Author Topic: Bay Area family new to FIRE. Punchisize my face! How can we save more?  (Read 6267 times)

Stamag

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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: $8000
Mortgage + 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: $140,000

House: $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!!

« Last Edit: March 01, 2019, 11:32:47 AM by Stamag »

ysette9

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #1 on: February 20, 2019, 05:27:00 PM »
Let’s see: some rough back-of-the-napkin calculations.

I don’t count principal as part of savings. It does increase your net worth but unless you plan on selling your house and living in a tent by the railroad tracks, that money is not available to be invested to produce income in retirement.

You have $140k in investments and we saving $1750/month. Assuming a 7% interest rate I am getting that you will need to work for around another 25 years.

Your groceries are rather high. I’d focus there along with meal planning so you aren’t eating out for lunch so much. Does your partner plan on returning to some kind of paid work once your kiddo gets older? The last thought I have is that as long as you aren’t maxing our your 401k space you shouldn’t be investing in taxable accounts because you are leaving that tax savings on the table.

Freedomin5

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #2 on: February 20, 2019, 05:47:34 PM »
1. Look at the Investment Order thread: https://forum.mrmoneymustache.com/investor-alley/investment-order/

2. Check out fellow poster MDM’s case study spreadsheet to calculate time to FI: https://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/

3. Fellow poster COEE’s FI calculators are also fun to use: https://engaging-data.com/freedom-calculator/#calendarupdate

4. There are also other FI calculators that are out there to help you figure out whether you can retire in 20 years.

Now for the face punches.

The low hanging fruit are:

1. all the subscriptions/memberships. Cut the media stuff down to one or two subscriptions.
2. Groceries/eating out: check out the “under $200 grocery bill” thread for ideas
3. Amazon: try thrifting - CA has some amazing thrift stores - I used to love going to Crossroads Trading
4. Clothing: thrift stores
5. Vacation: anyway to travel hack? How are you spending over $8000 per year for two somewhat local trips? We fly halfway around the world each year and spend less than that (also a family of three)
6. Contractors: I’m assuming this is not a consistent line item?

Being a SAHM can be tiring, so make sure you stock your freezer with easy dinners. For example, I will make four or five pizzas at the same time and freeze several of them. I also have several other homemade frozen dinners for those hectic days when I don’t have time or don’t feel like cooking.

MrThatsDifferent

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #3 on: February 20, 2019, 05:51:49 PM »
You have no HSA or 529. You have a lot of lifestyle inflation expenses which seem excessive for one income, even one as good as yours. Will your wife not work at all in those 20 years?

Your current yearly expenses are $96k and you’ll need $2.4m in order to sustain that. You currently have $140k in liquid assets. You’re either going to have to radically decrease expenses or increase income to get to that lump sum if you want to FIRE in 20 years.

lhamo

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #4 on: February 20, 2019, 07:00:57 PM »
How do the car expenses break down?  $300+/month seems very high given minimal commute and SAHP.

Another Reader

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #5 on: February 20, 2019, 08:31:26 PM »
Groceries are insane but Costco is not cheap for groceries.  You should have a Sprouts nearby.  Sprouts has excellent sales on boneless, skinless chicken parts.  Decent produce and prices as well.  Safeway has good sales on some things.  Buy their bread on sale and freeze it.  Use the circular and the Just 4 You app.  You have a lot of ethnic grocers in Oakland, both Asian and Hispanic.  Some will have good produce prices and if you do ethnic cooking, they offer a lot of spices and other ingredients at low prices.  The Instant Pot is your friend for fast, tasty meals.

Amazon is rarely the best place to buy stuff.  It's taken the place of Target for impulse spending.  Just stay away.  Learn to travel hack if you want to take a vacation.  Cheap flights, credit card bonuses, and AirBNB are your best tools.  Cut the subscriptions to the one or two that you actually use.  Walmart, Target, and Costco for cleaning supplies and paper products.  Watch the sales.

Number one thing you should change?  Pay yourself first.  Max out that 401 (k) and fund IRA's for both of you.  Fund all your savings and investment accounts, then spend what's left. 

Tuskalusa

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #6 on: February 20, 2019, 08:54:44 PM »
Agree the you should fund ROTH IRAs for both of you. You can still do backdoir ROTHs for 2018. Do that for both of you ASAP. And then set a plan for your 2019 contributions. I’d do this before the mega backdoor Roth. Great job on your plans to max out your 401k this year.

To fund some of these other investments, I think you could release those extra mortgage payments.

Great changes to start!


Stamag

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #7 on: February 20, 2019, 10:50:19 PM »
Already so much great advice, thank you!!

I updated the OP to:
1. Factor out principal from savings and assets.
2. Show car expenses breakdown (copied here for @lhamo)
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

@Freedomin5 I will look into those resources thanks!

@MrThatsDifferent You're right we don't have an HSA.  Unfortunately we're locked in an HMO for next year but 2020 I'm going to look into more affordable healthcare coverage.  As far as the 529 I've been reading that Roth IRA has a lot of the same benefits but is more flexible, do you prefer a 529?

@Tuskalusa We just funded both of our ROTH IRAs for the max amount for 2018! I like the idea to release the extra mortgage payments for now.

Some big things I'm hearing echoing are:
   Reduce grocery costs, Costco may not be the end all answer
   Vacation, look into travel hacking
   Cut out unnecessary memberships
   Pay yourself first!

Keep them coming, thanks!

Linea_Norway

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #8 on: February 21, 2019, 02:01:37 AM »
Lunches: cut out and bring your own. If you ever need to improvise, then buy lunch at a grocery store, instead of more expensive alternatives. The same is on a long car trip. Bring your own food, don't eat at diners or petrol stations.

If you can bike to the station, then do so and sell 1 car.

