Author Topic: Can Mr. and Mrs. Spendy cut their way to freedom?  (Read 4544 times)

mrspendy

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Can Mr. and Mrs. Spendy cut their way to freedom?
« on: July 13, 2017, 07:28:23 PM »
Putting this as a journal rather than case study, because spending is so fat that it's very obvious where cuts can be made.

EDIT: decided I won't be writing much flavor so moved to case study

This won't be overly interesting and will be a little messy. But typing things out may help with progress along the way.

Just Married, will file Jointly, no kids, HCOL Area, 28/27

Gross Salary/Wages:

Mine: ($95K + 0-70% of salary bonus, depending on company overall performance)
Hers: ~$23K Stipend
118K gross
-$18.5K 401k
-$4K HSA
$95.5K taxable income w/o bonus

taxes have been highly variable for me given that I've had substantial taxable investment gains and owed about $20K last year and we just got married, so far this year have about $10K of realized gains, but have a big loss that can offset this if i wish to realize it before year end.

But assuming no investment gains or bonus, online calculator says that taxes should be about $28K (Fica, Federal, State, Local), bringing take-home to $67K about $5,800

Normalized for no bonus, no investments

Take-home      : $5,800

Spending has been super messy with wedding, honeymoon, etc.

Below is estimated of "normal" go forward that is representative of our general lavish habits.

Rent & Parking:  $3,100
Restaurants          $800
Travel                   $500
Groceries              $400
Auto                     $600 ($316 payment on my car, $150 insurance for 2 cars, + miscellaneous)
Everything else      $600
                           $6,000

Cars: fully paid off '07 reliamobile owned by the wife, 2010 facepunchmobile <--i used to own outright, but took a loan out a few years back when had lots of investment opportunities, it worked out, will probably get rid of the loan soon since it's no longer meaningful

Assets:
Taxable Accounts: $314K        100% stocks
private company : $50K at cost, $90K market value (it's only quasi-private)
I-Bonds        :  $51K   
Taxable              $415K
loan -$50K (used to buy company)
Car loan: $8.6K
$357K taxable net worth

All non-roths are 100% pre-tax
Work 401k     : $33K    stable value $9.5K employer contribution, been there a year so mix of tail end of 2016 and full 2017 + employer
Rollover IRA 1: $136K  stocks
Rollover IRA 2: $81K    stocks
Roth IRA 1     : $73K    stocks 
HSA              : $6K      30 yr tsy's
Roth IRA 2     : $23K    stocks

Spouse doesn't have a 401k/403b...we put money from my taxable into her old rollover and converted to roth in 2016 when she had little income

Total retirement: $349K
Total taxable + retirement: $706K

My retirement and i-bonds was "earned" in the sense that all assets in those originate from a paycheck/bonus I worked for. Not saying it was all me given that I was privileged to have no loans and high paying job after super expensive college).

My taxable net worth is not the result of frugality but instead has substantial impact of inheritance (~$200K in 2011).

I've matched market returns in taxable, but have spent a lot of money. I invest in 2-3 stocks at a time in my retirement accounts and have made mid 20's per year which is not sustainable or advisable.

My goal is to not work for the man and invest full time (it's what I love to do). I want to be financially independent with wife's income ($50-$125K when out of school/ramped up , depending on geography). At the time FIRE is not a goal of hers, but I also don't want to be in a position where my desire to not be gainfully employed makes her feel resentful or forced to work.

Breaking my addiction to luxury will accelerate this goal.

More flavor, fewer facts in the future.
« Last Edit: September 01, 2017, 03:06:23 PM by mrspendy »

Lepetitange3

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #1 on: July 13, 2017, 07:39:08 PM »
Gonna follow.  Looking forward to you killing that restaurant bill ;)

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #2 on: July 13, 2017, 07:51:04 PM »
yep, that's the most obvious and insane (besides rent!).

I am also considering dropping das facenpunchenmobil von Bavaria as it is a ticking time bomb of unforeseen maintenance expenditures. I can ride my bike / uberpool (in the winter...ya ya ya i know) to work for significant savings taking into account insurance and future maintanence , etc. Won't save on parking until lease expires (currently $75/month/car but that was negotiated, it's normally $150!).

I rode every day this week so far.

It's a laughable 2 miles on a gorgeous greenway.
« Last Edit: July 13, 2017, 07:58:45 PM by mrspendy »

Lepetitange3

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #3 on: July 13, 2017, 08:04:55 PM »
Do it! If Mrs drives to work, maybe she can drop you on way in winter :)

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #4 on: July 29, 2017, 12:52:17 PM »
End of July (almost) Update, goal this month is to be more precise and understand where it all goes...restaurant addiction remains a real struggle

Personal Capital
July Outflows: $7,200
Reimbursable: - $500
Personal Expenses: $6,700

Rent & Utilities & Parking: $3,325
Restaurants:                    $1063 <---Good god....wife's birthday celebration where i paid tab and got paid back is inflating by $200
Travel (personal)             $560  <--bought tickets for October family reunion + ~$50 of non work related uber
Groceries                        $473  pretty normal for us, don't see this as an item to cut
Auto                               $400  ($315 payment on facenpunchenmobil, 1 tank, AAA membership)
"Telephone"                    $223  (2 months of fast internet & 30 channel cable)
Clothing                         $170  (wife's birthday, was cool with her purchases, not normal)
Concert                          $150 (James Taylor = wife's favorite, we go to 1-2 concerts a year, was worth it)
Personal Care                 $128 ($44 haircut for me, I get it every 2 months, $43 class pass for wife, $41 nails wife)
Wedding Gifts / shower   $122 (wife's best friend where she is bridesmaid)
Amazon                         $75   (all me, primarily investment related books and bike maintenance items)

Take home was $4,600 + $1,800 = $6,400, this represents normal rate when not contributing to 403b (already maxed).

Total NW increased from $717K to $731K for the month thanks to the market.

Hope to look better next month. Rode bike to work almost everyday, but it doesn't really save much until i get rid of the car since the costs of it sitting there (parking, payment, depreciation, etc.) outweigh cost of using it substantially. Still haven't sold it or taken steps to do so.

I recognize this could be a bit more entertaining...

I think I need to work on my withholdings: YTD Pay: $79K (salary + bonus), pre-tax deductions: $18.7K, Taxes: $23.7K
 
« Last Edit: July 29, 2017, 03:08:55 PM by mrspendy »

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #5 on: August 31, 2017, 04:30:53 PM »
Just wrote a big detailed august breakdown and then it got lost to the interwebz

Bottom line: Spent $6,700, made $6,600, $736K net worth w/o counting restricted stock gains, $796K counting them.

Remain addicted to restaurants, travel to friends' weddings, living in the high rent uber convenient downtown, etc. Paid off car loan. 

Note: Take home pay is higher than projected in first post because that is an average. I front load my retirement and don't have a paycheck for part of the year.
« Last Edit: September 01, 2017, 03:07:07 PM by mrspendy »

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #6 on: September 01, 2017, 03:30:37 PM »
Okay here's August Breakdown.

