Author Topic: Case Study-Coast FI but are expenses too high?  (Read 9722 times)

afuera

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Case Study-Coast FI but are expenses too high?
« on: January 04, 2023, 10:19:56 AM »
Case Study-Coast FI but are expenses too high?

Life Situation: MFG, Mid-30s couple with two kids under 2 and two big dogs, one getting pretty old (9 YO for large breed). 
We just moved into a expensive house with a big mortgage.  Husband FIRE'd in May 2021 to be a SAHD and our plan is that he will never have to go back to work.
We are in an expensive, hectic, exhausting phase of life just trying to keep up with the kids.


Gross Salary/Wages:
Me: $140,000 +$8-10K Bonus
Hubs: $0 House Spouse

Individual amounts of each Pre-tax deductions

401k: Pre-Tax-$22,500
HSA: $6,750 (Company contributes $1000 for HDHP Family Health Plan)
IRA: $13,000 Total (Me-$6,500, Spouse-$6,500)
Insurance: $3,600 (Medical, Dental Vision HDHP, LTD, Group Legal)
Total: $45,850

Other Ordinary Income: None currently.  Side hustle is pretty physical and time consuming so not worth it currently with young kids.  TL CCs got cancelled :(

Qualified Dividends & Long Term Capital Gains: Dividends reinvested, no LTCG.

Rental Income, Actual Expenses, and Depreciation: None

Adjusted Gross Income: $104,150

Taxes:
Federal:
     Witholding:$6,225
     EE SS: $8,275
     Medicare: $1,935
State/County: $8,225
Total: $25,000

Total Income after Taxes: $79,500


Current expenses: Tracked for the last ~4 years with YNAB
     Yearly     Monthly     Comment
Immediate Obligations
Mortgage P&I     $31,135     $2,595     5.25% interest, 5/1 ARM
Mortgage T&I     $4,860     $405     
Car Insurance     $1,500     $125     3 cars, one is a non-drivable project car.
Utilities     $600     $50     New house has solar (Paid off by previous owner). Mostly city water
Internet     $1020     $85     
Cell Phone     $1,440     $120     Verizon, bundle with home internet
Home Security     $720     $60     ADT Home Security
Streaming/Subscriptions     $130     $11     Steaming/Gaming
Necessary Expenses               
Groceries     $6,000     $500     
Baby     $1,800     $150     Diapers, Formula, Clothes, Toys
Pet Expenses     $3,000     $250     Food, Treats, Vet Appointments. High but this has been our AVG
Gas     $1,200     $100     
Auto Maintenance     $600     $50     Higher this year due to new tires on the commuter car
Home Maintenance     $2,400     $200     New House Projects
Health/Medical     $4,500     $375     Payment plan for birth of kid #2, finished in 2024
Therapy/Counseling     $1,200     $100     New expense for us this but so far absolutely worth it
Gifts     $600     $50     
Charity/Giving     $1,200     $100     Would like to increase in the future
Unexpected/Misc.     $100     $10     Usually stupid tax, missing a fee or something like that
Luxury Spending
My Guilt Free     $1200     $100     Usually clothes, big one-offs, or self care items
Spouse Guilt Free     $1200     $100     Project car stuff
Personal Care     $600     $50     Haircuts mostly. AVG last year was closer to $20/month
Fa(s)t Food     $600     $50     
Vitamin A     $600     $50     
Restaurants     $1,200     $100     Date nights and dinner with friends 2-3X per month
Fun Activities     $1,800     $150     Tickets to festivals, events, YMCA Membership.
Travel     $2,400     $200     Won't be travelling too often since we will have two babies.
Total Spend     $69,600      $5,800     

Assets          
Account     Amount     
401K     $10K     just started a new job
Traditional Rollover IRAs     $550K     
HSAs     $50K     3 total (My old one, Spouse old one, my new one)
Roth IRAs     $300K     Includes rollover from Mega Backdoor Roth
Taxable Brokerage     $50K     
Home     $520K     (2022 Purchase Price)
Total Assets     $1.4M     
Liabilities          
Mortgage     $415K     
          
Net Worth     $1.085M     


 
Specific Question(s):
1) We relocated to a more expensive area for a new job and timing for the housing market wasn't ideal. We decided to get a 5/1 ARM mortgage on our new house because it knocked 1.5% off our mortgage rate.  Our goal is to pay a little extra towards to principal every month and refinance before the rate changes.  We know it was a gamble to get an ARM but it saved us $300/month by getting a lower interest rate so we are putting that $300 extra towards the principal so we refinance a smaller balance in 3-5 years.  Is this a solid plan?

2) Any glaringly obvious expenses we need to cut?   I know anything under the "Luxury Spending" category could be cut ($750/month) but we are pretty happy with that spending level overall.  The fun activities category includes our YMCA membership that includes 2 hours a day of free daycare while you exercise and it is the single best thing we spend money on for mental/physical health.  I feel like we are in an expensive phase of life with small babies, old dogs, and high medical costs (for both!).  Realistically, these expenses will decrease in a couple years and we should spending $500+ less every month.

3) We are planning on two pretty big projects at our house over the next few years, building a deck and finishing the basement (including new bathroom).  Our plan right now is just to use the extra $10K/year leftover between take home and normal expenses to finance these projects.  Does that seem realistic?

4) Does our overall financial picture make sense? Before the move, we averaged $55-60K spending per year which I was pretty happy with. While our new house is more expensive, its 1000X worth it for the quality of life upgrade the new job/area has given us so I’m feeling its money well spent.
Also, we are kind of coast FI right now, my husband already FIRE'd to be a SAHD and we are still contributing ~$40K/year to retirement accounts so I kind of feel like letting everything ride on autopilot until 2025 and then we can see where everything shakes out with home refinance and FIRE.  Does that seem viable?

« Last Edit: February 28, 2023, 11:09:07 AM by afuera »

lhamo

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Re: Case Study-Coast FI but are expenses too high?
« Reply #1 on: January 04, 2023, 10:31:10 AM »
I don't see how you are getting to FIRE in two years with those numbers, especially with a mortgage that high -- and hoping that interest rates are going to magically drop down to historic lows is not exactly a plan.

Internet and cell phone are higher than they need to be.

Don't understand why you need a $60/month home security system.  We originally got Simply Safe when we bought our house (roughly $300 for the basic system then $15/month for monitoring), but stopped the monitoring because the house is rarely empty.

$50/month for one vitamin supplement seems high.

afuera

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Re: Case Study-Coast FI but are expenses too high?
« Reply #2 on: January 04, 2023, 10:37:42 AM »
Thanks, @lhamo!
Yea, with our current numbers 2025 FIRE is looking like a stretch since the market is down.  It looked better a year ago.
We can definitely optimize cell phone, internet, and home security.  The internet and cell phone were definitely an upgrade for better service and speeds then what we had at our old house.
Vitamin A is alcohol, it is a nod to my favorite FIRE blogger, Dr. Doom.  I appreciated all his insight on alcohol and constantly toy with the idea of going AF.

charis

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Re: Case Study-Coast FI but are expenses too high?
« Reply #3 on: January 04, 2023, 10:56:38 AM »
Your spouse strikes me as not FIREd, but a SAHP, which is still pretty great.  You are obviously in good shape financially, the mortgage is obviously high.  We spend a similar amount but the mortgage is $900 and kids (10&13) costs are a lot higher than the baby/toddler years (not including daycare).  (1) they are involved in sports and arts to a higher degree, (2) two diagnosed conditions that we didn't see coming at younger ages that require $, and (3) we've upped their college savings in recent years.  So I'd just be aware that your kid costs could look at lot different in 5-10 years even with the best laid plans.   