Can you switch to a vacation address where you don't need to rent a car? Maybe it is a lot cheaper to take a bus from the airport to the vacation address than renting a car for a week. Have you looked into AirBnB or likewise? What is your eating out schedule during a vacation? Eating out 3 meals a day? Can you provide your own breakfast and lunch and only eat out for dinner? You also don't need to have a 3 course dinner every day. As you have a child, have you looked into camping? Children usually find that fun.

Clothing: For the adults, just stop buying clothes because you fancy something new. Wear the same clothes as long as they last (for many years) and then replace that one item. For the child: look at second hand alternatives. In general, only buy stuff that is on sale.

Spouse: I also think the spouse should start working when the circumstances are appropriate for it.

Contractors: Painting is something you can do yourself. Don't hire people for the easy jobs. For more difficult jobs, you might check on the internet whether it is something you can learn to do yourself. Learning new skills like that is usually a good investment.

Are you living in an economic house or in the biggest/most expensive house you can "afford" (with a mortgage)? I know it is expensive to switch homes, but you might look at whether you are not paying more than you need to.
« Last Edit: February 21, 2019, 03:59:15 AM by Linda_Norway »

MrThatsDifferent

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #9 on: February 21, 2019, 02:16:18 AM »
Already so much great advice, thank you!!

I updated the OP to:
1. Factor out principal from savings and assets.
2. Show car expenses breakdown (copied here for @lhamo)
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

@Freedomin5 I will look into those resources thanks!

@MrThatsDifferent You're right we don't have an HSA.  Unfortunately we're locked in an HMO for next year but 2020 I'm going to look into more affordable healthcare coverage.  As far as the 529 I've been reading that Roth IRA has a lot of the same benefits but is more flexible, do you prefer a 529?

@Tuskalusa We just funded both of our ROTH IRAs for the max amount for 2018! I like the idea to release the extra mortgage payments for now.

Some big things I'm hearing echoing are:
   Reduce grocery costs, Costco may not be the end all answer
   Vacation, look into travel hacking
   Cut out unnecessary memberships
   Pay yourself first!

Keep them coming, thanks!

I don’t have an opinion on which is better. I was thinking that in addition to the $2.4m thst you’ll need, you’ll also need enough for your 2 kids’ education.

I’m still not sure how you get there in your timeframe, with those expenses and one income? Have you read MMM’s most popular blog posts? I highly recommend reading as many as you can.

lhamo

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #10 on: February 21, 2019, 08:39:16 AM »
That's an awful lot spent on gas for someone who has primarily a public transit commute (in a bikable area).  Second the suggestion of going down to one car.  And limiting the amount of random driving around that is being done by SAHP/on weekends.  Try to have at least a couple of "no-drive" weekend days per month (one a week would be better).

fuzzy math

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #11 on: February 21, 2019, 04:18:31 PM »
You keep really detailed records of your spending which is great!
One thing I didn't see listed that you reference is a housekeeper. Do you intend to spend as much on home repairs every year?

Your wife is eligible for a spousal (traditional) IRA since she doesn't have income. You should be doing that for 2018 to get your total income down since you pay a lot in taxes. You should still max a Roth IRA.

I don't think you can use a FSA to pay a babysitter unless they give you a federal tax ID so you can report their wages.

bacchi

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #12 on: February 21, 2019, 06:00:46 PM »
Go through your Amazon order list and see exactly what you're buying.

Lower your food costs: $250
Lower your Amazon shopping: $250
Lower your vacation costs: $150
Bring your lunch to work: $200

Total savings: $850

Reduce your driving (1200+ miles/month and you commute by train. Where are you driving?), learn to paint and DIY some things around the house, and stop buying so many new clothes (unless you're an attorney?) and you can save another $150/month or so.


Stamag

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #13 on: February 21, 2019, 10:44:47 PM »
Thank you again all of you wonderful people for reading my post and offering more advice!  I do feel very lucky to get this advice from who I consider to be experts for free!  It's much appreciated.  Here are some responses to your questions:

Can you switch to a vacation address where you don't need to rent a car? Maybe it is a lot cheaper to take a bus from the airport to the vacation address than renting a car for a week. Have you looked into AirBnB or likewise? What is your eating out schedule during a vacation? Eating out 3 meals a day? Can you provide your own breakfast and lunch and only eat out for dinner? You also don't need to have a 3 course dinner every day. As you have a child, have you looked into camping? Children usually find that fun.
You're right, during vacation we were eating out 3 meals a day.  I really like the idea to cook more of our own meals during vacation.  I am looking into camping for our next vacation!
Contractors: Painting is something you can do yourself. Don't hire people for the easy jobs. For more difficult jobs, you might check on the internet whether it is something you can learn to do yourself. Learning new skills like that is usually a good investment.
One thing I didn't see listed that you reference is a housekeeper. Do you intend to spend as much on home repairs every year?
I want to to all the home repairs/improvements I can this year myself, we've already fixed the dishwasher and patched/painted holes in the wall. But we are looking to get windows replaced and electrical box replaced which seem like things we'll need to hire for, is that right?
Are you living in an economic house or in the biggest/most expensive house you can "afford" (with a mortgage)? I know it is expensive to switch homes, but you might look at whether you are not paying more than you need to.
Though our mortgage is high we live in a 2 bed 1 bath house in a a relatively affordable neighborhood in the Bay Area.


Your wife is eligible for a spousal (traditional) IRA since she doesn't have income. You should be doing that for 2018 to get your total income down since you pay a lot in taxes. You should still max a Roth IRA.

I don't think you can use a FSA to pay a babysitter unless they give you a federal tax ID so you can report their wages.
We just opened a 2018 Roth IRA for the SAHM and put the max $5500 in it.  Our income is over the limit to deduct Traditional IRA contributions (Married filing jointly ≥ $121,000 -- No deduction allowed)
I opened a Childcare FSA this year and have already successfully been reimbursed showing paypal receipts paying the babysitter.  We only have her address, no SSN.  Does that indicate we're ok or are we in trouble of getting burned while doing taxes next year?