Rent, Utilities, Parking                 $3,348 ($3026 rent, $150 parking for two, $117 electric, $55 gas/water), 1100 sq foot temple of anti-mustachianism
Auto                                             $ 724    (DW's insurance bill $325 + $315 my payment, gas)<-paid off loan to be rid of the bill going forward
Restaurants                                   $676     Improvement! LOL
Travel                                           $625*   
Groceries                                      $487
Personal Care                                $319** 
Gifts                                             $127      another wedding gift, apparently July's was a shower gift, not a wedding gift.
Internet/Cable                               $106
Dry Cleaning                                 $133      Yours truly has spent a whopping $1200 on dry cleaning in 2017, this needs to change, pure laziness
the Rest                                        $188

Total                                            $6733

*Cost of attending friends' Wedding Hotel, $94 personal uber usage, $200 paid for in-laws rental car to visit (they don't have a big car and they hauled   our wedding gifts to us so we offered to pay, we had a surprising number of gifts brought to the actual event)
**$240 is related to being a bridesmaid (hair nails on day of, this is pretty standard, I wager we spend $5K-$8K a year on wedding related travel/stuff like this [bachelor parties, tux rentals, bridesmaid dresses, gifts, etc.])$44 is yours truly's snazzy haircut, rest are discounted fitness classes

« Last Edit: September 01, 2017, 03:40:42 PM by mrspendy »

4alpacas

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #7 on: September 01, 2017, 03:46:53 PM »
Since you moved your journal to the Case Studies section, I'll weigh in. 
Rent, Utilities, Parking                 $3,348     ($3026 rent, $150 parking for two, $117 electric, $55 gas/water), luxury uber convenient 1100 sq foot temple of anti-mustachianism
I can't imagine spending almost 35% of my pre-tax income on housing.  No facepunches because we spend more (HCOL), but we also make a lot more. 
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Auto                                             $ 724    (DW's insurance bill $325 + $315 my payment, gas)<-paid off loan to be rid of the bill going forward
Congrats on killing your car loan.
Quote
Restaurants                                   $676     Improvement! LOL
How do you have time to spend that much time on restaurants?
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Travel                                           $625*   
Have you tried travel hacking?  There are some great cards with flexible benefits that could slash your travel budget. I got started this year with http://www.travelmiles101.com/.
Quote
Dry Cleaning                                 $133      Yours truly has spent a whopping $1200 on dry cleaning in 2017, this needs to change, pure laziness
My DH used to really have a crazy dry cleaning bill until he switched to no-wrinkle shirts and pants (wash & dry with the regular laundry).  If he really needs to look dressed up, he tosses on a blazer and tie (which are rarely dry cleaned). 

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #8 on: September 01, 2017, 06:36:18 PM »
re the rent: I hear you. We live a life of luxury and I frankly love where we live; it's definitely not a necessity. Across the street from grocery, above/near restaurants, near awesome trail, 2 miles from work, across the street from SoulCycle and a boxing gym...been spending most my life livin' in a yuppie paradise....it is only 35% of pre-tax in a no bonus year...but my bonus is totally out of my control and not based on my performance so i should live on the assumption that it's $0.

If I had my choice we'd live in a 1/1 in the same building ($2600) the den and the extra bathroom are not necessary; it's great when family/friends visit. we made this decision prior to me having stronger inclinations toward mustachianism and i was all for it, signed a 2 year lease at a 20% discount to where the unit traded a few months before (a few buildings went up at once, creating a price drop). A very dingy poorly located 1BR would be ~$1,500 - $2,000.

It's interesting to me you see restaurants as a use of time. I view them as a (luxurious and convenient) saver of time. I can pick up a $10-12 delicious salad or rice bowl in <5 minutes and have a healthy meal super quickly. It's buying /  preparing food that uses time and energy.

Last month's restaurants further broken down

$200 to fill up my breakfast / lunch card, this is $3-$6 a day at work for healthy variety and good food
$92  treated inlaws to dinner
$50  fast casual salad place (3X)
$40  restaurant when traveling for friends wedding (1x)
$38  fast casual chicken (2x)
$32  bar (1x)
$32  frozen yogurt place (3x), did i mention we live by a lot of restaurants
$30  gelato place (that's treating my family after they treated us to multiple dinners)
$25  Panera bread (couple of spouse work lunches, maybe?)
$25  Fast casual rice bowl place (1x
$20  Fast casual place (1x)
$30  coffee shops 1 is from when we were traveling, don't know the other)
$10  chick fil a, purchased on drive to wedding, $5 a meal for delicious chick fil a!
$17  wife work lunch

So it's a death by 1000 cuts situation where convenience and desire for variety conspire to drain us of our wallet as we lavishly outsource our food prep.

Re the travel hacking. I have about 150,000 points after using 200,000 or so on our honeymoon. We usually use points on our annual big trip, never for "routine" / wedding travel. This year's trip was honeymoon (think that will be 2018's too!). My work involves the occasional $15,000 ticket to HK or tokyo which is great.

Thanks for the tip on the dry cleaning.

I know how all this sounds and recognize that this is all a choice. I struggle with what I really want to spend each month. I generally enjoy life and "can" afford to spend how I do (most 28 years olds aren't worth $700K, whether that be the result of my own merit or not). I also know that I'll inherit (from grandparents in their 90s) an educational trust that will take care of future kids education, so I'm not depriving future kiddos by living so lavishly.

But there's no question that our spending delays my goals of freedom and if it grows it will do so perpetually.
« Last Edit: September 01, 2017, 06:56:48 PM by mrspendy »

4alpacas

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #9 on: September 01, 2017, 06:57:21 PM »
It's interesting to me you see restaurants as a use of time. I view them as a (luxurious and convenient) saver of time. I can pick up a $10-12 delicious salad or rice bowl in <5 minutes and have a healthy meal super quickly. It's buying /  preparing food that uses time and energy.
Since I prepare my meals in advance, I frequently don't have to spend my lunch hour picking up food (I work out).  I also have premade breakfast that I eat on my commute.  I spend about 10-15 minutes assembling dinner during the week, which also doubles at kitchen cleaning time. 
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$200 to fill up my breakfast / lunch card, this is $3-$6 a day at work for healthy variety and good food
If I really concentrate on our food bill, we spend about $200 for 2. Now we're a bit looser ($250-$300/month including dog food and cleaning supplies)
$50  fast casual salad place
Why not just have all of the ingredients for salads at home?  It's so easy to assemble one and whip up a salad dressing. 
$40  restaurant when traveling for friends wedding
$38  fast casual chicken
From your description, I just am grossed out.
$32  bar
$32  frozen yogurt place (that's 3x)
I do a fair amount of sweets, but we have them at home.  Why spend $30 for something that costs $5 at the grocery store?
$30  gelato place (that's treating my family after they treated us to multiple dinners)
$25  Panera bread (couple of spouse work lunches, maybe?)
Maybe I'm a food snob, but Panera seems like a punishment.
$25  Fast casual rice bowl place
$20  Fast casual place
$30  coffee shops 1 is from when we were traveling, don't know the other)
$10  chick fil a, purchased on drive to wedding, $5 a meal for delicious chick fil a!
$17  wife work lunch
I think you'd be able to easily cut your food spending with a small amount of prep time.  We even get our groceries delivered to lessen the time committment.  One grocery delivery costs about one trip to the yogurt place.  Worth it!
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Re the travel hacking. I have about 150,000 points after using 200,000 or so on our honeymoon. We usually use points on our annual big trip, never for "routine" / wedding travel. This year's trip was honeymoon (think that will be 2018's too!). My work involves the occasional $15,000 ticket to HK or tokyo which is great.
Maybe you should try travel hacking to get a companion pass to at least cut your flights in half.
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I know how all this sounds and recognize that this is all a choice. I struggle with what I really want to spend each month. I generally enjoy life and "can" afford to spend how I do (most 28 years olds aren't worth $700K, whether that be the result of my own merit or not).
I've never understood this mentality.  I like to optimize everything.  Save time.  Save money.  Keep moving forward.

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #10 on: September 01, 2017, 07:09:47 PM »
re work breakfast / lunch. Fruit and coffee are free (what i have). Lunch is on our corporate campus and is what cost $3-6 / day, so that's. By "fill up card", I mean I put $200 on the card then will use $3-6 / day. I'd say closer to $6 In total there are 250 workdays a year so it's a $1,500 / year habit ($1,500 minus what it would cost to bring in lunch to be precise). Not great, but it's not the fattest part of the restaurant budget.

Groceries sell froyo?

I should've called it  a Mozambiquen-Portuguese Peri Peri Chicken place  ; )

Panera's okay...wouldn't be my choice either.

We cook most weeknights amazingly (that grocery money has to go somewhere) there are 30 days in a month and I count 9-10 dinners out. It's going from 20 ---> 25---> 30 that is very difficult for us. And my subsidized work lunch is tough to give up. DW is very good about taking leftovers but there are a few lunches of hers in there too.

Anyways, my friend's visiting and is about to arrive. We're going out to dinner. Got to start september out strong.



Tuskalusa

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #11 on: September 01, 2017, 07:11:14 PM »
PTF.