LifeHappens

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Re: Case Study-Coast FI but are expenses too high?
« Reply #4 on: January 04, 2023, 10:57:08 AM »
Quote
3) We are planning on two pretty big projects at our house over the next few years, building a deck and finishing the basement (including new bathroom).  Our plan right now is just to use the extra $10K/year leftover between take home and normal expenses to finance these projects.  Does that seem realistic?
This depends on so many factors. How big a deck? How big a basement? Entirely DIY, entirely contracted or somewhere in the middle? What level of finishing?

Overall, it sounds like you have pretty solid spending data, but a very fuzzy picture of the future. Totally understandable given your life stage. However, I am with lhamo that I don't see full FIRE being a possibility for you in 2025 unless you can reduce expenses and/or the market has a big rally soon.

What I DO see as a possibility is you reducing your work to part time. In fact, you could do that right now if you didn't mind working part time until your current savings reach your FIRE number in 5-10 years.

afuera

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Re: Case Study-Coast FI but are expenses too high?
« Reply #5 on: January 04, 2023, 11:07:39 AM »
Your spouse strikes me as not FIREd, but a SAHP, which is still pretty great. 
Tomato, tomahto.  He is never going back to work again and is doing exactly what I would do if I quit!

I appreciate the insight on how expensive kids activities can be.  I get it, I played travel soccer pretty much my whole childhood...

charis

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Re: Case Study-Coast FI but are expenses too high?
« Reply #6 on: January 04, 2023, 11:10:28 AM »
Your spouse strikes me as not FIREd, but a SAHP, which is still pretty great. 
Tomato, tomahto.  He is never going back to work again and is doing exactly what I would do if I quit!

I appreciate the insight on how expensive kids activities can be.  I get it, I played travel soccer pretty much my whole childhood...

Eh, ok, but he's not financially independent, as you wouldn't be, because you'd be relying on spousal income.  I guess coast FIRE might apply to his situation.  Either way, as I said, your family is in good financial shape.

afuera

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Re: Case Study-Coast FI but are expenses too high?
« Reply #7 on: January 04, 2023, 11:12:02 AM »
Quote
3) We are planning on two pretty big projects at our house over the next few years, building a deck and finishing the basement (including new bathroom).  Our plan right now is just to use the extra $10K/year leftover between take home and normal expenses to finance these projects.  Does that seem realistic?
This depends on so many factors. How big a deck? How big a basement? Entirely DIY, entirely contracted or somewhere in the middle? What level of finishing?

Overall, it sounds like you have pretty solid spending data, but a very fuzzy picture of the future. Totally understandable given your life stage. However, I am with lhamo that I don't see full FIRE being a possibility for you in 2025 unless you can reduce expenses and/or the market has a big rally soon.

What I DO see as a possibility is you reducing your work to part time. In fact, you could do that right now if you didn't mind working part time until your current savings reach your FIRE number in 5-10 years.
Thanks, @LifeHappens!
The crazy thing is my new job almost feels like it is part-time compared to my old one.   The stress, hours and commute are all substantially lower which is why I'm fine with the extra housing cost associated with the move.  It probably delayed full FIRE a bit but the quality of life is fantastic.

As far as the deck and basement work, we plan to mostly or entirely DIY.  We have been playing around with Lowe's Deck designer since we will knock that one out first.

Laura33

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Re: Case Study-Coast FI but are expenses too high?
« Reply #8 on: January 04, 2023, 12:00:11 PM »
So we're apparently neighbors, unless your Charm City is a different one than mine.  And if it's the same one, I'm not going to begrudge you the security system.  ;-)  But I do suggest checking out cheaper options (we had Vintage for $20/mo. until the house fire, don't know what we'll do when we move back in, but it won't be ADT).

I think on the details, you're largely in good shape -- you're saving half your take-home pay, even without considering the $10K leftover each year, and you have a lot of luxury built into your budget that you know you can cut if need be.  A few bigger-picture points:

-- Don't count your home equity in your FIRE 'stache.  You're always going to need a place to live, so unless your FIRE plan is to sell and dramatically downsize, is best to ignore it.  View the home -- and all home-related expenses -- as consumption, not investment.  FWIW, I would not throw more money at the mortgage.  In 5 years, your house will be worth what it's worth regardless if you have 1% equity or 100% equity.  If 5 years from now you decide you want to pay more toward the house to take out a smaller mortgage, you can take money out of cash/investments to do so.  OTOH, if the SHTF and say you lose your job, you can't take that money back out of the house to live off of.  Keep your investments liquid and make a decision on the house and mortgage when it's time to do so.

-- Along those lines, you can absolutely do home repairs/upgrades on a pay-as-you-go basis using that extra $10K/yr.  But don't fool yourself into thinking that those are one-offs.  Sure, you may build a deck only once every 20 years or so, but you're always going to have some "thing" that is going to want to suck up that extra $$.*  So if you start down the path of using that extra $10K for house upgrades, write that into your budget as an annual expense and plan accordingly.

-- As @charis noted, don't assume your kid spending will go down.  Are you planning on public schools, or are you in a neighborhood where you want/need to go private?  Even without private schools/sports/activities and such, what's your plan for funding college?  Because that's not in your current budget.  This is another area where your expenses can go as high as you're willing to let them.**  So it's safe to assume that your kid expenses will remain at least at their current level, assuming any level of after-school activities and college savings.  Figure out what kind of lifestyle expenses and enrichment options you want to provide for your kids, and build your FIRE budget around that.

-- Remember that your FIRE budget needs to reflect what you plan to spend for the rest of your life, not just what your current expenses are.  So it needs to include things like vacations, replacement vehicles, and hobbies -- things you may not have the time/energy/need for now, but that you will want to be able to do over the course of the next 50 years or so.

Given all of that, I agree that you're really not 2 years away.  But boy do you have a really nice 'stache!  You've got almost $900K in investable assets as of today, and even if you just let that sit there and don't add anything else, that will get you to FIRE in a decade or so (if you're not adding on $20K/yr of home repairs and kid expenses!).  So as long as you stay happy with  -- and employed in -- your current job, you really can just sit back and let the money take care of itself.  Congratulations!


*Ask me how I know.  House is 135 years old, and every time I've said that I finally had it just like I wanted it, we needed a new roof, and then 2 years later I discovered something else I wanted to change.  And then it burned down, of course. . . .  As Roseanne Roseannadanna said, it's always something.  So you can bitch about all the extra stuff a house needs, or you can plan for it.

