or similar.

Jaguar Paw

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #26 on: August 11, 2016, 05:37:17 PM »
Realistically I'm just commenting because I don't know how to follow without commenting. Plus, we plan on opening a coffee shop too!

Dicey

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #27 on: August 11, 2016, 05:56:26 PM »
Lots of good advice above. I hope you'll heed it. Redbird, my hat's off to your thoughtful reply especially.

My perspective is a little different. I agree that the school has got to go, but for different reasons. Based on the attitude evidenced by your choice of thread title, your previous BK (which you glossed over), your current income, and everything else I can glean from reading this, you are not on track to become wealthy in the near future. Putting your child in a fancy school feels like you are trying to prove something.

In reality, you are doing your child no favors. To start with, you are putting her in a situation where she is a "have-not" among "haves". It sucks to be the kid whose clothes aren't as nice, who doesn't have access to similar extracurriculars, whose parents are always stressed about money. Further, I would argue that spending this much on her education is premature. I'd propose that if one must attend an expensive private school, grades one through three are more essential, certainly not pre-school or kindergarten. Fear not, I am not proposing that either in your specific situation.

It seems more fair for your kid to grow up happy and well adjusted among kids from similar socio-economic background, where she's just like all the other kids. I am not referring in any way to racial equality, I am speaking only of economic parity. It's a helluva lot easier to get through life and the business of growing up if one feels part of the overall common experience and not an outsider looking in.

What happens when you finally admit you're spending too much money on her schooling and she has to start over somewhere else and make a whole new set of friends? It is highly unlikely that she will maintain those rich-kid friendships once she is out of their circle. Sucks, but it's the sad truth.

It makes much more sense to focus on improving your own fortunes than to hobble yourselves with outrageous tuition bills that you can't afford now and will be even less able to afford as she grows and her tuition rates and extracurricular pressures increase. Better for the whole family to focus on the future as a cohesive unit. The carousel of life spins more freely when everything's in balance.

I've saved the strongest words for last. It feels like you're using your child to gain entrance into a world you want to be part of, but cannot afford. Every bit of that feels wrong to me. I hope you will consider putting your child's actual needs ahead of your own perceived ones. Sorry, but this is a forum dedicated to financial freedom, not slavery to other's perceptions.

Noodle

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #28 on: August 11, 2016, 07:03:07 PM »
Part of the issue with earning more money may be that the low rent is tied to income of a certain level. Since Seattle rents are sky-high, especially in neighborhood that are most friendly to being car-free, I am guessing OP and his wife would have to have a pretty significant income jump to pay free-market rents and then come out ahead. They need to do a lot of number-crunching to figure out how the money works best.

I agree, however, that more thought needs to be given to family goals here. What do you want most--to live in Seattle, to give your child an expensive education, to buy a house, to start your business, to have a job you love, to have a more solid benefits/time-off situation? Other posters are right--improving your position through Mustachianism is possible at any level but the big goals can be tough to achieve on a small income and multiple big goals are even tougher. Maybe it would make most sense to learn the business in Seattle but move somewhere smaller to start your own business--less competition, cheaper rents and property, etc. I do think you can achieve ONE goal, maybe more, but not all of them.

Some posters here criticize early childhood education in ways that I don't usually agree with, but I think you have to put serious thought into that tuition cost. People give the Seattle Public Schools a lot of grief, and it does vary by neighborhood, but in general the public schools are pretty decent (having moved to a city where the schools are REALLY doing a lot of heavy lifting, I roll my eyes at Seattle public school hysteria)

DavidDoes

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #29 on: August 11, 2016, 11:21:06 PM »
Hey guys! First of all, thank you all so much for your comments and advice. There's a lot of you, but I'll try to address all of the topics here.

- Waldorf

This is actually much more affordable than preschool/daycare, and goes from 8 AM to 3 PM, rather than 11 AM to 2:30 PM, or what-have-you. Public school is out of the question this year because we told her that she would be going to Waldorf for another year. We've talked to her about it and we're not sure how to make the conversation not about money. Also, we would owe 50% of the tuition at this point if we cancelled ($4,160 total). I'm sure we could barter that out though, considering we are receiving income-based financial aid. I will talk to my wife again about having this conversation. However, I'm unsure what would happen with public - I didn't hear back from admissions after submitting the paperwork months ago, and I haven't been able to get a hold of anyone.