4alpacas

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #12 on: September 01, 2017, 07:14:35 PM »
Groceries sell froyo?
Ben & Jerry's has frozen Greek yogurt that is really good.
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I should've called it  a Mozambiquen-Portuguese Peri Peri Chicken place  ; )
Ok, that does sound tasty.

lhamo

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #13 on: September 01, 2017, 08:10:45 PM »
I can pick up a $10-12 delicious salad or rice bowl in <5 minutes and have a healthy meal super quickly. It's buying /  preparing food that uses time and energy.

oh, give me a f-in break!

How much time and effort does it take to make A FUCKING SALAD!!!!!!  BUY A GOD DAMN RICE COOKER  OR SPLURGE ON AN INSTAPOT AND MAKE YOUR OWN DAMN LUNCHES!  You will save hundreds of dollars a month.....

You are spending more than you bring home.  GET A GRIP!  If you keep this up, your inheritance will gradually be frittered away on stuff you won't want to look at (or smell) the next day.   
Wherever you go, there you are

marty998

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #14 on: September 02, 2017, 12:27:21 AM »
Anyways, my friend's visiting and is about to arrive. We're going out to dinner. Got to start september out strong.

Oh boy... I hope that doesn't mean a lavish expensive night out...are you sure you're on the right forum?

Playing with Fire UK

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #15 on: September 02, 2017, 12:56:11 AM »
I know how all this sounds and recognize that this is all a choice. I struggle with what I really want to spend each month. I generally enjoy life and "can" afford to spend how I do

Can you though?

Bottom line: Spent $6,700, made $6,600

You made $6,600 and yet somehow managed to spend more than that. WTAF?

...are you sure you're on the right forum?

My thoughts exactly, have you checked out Bogleheads? It seems more your style. [Which isn't to say you are not welcome here, just that you don't seem to be drinking what we're serving.]

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #16 on: September 02, 2017, 05:49:29 AM »
All fair criticisms, which is why I originally put this in "journals" rather than case studies.  It's not like I'm unaware that spending $12K / year or whatever it actually is to feed 2 people is not insane. The all too slow realization that we work 1-2 months a year to feed that habit is a reason to start changing things up. And I think we bit off a bit more rent than we can chew.

There are clearly other case studies where far most legitimate help is needed that are populated by  far more disciplined people.

Others weren't born on third and others aren't doing the moonwalk back to second base with a $13 signature cocktail in hand.

Writing it all out systematically on a monthly basis  is a helpful triage. I thought the run rate was $6K, but it's apparently more like $6.5-$7K, which is creeping up into "living on expected bonus" territory, which I don't want to do; bonus is more or less out of my control given how junior I am (I don't drive the decisions that determine if we will get paid).

Assuming no change in market prices, our retirement should increase by about $50K/ year ($18.5K +$9.5K match, $4K + $2K employee HSA contribution, $15K of dividends from stocks in our IRA's, don't own them for yield which is a terrible way to pick stocks, stocks i own just happen to pay a bit more than market). And I have saved $350K in retirement accounts that was 0 at the start of my working career.  So I would counter the couple of responses that make it seem like we're burning the furniture. Making some suboptimal choices for sure, increasing our working lives, absolutely. But we "can afford" to spend what we do and I've historically saved  bonuses (though expenditures related to our engagement / wedding (truly one time) certainly makes that a little less valid).

Anyways feel free to continue the face punches. Feel free to judge and pity. Hope to put up some more  cash flow positive months going forward and not be completely reliant on securities investment / speculation / bonus beyond my control to increase NW.







Playing with Fire UK

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #17 on: September 02, 2017, 05:56:22 AM »
Others weren't born on third and others aren't doing the moonwalk back to second base with a $13 signature cocktail in hand.

Writing it all out systematically on a monthly basis  is a helpful triage. I thought the run rate was $6K, but it's apparently more like $6.5-$7K, which is creeping up into "living on expected bonus" territory, which I don't want to do; bonus is more or less out of my control given how junior I am (I don't drive the decisions that determine if we will get paid).

That is a delightful way of looking at it, I'm happy to help slow down the moonwalk speed!

Laura33

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #18 on: September 02, 2017, 05:22:01 PM »
FWIW, you remind me of my DH - likes the idea of FIRE, but makes good money and wants to enjoy it and buy nice things that suit his perceived success, even though that desire conflicts with the first goal; and, of course, you know you have a spouse who will also be making good money, which takes some of the pressure off.  You are also in a similar situation in terms of a significant chunk of your income being in your bonus -- which, again feels like another safety net.  So there's just no sense of urgency to save more.

So if you do decide you want to commit to this, I would recommend rejiggering how you think about your finances.  Specifically:  adjust your budget so that ALL of your basic expenses AND the savings necessary to hit your FIRE target come out of your take-home pay.  That means cutting back on some of the extras (vacations, dining out, hair/makeup/manicures) to create $1-2k/mo. in savings.  And then, if you get a bonus, you can save part and then allocate part to some of the fun extras, like vacations and fancy dinners out.

This is both practical and psychological.  From a practical perspective, you want to set your "normal" budget -- the budget your everyday life is based on -- based on your guaranteed income.  That way you know you are ok even if the company has a down year.  And psychologically, that approach helps you re-cast the fancy dinners and trips and such as "extras" that come out of "found" money, not as a normal, expected part of everyday life.  Plus I find it helps to make the paychecks feel tight, because I hate seeing my bank account drop month to month.

Finally, I am going to challenge you on the food.  Not the special dinners out - the meaningless Panera and the like.  Because I do this too.  But the core principle of Mustachianism is to focus your spending on things that matter, that improve your life -- not on things that just enable being fat and lazy.  There is a difference in my mind between "OMG, I am totally craving that Portuguese/Peruvian chicken" and "oh, crap, it's 6, we gotta eat, let's go out."  I have found myself sitting at many a "fast casual" place and thinking, wow, this is mediocre, I am spending money on something that is bringing me no value at all, other than flat-out laziness.  And that is just stupid -- doesn't matter how much you have, how much you need, you are wasting it on shit that is bad for you on multiple levels.  So come up with some "oh crap it's 6" alternatives -- grilled cheese, tuna or egg salad, a big salad with some grilled chicken, chili that you keep in the freezer, whatever.  It doesn't even need to be a "real" meal - if you are going out because you need to put food in your body, just put some damn food in your body for free!

I am very serious that you need to get this under control now, because the longer you stick with this habit, the more it becomes an expectation, and the harder it is to break.  I have about 20 years of marriage on you, and two additional mouths to make happy, and I have spent most of those years doing exactly what you are doing - because, hey, we can afford it, and it's easy, and life is stressful, and [insert whine/complaint/justification here].  And now that I have realized how stupid it is, I am surrounded by three other people who see it as their God-given right to eat out all. the. time. - just for the sheer entertainment value of getting out of the house.  You really, really want to build healthier habits now, before you have years of history pulling you down and additional people you have managed to spoil into that lazy and spendy expectation. 
Laugh while you can, monkey-boy

happy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #19 on: September 02, 2017, 11:08:29 PM »
Why don't you do a challenge? No eating out for one week? Make keeping to that the priority for the week. If you can extend it to a month.

Don't be afraid, it won't hurt as much as you think.
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Playing with Fire UK

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #20 on: September 03, 2017, 12:39:02 AM »
...There is a difference in my mind between "OMG, I am totally craving that Portuguese/Peruvian chicken" and "oh, crap, it's 6, we gotta eat, let's go out." ...

An excellent point Laura33. It takes a mindset change, but it can save you hundreds of dollars a month.

And going out for a fancy dinner is more of an event when you normally eat at home (until your cooking gets so good that the food out is worse, but that takes time).

former player

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #21 on: September 03, 2017, 07:03:50 AM »
All your good financial habits seem to relate to before you were married.  Now you are "just married" and the end result is spending that is, essentially, out of your control - you are lacking either the desire or the ability to make changes.  You are surviving only because of your good income and your existing capital.  Given that things will probably only get more expensive from now on (monetary inflation, lifestyle inflation, kids, etc, etc.) you are nicely set in to the American dream of living the good life on credit and the work treadmill.  You don't need financial advice, you need a facepunch and a reset of your entitled attitude.