**We just had to replace DS's bike after the fire, and OMG the prices for a decent full-size bike that will last him for the next 10-15 years!  And don't get me started on phones and gaming. . . . 

afuera

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Re: Case Study-Coast FI but are expenses too high?
« Reply #9 on: January 04, 2023, 12:25:28 PM »
So we're apparently neighbors, unless your Charm City is a different one than mine.  And if it's the same one, I'm not going to begrudge you the security system.  ;-)  But I do suggest checking out cheaper options (we had Vintage for $20/mo. until the house fire, don't know what we'll do when we move back in, but it won't be ADT).
You get it :)  A company that worked with our relocation package setup the ADT for us but we will look into other options when our contract is up.

FWIW, I would not throw more money at the mortgage.  In 5 years, your house will be worth what it's worth regardless if you have 1% equity or 100% equity.  If 5 years from now you decide you want to pay more toward the house to take out a smaller mortgage, you can take money out of cash/investments to do so.  OTOH, if the SHTF and say you lose your job, you can't take that money back out of the house to live off of.  Keep your investments liquid and make a decision on the house and mortgage when it's time to do so.
Thank you for this!  I guess my brain forgot that I can actually take money OUT of investments to pay for things since I've never done that before....
I think I saw a comment you made somewhere along the lines of extra principal payments don't benefit you at all UNTIL the last one.  That is an excellent point and I think you convinced me.


Given all of that, I agree that you're really not 2 years away.  But boy do you have a really nice 'stache!  You've got almost $900K in investable assets as of today, and even if you just let that sit there and don't add anything else, that will get you to FIRE in a decade or so (if you're not adding on $20K/yr of home repairs and kid expenses!).  So as long as you stay happy with  -- and employed in -- your current job, you really can just sit back and let the money take care of itself.  Congratulations!


*Ask me how I know.  House is 135 years old, and every time I've said that I finally had it just like I wanted it, we needed a new roof, and then 2 years later I discovered something else I wanted to change.  And then it burned down, of course. . . .  As Roseanne Roseannadanna said, it's always something.  So you can bitch about all the extra stuff a house needs, or you can plan for it.

**We just had to replace DS's bike after the fire, and OMG the prices for a decent full-size bike that will last him for the next 10-15 years!  And don't get me started on phones and gaming. . . . 

I appreciate all the feedback!  I was low-key hoping you would comment on my post, your comments on other people case studies are always extremely helpful.  Thank you!

Laura33

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Re: Case Study-Coast FI but are expenses too high?
« Reply #10 on: January 04, 2023, 02:15:35 PM »
So we're apparently neighbors, unless your Charm City is a different one than mine.  And if it's the same one, I'm not going to begrudge you the security system.  ;-)  But I do suggest checking out cheaper options (we had Vintage for $20/mo. until the house fire, don't know what we'll do when we move back in, but it won't be ADT).
You get it :)  A company that worked with our relocation package setup the ADT for us but we will look into other options when our contract is up.

You know, it just can't be a good sign when "home security system" is one of the employment incentives. . . . ;-)

I do love my city, though.

lifeisshort123

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Re: Case Study-Coast FI but are expenses too high?
« Reply #11 on: January 04, 2023, 07:31:41 PM »
You’re in great shape financially.  I struggle to see how FIRE will fit into your timeline.  I echo the idea of part time work being helpful.

nouseforausername

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Re: Case Study-Coast FI but are expenses too high?
« Reply #12 on: January 05, 2023, 05:25:30 AM »
So we're apparently neighbors, unless your Charm City is a different one than mine.  And if it's the same one, I'm not going to begrudge you the security system.  ;-)  But I do suggest checking out cheaper options (we had Vintage for $20/mo. until the house fire, don't know what we'll do when we move back in, but it won't be ADT).
You get it :)  A company that worked with our relocation package setup the ADT for us but we will look into other options when our contract is up.

You know, it just can't be a good sign when "home security system" is one of the employment incentives. . . . ;-)

I do love my city, though.

Hi neighbors.

Flee to the 'burbs! Lower taxes. Ample parking day or night. Cute town centers.

And, I just kept the ADT sticker from the old owner on my door and never paid for it.  I did spring for a camera, though.

c-kat

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Re: Case Study-Coast FI but are expenses too high?
« Reply #13 on: January 05, 2023, 08:08:44 AM »
I don't think your expenses are high enough.

You're kids are under two so you can do free activities, but when they get older activities will cost money. Our kids are still young 4 and 6 and we spend 2500$ one each per year. This includes activities (swimming and dance classes), school supplies and field trip expenses for the one in school, and gifts for kids at the birthday parties they get invited to.  Yes, you can reduce activities, but things like swimming should not be skipped as swimming is a life saving skill. Also, I do think its good to support your kids interests.  And Ive heard from other parents that once kids become teens these expenses increase.

House maintenance at 200 a month also seems low.  In the last four years we've had to replace our roof, air con and furnace and the rickety fence we have (because we have a pool by law it must be in goof order and we lost the fence in a storm). This worked out to 6K per year.

Vacation money is fairly low. If you plan to do a local trip each year that would work, but when the kids are older do you plan to go places like Disney?  If so, you might want to increase this.

You are in great shape to have one parent stay home, but not to FIRE yet.  Have you used the FIRE calculator?

lhamo

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Re: Case Study-Coast FI but are expenses too high?
« Reply #14 on: January 05, 2023, 09:22:23 AM »
I don't think your expenses are high enough.

You're kids are under two so you can do free activities, but when they get older activities will cost money. Our kids are still young 4 and 6 and we spend 2500$ one each per year. This includes activities (swimming and dance classes), school supplies and field trip expenses for the one in school, and gifts for kids at the birthday parties they get invited to.  Yes, you can reduce activities, but things like swimming should not be skipped as swimming is a life saving skill. Also, I do think its good to support your kids interests.  And Ive heard from other parents that once kids become teens these expenses increase.

House maintenance at 200 a month also seems low.  In the last four years we've had to replace our roof, air con and furnace and the rickety fence we have (because we have a pool by law it must be in goof order and we lost the fence in a storm). This worked out to 6K per year.

Vacation money is fairly low. If you plan to do a local trip each year that would work, but when the kids are older do you plan to go places like Disney?  If so, you might want to increase this.

You are in great shape to have one parent stay home, but not to FIRE yet.  Have you used the FIRE calculator?

This is exactly the kind of post that makes some of us "old-timers" roll our eyes and want to leave the forum.

If you have a pool in your backyard why can't you teach your own kids to swim rather than paying somebody else to do it? 

There are plenty of ways for kids to have an active, enjoyable childhood without paying other people to assist with it.  Particularly if you have a SAHP.

c-kat

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Re: Case Study-Coast FI but are expenses too high?
« Reply #15 on: January 05, 2023, 10:14:11 AM »
I don't think your expenses are high enough.

You're kids are under two so you can do free activities, but when they get older activities will cost money. Our kids are still young 4 and 6 and we spend 2500$ one each per year. This includes activities (swimming and dance classes), school supplies and field trip expenses for the one in school, and gifts for kids at the birthday parties they get invited to.  Yes, you can reduce activities, but things like swimming should not be skipped as swimming is a life saving skill. Also, I do think its good to support your kids interests.  And Ive heard from other parents that once kids become teens these expenses increase.

House maintenance at 200 a month also seems low.  In the last four years we've had to replace our roof, air con and furnace and the rickety fence we have (because we have a pool by law it must be in goof order and we lost the fence in a storm). This worked out to 6K per year.