@bacchi
1200 miles/month does seem like waaay more than we drive but I confirmed your calculations.  I'm going to try and track the gas mileage in my car and make sure it's what I think it is.
Next thing I need to do is find out exactly what we're spending on Amazon purchases as you suggested.
« Last Edit: February 21, 2019, 10:53:44 PM by Stamag »

lucylu

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #14 on: February 22, 2019, 03:12:23 AM »
You cannot use a dependent care FSA to pay the babysitter unless your wife is using that time to work at a paid job. "To qualify for either an FSA or the childcare tax credit, both you and your spouse must have earned income. Exception: One of you was a full-time student for five months of the tax year."

You may be audited if you do not show earned income for her in the last tax year, yet have an FSA, so I wouldn't claim this again.

ShoulderThingThatGoesUp

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #15 on: February 22, 2019, 04:43:26 AM »
Takeout lunches should be zero days a week.

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #16 on: February 22, 2019, 05:29:18 AM »
I'm a bit confused as to where you get to $1,750 in savings per month with only $550 - 5.8% going into your 401k.  Paying off your mortgage is great, but you can't create an income stream from your house to live on in retirement unless you plan to sell and downsize or rent out rooms.  At $147k in income, your percentage should be 13% to max out your 401k, 5.8% sounds like a number to get a match not to max.  I'd increase your percentage every month until you get to 13%.  Try 5% and see what happens, then rinse and repeat.  And agree with others to take a hard look at your clothing, groceries and eating out - those are all really low hanging fruit to cut.  There are a ton of threads to lower your groceries.  And I'll add in that Costco is not ideal for lowering grocery costs.  I've been tracking for 7 years and we've lived in three cities in two states in those three years - the year we had a Costco membership was the highest.   The bonus is, the more you cut your expenses, the less you need to save. 

Looks like California does not have a tax break for a 529 plan.  If you have access to a mega backdoor Roth, check out the investment order, I think it's pretty high on the list.  I kick myself pretty frequently for waiting so long to set a mega backdoor Roth up, but I will say the regular calls to Fidelity to transfer over are a pain.
 

Dee18

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #17 on: February 22, 2019, 09:53:42 AM »
Instead of a 72 hour Amazon rule, use a 30 day rule for all purchases except food.  Also, no need to shop new for any baby things.  I used to find baby/toddler clothes and shoes still with the tags on at thrift stores and toys in great shape.

ysette9

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #18 on: February 22, 2019, 10:16:52 AM »
We joined our neighborhood Buy Nothing group on Facebook and that has been great for getting free stuff and being able to borrow tools and whatnot from neighbors. For clothes for me and my girls I almost exclusively use ThredUP, an online consignment store. The kids’ clothes aren’t that great for prices but I have found some amazing deals for myself.

I agree with others that Costco isn’t that great of a deal. We have finally given up our membership. The prices aren’t always better on a per-unit basis and the quantities are so massive that it is easy to over buy. We have a small Bay Area house also so Costco-sized quantities of toilet paper and whatnot just don’t have a place in our limited storage.

fuzzy math

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #19 on: February 22, 2019, 02:43:39 PM »
So I think you are incorrect when you are quoting the $121k limit. my family income is above that threshold and I'm pretty sure we've used a spousal traditional IRA.  you would not be eligible but your wife would. I'm not a CPA though but here's what I read:

Modified AGI limit for traditional IRA contributions. For 2018, if you are covered by a retirement plan at work, (BOTH OF YOU) your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

More than $101,000 but less than $121,000 for a married couple filing a joint return or a qualifying widow(er),
More than $63,000 but less than $73,000 for a single individual or head of household, or
Less than $10,000 for a married individual filing a separate return.
 

Modified AGI limit for certain married individuals.

If you are married and your spouse is covered by a retirement plan at work and you aren’t and you live with your spouse or file a joint return, your deduction is phased out if your modified AGI is more than $189,000 (up from $186,000 for 2017) but less than $199,000 (up from $196,000 for 2017). If your modified AGI is $199,000 or more, you can’t take a deduction for contributions to a traditional IRA."

https://www.irs.gov/publications/p590a#en_US_2014_publink1000230412
« Last Edit: February 22, 2019, 02:45:11 PM by fuzzy math »

CanuckExpat

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #20 on: February 22, 2019, 09:12:21 PM »
I think you've gotten a lot of good suggestions on cutting expenses already (really, almost everything can be cut). Hopefully you have already reduced your subscriptions or brought them to zero, imposed an Amazon shopping moratorium, and have a plan to go down to one car :)

Have you updated your 401k withholding so you will max out $18k for the year already?
What is the interest rate on your mortgage?

How old is your child, did your wife do any paid work before you had a child? If her earning potential is anywhere near yours, you really need to consider the opportunity cost of her not working, even after accounting for child care. Is it a conscious decision?

Linea_Norway

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #21 on: February 23, 2019, 11:57:43 AM »
Yes, replacing windows and an electric box sounds like something you hire a professional for. Exception for experienced amateurs who read up on all the building rules and only if you are allowed to do the electrical stuff yourself.

mavendrill

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #22 on: February 24, 2019, 06:18:01 AM »
This is very small potatoes compared to excellent suggestions in the but, you mention vision insurance. Presumably this is tied to health insurance so you are stuck for the year.  But vision insurance is an extremely bad bargain.  There is nothing to insure against: people who need their vision corrected all need (nearly) the same thing.  Unless you are an extreme case, or your employer is kicking in a huge subsidy, going without vision insurance generally saves money (plus it gives you incentives to start asking about vision costs and negotiating those down, which gives more savings).

feelingroovy

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #23 on: February 24, 2019, 07:58:08 AM »
Just wanted to ask how on board your wife is. As a SAHP she has a lot of power to make big changes. If she is on board, reading The Tightwad Gazette would be very inspiring. It's a bit out of date in the specific details but the mindset and general approach of running a household in a resourceful way are still spot on.