 
Be frugal and industrious, and you will be free (Ben Franklin)

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #22 on: September 03, 2017, 11:07:30 AM »
Laura, I think you hit the nail on the head.  While the monthly and annual inflows and outflows in my life have generally amounted to "not that bad" and i'm overall in a great place, objectively, the compounding effects of our current mindset, which involves no amount of sacrifice or normalcy, are starting to become apparent.

It's like I look ten years forward and I'm signing the dotted line on a leased Q7* to take the kids to $30K/year private school and park in my mortgaged up $1.5mm house and my net worth relative to spending hasn't grown at all and level of freedom has not increased; only the velocity of and magnitude of earning and consuming has grown. That is what will occur if we don't change.  It's a outcome that most could never dream of, and it's very comfortable and outwardly very beautiful, but it's not one that involves freedom. My boss probably makes ~$600K and boss's boss makes $1mm-$3mm (his comp is public info and highly variable, a more extreme version of mine), but they still work very hard and have all the same stresses I do (if not more) even though they've paid their dues for 1 decade (boss) and 2 decades (boss's boss) longer than I have.

I started out my career on Wall street where all of these numbers would basically be multiplied by 3 (2 years into my career I took a 50% pay cut leaving my job as a trader<--this, along with my writing style is probably identifying info so hopefully no one i knows is reading this, if you are, well you now know my weird internal struggles and that i'm a mini-trust fund baby, something i keep on the down low).

So I already feel like I made the healthy work / life balance / decrease consumption increase happiness trade, but then I read MMM and it made me realize I/ we still spend at an extreme level. If I'd never read about it I'd probably be more content, knowing my balance sheet was fatter than 95% of normal people (though a lot thinner than if I'd continued slangin'  complex bonds to community banks and insurance companies). The smug satisfaction of having given up on the NYC/wall street game gave me a lot of confidence in how i chose/choose to live my life. Reading about people rapidly heading toward freedom because they soak  beans overnight, bike commute, live in efficiently small places while still making a lot of dough, shakes that confidence. But I haven't made any real change yet. talk is cheap without real change. I think you all will get frustrated with my lack of "cold turkey" commitment to all this and I KNOW for a fact that $30K / year non housing spending or whatever is not the right level for us. But I also think the current level will only compound at the rate of take-home salary (and that the max on tax advantaged accounts will become less meaningful overall) if we stick to the current mindset.

However one wants to quantify the "head start" I've had (somewhere in between $200K and "undefined" when taking into account private school, debt free college, etc.), my taxable net worth growth from 2011 to today indicates that I haven't really saved anything from take-home pay (it's more or less up with the market). When I add up wedding contribution, engagement ring, and a way too nice car, (all of these are on me, my wife did not/does not require those things; my family's own expectation of normal on the other hand has definitely had an undue influence on me and I bear the responsibility of conforming to their views) that amounts to a big differential, particularly since the ring and car came before 2016 when investments did very well.

end somewhat pointless rant, enjoy your labor day y'all and thanks for the input


*or fully loaded Outback; having grown up in a more outwardly spendy and sunny part of the world where BMW's and Benz's are the order of the day, it amazes me how many extremely wealthy people around here have fully loaded Outbacks.
« Last Edit: September 03, 2017, 11:27:46 AM by mrspendy »

farfromfire

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #23 on: September 03, 2017, 12:06:11 PM »
It's like I look ten years forward and I'm signing the dotted line on a leased Q7* to take the kids to $30K/year private school...
...what are you talking about? You are living above your income. Quite simply, you cannot afford private school.

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #24 on: September 03, 2017, 12:29:07 PM »
Those are the thing I associate with lifestyle inflation. Those are the things that future  increases in pay would find their way to funding if I didn't put any thought into it and wasn't lurking around here ( with thought they still might find their way to private school depending on where we live).  Those are the next speeds on the working / consuming treadmill.

I'm pretty junior / low on pay scale for what I do. I've performed  well and think I'm on track to advance over time. My wife won't be in grad school in the future. As long as I'm employed in the same field, and we don't have kids too soon(plan is in3-4 years), we certainly will be able to  afford private school and all the trappings of top 5% life ( good schools, healthcare, nice vacations, etc.); it's all a matter of choice as to how we handle the likely ramp up in take home pay that will occur in the next 3 years or so and the current trend is not at all positive from a mustachian standpoint as pointed out by many here.

I'm not trying to be defensive because there are choices being made that aren't defensible, but just feel the need to clarify.

Finances_With_Purpose

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #25 on: September 04, 2017, 12:22:22 AM »
FWIW, you remind me of my DH - likes the idea of FIRE, but makes good money and wants to enjoy it and buy nice things that suit his perceived success, even though that desire conflicts with the first goal; and, of course, you know you have a spouse who will also be making good money, which takes some of the pressure off.  You are also in a similar situation in terms of a significant chunk of your income being in your bonus -- which, again feels like another safety net.  So there's just no sense of urgency to save more.

So if you do decide you want to commit to this, I would recommend rejiggering how you think about your finances.  Specifically:  adjust your budget so that ALL of your basic expenses AND the savings necessary to hit your FIRE target come out of your take-home pay.  That means cutting back on some of the extras (vacations, dining out, hair/makeup/manicures) to create $1-2k/mo. in savings.  And then, if you get a bonus, you can save part and then allocate part to some of the fun extras, like vacations and fancy dinners out.

This is both practical and psychological.  From a practical perspective, you want to set your "normal" budget -- the budget your everyday life is based on -- based on your guaranteed income.  That way you know you are ok even if the company has a down year.  And psychologically, that approach helps you re-cast the fancy dinners and trips and such as "extras" that come out of "found" money, not as a normal, expected part of everyday life.  Plus I find it helps to make the paychecks feel tight, because I hate seeing my bank account drop month to month.

Finally, I am going to challenge you on the food.  Not the special dinners out - the meaningless Panera and the like.  Because I do this too.  But the core principle of Mustachianism is to focus your spending on things that matter, that improve your life -- not on things that just enable being fat and lazy.  There is a difference in my mind between "OMG, I am totally craving that Portuguese/Peruvian chicken" and "oh, crap, it's 6, we gotta eat, let's go out."  I have found myself sitting at many a "fast casual" place and thinking, wow, this is mediocre, I am spending money on something that is bringing me no value at all, other than flat-out laziness.  And that is just stupid -- doesn't matter how much you have, how much you need, you are wasting it on shit that is bad for you on multiple levels.  So come up with some "oh crap it's 6" alternatives -- grilled cheese, tuna or egg salad, a big salad with some grilled chicken, chili that you keep in the freezer, whatever.  It doesn't even need to be a "real" meal - if you are going out because you need to put food in your body, just put some damn food in your body for free!

I am very serious that you need to get this under control now, because the longer you stick with this habit, the more it becomes an expectation, and the harder it is to break.  I have about 20 years of marriage on you, and two additional mouths to make happy, and I have spent most of those years doing exactly what you are doing - because, hey, we can afford it, and it's easy, and life is stressful, and [insert whine/complaint/justification here].  And now that I have realized how stupid it is, I am surrounded by three other people who see it as their God-given right to eat out all. the. time. - just for the sheer entertainment value of getting out of the house.  You really, really want to build healthier habits now, before you have years of history pulling you down and additional people you have managed to spoil into that lazy and spendy expectation.

+1.  Been there.

Decide what life you really want.

Read Millionaire Next Door and decide which life you want. (Referral/link: http://amzn.to/2eAx96Y

You have a huge asset via income and inheritance. But you have a huge anchor in that you're living a high-flying lifestyle, probably around coworkers and friends whore doing the same, assuming they'll keep on working that way.

Ten years in, folks will reassess, health problems will emerge for some (working a lot, if you do, and eating out aren't great for a body), and habits will be set.

I'd seriously reevaluate now.  For you, you'll have to live against culture and be different in order to move ahead much - the spending habits will overwhelm you eventually, whether it's food or cars or suits or whatever....you're setting that'll be harder to drop the longer you keep them.  Especially for your spouse (often). 

Read that book. Consider changing your playground and playmates (so to speak) if that helps. 