Vacation money is fairly low. If you plan to do a local trip each year that would work, but when the kids are older do you plan to go places like Disney?  If so, you might want to increase this.


This is exactly the kind of post that makes some of us "old-timers" roll our eyes and want to leave the forum.


Wow, if you don't agree with me no problem, but I find this statement quite rude and unnecessary. We all choose what we want to spend our money on and there is no need to shame anyone for it. For example we spend only 1/3 of what the OP does on housing, but prioritize other things. I thought this was an inclusive forum.

I'm just sharing that expenses can increase as kids get older, as others have stated above. You are right, you can choose not to spend on any of this stuff. Personally we find these things worth it, but we also have a child that has some challenges and we need the extra support and we don't have a SAHP. If they don't need to spend on this and can teach their own kids to swim that's great, but some adults don't know how to swim and therefore couldn't be a swim instructor. Everyones situation is different.

We only do a vacation to visit family that cost about 1200 a year total, but I mentioned the more expensive vacations in case that's something they are interested in the future.
« Last Edit: January 05, 2023, 10:29:53 AM by c-kat »

Weisass

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Re: Case Study-Coast FI but are expenses too high?
« Reply #16 on: January 05, 2023, 10:51:47 AM »
I don't think your expenses are high enough.

You're kids are under two so you can do free activities, but when they get older activities will cost money. Our kids are still young 4 and 6 and we spend 2500$ one each per year. This includes activities (swimming and dance classes), school supplies and field trip expenses for the one in school, and gifts for kids at the birthday parties they get invited to.  Yes, you can reduce activities, but things like swimming should not be skipped as swimming is a life saving skill. Also, I do think its good to support your kids interests.  And Ive heard from other parents that once kids become teens these expenses increase.

House maintenance at 200 a month also seems low.  In the last four years we've had to replace our roof, air con and furnace and the rickety fence we have (because we have a pool by law it must be in goof order and we lost the fence in a storm). This worked out to 6K per year.

Vacation money is fairly low. If you plan to do a local trip each year that would work, but when the kids are older do you plan to go places like Disney?  If so, you might want to increase this.

You are in great shape to have one parent stay home, but not to FIRE yet.  Have you used the FIRE calculator?

This is exactly the kind of post that makes some of us "old-timers" roll our eyes and want to leave the forum.

If you have a pool in your backyard why can't you teach your own kids to swim rather than paying somebody else to do it? 

There are plenty of ways for kids to have an active, enjoyable childhood without paying other people to assist with it.  Particularly if you have a SAHP.

I'm no old timer, but I also couldn't agree with you more. As a parent of four kids aged 3 through 11 *yes I know face punch for that* I can also attest that you can give your kids a great childhood without out sourcing all of the activities. There is also a HUGE difference between local soccer club and "fancy pants travel soccer," and the biggest difference is the face punch inducing amount of money that people drop on these activities that are often just as much (if not more) about parents living out their own childhood dreams on the backs of their kids as much as anything else. In my relatively expensive suburb, we have managed to keep our kids expenses pretty low because we:
1) play with our kids in the yard instead of farming them out to private sport clubs
2) get a summer membership to the township pool instead of paying obscene private pool prices
3) prioritize free and low cost fun, ie we don't get a membership to everything under the sun, and we USE the memberships we *do* have, and we take advantage of the wealth of free and low cost activities that come with living where we do (ie federal and state parks, local attractions and events, public school clubs). 

Proving your kids a good childhood DOES NOT require spending shit tons of money.

c-kat

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Re: Case Study-Coast FI but are expenses too high?
« Reply #17 on: January 05, 2023, 11:16:36 AM »

I'm no old timer, but I also couldn't agree with you more. As a parent of four kids aged 3 through 11 *yes I know face punch for that* I can also attest that you can give your kids a great childhood without out sourcing all of the activities. There is also a HUGE difference between local soccer club and "fancy pants travel soccer," and the biggest difference is the face punch inducing amount of money that people drop on these activities that are often just as much (if not more) about parents living out their own childhood dreams on the backs of their kids as much as anything else. In my relatively expensive suburb, we have managed to keep our kids expenses pretty low because we:
1) play with our kids in the yard instead of farming them out to private sport clubs
2) get a summer membership to the township pool instead of paying obscene private pool prices
3) prioritize free and low cost fun, ie we don't get a membership to everything under the sun, and we USE the memberships we *do* have, and we take advantage of the wealth of free and low cost activities that come with living where we do (ie federal and state parks, local attractions and events, public school clubs). 

Proving your kids a good childhood DOES NOT require spending shit tons of money.

100% agree but it doesn't have to be all or nothing.  My kids take only one lesson a week during the school year (it's swimming in warmer months, and dance in the cold ones).  In addition we play in the yard, swim in the pool, play at the park, go for hikes, beach days, play indoor games, do art, go to the free public play groups, library etc. 

charis

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Re: Case Study-Coast FI but are expenses too high?
« Reply #18 on: January 05, 2023, 12:08:09 PM »

I'm no old timer, but I also couldn't agree with you more. As a parent of four kids aged 3 through 11 *yes I know face punch for that* I can also attest that you can give your kids a great childhood without out sourcing all of the activities. There is also a HUGE difference between local soccer club and "fancy pants travel soccer," and the biggest difference is the face punch inducing amount of money that people drop on these activities that are often just as much (if not more) about parents living out their own childhood dreams on the backs of their kids as much as anything else. In my relatively expensive suburb, we have managed to keep our kids expenses pretty low because we:
1) play with our kids in the yard instead of farming them out to private sport clubs
2) get a summer membership to the township pool instead of paying obscene private pool prices
3) prioritize free and low cost fun, ie we don't get a membership to everything under the sun, and we USE the memberships we *do* have, and we take advantage of the wealth of free and low cost activities that come with living where we do (ie federal and state parks, local attractions and events, public school clubs). 

Proving your kids a good childhood DOES NOT require spending shit tons of money.

100% agree but it doesn't have to be all or nothing.  My kids take only one lesson a week during the school year (it's swimming in warmer months, and dance in the cold ones).  In addition we play in the yard, swim in the pool, play at the park, go for hikes, beach days, play indoor games, do art, go to the free public play groups, library etc.

I will own the face punches I deserve for kid expenses.  It's one of our top three expenses, but it was negligible for years (free or low cost lessons, classes, sports through our rec dept or the ymca, some which we still do).  Now, the bulk goes to an intensive program my eldest attends (not living my dream, I never did it and I regularly question the commitment involved with my child), a chronic medical condition that requires expensive medication and regular doctor visits, a learning disability that requires special tutoring, and summer camp.  Most of these didn't exist until the last 3-4 years.
 
So it's just to that things can change, some are choices, and some are not. 

zolotiyeruki

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Re: Case Study-Coast FI but are expenses too high?
« Reply #19 on: January 05, 2023, 12:17:19 PM »
I'll pile in with others who have said that kids get more expensive with time.  Yes, diapers are expensive.  But hungry teenagers are, too.  You can get baby/toddler/little kid clothes for pennies on the dollar all day long, but good luck finding pants for 7-12-year-old boys in a thrift store.  I swear some day I'm going to start a clothing company that makes boys' pants out of kevlar.