Also, we've moved since we submitted paperwork to the school district. We moved out of one school zone and into another. The one we used to live in goes from 7:55 to 2:05. The one we're in now goes from 9:45 to 3:45. If she were to attend the previous zone, our work schedules would have to change. This is most likely doable, but not without painful navigation, but more on that later.

- Previous Job

I left my previous field (which I was actually quite good at, receiving three promotions in three years, going from $12/hr to $22/hr) due to stress. In my most recent position as supervisor, the expectations were too damn high. I was overworked, disrespected, and I was unhappy to the point where I was considering seeing a professional. While I did have healthcare, retirement, and a huge savings, in the end it was not worth it. I understand that this could change depending on the employer, but I saw this as my opportunity to do something I've wanted to do for some time.

I am working on my photography to try to make it a side income, but it's a far reach. The field leaves me wanting more equipment all the time, and we all know that's not something I should do.

I have actually been working on learning coding at home, with the aspirations to do some app development for iOS and Android, or even become a web developer (which happens to be growing by 27% according to the BLS). Many of my customers are web or back-end developers and they've all spoken about how you don't need a formal education to succeed. About half of my customers are self-taught.

- Buying a House

I only mentioned this because the House always seems to be a measure of financial independence. And rightly so – with no mortgage or rent, that eliminates ~30% of your expenses.

- Amazon / Spotify / Adobe CC

I just went over our Amazon purchases, and we've been pretty darn good about it. We haven't purchased any books unless we couldn't get them from our super expansive library system (so we've purchased only a few books in the last couple of years, which were cookbooks). What we do buy a lot of is pet food, coffee filters, and the like. And yes, I do check out other websites and local places to make sure I'm not paying for convenience. Recently, I actually found that PetFlow and Chewy have our pet food for cheaper, so I switched to them (went with Chewy first for discount on first three orders, now I'm using PetFlow for discount on first three orders, then will switch back to Chewy, as it's $2 cheaper).

Spotify is mostly for work purposes, and because the commercials are always so dang loud! There's actually an app for Mac that will silence advertisements on Spotify. I will discuss with my wife about ditching this.

- Discover Card

The total balance was $2,000 at 0%. I feel like an idiot for not paying this off already, but it's been some time since we had debt, I completely forgot about getting rid of debt. (Don't laugh!) We only owe $800. I'll tell my bank to send a check for the remaining balance tomorrow!

- Coffee

One poster made mockery of working in coffee. What's wrong with that? Are you better because you have some sort of important job? Okay...

Anyways, I really enjoy working in coffee. In fact, this week I was offered a position with two different employers, both of which would be better financially and for my career in coffee and my workplace happiness. I went and worked a couple of short shifts at one, and tomorrow I am letting them know that I've chosen the other establishment, which happens to be the same place that my wife works.

My wife and I will be working together. They have already made accommodations around our availabilities so that there's no lapse, as they know we have a daughter. They just started offering health/vision/dental/401k, which are all pretty darn good (comparable to what I go from my $22/hr full time job), especially for "just a coffee job". This employer actually works with street involved youth, training them to become successful members of the workforce. So, still think coffee isn't a career worth pursuing? Beyond that, they purchase coffee direct from the farmers, ensuring they're getting paid at least 2x what they would if they were to use the market. I could go on forever about what I love about the coffee community...

- Seattle

We actually don't know that we want to stay in Seattle forever, or if it's where we want our future business to be. We feel it would do well here, but we also lived in nearby Tacoma for a year, which is much more affordable, has room for coffee shops, and is slated to be one of the fastest growing cities in America. We still talk about missing Tacoma. So, no, Seattle is definitely not the end-all be-all for us. :) However, with what we're doing right now, it's definitely where we should be, being car-free, in coffee, etc.