The Average American spends like there's no tomorrow and will be enslaved to debt and jobs he strongly dislikes.  You don't have to be that way, it'll just be a tough change. 

You don't have any budget issue, it's all about psychology and spending.  Change that, and your budget will fix itself. Don't, and you're wasting time asking folks here for budgeting advice (which is why some seem perplexed).  You're clearly very competent and capable.  It's a matter of priorities and lifestyle.

I'd love to be optimistic, but I also know to a degree just how hard it'll be for you to seriously change things. So I'm being firm and frank with you.

One small tip: start thinking about purchases by thinking of how much it'll cost you to sustain it for life. Read Your Money or Your Life (referral link: http://amzn.to/2ewlzF7).  But best tip I have is to read that and Millionaire Next Door, then evaluate your spending and where you want to be long term. It'll be worth more for your time than browsing the forums here, and I say that even though I love the forums here.

Playing with Fire UK

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #26 on: September 04, 2017, 01:35:41 AM »
But I haven't made any real change yet. talk is cheap without real change. I think you all will get frustrated with my lack of "cold turkey" commitment to all this and I KNOW for a fact that $30K / year non housing spending or whatever is not the right level for us. But I also think the current level will only compound at the rate of take-home salary (and that the max on tax advantaged accounts will become less meaningful overall) if we stick to the current mindset.

However one wants to quantify the "head start" I've had (somewhere in between $200K and "undefined" when taking into account private school, debt free college, etc.), my taxable net worth growth from 2011 to today indicates that I haven't really saved anything from take-home pay (it's more or less up with the market). When I add up wedding contribution, engagement ring, and a way too nice car, (all of these are on me, my wife did not/does not require those things; my family's own expectation of normal on the other hand has definitely had an undue influence on me and I bear the responsibility of conforming to their views) that amounts to a big differential, particularly since the ring and car came before 2016 when investments did very well.

Get frustrated?!? Like in the future? Dude, the frustration is here and real right now. Your spending is obscene. You have basically wasted the gift of your education because you could have just as easily got a non-fancy job and spent all of a lower salary and been just as happy and in the same place financially.

Either take a shit or get off the pot.

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #27 on: September 05, 2017, 06:15:29 AM »
I have good news. there seems to have been a decline in the rental market. 1 BR's in my building (used to be $2,400-$2,700) are now $1,900 - $2,500. There's a unit 1 floor down that's $2,050. So our extra bathroom, den, and 400 sq. feet are now costing us $1,000 / month.

We could move for $500 break fee + hiring some folks to help move furniture. I'm not sure if our parking would re-price to the rack rate, so that would decrease the cost savigns by $150/month if we weren't able to carry over our parking deal.

Going to be hard to convince DW, but $800-$1,000 / month would worth being a little less spacious and making guest get hotels/sleep on air mattresses.

former player

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #28 on: September 05, 2017, 07:09:57 AM »
$12,000 a year buys a very nice hotel room for guests.
Be frugal and industrious, and you will be free (Ben Franklin)

bouldertechwarrior

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #29 on: September 06, 2017, 01:11:01 PM »
Hi, there, fellow 20's newlywed!

Just thought I'd pipe in - I went to a yuppie Ivy-league college, married a software developer, and work in tech. We have similar net worth values (spouse and I are 25/28 years old, respectively), and are worth ~$800k.

I KNOW how easy it is to fall into the NYC trader lifestyle, because that elite club of six-figure 23 year olds takes some clout to get into, and it's a snazzy place to be. Bonus points if you were recruited directly from your ivy-tower dorm room. Been there. The key point is, it's hard to see the merit in mixing your own laundry soap amidst that lifestyle - what's $1/week saved if your salary is 100k with potential for tripling in a few very long trader years? Plus, it feels high-class and powerful to be getting drunk networking with people who just bought 1 World Trade on credit from JP Morgan himself... I  jest, but only a little.

This is more of a plea for you to consider the meaning of life - beyond the money. Money comes easy for us (thanks, mom and dad, for helping us get into/pay for college). The idea is to get beyond it, where that $18 cocktail isn't a status symbol, that $30k wedding isn't worth the Instagram likes, and you can just be. Don't worry about the laundry soap, or other "making paper towels out of used bank receipts" frugality. Just sit down over a cup of tea or something, and think about what your "ideal day" might look like. Write it down. Think about five years, ten years out - an ideal life is made up of many ideal days.

This made us move out of the rat race to cool Colorado - we get lots of "early morning runs" , "long hikes" and "cups of coffee outside" - all components of our "ideal days" - and not so much "paying for expensive wedding travel" - we just said our first "thanks, but no thanks" to that, and man, it felt amazing to give ourselves the gift of time!

Bottom line - you're making money, but not *check out my jet that takes me to my other house in Paris* money. You have the same net worth as us, with similar levels of immense privilege. However, our net worth increases $20k/month on average, (thanks, stock market boom this year) - due to just a bare minimum thought about priorities (the "ideal days"). You're going to have to have hard thoughts/conversations more than hard cost-cutting frugality. Just have them, because otherwise, you'll be living in my worst fear - being 55 with a completely unplanned, wasted life behind you. Do the hard thoughts. The rest will follow.

Good work, good luck! Wall street is tough. the 20-hour days are tough. the salaries are big, but the time and energy is too. feel free to reach out if you want more details about our similar situations or are pondering how to escape the NYC life for some freedom.




Sweetpotatofries

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #30 on: September 06, 2017, 04:26:26 PM »
Hi, there, fellow 20's newlywed!

Just thought I'd pipe in - I went to a yuppie Ivy-league college, married a software developer, and work in tech. We have similar net worth values (spouse and I are 25/28 years old, respectively), and are worth ~$800k.

I KNOW how easy it is to fall into the NYC trader lifestyle, because that elite club of six-figure 23 year olds takes some clout to get into, and it's a snazzy place to be. Bonus points if you were recruited directly from your ivy-tower dorm room. Been there. The key point is, it's hard to see the merit in mixing your own laundry soap amidst that lifestyle - what's $1/week saved if your salary is 100k with potential for tripling in a few very long trader years? Plus, it feels high-class and powerful to be getting drunk networking with people who just bought 1 World Trade on credit from JP Morgan himself... I  jest, but only a little.

This is more of a plea for you to consider the meaning of life - beyond the money. Money comes easy for us (thanks, mom and dad, for helping us get into/pay for college). The idea is to get beyond it, where that $18 cocktail isn't a status symbol, that $30k wedding isn't worth the Instagram likes, and you can just be. Don't worry about the laundry soap, or other "making paper towels out of used bank receipts" frugality. Just sit down over a cup of tea or something, and think about what your "ideal day" might look like. Write it down. Think about five years, ten years out - an ideal life is made up of many ideal days.

This made us move out of the rat race to cool Colorado - we get lots of "early morning runs" , "long hikes" and "cups of coffee outside" - all components of our "ideal days" - and not so much "paying for expensive wedding travel" - we just said our first "thanks, but no thanks" to that, and man, it felt amazing to give ourselves the gift of time!

Bottom line - you're making money, but not *check out my jet that takes me to my other house in Paris* money. You have the same net worth as us, with similar levels of immense privilege. However, our net worth increases $20k/month on average, (thanks, stock market boom this year) - due to just a bare minimum thought about priorities (the "ideal days"). You're going to have to have hard thoughts/conversations more than hard cost-cutting frugality. Just have them, because otherwise, you'll be living in my worst fear - being 55 with a completely unplanned, wasted life behind you. Do the hard thoughts. The rest will follow.

Good work, good luck! Wall street is tough. the 20-hour days are tough. the salaries are big, but the time and energy is too. feel free to reach out if you want more details about our similar situations or are pondering how to escape the NYC life for some freedom.

Mind if I take you up on this? H and I are 26/28, NYC burbs with an 8 month old, but we're already pretty frugal and plotting our escape from the area...

zoe2dot

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #31 on: September 06, 2017, 05:21:46 PM »
Not sure if it would be  economically  much different than  eating out but Blue Apron is a good way to wean yourself  off eating out without giving up diversity.  You can then create shopping lists for the recipes you like and have Fresh Direct delivered to your doorman.