In terms of kids' activities, we've found that even the local parks 'n' rec activities have skyrocketed in the last couple years.  It's ridiculous, and I blame it on local municipalities trying to make up for their losses during COVID, plus higher labor costs, plus a good dollop of "because we can."

I don't know what the schools are like by OP, but in our local public school district, we have to pay all sorts of registration fees, class fees, material fees, activity fees, etc, on top of the high property taxes we pay.  High school is the worst.

2) Any glaringly obvious expenses we need to cut? Cell phone and internet, for sure!  I'd also take a look at your car insurance.  If you have more than liability only, is there a reason for that?  For the kids, IMO there is no reason to pay full retail for clothes or toys.  We live in such a consumerist world that those things can be had for a song.

3) We are planning on two pretty big projects at our house over the next few years, ...  Does that seem realistic? Depends on how many square feet, if you're DIYing it, and how fancy you make it.  A couple of datapoints: Several years ago I DIYed a 12x16' composite deck, and it came out to about $3000 all in.  A few years ago, I DIYed our basement with ~1200 finished square feet.  Total cost was about $16k.  We outsourced plumbing ($3k), drywall ($3k labor + materials), and carpet ($3500).  The finished space includes one bedroom, one 3/4 bath, and one closet under the stairs, with the rest of the space wide open.  Material costs have gone haywire since then (thank heavens I finished the basement a year before COVID!), so you'll have to factor that in.

4) Does our overall financial picture make sense? You're in fantastic financial shape for your age, but barring a massive windfall, you won't be ready for FIRE in 2025.  Your current spending of $70k would require $1.75M of investable assets, so you have an $850k gap to close.  I don't see that happening in the next two years, although the $40k+ you're socking away, plus market returns, will definitely put a dent in it.

I don't see in your spending a "sinking fund," i.e. savings for infrequent but expected expenses.  Things like replacing a car or a roof or the air conditioning or water heater.  In our family, we put things like car insurance (paid twice yearly), Christmas, vacations, etc in that same category.  It makes the monthly budget a bit simpler and more predictable, and helps capture expenses that would otherwise blow up a carefully-planned budget.

What's your plan for health insurance once you've both retired?  You have a good idea of your current expenses, but have you mapped out what you expect to spend in retirement?  Have you mapped out your spending for the years when your kids are still at home vs after they've left?

afuera

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Re: Case Study-Coast FI but are expenses too high?
« Reply #20 on: January 05, 2023, 01:05:08 PM »
@zolotiyeruki I appreciate the feedback especially answering my specific questions!

I actually just updated the car insurance yesterday since we moved states and dropped comprehensive coverage so that should drop now to ~80/month.  Cell phone and internet are tied to contracts right now but will I will try to optimize those more when the contracts end.

I really appreciate the data points for the deck and basement.  We want to tackle the deck first and I'm pretty sure we want composite.   We haven't decided how big to make the deck and are still trying to finish the design.  Our basement is actually similar sqft.  It has a rough in for a bathroom and laundry is already set up down there.  Biggest expense is going to be framing out and plumbing the bathroom buy that might not happen until 2024 or later.

I agree we won't make our original 2025 FIRE goal. I made that goal 8 years ago and I knew it was a stretch but I was much more optimistic before our investments dropped 20% but the market giveth and the market taketh away so all we can do is keep chugging along and investing everything we can!  Its sad because 2025 just had such a nice ring to it, 2026/2027 just doesn't hit the same lol.

You are right that we don't really have a sinking fund since before we could just cashflow anything that was unexpected.  Something to look into but our house/appliances are new and our cars are well maintained Toyotas so we really don't anticipate anything expensive here for a bit.   Christmas and vacations we just spread out over the year.  We do a fair amount of travel hacking which is how we are taking 5 people to Aruba for 2 weeks in March for only $1,500.  That is our one big trip this year and we still have southwest points/companion pass to use before EOY.

Again, really appreciate the comments.  Thank you!

For healthcare in the future, we plan on drawing down on using our HSAs to pay premiums and keeping taxable income under the subsidy limit for ACA using Roth funds.  We have $50K right now which is all invested and plan to keep adding the max that we can for the next few years.  We have been saving receipts since we opened the HSAs and currently have about $10K worth that we could cash out tax free right now but I like the idea of just keeping them invested indefinitely to cover medical costs.
« Last Edit: January 05, 2023, 01:24:35 PM by afuera »

afuera

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Re: Case Study-Coast FI but are expenses too high?
« Reply #21 on: January 05, 2023, 01:17:41 PM »
I don't think your expenses are high enough.

You're kids are under two so you can do free activities, but when they get older activities will cost money. Our kids are still young 4 and 6 and we spend 2500$ one each per year. This includes activities (swimming and dance classes), school supplies and field trip expenses for the one in school, and gifts for kids at the birthday parties they get invited to.  Yes, you can reduce activities, but things like swimming should not be skipped as swimming is a life saving skill. Also, I do think its good to support your kids interests.  And Ive heard from other parents that once kids become teens these expenses increase.

House maintenance at 200 a month also seems low.  In the last four years we've had to replace our roof, air con and furnace and the rickety fence we have (because we have a pool by law it must be in goof order and we lost the fence in a storm). This worked out to 6K per year.

Vacation money is fairly low. If you plan to do a local trip each year that would work, but when the kids are older do you plan to go places like Disney?  If so, you might want to increase this.

You are in great shape to have one parent stay home, but not to FIRE yet.  Have you used the FIRE calculator?

I was actually a swim school instructor when I was in college so I plan on teaching the babies how to swim myself!  I'm also hoping that once I FIRE and have more time to pickup some youth sport coaching when my kids are old enough to play.  I grew up on the fancy pants travel sports team and even got a scholarship to play in college so it would probably be a good fit!  Realistically, we are 5-10 years away from when kids activities/sports can start getting really expensive so I'm not going to focus on that too hard until we are closer.

Our mortgage is high because we bought a new house with new appliances/roof/solar/etc. but we have only been here a few months so we will see where the home maintenance category shakes out.  Anything we have spent money on so far has been an optional upgrade, not anything we were replacing because it didn't work.

We are able to take a 2 week trip to Aruba for 5 people this year for $1500 (probably closer to $2000 after food and activities) with plenty of travel points left over but we do a fair amount of travel hacking. And no, I won't be taking the kids to Disney when they are older.  That just does not sound like an appealing vacation to me...

zolotiyeruki

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Re: Case Study-Coast FI but are expenses too high?
« Reply #22 on: January 06, 2023, 08:55:50 AM »
@zolotiyeruki I appreciate the feedback especially answering my specific questions!

I actually just updated the car insurance yesterday since we moved states and dropped comprehensive coverage so that should drop now to ~80/month.  Cell phone and internet are tied to contracts right now but will I will try to optimize those more when the contracts end.

I really appreciate the data points for the deck and basement.  We want to tackle the deck first and I'm pretty sure we want composite.   We haven't decided how big to make the deck and are still trying to finish the design.  Our basement is actually similar sqft.  It has a rough in for a bathroom and laundry is already set up down there.  Biggest expense is going to be framing out and plumbing the bathroom buy that might not happen until 2024 or later.