Thanks again everyone!

lhamo

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #30 on: August 11, 2016, 11:58:29 PM »
The move actually works in your favor in terms of school options/schedules Your daughter should have a guaranteed seat in your new reference school. Get your paperwork in for enrollment in the new school asap. See if the Waldorf school has a waiting list. If they do they will probably not charge you. In any event follow up with SPS asap to at least get your daughter enrolled, preferably before August 15 which is the wait list cutoff date this year. I think they still have to accept her in the reference school, but better to meet the deadline.

You are not doing your young child any review by keeping her in a school you can't really afford. She is five. She will be fine.

kenaces

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #31 on: August 12, 2016, 12:21:37 AM »
wow - so much advice in this thread so I don't have much to add but you guys are missing one factor - they must be getting great coffee for free!

David do you have a suggestion for good Sumatra bean? or something similar?

cloudsail

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #32 on: August 12, 2016, 02:15:16 AM »
You are to be commended for discussing life choices with your young daughter, and she sounds like a precocious child, but do keep in mind she is only five, so the decision should ultimately be yours and your wife's. And why can't it be about money? If she can understand discussions about her schooling she can understand money. From as far back as I can remember I always knew that my parents were not wealthy and therefore we could not afford things like expensive toys, fancy vacations, elite schools, etc.

Playing with Fire UK

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #33 on: August 12, 2016, 02:16:45 AM »
You are allowing a child to make a massive financial decision for you. This is not mandatory. As a parent, you are allowed to tell your child that they will be starting at public school right now.

Young children do not know what is best for them. What would you say if your child was asking for a tattoo gun? Assume that they know best or that you know best?

ShoulderThingThatGoesUp

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #34 on: August 12, 2016, 02:32:06 AM »
If this career is what you are going to do no matter what, I think you ought to leave Seattle. You're only ever going to be a little fish in a huge pond there.

boarder42

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #35 on: August 12, 2016, 03:29:00 AM »
I don't even understand what you mean by " working in coffee". Are you trying to not say you manage a coffee shop wth does that even mean.

Paul der Krake

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #36 on: August 12, 2016, 05:56:43 AM »
You are allowing a child to make a massive financial decision for you. This is not mandatory. As a parent, you are allowed to tell your child that they will be starting at public school right now.

Young children do not know what is best for them. What would you say if your child was asking for a tattoo gun? Assume that they know best or that you know best?
A million times this. Heck, my parents didn't ask us kids our opinions on which country to live in, let alone choose our schools. My youngest sister was dropped not once, but twice, at age 3 and 7, in a foreign schooling system where she didn't even speak the language. School is school, you go where you're told. You make new friends.

Children are much more resilient than they are given credit for. Shielding them from having to switch schools *in the same city* does not do them any favors.

boarder42

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #37 on: August 12, 2016, 06:02:34 AM »
You are allowing a child to make a massive financial decision for you. This is not mandatory. As a parent, you are allowed to tell your child that they will be starting at public school right now.

Young children do not know what is best for them. What would you say if your child was asking for a tattoo gun? Assume that they know best or that you know best?
A million times this. Heck, my parents didn't ask us kids our opinions on which country to live in, let alone choose our schools. My youngest sister was dropped not once, but twice, at age 3 and 7, in a foreign schooling system where she didn't even speak the language. School is school, you go where you're told. You make new friends.

Children are much more resilient than they are given credit for. Shielding them from having to switch schools *in the same city* does not do them any favors.

the OP is hiding behind his child "making the decision" its obviously his decision as well. he keeps making excuses for it. 

The whole title of this post needs to be changed along with OPs attitude.  it screams i'm not here to learn i'm helpless and dont want to change.

and coffee isnt something you're "in" you can be in law or in medicine but to say you're "in" coffee as a starbucks person who serves coffee to people is like trying to say i'm in buritto's ... really what do you do ... oh i make them at chipotle.  love burritos ... hoping to open a burrito joint one day.

come up with something original.  esp. in your city ... seattle.  coffee shops have to be a dime a dozen. (they are a dime a dozen EVERYWHERE)


[MOD NOTE: This thread has been flagged for several different response posts denigrating the OP's choice.  Just because you can't see a future "in coffee" doesn't mean the OP can't grow a business.  Let's have some manners, here.  Criticize, if you wish, but save the hyperbole and insult.]
« Last Edit: August 12, 2016, 12:39:11 PM by FrugalToque »