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #32 on: September 07, 2017, 06:45:48 AM »
Hi, there, fellow 20's newlywed!

Just thought I'd pipe in - I went to a yuppie Ivy-league college, married a software developer, and work in tech. We have similar net worth values (spouse and I are 25/28 years old, respectively), and are worth ~$800k.

I KNOW how easy it is to fall into the NYC trader lifestyle, because that elite club of six-figure 23 year olds takes some clout to get into, and it's a snazzy place to be. Bonus points if you were recruited directly from your ivy-tower dorm room. Been there. The key point is, it's hard to see the merit in mixing your own laundry soap amidst that lifestyle - what's $1/week saved if your salary is 100k with potential for tripling in a few very long trader years? Plus, it feels high-class and powerful to be getting drunk networking with people who just bought 1 World Trade on credit from JP Morgan himself... I  jest, but only a little.

This is more of a plea for you to consider the meaning of life - beyond the money. Money comes easy for us (thanks, mom and dad, for helping us get into/pay for college). The idea is to get beyond it, where that $18 cocktail isn't a status symbol, that $30k wedding isn't worth the Instagram likes, and you can just be. Don't worry about the laundry soap, or other "making paper towels out of used bank receipts" frugality. Just sit down over a cup of tea or something, and think about what your "ideal day" might look like. Write it down. Think about five years, ten years out - an ideal life is made up of many ideal days.

This made us move out of the rat race to cool Colorado - we get lots of "early morning runs" , "long hikes" and "cups of coffee outside" - all components of our "ideal days" - and not so much "paying for expensive wedding travel" - we just said our first "thanks, but no thanks" to that, and man, it felt amazing to give ourselves the gift of time!

Bottom line - you're making money, but not *check out my jet that takes me to my other house in Paris* money. You have the same net worth as us, with similar levels of immense privilege. However, our net worth increases $20k/month on average, (thanks, stock market boom this year) - due to just a bare minimum thought about priorities (the "ideal days"). You're going to have to have hard thoughts/conversations more than hard cost-cutting frugality. Just have them, because otherwise, you'll be living in my worst fear - being 55 with a completely unplanned, wasted life behind you. Do the hard thoughts. The rest will follow.

Good work, good luck! Wall street is tough. the 20-hour days are tough. the salaries are big, but the time and energy is too. feel free to reach out if you want more details about our similar situations or are pondering how to escape the NYC life for some freedom.

BTW, I appreciate the advice and perspective. To be clear, I already left Wall Street / NYC and that level of HCOL and spending about 4 years ago (though many here will point out I may have never truly left that level of spending). I took a 50% pay cut to enter a somewhat related field in an awesome city that I love/d; it was also a bit of a step back in terms of status/prestige in that I now work in a part of the financial world that not as associated with being the cream of the crop. I moved about a year ago to another high cost of living area to be with my wife while she's in grad school.  I only just made it back this year to my total comp of my 2nd year on wall street; had I stayed, I'd be making (and spending) a lot more.   I think my issue is that I've taken the habits of eating out when I was paying $850 / month in rent (in city #2) and kept them relatively constant now that I'm paying $3,174 and the restaurant prices are 30-40% higher. We hope to escape to a lower cost of living place in the future but the narrowness of my field (and inflexibility of her path to becoming fully qualified in her profession 5 years post u-grad education + 1 year residency like year) makes this a challenge and us changing our habits more important.

The hard conversations you speak of are ongoing and thus far the 1/2 w/ den -->1/1 trade conversation isn't going particularly smoothly (and a couple of the open units have been taken, which re-prices the remainder to $2,200-$2,600. The dynamic pricing model the large apartment buildings use is really cool from an inventory / occupancy management standpoint but can be quite annoying as a potential renter. We aren't going to move to save $3K / year (after break fee and other frictional costs like the re-pricing of parking). I want to move if we can save $10K+. There are still a couple available that would allow that and I'm trying to get us to tour one this weekend to see precisely what having less space looks like; the commensurate decline in stuff owned is also an exciting possibility, but also a scary one given that we just acquired like $10K of wedding registry stuff.  I've tried to think of potential compromises / carrots. 1 is the savings would help us pay for dog walker / food. I've resisted getting a dog due to our work and travel schedules necessitating a level of expense and complexity that I believe outweighs the benefits of companionship. But I don't want to rob the rent gods to pay the dog/car/whatever else; I want to actually save the money. I think I brought it up at a bad time and there may be more progress in the future.

Zoe2dot,
We love to cook and usually do cook (that may be a surprise given the restaurant spending) and have used blue apron a lot in the past. I nixed it because I thought we just did better from a meal simplicity and deliciousness standpoint relative to cost and prep time by cooking things ourselves and wife agreed...We felt like we spend a half hour chopping and spend  $8 / meal or whatever it is and the reward was not great; they'll probably be out of business soon given their customer acquisition cost, declining quality and increasing churn. Blue apron is this unappealing part of the spectrum of food where it costs almost as much as eating a decent meal out and the overly complex menus make them a hassle on the weekdays.  we'd rather spend $12/meal for fast casual or just cook. In the past week I've made this https://cookieandkate.com/2014/quick-vegan-chana-masala/ and this http://www.myrecipes.com/recipe/fontal-polenta-with-mushroom and wife made some delicious sweet potato avocado and black bean rice bowls with the left over rice from the chana masala. An area where we NEED to improve is just being okay with making bigger portions and therefore eating the same thing again. Like last night the polenta and shrooms made us dinner and my wife's lunch (3 servings as opposed to the advertised 4 and there's no reason why I couldn't have doubled it...I don't think at least) and the chana masala was 1 meal for 4 (we hosted 2 sets of guests this weekend); easily could have thought to double that up too.




« Last Edit: September 07, 2017, 07:01:03 AM by mrspendy »

kaypinkHH

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #33 on: September 07, 2017, 07:27:17 AM »
Hey Mr. Spendy, another late 20s "high income/high networth" living in a HCOL person's opinion:

Echoing bouldertechwarrier...Where do you want to be in 10/15 years? It sounds like you don't want to wake up and have the loan on the Q7 and private school bills etc. etc. Maybe your goal isn't full ERE or FIRE, but what are your goals? Do you want a house some day, what about kids.. right now you couldn't "afford" daycare.

Have you looked at the cost of buying a condo? You seem like a pretty smart dude so I'm assuming the math works better for renting.

Also, your grocery+restaurant total seems high (I know other people have talked about the restaurant spend). I think the $200 for lunches per month at your work is probably the best deal for you, (although homemade lunches tend to be closer to $2/meal, which is an approximate savings of $625 a year..which is a flight somewhere cool), but if all your lunches are taken care of, and the the other restaurant meals why are you still spending $400 in groceries every month. Check to see how much food you are wasting. 

What stands out to me is the assumption of "what is needed" in your life. For example, when detailing the move to a smaller condo, you say "we would need to hire people to move". Why? Get your spendy pants friends to come over, and help move stuff. Buy pizza and beer. Done...plus it is a free workout :D.

So here is what I would do. (YMMV). (Math is rounded) 

Savings listed per month:
Move to a smaller place: $1000
Sell one car: $300+$75 for parking (I'm assuming the related other savings could be spent on a transit/taxis/car to go/rental bikes etc.)
Cut restaurant and food to a total of $800 a month: $300-$500 a month
Cut personal care spending in half for the year (a $44 dollar hair cut every 2 months?? Seriously? Also, since you are spending so much on mandatory stuff for weddings, does your DW need to get her nails done extra to that): $60
Cut dry cleaning costs in half: $50
Cut the phone/internet/cable bill, you should be able to find something for the 2 of you closer to $150 a month: $75

Additional:
Consider the amount you are spending on gifts..being a bridesmaid+ a $122 shower gift +$127 wedding gift is VERY generous. Even if you cut wedding spending by 25% (maybe skip one party or one shower), you are saving $166 a month of your total yearly spend. 


TOTAL SAVINGS PER MONTH: $2126

If I was feeling REALLY frugal I could probably squeeze another $500-700/month out of your spending, but I think the above is a more realistic approach.

