Getting Married In a Month - Planning Our Financial Future

[burningmanbun]

My lovely fiancee (31) and I (33) are getting married in a month. While I have always been frugal, I've only started doing any long term financial planning the last two years after landing my first real job after grad school. Smacking myself for not learning about tax advantaged accounts and index funds earlier. Oh well, better late than never.

The Good

• NO MORTAGE - I flipped and rented out a house in a rapidly gentifying neighborhood while I was in grad school, and the proceeds allowed me to buy my current home with cash (bought for 75K, sold for 200k, current home is 165K).
• No debt - we both graduated debt free, she doesn't have a car, mine is paid off.
• Decent income, but my company is known for underwhelming raises and bonuses.
• I live in a L/MCOL area.
• I live close to work, currently biking to work 3 seasons of the year, hoping to make it year-round.

The Bad

• Missed out on the record stock market growth over the last decade, had cash just sitting idle in bank accounts because they were clueless about investing.
• Starting from scratch in our early 30s.

The Ugly

• Fiancee lives in different city with VHCOL, we can't move in together yet because of her job, but the plan is for her to eventually move here, but that will probably happen in 2 years time.
• Her rent alone is 1/3 of her post-tax income, this makes it impossible for her to save anything beyond her retirement savings.

Here's a detailed breakdown of our finances, skip to the bottom if you don't want to read the details.

	Mine	Hers	Remarks
Gross Income	$120,000	$68,000	Bonus is depressingly negligible, so not including it at all.
Pre-Tax Savings	$19,000 (401K) + $6,000 (Roth IRA) + $3,500 (HSA) = $28,500 (Total)	$19,000 (403B) + $6,000 (Roth IRA) = $25,000 (Total)	We max out whatever we can.
Employer Contribution	$7,200 (6% 401K) + $800 (HSA) = $8,000	NA
Taxes	$30,000 (est.)	$13,000 (est.)
Health Insurance	$1,038	0	My company has crappy health insurance, the 1k I'm paying now is only dental (need some work this year, otherwise I can go with a more basic plan). Hers on the other hand is awesome (perks of working in a healthcare field). We are going to look into whether I can be covered under her health insurance once we get married.
Housing (Fixed)	$6,500 (Property Tax) + $720 (Homeowner's Insurance)	$1,575 x 12 = $18,900	Ouch and ouch, but I decided to trade high property tax (almost 4% of house value) for living in a walkable neighborhood and being able to bike to work. Her rent will go away once we move in together, hopefully in < 2 years time.
Housing (Budgeted)	$4,000 (Home Improvement/Maintenance)	NA	About 2% of home value, seems reasonable.
Utilities	$1,800 (Electric, Gas & Water)	$400 (Electric)
Internet	$65 x 12 = $780	$55 x 12 = $660	Only internet provider. Monopoly sucks!
Phone	$35 x 12 = $420	$35 x 12 = $420
Transportation (Fixed)	$720 (Car Insurance) + $55 (Registration + Inspection)	$120 x 12 = $1440 (Subway Pass)	10 year old car, paid off and going strong.
Transportation (Budgeted)	$2,400 (Gas) + $1,000 (Repair/Maintenance)	$1,000 (Bus tickets to visit me)	I mostly bike to work (< 10 miles RT), but between driving to visit my fiancee on weekends and frequent drives to hiking trails and other road trips, the miles really add up.
Groceries	$2,400	$3,000	Her grocery budget is higher due to living in a HCOL area.
Dining Out (Us)	$3,600	NA	This is a shared expense, and I (gladly) pay by default. We are both foodies so this is one of our guilty pleasures.
Dining Out (General)	$1,200	$1,200	I eat out for social purposes only, all other times I cook and meal prep, but I have some very spendy friends and I crumble under peer pressure.
Travel/Vacations (Budgeted)	$2,000	$2,000
Healthcare (Budgeted)	$2,000	$1,000	Neither of us have had any healthcare related expenses in the last 10 years, but I figured this is good to have in the budget.
Entertainment (Budgeted)	$1,000	$1,000	Another guilty pleasure of ours, we both love music and theater.
Hobbies + Electronics (Budgeted)	$1,500	$200	I'm in charge of shopping for phones/laptops etc. I also buy outdoor gear once in a while.
Beauty Products	$100	$???	I haven't tried asking, but judging by the stuff spewed over every surface of her apartment I'm guessing substantial amount. XD She is working on cutting down on her spending in this category though.
Clothes / Accessories	$500	$???	Again, don't ask don't tell.
Shit Happens (Budgeted)	$2000	$2000	Because death, taxes and... shit.
Total Expenses	$35,013	$33,220 + $???
Total Savings	$64,987	$22,780	Her calculated savings is lower than what she's actually putting away ($25,000 in her 403B and Roth IRA, because there are items in the budget we ended up not paying for, e.g. healthcare)
Post Tax Income	$90,000	$55,000
Saving Rate	70%	40%
Current NW	$47,000 (401K) + $28,000 (Roth IRA) + $59,000 (Taxable Investment Acct) + $3,800 (HSA) + $23,000 (HYSA) = $160,800	#28,000 (403B) + $19,000 (Roth IRA) + $5,000 (Cash) = $52,000