SKL-HOU

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #38 on: August 12, 2016, 07:51:44 AM »
Of course, you are free to do what you love, which apparently is "coffee". however, if you want to all these other things like buying a house, opening a coffee shop or anything else that requires money, then you need to make a choice since obviously coffee is not paying you enough. If it was paying you enough, you wouldn't have filed for bankruptcy. I wouldn't give up on the school either if I thought it was better for my child. But then again I also would have sucked it up at the better paying job too. I don't understand how you were disrespected if you were given 3 promotions in 3 years? Honestly from everything you write, you sound like you feel entitled to having a low stress job even it means risking your family's future (same goes for your wife if she has the ability to do something else).

ShoulderThingThatGoesUp

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #39 on: August 12, 2016, 08:05:29 AM »
Serving coffee is a perfectly respectable job. I get upset when we get resumes in and people laugh at the applicant having worked at Wal-Mart in college. There's not a damn thing wrong with serving coffee or working at Wal-Mart.

But - if there's any way to get back into your old field, maybe at a different place that has a culture that suits you better, I think you really need to consider that for the sake of your family. I think that starting a business is not going to happen now that you have a bankruptcy on your record.

I understand keeping your daughter in the school you agreed she could go to for another year. Children are people and promises made to them matter. Trust is important.

You're not making any money on your photography and your Adobe subscription needs to go. You can listen to commercials on Spotify (are you providing the music for your employer? If so, get that reimbursed). You don't need Amazon Prime. You don't need to go out to dinner, and you certainly don't need to go out for coffee when you're both coffee experts!

Jack

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #40 on: August 12, 2016, 08:06:09 AM »
Also, we've moved since we submitted paperwork to the school district. We moved out of one school zone and into another. The one we used to live in goes from 7:55 to 2:05. The one we're in now goes from 9:45 to 3:45. If she were to attend the previous zone, our work schedules would have to change. This is most likely doable, but not without painful navigation, but more on that later.

Your kid goes to the school for which you're zoned. That's how public schools work, by default, almost everywhere. (Allowing a kid to attend some school other than the one for which they are zoned is generally a weird exception.) Therefore, the previous school zone is irrelevant. Public school, in the zone you live in, from 9:45 to 3:45, is your new reality. Deal with it.

I am working on my photography to try to make it a side income, but it's a far reach. The field leaves me wanting more equipment all the time, and we all know that's not something I should do.

I have actually been working on learning coding at home, with the aspirations to do some app development for iOS and Android, or even become a web developer (which happens to be growing by 27% according to the BLS). Many of my customers are web or back-end developers and they've all spoken about how you don't need a formal education to succeed. About half of my customers are self-taught.

LOLWUT?

You want to own a coffee shop, then you want to be a photographer, then you want to be a software developer. MAKE UP YOUR DAMN MIND!

If you want to be a photographer, forget about being a software developer. If you want to be a software developer, ditch all your photography gear right now and focus 100% on that. If you want to run a coffee shop, forget both of the others and go to business school or something.

I just went over our Amazon purchases, and we've been pretty darn good about it. We haven't purchased any books unless we couldn't get them from our super expansive library system (so we've purchased only a few books in the last couple of years, which were cookbooks). What we do buy a lot of is pet food, coffee filters, and the like. And yes, I do check out other websites and local places to make sure I'm not paying for convenience.

Regardless, you don't need Prime. What's wrong with regular 'super-saver' shipping? Nothing, that's what! Not to mention the possibility, however quaint it might seem, that you could actually go to a store to get your pet food.

Spotify is mostly for work purposes

BS. Quit making excuses and ditch it.

I'll tell my bank to send a check for the remaining balance tomorrow!

Good job!

One poster made mockery of working in coffee. What's wrong with that? Are you better because you have some sort of important job? Okay...

There's nothing wrong with working at a coffee shop (as long as you're making enough money at it to support your household without feeling the need to whine about the consequences of your choice). It was really the way you phrased it -- "in coffee" as opposed to "at a coffee shop" -- that was weird. Only in Seattle is coffee an industry unto itself rather than merely a subset of the fast food/restaurant industry.