I agree we won't make our original 2025 FIRE goal. I made that goal 8 years ago and I knew it was a stretch but I was much more optimistic before our investments dropped 20% but the market giveth and the market taketh away so all we can do is keep chugging along and investing everything we can!  Its sad because 2025 just had such a nice ring to it, 2026/2027 just doesn't hit the same lol.

You are right that we don't really have a sinking fund since before we could just cashflow anything that was unexpected.  Something to look into but our house/appliances are new and our cars are well maintained Toyotas so we really don't anticipate anything expensive here for a bit.   Christmas and vacations we just spread out over the year.  We do a fair amount of travel hacking which is how we are taking 5 people to Aruba for 2 weeks in March for only $1,500.  That is our one big trip this year and we still have southwest points/companion pass to use before EOY.
Have you made a full estimate of your expected retirement expenses, taking into account various stages of life?  If you retire in 5 years, you'll still have little kids (and then big kids) for the following 13ish years, but then they'll (hopefully) be out of the house and your expenses will drop.  You have plans to spend a bunch of money on a deck and basement in the near future, but then those expenses will drop off.  Way down the road, you can account for social security and medicare.  Throughout the next 35 years, you'll see your expenses swing drastically.

If I were to do anything differently about our deck, I'd make it bigger.  12x16 works great with the standard length of deck boards (16') and it's big enough for a table and chairs, but that's about the only thing that fits.  And we have to navigate around them to get to the stairs down to the back yard.  Also, we have a decent view out our back yard, so we opted for balusters made from 1/2" electrical conduit, painted black, so they'd obstruct the view less, and we are very happy with them.  It added a bunch of time to clean, scuff, clean, and spray paint them, but it saved a bunch of money and looks fantastic.

When finishing your basement, I'd suggest you take plenty of time to refine the layout.  We lived in our house for eight years before we had enough time and money to finish it, and I finally had a layout that ticked all the boxes.  And we are *very* pleased with the outcome.  Having a plumbing rough-in will save you a whole lot of time and expense, if it's in a good spot.  We had no rough in, and having to cut the concrete was annoying.  That said, our neighbors *did* have a rough in, but the original builder had put it in the absolute worst location, so they had to redo it.

lifeisshort123

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Re: Case Study-Coast FI but are expenses too high?
« Reply #23 on: January 06, 2023, 07:45:45 PM »
What are your plans for college expenses?

Your HSA idea makes sense, but I do not think your lifestyle will allow you to have income low enough for subsidies, particularly if they are not extended post-2025.  I think you will need more, plus, to be honest, I prefer the idea of letting the HSA build over time.  You’ll have a long runway potentially for that tax-free money to grow tax-free.  The HSA is arguably the single greatest wealth-building tool in the United States. How I WISH I could have one right now… My current employer doesn’t allow it sadly despite their deductibles being high enough to count as a HDHP... It is infuriating! I wouldn’t be so quick to pull out of it.  I’d keep letting that money grow.

I like the idea of inexpensive activities for the children, but it is not just about that. 

Also, I bought a relatively new house.  This Summer it poured… I needed to patch the roof, replace the garbage disposal, redrywall part of the house from the roof issue, and also had to replace the A/C unit.  These were not all one issue.  Just because a house is new does not mean anything! And boy has inflation hit the “home repair” category!!! I hope you’re luckier than I am, but maintain you need more of a sinking fund to cover these things.  We went from $0 home maintenance the first few years of our home to hitting an annualized average of say $500/month within 2-3 months. 

Would a part time opportunity making say $70k not be possible?

I maintain FIRE is ambitious.

Finances_With_Purpose

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Re: Case Study-Coast FI but are expenses too high?
« Reply #24 on: January 07, 2023, 12:41:21 AM »
I agree with the many others overall: you've done great work, though your expenses omit some things and your kid and/or medical expenses may vary going forward.  I happen to be very familiar with your situation, as I have lived it, in part. 

I'll skip to your four questions:
1)  I would listen to @Laura33 on that one.  I prefer paying down fixed-rate mortgages that are higher in rate, however, not when you have a large liquidity risk and a 5/1 ARM mortgage.  You have to get that sorted out first, before FIRE.  Your whole plan depends upon interest rates over the next five years, so I would figure this piece out, see where your expenses are by then, and then revisit this analysis, if it were me. 

2)  Expenses looked fine.  BUT, the big caveat: you have no sinking fund for large home ownership expenses or also for big projects (deck, etc.). 

The hot water heater will go out (and hopefully not flood).  The winter storms may bust a pipe.  You'll eventually have to replace the roof and A/C.  You're asking about FI, so you have to have those bases well-covered with your budget and I don't see them.  These aren't things you can easily cash flow out either, since you don't have a large "misc" built in for things like it. 

So, I would add $1k/mo in sinking fund until you hit the right spot.  You didn't list some of the other home details I would want to narrow that down more easily.  (Maybe it's $800 / mo., but it's definitely way above where you have and likely $1k+ for a good home in a HCOL area.  Right now, you're going to be way over $1k/mo, and closer to $2k/mo.)  The unfortunate problem is that those expenses are really irregular and painful. 

Ditto kid expenses: they are likely to increase, not decrease.  Young kids are cheap except for childcare, and older kids are expensive on literally everything else.  I would assume that that number goes up a little instead of down.  If it works out better, then great, but at least you won't be disappointed. 

3)  You can do that.  And maybe it's worth it to you, but I would seriously look at your life plan/goals, especially re: FI, and see if it makes sense to do it (or really, to do it right now/this soon).  You might wait until materials are cheap/you collect some, or other hacks.  Like others mentioned, I would also add this into your budget: you are likely to continue wanting to do some things like this and/or replace these over some time period (e.g. the deck), so this adds to your net expense some. 

4)  Yes, your plan to coast to 2025 seems very reasonable, since that's when you'll know more about the house, your kids won't be as tiny, and you'll know a lot more about your home spending levels, too.  That's exactly what I would do. 

I would only add that you're adding $40k/year to your retirement, which is fantastic, but your net spend is up significantly, so you're probably a bit farther from FI than you're thinking based upon your old numbers.  I suspect that that's what you're going to find when you do this again in five years, however, your upside is that your kid expenses will go away once the kids are out of school, so unless you plan to quit sooner, you're going to hit a point where it should become far easier eventually. 

If you DO want to quit sooner, then I would adjust plans now and/or buckle down a little more on big-picture things: home spending (projects), income (if any ideas there make sense), and whatever you can do to improve the 5/1 ARM situation.  And add more to savings, of course. 

I measure our net worth monthly with a quick/easy spreadsheet where I track it, but the best measure for FI is looking at how much you have saved in liquid assets (real net worth, excluding your home) versus your income (or your income less actual retirement contributions - i.e., your actual net spending).  It bakes in all the problems: lifestyle inflation, actual spending, and so on. 

You want to be at 25x your net spending in assets before you pull the trigger, and some are more conservative than that.  Compounding helps, of course, but that ratio will give you an immediate gauge for where you are.  If you're at 5x, then you need to double it at least 2+x, which is going to take a while.  If you're at 20x, then you're within reach assuming that you keep up a good savings rate. 