Oh also, sell some stuff...sounds like you got a bunch of amazing wedding presents..do you really need all of them?

Oh btw, in my HCOL city, that $2162 goes directly to child care, so if you are planning kids, it is probably better to get used to this "savings" now vs later.

 




Laura Ingalls

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #34 on: September 11, 2017, 06:51:53 AM »
I think at this stage in your life moving (to another floor) should be on the table for almost  any price savings.  It should have almost no upfront costs.  If it takes 10 hours and saves 3k that is $300 per hour.  Still way more than current salary;).

I have found one of the side effects of living by uninspiring restaurants is that when we eat out less we enjoy it more.  I would make a challenge to eat home cooked food for x days and then go out. 

The constant wedding invites will go away.  It is your current season in life.

badassprof

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #35 on: September 11, 2017, 09:03:07 PM »
Do you need a car or could you downsize to one? I recall that you live two miles from work and have lots of conveniences nearby.That might help to make your pricey digs a mustachian type expense.

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #36 on: September 12, 2017, 06:24:10 AM »
car isn't necessary. I drove less than 3K miles last year and that included a LOOOONG road trip. my car is almost strictly a commuting tool and we never use it on the weekends (thanks to aforementioned well located apartment and zero tolerance for drinking/driving) with the exception of driveable weddings which are few and far between. My bike trail  just got closed for construction for the next 5 years : (  (I thought NIMBY-ism would delay it perpetually<--some of you now know where I live), so it's either ride the streets, uber pool, or walk ~45 minutes (the bike path is a lot more direct than streets, another reason we picked apartment).

the car in question is a 2010 BMW 528xi w/ 75K miles. It's beautiful and in good condition though I got hit at very low speed in a hit and run a couple years back which kills the resale (replace quarter panel and a few other things $3K of damage paid by insurance); it's probably worth $9K - $14K.

I've driven it for 50K (used to drive a lot more mostly road trips to/from DW) with nothing but oil changes and other routine maint; it's been a surprisingly reliable facenpunchenmobil. It's  a ticking time bomb of expensive future repairs.  4 years ago when I bought it, I was going to buy a smaller used car (specifically a 3-4 year old 3 series, not going to act like I was perusing craigslist for a corolla), my parents called me from the dealership and said "you're buying this car, we think it's safe and the right car for you and we'll pay half"...a very generous offer. so my $36K car cost $18K. It also cost me some feelings of independence and if I sold it there'd be some strife ("we didn't buy the car for you to sell it...when was the last time you had it waxed...we thought our grandkids would be in that car"). But woe is me, these are not real problems by any means.

DW needs the car. Mass transit not an option for either of the two places she works. It's a 10 year old Toyota w/ 80K bought from my grandpa for 1/2 off; he took good care of it.

I just paid off the BMW loan to be rid of the bill and as a first step to potentially getting rid of it.

Keep Car
$900 Parking (market rate is $1,800 / year)
$1040 insurance (can be lowered by $120 / year to increase all deductibles to $2K), $260 / year to get rid of collision and comprehensive, if I keep the car, I'll probably go the middle route. the logical probability weighted choice is to forego collision and comprehensive completely, but if the car was totaled and I lost us $10K, I'd feel kind of dumb, losing 38 years of savings at 1 fell swoop.
???? Maintenance
I use like 1 tank every 2 months not counting road trips...Call me Mr. Money Mustache!

Get rid of car
1 way uber pool is $7-$10. So if I did this every single day, both ways it would be $5K / year. But uberpool can now be put in a pre-tax commuter account up to like $2400 a year so that decreases the effective cost by $700 or so. So the maximum cost of ubercommuting is $4,300 / year (less any times I choose to run/walk, less any times I could theoretically bike, but honestly not sure if I'd bike the streets to work).

I think uberpooling would work out to be cheaper, even if I did it almost every day, because of the maintainance time bombs of the 8 year old bimmer. And it absolutely would be cheaper if I walk/run/bike a material % of the time. 50% muscle over motor rate gets to like $2K / year. Winter is coming and I'm unsure of uberpool availability / pricing then, but am in process of testing it out. And selling the car would give me a couple years of uberpooling cost in cash.

I don't think getting a different car makes any real sense because parking / liability insurance are the biggest components of my car costs so even if I had a beater, it wouldn't be mustachian and I wouldn't get a lto of value for the fixed costs.

Here come the facepunches.


« Last Edit: September 12, 2017, 07:01:28 AM by mrspendy »

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #37 on: September 12, 2017, 07:08:27 AM »
what about kids.. right now you couldn't "afford" daycare.

very true. we can't afford a dog, much less a kid. I had this discussion this weekend w/ DW and she said that we won't have kids before I get promoted / she is on the tail end of her many years long journey of post u-grad education and reminded me that I get a bonus in most years.... I heard me speaking when she said that.

"ya that's expensive and we can't afford it but don't worry you'll make a lot more $ in the future"

on the other hand, there's been some buy-in on the grocery / restaurant front....very little on the moving front...think putting all attention to car / food /dry cleaning / gifts / travel is best in the near term.
« Last Edit: September 12, 2017, 07:20:34 AM by mrspendy »

Laura33

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #38 on: September 12, 2017, 08:17:17 AM »
OMFG get rid of the fucking Beemer.  Giant catastrophe waiting to happen.

I personally don't care if you replace it with a cheap city-appropriate car* vs. ride the streets vs. walk vs. uber or whatever.**  But get rid of that thing before you have to start forking over $2-4K/yr in maintenance (which for me was right about the 7-yr/60K mi. mark -- at 8 yrs it blew up).

You guys are doing great.  You don't need an expensive douchemobile to prove it to anyone.  And anyone who matters wouldn't be impressed by it anyway.***

* If you are driving a couple of miles in city traffic, and you have alternatives if the car breaks down on you, why not buy the cheapest little POS you can find?  Like a 10-yr-old Geo Metro or Toyota Yaris or something?  That way you won't care if it gets dinged in traffic or the parking garage, you can dump all but liability insurance because (again) you won't care if it gets totaled, and it will run on regular gas and at least drop your fuel bill a few bucks.  Or buy your DW's car from her and let her get a reliable newer one since she actually needs it and you don't.

**Yes, you know what you should do, but I am ok with baby steps -- it's a long life, you have time to get there.

***  Full disclosure:  I am a total car girl and drive the ultimate 60-yr-old-man-midlife-crisis-mobile, because I just fucking love driving.  But I am also 50+ and FI, and I paid cash.  :-)
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kaypinkHH

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #39 on: September 12, 2017, 12:14:28 PM »
Laura33. I love you.*

That is all.

*In a completely platonic, mad respect, on a online forum, way.

gluskap

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #40 on: September 21, 2017, 12:45:40 PM »
I wish I had discovered MMM when I was your age.  I'm in the same "we're comfortable and can afford it" type of spendypants mentality thinking.  Complete with 8 year BMW and pricey restaurant/grocery spending.  Only we're older and have a kid. I think the sooner you make the changes the better off you'll be because it really is about getting into the habit.  We end up eating out way too much because we're both stressed from work and lazy when we get home and that seems the simpler option.  I'm trying to do more meal prep on the weekends and have food frozen so that when we have those lazy, stressful days that we have a cheap eat at home option that is easy.  Still working on the bringing food to work thing too.  It really is about stopping to think about what you want and making a conscious decision.  But sometimes it's easier to just ease into it a little bit at a time.

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #41 on: September 21, 2017, 05:09:18 PM »
I've spent a lot of time cleaning up personal capital.

$64K of normalized run rate expenditures, approximately $7K / month ($1K more than I originally thought and consistent with the prior two months).

At 45% of our spending and 54% of our take home, mathematically, the rent is our problem....no traction on the rent/moving...the idea of moving is a hugely stressful to DW and "absolutely not happening before summer/while in school/TA'ing/working/researching etc."

