I thought I was living a very frugal lifestyle by doing things like taking the train to work or not having a gym membership. When actually adding up our expenses though I was blown away by how much we spend. There are some pretty obvious areas that we are going to work on but I would love this forum’s insight on where we should focus our efforts.
Thank you so so much for any advice you can give, I am a FIRE noob and I bow to the expertise that I have seen in this forum.
Married, one child, single income. Age 32. Live in the a suburb of Oakland, CA in the Bay Area. 2018 Finances below.
($) amounts are dollars per month. (%) is percent of After Tax income.
Gross Salary/Wages: $12,250/month ($147,000/year)Pre-tax deductions:
401k - $550 - 5.8%
Health/Dental/Vision Insurance - $440 – 4.6%
AGI: $11,260/month
Taxes: $2,525/month – (Yearly – $30,300 - $16,000 Federal, 4,300 State, 10,000 Social Security and Medicare)
After-tax income: $9,725/month - 100%Take home monthly income: $8735
Monthly Spending: $8000Mortgage + Escrow: $2400/month + $200/month extra principal - 27.4%
Principal: $871 ($671 + $200)
Interest: $1,152
Escrow(Property Tax and Home Insurance): $576
Vacation: $678 – 7.1% - A couple trips to Colorado and 1 week long trip to Northern CA
Groceries: $981 – 10.1% - Used Amazon Fresh for a few months during a hectic period
Amazon: $573 – 6.1% - Mostly household and baby items
Contractors: $555 – 5.8% - New wall heater, hot water heater, sand and repaint bathroom
Restaurants: $412 – 4.3% - Mostly getting lunch takeout
Donations: $361 – 3.8%
Cars: $337 – 3.5% – Two cars, no payments. Drive to train station then commute by train.
$171 – 52% – Gas
$101 – 31% – Insurance
$25 – 8%– Registration
$34 – 10% – Rental Cars on Vacation
Clothes: $182 – 1.9%
Childcare: $181 - 1.9% - Babysitter once a week to allow Stay at home mom to do chores/rest
Media/Memberships: $122 – 1.2% - Spotify, Hulu, Patron, Zoo, Yoga, eBooks, Audible, Volleyball
Gas/Electric: $109 – 1.2%
Internet: $74 – 0.8%
Garbage/Water: $63 – 0.7%
Transit: $76 – 0.8%
Parties: $55 – 0.6%
Contacts: $50 – 0.5%
Misc: $147 – 1.5% - Vet, Pedicures, Life Insurance,
Total non-retirement savings: $1200 – 12.6%
Total savings (adding in 401k): $1750% - 18.4%Assets:
401k: $40,000
Vanguard Brokerage: $90,000
Vanguard Traditional IRA: $5000
Vanguard Roth IRA: $5000
Total Investments: $140,000House: $70,000 Equity, $380,000 Loan. 27 years left
Here are some changes we are already looking to make for 2019:
- Do all house work possible ourselves
- Limit lunch take-out to 2x/week
- Bike instead of drive to train station every day, even in the rain.
- Use Childcare FSA for babysitter payments
- Implement 72 hour rule for Amazon purchases
- Cook way more
- No more Amazon Fresh. Use Costco as much as possible for food.
- Put maximum amount from Brokerage account into Roth IRA.
- Increase 401k savings to $19,000 maximum and attempt Mega-Backdoor Roth with $8,000 after-tax 401k contributions
Additional ideas we want to try out from suggestions in this thread:
- Check alternative grocery options like ethic markets, Grocery Outlet and read $200 grocery bill thread
- Get take out lunch 0x per week. Meal planning
- Travel Hack for vacations
- Buy all clothes at thrift stores or with thredup.com
- Price compare auto and home insurance
- Move down to 1 car
- Find out what Amazon spending is and reduce it. Thrift stores may help here too.
- Utilize local Buy Nothing groups
- Nix vision insurance
- Use local library for media and books[\li]
Are we in a good position to retire early? I really would love to be FI in 20 years but I worry we are not on the right track especially since we’re planning to add another kid soon.
Thank you again!!