And I want to reemphasize that you can't use that FSA for a babysitter unless your wife is earning income. And yes, you will need the baby sitter's SSN.

Overall, though, it looks like you are making the right changes.

Dicey

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #24 on: February 24, 2019, 09:51:16 AM »
Ditching the vision insurance and buying your glasses at Costco could justify the entire membership fee. The problem with Costco is you have to be vigilant about what you buy. The prices for ingredients are excellent, but the grab and go, prepared meals and luxury items add up quickly, especially for a small family. I keep a list on my phone, check off what I need to buy before I leave home, and that's all I put in my cart.

I also shop first at the 99 Cents Only Store and Grocery Outlet before I set foot into Costco. There should be stores near you. Lhamo's suggestions about local ethnic stores are also right on, as is the Amy D suggestion. Buy this copy:

https://www.barnesandnoble.com/p/the-complete-tightwad-gazette-amy-dacyczyn/1111619571/2661257748923?st=PLA&sid=BNB_New+Marketplace+Shopping+Books&sourceId=PLAGoNA&dpid=tdtve346c&2sid=Google_t&gclid=CjwKCAiAnsnjBRB6EiwATkM1XqHPw_f1SoYU5lOQQD6e87-FFctMhxIFmOirDr-C4xzlfI81UGnGFxoCqGwQAvD_BwE

You can get it free from the library, but I like a copy that I can read over and over and over. Even though it's laughably outdated in parts, it's also endlessly inspiring.

whywork

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #25 on: February 24, 2019, 03:01:26 PM »
Let's see. You have 210K current networth and save ~2156$ per month. At 7% ROI, your networth will be ~2M in 20 years when you can FIRE

Now if you stretch and live more frugally, you can add 1600$ per month. Then it will take 16 years for ~2M.

Is that extra frugality worth the 4 years earlier FIRE? Honestly don't think so. Just enjoy your life and take it as it goes instead of focusing on FIRE. It is is just too far away to be thinking about it.

Your best bets would be to get your wife earning or you finding something that pays higher. I'm in bay area and my wife doesn't work either. Single income life is hard. My thread here: https://forum.mrmoneymustache.com/case-studies/reader-case-study-selfish-fire-vs-fire-for-kids/msg2233273/#msg2233273

MrThatsDifferent

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #26 on: February 24, 2019, 03:20:16 PM »
Let's see. You have 210K current networth and save ~2156$ per month. At 7% ROI, your networth will be ~2M in 20 years when you can FIRE

Now if you stretch and live more frugally, you can add 1600$ per month. Then it will take 16 years for ~2M.

Is that extra frugality worth the 4 years earlier FIRE? Honestly don't think so. Just enjoy your life and take it as it goes instead of focusing on FIRE. It is is just too far away to be thinking about it.

Your best bets would be to get your wife earning or you finding something that pays higher. I'm in bay area and my wife doesn't work either. Single income life is hard. My thread here: https://forum.mrmoneymustache.com/case-studies/reader-case-study-selfish-fire-vs-fire-for-kids/msg2233273/#msg2233273

Whywork, not to derail this, but I followed your link and now curious what plan you’re working on now? Reading that you’re 39 and not expecting to live past 60 is a bummer and invites so many questions. Your situation is different than the OPs as you make twice the amount and have a sizeabke amount already saved. OP is burning through cash. You don’t get time back, so if you can get your money, move and live a quality life, do it. You can always do side contracts, teach or whatever to keep the brain ticking. Make the money and run!

aceyou

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #27 on: February 24, 2019, 07:45:38 PM »

My first post was when I was 32 also, and almost identical household income.  Once the money coming in wasn't suddenly flying right back out, it was all diverting that money to retirement buckets.  Here's some things I did to cut down on spending:

Food/Restaurants 1k/month pre-mmm, 600/month after.
  • Switched to Aldi.  This will save you way more than you think it will, and the quality is far higher than you would imagine.
  • Restaurants limited to 1-2 times/month...things like getting a coffee, quick stop through a drive through...nope!
  • Lunches.  I bought a toaster for $15 from walmart and brought it to work.  Each week I bring a high quality loaf of Seedtastic bread, peanut butter, and jelly to work.  Toast with peanut butter/marmalade is delicious, super simple, and cheap.  There's lots of things like this if you don't like my specific suggestion.  I'm thinking of bringing in a griddle so I can just bring a dozen eggs each week and have 2 eggs and toast for lunch with a half an avocado.  Again, cheap, easy, decently nutritious.
  • Between food, restaurants, and amazing, you are a shade under 2k for just those.  I see no reason that needs to be over 1k.  We probably combine for $750 between groceries/restaurants/amazon, and we have two kids plus an exchange student living with us.  (It took us a full 18 months to reach that new normal without having to track every darn thing, but man is it worth it.)

Housing
  • We refinanced to a 15 year loan because we wanted to FIRE at 48.  Because we did this at 32, we'll have our mortage paid off 1 year before FIRE. Many here disagree with this move(and admittedly math backs them up), this it was a good mental hurdle for my wife and I to know that would be checked off the list before FIRE.  Also, it allows you to pay very little interest each month.
  • Shop for the very best home/auto insurance.  We cut our insurance in HALF by calling around.  Actually, by more than that...apparently we were way overpaying.


Goldielocks

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #28 on: February 24, 2019, 10:25:35 PM »
It's been a while, but your numbers look a lot like mine when I lived in the Bay Area (Dublin / Pleasanton).

The difference was that we were a family of 4, (kids aged 5 and 7) but we also had a single income, about the same.   

Similar income, more or less, and similar housing costs.   The difference is that this was quite a few year ago, but I also paid a lot higher taxes as we were renting, so no mortgage deduction.  It should be more or less a wash.