That's the fastest way to see where you're at IMO.  You'll see that added spending (bigger house, more projects, more maintenance, inflation in general) kills your ratio and thus your time to FI, whereas more savings helps it speed along. 

Weisass

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Re: Case Study-Coast FI but are expenses too high?
« Reply #25 on: January 07, 2023, 02:14:30 PM »

I'm no old timer, but I also couldn't agree with you more. As a parent of four kids aged 3 through 11 *yes I know face punch for that* I can also attest that you can give your kids a great childhood without out sourcing all of the activities. There is also a HUGE difference between local soccer club and "fancy pants travel soccer," and the biggest difference is the face punch inducing amount of money that people drop on these activities that are often just as much (if not more) about parents living out their own childhood dreams on the backs of their kids as much as anything else. In my relatively expensive suburb, we have managed to keep our kids expenses pretty low because we:
1) play with our kids in the yard instead of farming them out to private sport clubs
2) get a summer membership to the township pool instead of paying obscene private pool prices
3) prioritize free and low cost fun, ie we don't get a membership to everything under the sun, and we USE the memberships we *do* have, and we take advantage of the wealth of free and low cost activities that come with living where we do (ie federal and state parks, local attractions and events, public school clubs). 

Proving your kids a good childhood DOES NOT require spending shit tons of money.

100% agree but it doesn't have to be all or nothing.  My kids take only one lesson a week during the school year (it's swimming in warmer months, and dance in the cold ones).  In addition we play in the yard, swim in the pool, play at the park, go for hikes, beach days, play indoor games, do art, go to the free public play groups, library etc.

I will own the face punches I deserve for kid expenses.  It's one of our top three expenses, but it was negligible for years (free or low cost lessons, classes, sports through our rec dept or the ymca, some which we still do).  Now, the bulk goes to an intensive program my eldest attends (not living my dream, I never did it and I regularly question the commitment involved with my child), a chronic medical condition that requires expensive medication and regular doctor visits, a learning disability that requires special tutoring, and summer camp.  Most of these didn't exist until the last 3-4 years.
 
So it's just to that things can change, some are choices, and some are not.

That’s fair. I think especially the recognition that little people can have expensive problems is helpful to plan for.

MaybeBabyMustache

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Re: Case Study-Coast FI but are expenses too high?
« Reply #26 on: January 07, 2023, 02:28:32 PM »

I'm no old timer, but I also couldn't agree with you more. As a parent of four kids aged 3 through 11 *yes I know face punch for that* I can also attest that you can give your kids a great childhood without out sourcing all of the activities. There is also a HUGE difference between local soccer club and "fancy pants travel soccer," and the biggest difference is the face punch inducing amount of money that people drop on these activities that are often just as much (if not more) about parents living out their own childhood dreams on the backs of their kids as much as anything else. In my relatively expensive suburb, we have managed to keep our kids expenses pretty low because we:
1) play with our kids in the yard instead of farming them out to private sport clubs
2) get a summer membership to the township pool instead of paying obscene private pool prices
3) prioritize free and low cost fun, ie we don't get a membership to everything under the sun, and we USE the memberships we *do* have, and we take advantage of the wealth of free and low cost activities that come with living where we do (ie federal and state parks, local attractions and events, public school clubs). 

Proving your kids a good childhood DOES NOT require spending shit tons of money.

100% agree but it doesn't have to be all or nothing.  My kids take only one lesson a week during the school year (it's swimming in warmer months, and dance in the cold ones).  In addition we play in the yard, swim in the pool, play at the park, go for hikes, beach days, play indoor games, do art, go to the free public play groups, library etc.

I will own the face punches I deserve for kid expenses.  It's one of our top three expenses, but it was negligible for years (free or low cost lessons, classes, sports through our rec dept or the ymca, some which we still do).  Now, the bulk goes to an intensive program my eldest attends (not living my dream, I never did it and I regularly question the commitment involved with my child), a chronic medical condition that requires expensive medication and regular doctor visits, a learning disability that requires special tutoring, and summer camp.  Most of these didn't exist until the last 3-4 years.
 
So it's just to that things can change, some are choices, and some are not.

That’s fair. I think especially the recognition that little people can have expensive problems is helpful to plan for.

We spend more overall on activities (and, would cut if we needed to), so not claiming to be MMM on this topic, but agree with the comment about the learning disability & tutoring, which is a large chunk of our current "kids" bucket.

Dicey

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Re: Case Study-Coast FI but are expenses too high?
« Reply #27 on: January 08, 2023, 11:33:33 AM »
I don't think your expenses are high enough.

You're kids are under two so you can do free activities, but when they get older activities will cost money. Our kids are still young 4 and 6 and we spend 2500$ one each per year. This includes activities (swimming and dance classes), school supplies and field trip expenses for the one in school, and gifts for kids at the birthday parties they get invited to.  Yes, you can reduce activities, but things like swimming should not be skipped as swimming is a life saving skill. Also, I do think its good to support your kids interests.  And Ive heard from other parents that once kids become teens these expenses increase.

House maintenance at 200 a month also seems low.  In the last four years we've had to replace our roof, air con and furnace and the rickety fence we have (because we have a pool by law it must be in goof order and we lost the fence in a storm). This worked out to 6K per year.

Vacation money is fairly low. If you plan to do a local trip each year that would work, but when the kids are older do you plan to go places like Disney?  If so, you might want to increase this.

You are in great shape to have one parent stay home, but not to FIRE yet.  Have you used the FIRE calculator?

This is exactly the kind of post that makes some of us "old-timers" roll our eyes and want to leave the forum.

If you have a pool in your backyard why can't you teach your own kids to swim rather than paying somebody else to do it? 

There are plenty of ways for kids to have an active, enjoyable childhood without paying other people to assist with it.  Particularly if you have a SAHP.
Thanks, lhamo!

maisymouser

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Re: Case Study-Coast FI but are expenses too high?
« Reply #28 on: January 09, 2023, 11:15:41 AM »
I thought HSA funds could not be used to pay towards medical premiums. Correct me if I am wrong.

Sandi_k

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Re: Case Study-Coast FI but are expenses too high?
« Reply #29 on: January 09, 2023, 11:19:07 AM »
I thought HSA funds could not be used to pay towards medical premiums. Correct me if I am wrong.

They can be used for Medicare premiums. But not regular non-retired healthcare premiums.

rockeTree

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Re: Case Study-Coast FI but are expenses too high?
« Reply #30 on: January 12, 2023, 03:18:44 PM »
So we're apparently neighbors, unless your Charm City is a different one than mine.  And if it's the same one, I'm not going to begrudge you the security system.  ;-)  But I do suggest checking out cheaper options (we had Vintage for $20/mo. until the house fire, don't know what we'll do when we move back in, but it won't be ADT).
You get it :)  A company that worked with our relocation package setup the ADT for us but we will look into other options when our contract is up.

You know, it just can't be a good sign when "home security system" is one of the employment incentives. . . . ;-)

I do love my city, though.

Hi neighbors.

Flee to the 'burbs! Lower taxes. Ample parking day or night. Cute town centers.