Midwest

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #41 on: August 12, 2016, 08:06:28 AM »

- Waldorf

This is actually much more affordable than preschool/daycare, and goes from 8 AM to 3 PM, rather than 11 AM to 2:30 PM, or what-have-you. Public school is out of the question this year because we told her that she would be going to Waldorf for another year. We've talked to her about it and we're not sure how to make the conversation not about money. Also, we would owe 50% of the tuition at this point if we cancelled ($4,160 total). I'm sure we could barter that out though, considering we are receiving income-based financial aid. I will talk to my wife again about having this conversation. However, I'm unsure what would happen with public - I didn't hear back from admissions after submitting the paperwork months ago, and I haven't been able to get a hold of anyone.

David:

Why don't you want to make the conversation about money?  Money is the problem here.  We all want the best for our children and ourselves, but their are monetary limitations.  This could be a good lesson for her.


- Previous Job

I left my previous field (which I was actually quite good at, receiving three promotions in three years, going from $12/hr to $22/hr) due to stress. In my most recent position as supervisor, the expectations were too damn high. I was overworked, disrespected, and I was unhappy to the point where I was considering seeing a professional. While I did have healthcare, retirement, and a huge savings, in the end it was not worth it. I understand that this could change depending on the employer, but I saw this as my opportunity to do something I've wanted to do for some time.

You were unhappy in your previous job due to stress.  In addition, you indicate starting a business is something you are considering.  Starting a business is hard and very stressful with a high risk of failure.

If you like your job, that is wonderful.  If you want to retire early (or do more than subsist), you need to increase your income and cut your expenses.  Increasing income will almost certainly involve more stress at work.  Cutting your expenses should be easy and a good opportunity to teach your daughter about money.

Good luck.

zolotiyeruki

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #42 on: August 12, 2016, 09:19:34 AM »
You are to be commended for discussing life choices with your young daughter, and she sounds like a precocious child, but do keep in mind she is only five, so the decision should ultimately be yours and your wife's. And why can't it be about money? If she can understand discussions about her schooling she can understand money. From as far back as I can remember I always knew that my parents were not wealthy and therefore we could not afford things like expensive toys, fancy vacations, elite schools, etc.
I can't resist the urge to pile on the Waldorf dog pile.  Five-year-old kids do NOT need fancy pants preschool or kindergarten.

In my mind, this is a perfect opportunity to teach your 5-year-old (and, let's be honest, yourself) some important lessons.  The concept of scarcity.  The concept of trade-offs--you gave up a significant amount of income in order to be happier at work (and therefore at home).  The concept that "you can't have it all."

cj25

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #43 on: August 12, 2016, 09:33:56 AM »
I don't get the whole Waldorf thing.  I mean, she's 5.  My nephew is 5 and just started Kindergarten.  He is a very bright 5 year old, yet he has no idea about types of schools, whether he goes to private, charter, public or if he is even in his zoned school.  Kids do not make the decisions.  You're the adult/parent.  You don't even need to explain why - you have to switch her school and that's it.  At 5, I really doubt they have any concept of the value of money other than it's required to buy stuff - so it doesn't matter whether you make it about money or not.

Can't wait til she wants a pony when she's 7.

economista

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #44 on: August 12, 2016, 09:37:23 AM »
Weighing in on discussing finances with your daughter. She might not be old enough to fully understand money yet, but it is still important for her to know what kind of things you can and cannot afford.  Growing up my parents were divorced and my dad got custody of me when I was nine.  My mom and step-dad lived on welfare, in subsidized housing, and had no concept of financial responsibility.  They always spent every single dollar that came into their hands and once a year bought a whole bunch of nice expensive gadgets and such (earned income tax credit!).  My father ran his own plumbing business and took a salary that was actually less than what my step-dad made (when he was working) but he wasn't willing to apply for any entitlement programs and we simply made do with what little salary he was taking (around $300 per week).  I was always aware of our financial situation and I knew not to ask for unnecessary "things" constantly.  Also, when I got things I really wanted or needed they were a lot more special to me; in general I was a happier child and teenager than my half siblings.  A perfect example that is similar to the Waldorf school is private flute lessons.  I started playing the flute in 4th grade.  Almost everyone I knew who stuck with it started taking private lessons in 5th or 6th grade.  When I asked about lessons my dad sat me down and explained how much they cost and that it would not be in the budget; I would just have to practice more instead.  When we got to high school I was the only one in the 1st row who didn't take private lessons, and I was always 1st chair (if you don't know about music, that is a big deal).  I grew up very well adjusted, even though I didn't go to private schools and I knew my family's dismal financial situation, and I even knew that I would not be receiving a cent from my parents for college.  I ended up going to a very expensive private university, receiving their maximum scholarships for undergrad and graduate school.  I worked my way through to pay for my living expenses and I am now a very successful economist.  My half siblings who grew up with my mom and never learned about finances or living within their means are not so lucky.  They didn't go to college, don't understand the concept of hard work, and are simply continuing the cycle of poverty.