What I see:

1)  Why single income?  When will tha change.  Bay area with only one kid, so you should optimize your income earning with two people and pay for child care.  All of that "choice" of SAHP really is intended for people that choose to live in Stockton and commute, or to live in a lower cost area... My exception to this was that my DH had a limited work visa and then was quite ill for a year.  What is your reason?

2)  Do you only have one car?   Can you transit or ride a bike?  I rode a bike 10miles each way and the weather is fantastic.  I did put an electric assist on mine because of all the hills but the weather was awesome for cycling.  Year 2, I bought at 150 cc scooter instead of getting a 2nd car, and that was fun, too... and very cheap to run compared to a car.

3) Bag lunch except for that one time a week when you go out with colleagues, and look for weeks where work will pay for this (even working lunches in house).

4)  Groceries -- Really, you can get this a LOT lower.  Start only buying in bulk and cook everything from scratch.  Buy meats and produce that is on the lower end of the spectrum.   It takes a lot, and I was at your level once upon a time, too.   Somehow, now that I am not working full time, I am able to cut my groceries to $600/mo for a family of 4, with teenagers.  Others are much better than me.   Just stop buying anything that is expensive per unit, and packaged. Stop anything whole foods and embrace ethnic markets, Aldi's, etc.

5) $573 at amazon.  Crazy.   Diapers or buying cloth diapers, fine.  Take a look. What did you buy at amazon that could not have waited 3 weeks?  Cut all of that out.

6) Contractors -- unless your house is falling apart, you DO NOT NEED THIS.  Really, truly you don't.   Things to pay for are caulk, new paint occassionally, weather stripping, and utterly broken applicances (and buy used if you can to get nicer models at lower prices).  Hot water heater is good.  Paint, wall heater likely not really needed..  (I am a cruel person about this but it can be a massive sink in the budget for this line item, preventing you from ever getting ahead.   This way my personal pitfall, after too many kid activities).

7) $182 seems like a lot for clothing.  Do you buy at the thrift store for 80% of your clothing?  Why is your clothing wearing out so fast?  Instead, set up two spending accounts, one for you, one for her, for personal spend items.   You can buy your lunches with it, she can buy clothing / baby fun stuff with it.  You both can buy the extra treats from the grocery store with it, too.
8) Child care $181   WTF?  you only have one child, right?  Why don't you take care of junior on saturday mornings and she can have her chore / personal time then?
9)Media -- drop to under $30.   She is at home with kid.   I understand some media is needed.  but ALL the media?
10) Contacts -- look into other types.  Soft monthly / two monthly contacts instead of dailies?  Something else?  Can you wear glasses more often so the contacts last longer? This is $600/year in contacts.  Quite a bit.  Maybe put this into your personal allowance spend budget.

Donations monthly are higher than I used to afford, maybe double.  Otherwise, the remainder looked somewhat what I ended up spending.  (We had less restaurants and more on weekend entertainment with a lot of day trips with the family).

« Last Edit: February 24, 2019, 10:43:13 PM by Goldielocks »

whywork

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #29 on: February 24, 2019, 11:30:14 PM »
Whywork, not to derail this, but I followed your link and now curious what plan you’re working on now? Reading that you’re 39 and not expecting to live past 60 is a bummer and invites so many questions. Your situation is different than the OPs as you make twice the amount and have a sizeabke amount already saved. OP is burning through cash. You don’t get time back, so if you can get your money, move and live a quality life, do it. You can always do side contracts, teach or whatever to keep the brain ticking. Make the money and run!

I am still at the same job, trying to make the money and run as you said. My networth is now 750K, thanks to the markets coming back up. End of 2019, I am looking at 930K and with each year next, 1.1M, 1.4M, 1.7M. Ideally would like to be till then at the current job and stop it at 1.7M (3 years 10 months from now). If, on the other hand I am not able to tolerate it (or i get fired), I will leave and try to find something else. In either case, I will FIRE at 1.7 to 2M. The next two years are crucial for me to keep my job as I will cross the 1M mark after which even a lower pay job should work out for my FIRE plans
« Last Edit: February 24, 2019, 11:32:44 PM by whywork »

Dicey

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #30 on: February 24, 2019, 11:51:55 PM »

My first post was when I was 32 also, and almost identical household income.  Once the money coming in wasn't suddenly flying right back out, it was all diverting that money to retirement buckets.  Here's some things I did to cut down on spending:

Food/Restaurants 1k/month pre-mmm, 600/month after.
  • Switched to Aldi.  This will save you way more than you think it will, and the quality is far higher than you would imagine.
  • Restaurants limited to 1-2 times/month...things like getting a coffee, quick stop through a drive through...nope!
  • Lunches.  I bought a toaster for $15 from walmart and brought it to work.  Each week I bring a high quality loaf of Seedtastic bread, peanut butter, and jelly to work.  Toast with peanut butter/marmalade is delicious, super simple, and cheap.  There's lots of things like this if you don't like my specific suggestion.  I'm thinking of bringing in a griddle so I can just bring a dozen eggs each week and have 2 eggs and toast for lunch with a half an avocado.  Again, cheap, easy, decently nutritious.
  • Between food, restaurants, and amazing, you are a shade under 2k for just those.  I see no reason that needs to be over 1k.  We probably combine for $750 between groceries/restaurants/amazon, and we have two kids plus an exchange student living with us.  (It took us a full 18 months to reach that new normal without having to track every darn thing, but man is it worth it.)

Housing
  • We refinanced to a 15 year loan because we wanted to FIRE at 48.  Because we did this at 32, we'll have our mortage paid off 1 year before FIRE. Many here disagree with this move(and admittedly math backs them up), this it was a good mental hurdle for my wife and I to know that would be checked off the list before FIRE.  Also, it allows you to pay very little interest each month.
  • Shop for the very best home/auto insurance.  We cut our insurance in HALF by calling around.  Actually, by more than that...apparently we were way overpaying.
No Aldi anywhere in NorCal, which is why I suggested 99 Only and Grocery Outlet. We have its cousin, Trader Joe's, but it's not a low price option, IMO.


calimom

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #31 on: February 25, 2019, 10:22:20 AM »
Another vote for Grocery Outlet. I shop pretty regularly at the one in my town. Just checked, and Oakland has one on upper  Broadway. It's absolutely worth looking into.