My wife basically has 4 part time jobs and probably works longer hours than I (and I clocked a solid 15 hour day last week, usually work 8AM to 6PM and then 4-6 hrs on the weekend though which isn't bad at all); she works super hard and my thoughts toward her chosen career path are a blend of admiration and frustration. 5 years funded grad school ($24K), 1 year internship ($25K), 1-2 years post-doc ($40-$50K) is a boat load of schooling/low pay work for a profession that generally pays $80-$120K if you get one of the handful of very competitive good jobs, not to mention the geographical matching issues with my career. I don't view her career path as entirely "rational", but it doesn't involve a ton of debt either and will diversify the family's source of income beyond my somewhat volatile one.

The grind of grad school (and grad school related unpaid internship) seems to be discouraging to DW to change our lives (our nice home / restaurants/going out is our entertainment/escape), whereas the grind of working and seeing 95% of my take home go to rent and restaurants wants me to change our life. That's the tension.

Meanwhile, at the ripe age of 28, I am learning to iron. It's not my idea of a great time, but hey it will decrease my expenditures by 1%...and watching my silver spoon ass (firm believers in Taylorism, my family always had an ironing lady) fumble through that exercise is more "symbolic/be the change" than anything.

We've pretty successfully stopped going out to eat during the week, but $'s on restaurants hasn't decreased at all this month because of a somewhat disastrous labor day weekend when 2 sets of friends visited. Cutting the fast casual during the week has been easier than thought (making bigger portions). Cutting the Friday/Saturday night dates and outings with friends doesn't really have any real traction. 

In 4 days the last $15 on my car loan will be paid.

No real or lasting changes will be made until we are a team on this.



Hadilly

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #42 on: September 21, 2017, 07:44:22 PM »
Hey Mr. Spendy, just a couple of suggestions. I would also encourage you to move. Maybe tell your wife you will do all of it. Even if you spend a few hundred on movers to pack you out, still totally worth it.

Ironing: I hate it, but I do like using my steamer. Maybe check them out. That plus a few no iron shirts and you should be good.

Congratulations on embarking on this journey!

I have been thinking a lot about social signaling lately, and I feel this forum community offer a marvelous counterweight to life in an HCOL. I read this NYT article about poor families getting themselves out of poverty: https://www.nytimes.com/2017/08/15/opinion/poverty-family-independence-initiative.html
 And one of the things that made a big impression was the role social signaling has on choices. Coming here, and basing my choices on mustachian, as opposed to big tech/VC money, mores has made all the difference for me, and in turn for my family because I drive the spending, saving and investing. Maybe something to consider as you make decisions grounded in a new ethos for you.

Edited to fix a misplaced comma
« Last Edit: September 21, 2017, 10:18:39 PM by Hadilly »

Laura33

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #43 on: September 22, 2017, 07:09:29 AM »
No real or lasting changes will be made until we are a team on this.

Look, I feel you on this -- my DH and I are on different pages as well (if it were up to me, we'd be FIRE'd already).  But it takes time and patience.  If you think about it, you've really pulled a bait-and-switch on her -- when she met you, you were big high-pay job, ambitions, let's live it up with a great apartment and vacations and eating out all the time, etc.  And now you are on her about how all that is too much -- wtf? 

Also:  if my DH suggested moving while I were in the middle of working 14-16hr days running after 4 jobs, my response would not be printable -- even in this forum, where the "fucks" fly freely.  Especially if he were sending me the vibe that he doesn't think the career to which I am currently dedicating my life is worth it. 

My advice:  back WAY the fuck off on her.  You have fixated on the apartment -- objectively very reasonable given the costs, but clearly it is not something that she is willing to even consider right now.  So drop it.  Wait until your lease is about to end, until she is in a better place with school and work and all, and then you can talk about a better choice for your next place.  Remember that this is a marathon, not a sprint:  you are all fired up to change your lives, so you want to jump on it RIGHT NOW.  But really, this is just the same "I want it now!" impatience that led you into your spendy lifestyle in the first place!  You have many, many years ahead of you; taking one or two of those years to give your wife time to adjust is better than pushing too hard and FIREing alone.

In the interim, do whatever you can do.  If she is working more hours, then take 100% responsibility for grocery shopping, menu planning, and cooking.  SELL THE STUPID CAR, take over her beater, buy her a cheap, reliable used car that is still nicer than what she is driving now.  Clean the apartment yourself on the weekend.  Do some research on W-Th on free/cheap events around town for the weekend.  Ride bikes, get out in nature, away from your climate-controlled life.  Etc.  Read the "how to convert your SO thread" and implement; then read it again and do more.  Lead by example so she can see how fun and fulfilling your lives can be without throwing money away on stupid stuff.

Yes, it sucks to take all that on yourself.  But you're the one who wants to change the rules.
Laugh while you can, monkey-boy

mrspendy

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #44 on: September 22, 2017, 07:28:45 AM »
Laura, you have a habit of reading my mind and diagnosing the situation perfectly. We recently had this very discussion where I acknowledged the fact that my attitude toward money had totally changed and I didn't want it to seem like I "tricked" her; going from "hey we're 23 and it's Saturday night in NYC, let's go to Buddakan/Nobu/Fig&Olive/whatever" to "maybe we should watch how much we eat Sweetgreen" to "so rice and lentils on Saturday?"  Is a bit of an about face and a change, and somewhat hypocritical given the flashiness of the rest of my life: driving the BMW to my job where i have a bunch of delicious food and fly first class around the world and get to see Hong Kong, Tokyo, Singapore in a year (or at least office buildings and hotels in those places LOL). It's all bit unfair to her; I get to be wined and dined even if we spent $0 on restaurants and travel. I commute 10 mins, she has a hellish 40 minute commute. I have an office on a leafy corporate campus (deer come up to my window sometimes), she's in a cube or a classroom or a hospital.

The "I know I've flipped the switch on you, but here's what I'm thinking and why and here are some changes i hope to gradually make" approach is immeasurably more productive than the "we need to deprive ourselves while we are working super hard so that we can amass more dough for me to play with" approach.

One thing we both are working on is taking advantage of more free forms of entertainment (i.e. Enjoy our apartment's proximity to trails and parks rather than it's proximity to restaurants), like you mention and hosting friends for meals/drinks instead of going out. There's concensus there.

thanks for the tips, everyone.




Laura33

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #45 on: September 22, 2017, 07:32:02 AM »
I commute 10 mins, she has a hellish 40 minute commute.

Well, there's your sales pitch for the next apartment:  swap your commutes.  :-)

And, yeah, her resistance makes a lot more sense in that context, too -- it's very much an "easy for YOU to say, YOU still get the fancy restaurants and first-class travel," isn't it?
Laugh while you can, monkey-boy

Meesh

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Re: Can Mr. and Mrs. Spendy cut their way to freedom?
« Reply #46 on: September 22, 2017, 06:31:18 PM »
We make right around what you make and I agree with everyone that you have a lot of ways to fix your spending, but honestly I'm posting because you remind me of my parents.

My parents make what you say your boss's boss makes pretty much my entire life (I'm a few years older than you) and they just blow it all away ever month "because they can afford it". They have no savings. I'm not even sure how they spend that much but my guess would be their STAFF. You are absolutely right that life style creep will come in. First it will be moving to a good area for schools or putting them in private schools maybe both, then it will be birthday present cars and private universities (mine was in Europe with a first class ticket for "extra baggage"). I'm only saying these things to get you to wake up! You can always spend everything, even on 1m. And I can say on good authority it won't make you any happier. Now is the time to make these big decisions before your income goes up.

Your rent is crazy, which you already know. It needs to go way down. I'm sure your wife is very confused, so go slow. Good on you for going in the right direction, but don't get stuck in the "because I can afford it" mentality. If FI is a real goal of yours then continue to make small improvements to get your spending in check, not hope you'll do better once you make more money.

We make what you do and I go out to restaurant probably once a month max. We don't live in a HCOL but we do live in a hoity-toity suburb since that's where DH's job is at a grand total of 1k a month. Which I consider excessive. If we didn't have a child we would have gotten a studio. My DH drives a beater when he's not walking to work.

When we do spend we use it on spending time with each other, like weekenders and camping. Is your home close to massive amounts of expensive and unhealthy restaurants really what you want to spend your money on? It seems to just be fueling the convenient fire. Move away from the restaurants and lower your wife's crazy commute. Then spend some of the extra on fun experiences together.