DavidDoes

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #45 on: August 12, 2016, 10:33:38 AM »
- Waldorf

There's not much to understand, really. She was not old enough to attend kindergarten this last school year, and Waldorf – with tuition assistance – was more than $400 cheaper than daycare, and was only $100 more than what we would have had to pay for Seattle Schools' preschool, which was in a downtown building with not much outside time. We made our decision for that year. We've been flip-flopping about this coming year, which is obviously not a good thing. It's hurt us financially, and that's one of the reasons I'm laying it all out on the table here for you folks!

Taking my kiddo to camp right now. When I get home, I'll call the admissions office for Seattle Schools. If I remember right, they're not in-office until September. I put it on my calendar but can't seem to find it now. "/

- Coffee

Actually, working in coffee is a thing. And it's not only in Seattle. Look up the SCAA, for instance. There are regional, national, and international competitions. My wife's employer paid for her to go to competition in Kansas City last year. Beyond that, there are so many different things that everyone is doing. It's never just coffee.

You don't have to understand it. But you also don't need to be an imbecile about it... MOD NOTE: It's tough when you are being criticised, try and take the higher road

---

Thank you to everyone who is understanding and providing constructive feedback. I'll try to have a conversation with my little family this evening. Didn't get much time last night. :(
« Last Edit: August 13, 2016, 07:46:13 PM by swick »

boarder42

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #46 on: August 12, 2016, 10:38:33 AM »
you're taking your daughter to CAMP!?!?!?!?! is it FREE if so great move if not ... you cant afford this luxury.

honeybbq

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #47 on: August 12, 2016, 10:56:51 AM »
Seattleite here.

I'll echo what most of the others have said. You have a lot of wants, a lot of expenses, and not a lot of income. Something needs to compromise. You guys are very young. I don't deny that you'll want more to your existence, but you may need to work 2 jobs or a less than wonderful job for a while to get some things paid off and start getting ahead.

I will say, Chewy.com will deliver dog/cat food for free if it's over $49 I think. I use them and I'm very happy with their service and their autoship reminders.


ShoulderThingThatGoesUp

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #48 on: August 12, 2016, 10:59:35 AM »
Actually, working in coffee is a thing. And it's not only in Seattle. Look up the SCAA, for instance. There are regional, national, and international competitions. My wife's employer paid for her to go to competition in Kansas City last year. Beyond that, there are so many different things that everyone is doing. It's never just coffee.

You don't have to understand it. But you also don't need to be an imbecile about it...

I hear you, and I don't doubt you and your wife are good at your jobs, but I think it's understandable that making $24,000 a year "in" coffee sounds like a really fancy way to describe what's basically an entry-level food-service position.

Adding something constructive here, have you read MMM's 50 Jobs Over $50k Without a Degree lists? Most of them are attainable and surely at least one interests you.
« Last Edit: August 12, 2016, 11:09:50 AM by ShoulderThingThatGoesUp »

historienne

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Re: We may never reach that financial freedom. Here's why. [Case Study]
« Reply #49 on: August 12, 2016, 11:06:06 AM »
you're taking your daughter to CAMP!?!?!?!?! is it FREE if so great move if not ... you cant afford this luxury.

Well, they both work.  In these circumstances, I'd assume that "camp" is basically a summer daycare that you pay for by the week.  Every working family I know sense their kids to those kind of summer camps once they hit elementary school age.