Another thing that might be under consideration is for the at-home parent to set up an informal arrangement with another parent to give each other a break from time to time. Kids get to play together, at-home parent gets a break, and just like that you've saved $180 per month.

Go  line item by line item and find out where the bleeding is, and immediately put a compress there to stop the flow.

ysette9

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #32 on: February 25, 2019, 12:31:56 PM »
I LOVE Trader Joe’s! They aren’t Grocery Outlet cheap but I think in general the quality is much better, and they really excel at helping families with not much time thrown together a fast meal.

robartsd

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #33 on: February 25, 2019, 12:55:18 PM »
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

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!!
You're right that you haven't been on the right track, but you seem to have identified a good start for yourself here.

I didn't see any phones on your expense list. Perhaps you have one through your employer, but does SAHP have a phone?

Internet bill seemed high. You may be paying for more bandwidth than you need. Telecoms like to have you list your devices and sell you internet enough to use all of them at the same time at near their maximum streaming capacity. How many streams does your family watch at once? HD video streams only need about 5-7 Mbps. Most providers have enough for 1-2 streams in their lowest tier offering. Don't be fooled by the "best value" 100 Mbps plan - if you're only consuming 10 Mbps you don't saving anything by paying twice as much to have the capacity to use 10x what you actually use.

I'm not thrilled with produce quality at 99 cent stores or Grocery Outlet, but both can be great for packaged groceries. Loss leaders at other stores can be great deals (shop the ads, not the stores). A real farmer's market and eating seasonally might not be rock bottom prices for produce, but seems to yield a decent value for the quality. Costco prices can be reliable value for consistent quality that beats many grocery stores if you aren't paying attention to sales. See APower's Grocery shopping thread for a great example of how to really save money on food.

CalBal

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #34 on: February 25, 2019, 03:01:51 PM »
Another vote for Grocery Outlet. I shop pretty regularly at the one in my town. Just checked, and Oakland has one on upper  Broadway. It's absolutely worth looking into.

Another thing that might be under consideration is for the at-home parent to set up an informal arrangement with another parent to give each other a break from time to time. Kids get to play together, at-home parent gets a break, and just like that you've saved $180 per month.

Go  line item by line item and find out where the bleeding is, and immediately put a compress there to stop the flow.

If OP is close or in Oakland they may want to check out Berkeley Bowl. It is a fantastic source for produce (of a huge variety), at least it used to be, and is pretty close to the Ashby BART stop (if taking transit).

Stamag

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #35 on: February 25, 2019, 04:50:08 PM »
Wow thank you all for taking the time to read and comment on my post!  I am so grateful for all of this amazing advice!  I want to do my best to reply as much as possible.

You cannot use a dependent care FSA to pay the babysitter unless your wife is using that time to work at a paid job. "To qualify for either an FSA or the childcare tax credit, both you and your spouse must have earned income. Exception: One of you was a full-time student for five months of the tax year."

You may be audited if you do not show earned income for her in the last tax year, yet have an FSA, so I wouldn't claim this again.
Thanks for the heads up @lucylu, I will see if about changing my FSA contribution.

Takeout lunches should be zero days a week.
You're right!  This is my new goal!

I'm a bit confused as to where you get to $1,750 in savings per month with only $550 - 5.8% going into your 401k.
My employer stopped offering 401k contributions halfway through the year due to an acquisition.  Now they're available again though with 3% matching!  Planning on 13% before tax to max out $19,000 then 5% after tax mega backdoor roth.  Thanks for the tips about Costco, I'll keep an eye on spending there and look into other options too.

@ysette9 I will check out ThredUp thanks!

Modified AGI limit for certain married individuals.

If you are married and your spouse is covered by a retirement plan at work and you aren’t and you live with your spouse or file a joint return, your deduction is phased out if your modified AGI is more than $189,000 (up from $186,000 for 2017) but less than $199,000 (up from $196,000 for 2017). If your modified AGI is $199,000 or more, you can’t take a deduction for contributions to a traditional IRA."

https://www.irs.gov/publications/p590a#en_US_2014_publink1000230412
Wow you're right!  I looked into it more and it does seem common to use a Spousal Traditional IRA to get an extra above-line deduction on your taxes.  Going to do that for next year!

I think you've gotten a lot of good suggestions on cutting expenses already (really, almost everything can be cut). Hopefully you have already reduced your subscriptions or brought them to zero, imposed an Amazon shopping moratorium, and have a plan to go down to one car :)

Have you updated your 401k withholding so you will max out $18k for the year already?
What is the interest rate on your mortgage?

How old is your child, did your wife do any paid work before you had a child? If her earning potential is anywhere near yours, you really need to consider the opportunity cost of her not working, even after accounting for child care. Is it a conscious decision?
Yes we will be maxing 401k this year.  3.625% interest rate on the mortgage.  We're planning on re-evaluating our work situation once all kids are in full time school but for now we have really enjoyed having one parent at home and we wouldn't be saving much more after factoring in full time childcare.

Yes, replacing windows and an electric box sounds like something you hire a professional for. Exception for experienced amateurs who read up on all the building rules and only if you are allowed to do the electrical stuff yourself.
Got it thanks @Linda_Norway

This is very small potatoes compared to excellent suggestions in the but, you mention vision insurance. Presumably this is tied to health insurance so you are stuck for the year.  But vision insurance is an extremely bad bargain.  There is nothing to insure against: people who need their vision corrected all need (nearly) the same thing.  Unless you are an extreme case, or your employer is kicking in a huge subsidy, going without vision insurance generally saves money (plus it gives you incentives to start asking about vision costs and negotiating those down, which gives more savings).
Good idea, I will re-evaluate this next year and most likely get rid of it.  I always though vision insurance was weird since it's not really "insuring" anything.  Usually you either need glasses/contacts or not unlike car/health where something can go wrong.