Our actual expenses are usually lower than this, but I decided to budget conservatively just in case.

We both love our jobs so we're not sure if we will RE, but FI sure sounds awesome! We should be able to cut down on our collective expenses once she moves in with me, but we are also planning to have kids then, so total expenses might be a wash. ideally we want to keep our (inflation-adjusted) expenses to 50K a year tops, so I think we'll count ourselves FI at ~1.5mil, at our current rate we're hoping to get there in ~10 years time. What do you guys think of our plan? Any feedback/advice/facepunches are welcome!

[farmGirl14]

You guys are planning on living apart for two years while married? I would absolutely hate that.

[LifeHappens]

Your living situation is unfortunate, but you do what you have to do. Hopefully you and your fiance can live together sooner than in two years' time.

Do either of you have life insurance? Since you're planning to have kids it makes sense to get term life policies sooner rather than later. In general the younger you are, the less expensive it is.

[acepedro45]

Do either of you have life insurance? Since you're planning to have kids it makes sense to get term life policies sooner rather than later. In general the younger you are, the less expensive it is.

Disagree. Get life insurance once you have something you need to protect - for most adults, that's once you have kids coming. Until then, save your money.

[burningmanbun]

You guys are planning on living apart for two years while married? I would absolutely hate that.

Yeah we're not in love with this arrangement either, but due to some complications at her job this is what we have to settle for now. We've been together for 10 years, and the last 5 years have all been long distance, mostly because I was still in grad school. Our cities are close enough to spend almost every weekend together though.

Do either of you have life insurance? Since you're planning to have kids it makes sense to get term life policies sooner rather than later. In general the younger you are, the less expensive it is.

Disagree. Get life insurance once you have something you need to protect - for most adults, that's once you have kids coming. Until then, save your money.

Incidentally, I did buy life insurance for the first time this year, but only for AD&D (accidental death and dismemberment), that's included in the health insurance cost I listed. For 1.2 mil payout it costs $25/m, and I figured it's a relatively small price to pay for the assurance that if anything happens to me my (very near-future) wife will be taken care of financially. I would love to hear which way the rest of the Mustachian community leans on this issue.

[SimpleCycle]

I love your username, so you already have that going for you.

I'll weigh in on the life insurance question.  The usual mustachian advice is that adults can support themselves, life insurance is for kids only, and that you only need enough to get you to FI since then you'll be self insured.  But that said, if you have had no significant medical expenses in the last 10 years, your insurance rates are going to be very low.  So if you are planning on having kids, I'd consider insurance now.  My very healthy wife got a $1M 30 year policy at age 35 for $36/month.  I, on the other hand, pay triple that for the same policy due to health issues that started in my 20s.  Based on that experience, I say get policies while you are young and healthy, and run them through when you expect to be FI.  We are definitely overinsured at this point since we'll be FI in 8-10 years, but we didn't really think about that when buying the policies.  It will be MUCH more cost effective to get real term life insurance than to get the AD&D coverage you have now.

Your financials and plan look very good.  So instead I'll give you marriage advice. :)  Talk about your hopes and dreams early and often, both to get on the same page and to uncover areas where you are not aligned.  Not just about finances (which are important, but not the end all, be all) but about kids (if/when/how to raise them) and aging parents and what adventures you want to have and where you want to live.  You've already covered some of the biggies (grad school, choosing careers) but early retirement plans bring up goals that are different from the average life trajectory and it can turn out that one of you has more tolerance for bucking expectations than the other.  I have found that having aligned values and goals has gone a very long way in my marriage.  We are a team, we act as a team, and we are better together than each of us on our own.