Just wanted to ask how on board your wife is. As a SAHP she has a lot of power to make big changes. If she is on board, reading The Tightwad Gazette would be very inspiring. It's a bit out of date in the specific details but the mindset and general approach of running a household in a resourceful way are still spot on.

And I want to reemphasize that you can't use that FSA for a babysitter unless your wife is earning income. And yes, you will need the baby sitter's SSN.

Overall, though, it looks like you are making the right changes.
She’s on board but not quite as gung-ho as I am currently.  I’ll check the book at thanks!

Ditching the vision insurance and buying your glasses at Costco could justify the entire membership fee. The problem with Costco is you have to be vigilant about what you buy. The prices for ingredients are excellent, but the grab and go, prepared meals and luxury items add up quickly, especially for a small family. I keep a list on my phone, check off what I need to buy before I leave home, and that's all I put in my cart.

I also shop first at the 99 Cents Only Store and Grocery Outlet before I set foot into Costco. There should be stores near you. Lhamo's suggestions about local ethnic stores are also right on, as is the Amy D suggestion. Buy this copy:

https://www.barnesandnoble.com/p/the-complete-tightwad-gazette-amy-dacyczyn/1111619571/2661257748923?st=PLA&sid=BNB_New+Marketplace+Shopping+Books&sourceId=PLAGoNA&dpid=tdtve346c&2sid=Google_t&gclid=CjwKCAiAnsnjBRB6EiwATkM1XqHPw_f1SoYU5lOQQD6e87-FFctMhxIFmOirDr-C4xzlfI81UGnGFxoCqGwQAvD_BwE

You can get it free from the library, but I like a copy that I can read over and over and over. Even though it's laughably outdated in parts, it's also endlessly inspiring.
More convinced to get rid of the vision insurance with this tip.  Thanks!

Let's see. You have 210K current networth and save ~2156$ per month. At 7% ROI, your networth will be ~2M in 20 years when you can FIRE

Now if you stretch and live more frugally, you can add 1600$ per month. Then it will take 16 years for ~2M.

Is that extra frugality worth the 4 years earlier FIRE? Honestly don't think so. Just enjoy your life and take it as it goes instead of focusing on FIRE. It is is just too far away to be thinking about it.

Your best bets would be to get your wife earning or you finding something that pays higher. I'm in bay area and my wife doesn't work either. Single income life is hard. My thread here: https://forum.mrmoneymustache.com/case-studies/reader-case-study-selfish-fire-vs-fire-for-kids/msg2233273/#msg2233273
Thank you for your perspective @whywork.  Current quality of life is something I definitely have to keep in mind.  I want to do more things myself (house projects, cooking, gardening/cleaning) but I don’t ever want that to come at the price of spending time with my family.  Ideally I would like to integrate good habits like these into all of our lives so that we can live more intentional and meaningful lives and teach my child how to live frugally and happily.  It will ultimately be a balance, though, and I should redo FIRE calculations to see what these cost saving techniques will do to my timeline.  Best of luck with your journey, I’m wishing you the best finding happiness in your current situation and your soon to come FIRE lifestyle.



My first post was when I was 32 also, and almost identical household income.  Once the money coming in wasn't suddenly flying right back out, it was all diverting that money to retirement buckets.  Here's some things I did to cut down on spending:

Food/Restaurants 1k/month pre-mmm, 600/month after.
  • Switched to Aldi.  This will save you way more than you think it will, and the quality is far higher than you would imagine.
  • Restaurants limited to 1-2 times/month...things like getting a coffee, quick stop through a drive through...nope!
  • Lunches.  I bought a toaster for $15 from walmart and brought it to work.  Each week I bring a high quality loaf of Seedtastic bread, peanut butter, and jelly to work.  Toast with peanut butter/marmalade is delicious, super simple, and cheap.  There's lots of things like this if you don't like my specific suggestion.  I'm thinking of bringing in a griddle so I can just bring a dozen eggs each week and have 2 eggs and toast for lunch with a half an avocado.  Again, cheap, easy, decently nutritious.
  • Between food, restaurants, and amazing, you are a shade under 2k for just those.  I see no reason that needs to be over 1k.  We probably combine for $750 between groceries/restaurants/amazon, and we have two kids plus an exchange student living with us.  (It took us a full 18 months to reach that new normal without having to track every darn thing, but man is it worth it.)

Housing
  • We refinanced to a 15 year loan because we wanted to FIRE at 48.  Because we did this at 32, we'll have our mortage paid off 1 year before FIRE. Many here disagree with this move(and admittedly math backs them up), this it was a good mental hurdle for my wife and I to know that would be checked off the list before FIRE.  Also, it allows you to pay very little interest each month.
  • Shop for the very best home/auto insurance.  We cut our insurance in HALF by calling around.  Actually, by more than that...apparently we were way overpaying.
Thanks for the tips!  I am actually lucky enough to have a kitchen at my workplace that also provides snacks (like peanut butter).  So I just have to bring some wholesome bread and jam and I’ll be good to go on days with no leftovers.

@Goldielocks
Thanks for your line by line advice on savings.  This thread is giving me more confidence to work on my house more myself and avoid contactors as much as possible. 

Another vote for Grocery Outlet. I shop pretty regularly at the one in my town. Just checked, and Oakland has one on upper  Broadway. It's absolutely worth looking into.

Another thing that might be under consideration is for the at-home parent to set up an informal arrangement with another parent to give each other a break from time to time. Kids get to play together, at-home parent gets a break, and just like that you've saved $180 per month.

Go  line item by line item and find out where the bleeding is, and immediately put a compress there to stop the flow.
I really like the idea of "trading" babysitting like this. We're talking about the idea but as far as I understand it can be a bit delicate working that out with other parents. 

You're right that you haven't been on the right track, but you seem to have identified a good start for yourself here.

I didn't see any phones on your expense list. Perhaps you have one through your employer, but does SAHP have a phone?

Internet bill seemed high. You may be paying for more bandwidth than you need. Telecoms like to have you list your devices and sell you internet enough to use all of them at the same time at near their maximum streaming capacity. How many streams does your family watch at once? HD video streams only need about 5-7 Mbps. Most providers have enough for 1-2 streams in their lowest tier offering. Don't be fooled by the "best value" 100 Mbps plan - if you're only consuming 10 Mbps you don't saving anything by paying twice as much to have the capacity to use 10x what you actually use.

I'm not thrilled with produce quality at 99 cent stores or Grocery Outlet, but both can be great for packaged groceries. Loss leaders at other stores can be great deals (shop the ads, not the stores). A real farmer's market and eating seasonally might not be rock bottom prices for produce, but seems to yield a decent value for the quality. Costco prices can be reliable value for consistent quality that beats many grocery stores if you aren't paying attention to sales. See APower's Grocery shopping thread for a great example of how to really save money on food.
I am a gamer so the bandwidth is nice to have.  Although I called Comcast and asked for a promotional deal and got $15 off for the next year.  Planning on doing it again in a year :)

robartsd

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #36 on: February 25, 2019, 05:32:03 PM »
I am a gamer so the bandwidth is nice to have.  Although I called Comcast and asked for a promotional deal and got $15 off for the next year.  Planning on doing it again in a year :)
Even for gaming there's not really any benefit to increased bandwidth beyond an HD stream. In online gaming latency is much more important than bandwidth - but that's not what any provider I've seen advertises around. It may well be that the pricier plans or providers do provide lower latency (I haven't looked into this myself), but I'm not convinced that this is necessarily the case.

seattlecyclone

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #37 on: February 26, 2019, 04:40:14 PM »
401k - $550 - 5.8%

At your income level you should be able to max out your 401(k). Pre-tax deductions are few and far between when you earn a high salary. Take advantage of the ones that exist. Do this before you contribute to Roth IRAs or make extra mortgage payments. Glad to see you're already planning to do that this year.

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Escrow(Property Tax and Home Insurance): $576

Have you looked at your homeowner's insurance lately? Could you afford to increase your deductible? Would another company offer better rates? Do you have umbrella insurance?

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Groceries: $981 – 10.1% - Used Amazon Fresh for a few months during a hectic period

This is high, but others have already given good suggestions here. One thing I've done in the past year to decrease our grocery spending is to pay more attention to the weekly specials and stock up on things that are on sale. Doing this well requires you to know what the things you typically buy typically cost. Building up this knowledge does take time and effort, but it can pay off quite a bit.

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Amazon: $573 – 6.1% - Mostly household and baby items

I spent less than this at Amazon during all of last year, and we have two little kids. Look into whether your neighborhood has a strong Buy Nothing group for trading lightly-used kid's items around. Garage sales are also a great thing to check out. We've gone to several where we were able to get the bulk of the clothing our oldest would need for the next size up, for something like $1-2 per item.

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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

I personally put rental cars into the vacation expense bucket, but to each their own.

Consider trading the car you drive to the train station for a bike instead. Dropping a car can save a ton of money.

Again, have you looked into your car insurance coverage lately? If your cars are paid off, you might want to consider going to a liability-only policy if you have not yet already done so. Do make sure your liability limits are high enough; the state minimum usually is not, and umbrella insurance on top of the car insurance can be a good idea as well.

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Media/Memberships: $122 – 1.2% - Spotify, Hulu, Patron, Zoo, Yoga, eBooks, Audible, Volleyball

Have you looked into how much of this could be duplicated for free by your local public library? Mine has tons of ebooks and audiobooks available to download free of charge. They even have free passes to the local zoo and several museums; you can't go every day by any means, but it's been more than enough for us so far.

Stamag

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #38 on: March 01, 2019, 11:28:02 AM »
@seattlecyclone
Thanks for your suggestions!
  • Re-examining Home and Auto insurance is something I need to do, good suggestion!
  • I made an Amazon catagory because that's how it shows up on our spending history but I think I need to dig deeper and catagorize the actual Amazon spending so we know where the money is going.
  • Looking into joining a local Buy Nothing!
  • Downloaded library app and going to get it set up next week

After the repeated suggestions here we are making steps towards moving to 1 car!  I'm a bit nervous about it but it definitely seems like the right way to go.

@Freedomin5 @robartsd
I read the under $200 grocery thread and that has helped a lot to give context on how much food should cost, thanks!  We're using a under $1/lb is a good deal rule of thumb we're finding what food should be staples and what should be special occasion ($0.50/lb for bananas should be a staple.  $10/lb for raspberries should be a very special occasion!)

CanuckExpat

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #39 on: March 04, 2019, 09:44:57 PM »
We were one car family our entire time in Bay Area (we were San Jose), it's definitely doable.
There are a lot of options. I had a six month gig that was a little out of my bike commuting comfort range, so I got an electric bike on Craiglist, six months later I sold it on Craigslist for $50 less than I paid. It beats depreciation on a car.
Last bit of commuting I got lazy would use this often and it worked well: https://www.takescoop.com/

Pennycounter

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Re: Bay Area family new to FIRE. Punchisize my face! How can we save more?
« Reply #40 on: April 28, 2019, 07:06:15 PM »
How did things end up a few month in?

Stamag

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@Pennycounter

We've taken a lot of measures to reduce our spending.  Notably: downsized to 1 car, more careful grocery shopping, and no more take-out lunches.  I haven't seen a decrease in our spending, though, when I look at our Mint account.

Mint has been pretty confusing and not super useful for me so far.  I don't feel like I know what our exact budget for every little category is and therefore it doesn't catch everything.  I'm hoping after a few months we'll see more progress