And, I just kept the ADT sticker from the old owner on my door and never paid for it.  I did spring for a camera, though.

Eh, the city is fine. Not many places in town with new build half million dollar homes - she is not in a part of town any more dangerous than any other city in the country on average. Could still be in a part of town where private school after elementary starts to be appealing though. (Houses where I am, in walking distance of many amenities, cost half that these days and I don't need a security system and never have to look for parking, though I guess I do have bars on my basement windows).

Y'all are doing great. Keep at it, settle in, get the kids to a less hectic stage, and re-run the numbers. If it's not 2025 the world won't end. Welcome to the Greatest City In America.

JupiterGreen

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Re: Case Study-Coast FI but are expenses too high?
« Reply #31 on: February 04, 2023, 12:53:58 PM »
So we're apparently neighbors, unless your Charm City is a different one than mine.  And if it's the same one, I'm not going to begrudge you the security system.  ;-)  But I do suggest checking out cheaper options (we had Vintage for $20/mo. until the house fire, don't know what we'll do when we move back in, but it won't be ADT).
You get it :)  A company that worked with our relocation package setup the ADT for us but we will look into other options when our contract is up.

You know, it just can't be a good sign when "home security system" is one of the employment incentives. . . . ;-)

I do love my city, though.

Hi neighbors.

Flee to the 'burbs! Lower taxes. Ample parking day or night. Cute town centers.

And, I just kept the ADT sticker from the old owner on my door and never paid for it.  I did spring for a camera, though.

Eh, the city is fine. Not many places in town with new build half million dollar homes - she is not in a part of town any more dangerous than any other city in the country on average. Could still be in a part of town where private school after elementary starts to be appealing though. (Houses where I am, in walking distance of many amenities, cost half that these days and I don't need a security system and never have to look for parking, though I guess I do have bars on my basement windows).

Y'all are doing great. Keep at it, settle in, get the kids to a less hectic stage, and re-run the numbers. If it's not 2025 the world won't end. Welcome to the Greatest City In America.

total non-sequitur, but this is one of my favorite cities in the US. I don't live there but I've visited a few times, was just there for a conference and was reminded of how much I like it. I could definitely see myself living there. It has crime yes, but all cities do. I think it is one of the most underrated cities in the US that has a ton to offer residents (and visitors). It's just a beautiful location. Congrats on the new job and the move. /end tangent

afuera

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Re: Case Study-Coast FI but are expenses too high?
« Reply #32 on: April 09, 2024, 02:02:33 PM »

Milestone Update: Case Study-Coast FI but are expenses too high?

Updating this case study since we just hit 1.5M NW for the first time.  This was an arbitrary FIRE number we set back in 2015 when we first found MMM.  We haven't made it yet but the math works and we would be FI now if we hadn't moved and probably would still be planning to pull the plug in 2025 which was our original plan.

Life Situation: MFG, Mid-30s couple with two toddlers and two big old dogs.

Gross Salary/Wages:
Me: $142K +$8-10K Bonus
Hubs: $0 House Spouse


2024 Expenses: New house/life expenses tracked in YNAB for 1.5 years.
     Yearly     Monthly     Comment
Immediate Obligations
Mortgage P&I     $27,600     $2,300     5.25% interest, 5/1 ARM
Mortgage T&I     $6,060     $505     
Car Insurance     $1,080     $90     3 cars, one is a non-drivable project car.
Utilities     $1,200     $100     Electricity (offset by solar) and water
Internet     $1020     $85     
Cell Phone     $1,440     $120     Verizon, bundle with home internet.  Actively planning our switch to Mint
Home Security     $600     $50     ADT Home Security.  Cancelling ASAP
Streaming/Subscriptions     $480     $40     Steaming/Gaming
Necessary Expenses               
Groceries     $6,000     $500     
Baby     $1,800     $150     Diapers, Clothes, Toys
Pet Expenses     $3,000     $250     Food, Treats, Vet Appointments. High but this has been our AVG
Personal Care     $1,800     $150     Gym membership and any household purchases
Gas     $2,400     $200     
Auto Maintenance     $600     $50     
Home Maintenance     $600     $50     Needed fixes.  Home warranty covered sump pump issue and AC repair last year.
Health/Medical     $3,600     $300     3 medical payment plans
Therapy/Counseling     $1,200     $100     
Gifts     $1,200     $100     
Charity/Giving     $3,600     $300     Would like to increase in the future
Unexpected/Misc.     $100     $10     Usually stupid tax, missing a fee or something like that
Luxury Spending
My Guilt Free     $1200     $100     Usually clothes, big one-offs, or self care items
Spouse Guilt Free     $1200     $100     Project car stuff
Fa(s)t Food     $600     $50     
Vitamin A     $0     $0     AF for now
Restaurants     $1,800     $150     Date nights and dinner with friends 2X per month
Fun Activities     $1,200     $100     Yearly memberships, events, etc.
Travel     $1,200     $100     Only domestic trips this year
Home Renovation     $1,200     $100     Was $15K last year but no other big renovation project planned.  Split renovation out from maintenance so would have a better idea of what was optional/necessary
Total Spend     $72,000      $5,500-$6,000     

Assets          
Account     Amount     
Cash     $25K     Checking and HYSA
401K     $62.5K     10% company match
Traditional Rollover IRAs     $745K     
HSAs     $75K     3 total (My old one, Spouse old one, my current one)
Roth IRAs     $400K     Includes rollover from Mega Backdoor Roth
Taxable Brokerage     $80K     
Home     $525K     (2022 Appraisal)
Total Assets     $1.9M     
               
Liabilities          
Mortgage     $407K     
          
Net Worth     $1.5M     


 
Updates:
1) We have been very happy with our 5.25% ARM the last 1.5 years.  We are just waiting until 11/27 now to see if we can lock in anything around 5-6% for a 30 YR mortgage.  Haven't prepaid anything towards the principal except for our first couple payments.

2) Pretty much stayed at the same spending level as we estimated, adjusted our budget based on 2023 spending and our new baseline now that we have gotten settled.

3) We ended up having a deck built last year.  Materials for DIY we estimated to be around $8K (tibertech PVC, 16'X20'+steps to grade) and we found a company willing to do it for us for $14K.  We had one incident with our toddler falling down the steps so decided to pay the additional $6K for labor in order to get the deck built quicker than we could DIY.  We love it and definitely feel like it was worth it.   We haven't done anything to the basement yet but I have been avidly following @CowboyAndIndian 's DIY basement remodel journal and plan to pretty much copy it slowly overtime at this point. 
Anything we save in our E-fund over 3 mos expenses is considered home repair/car replacement fund.

4) Lastly, we are still pretty much coasting over here and letting the market recovery do most of the work while trying to max all tax-advantaged accounts.  I'm started to get excited for when my kids get a little older and I can quit my day job and coach whatever sport they want to play.  Life is good and feeling very luxurious these days.

CowboyAndIndian

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Re: Case Study-Coast FI but are expenses too high?
« Reply #33 on: April 10, 2024, 09:03:47 AM »
Thank you for the basement comment.  I had an excellent brain-trust from this forum who kept me from making serious mistakes.

ETA: Considering how bad we were in our mid-thirties, I think you are doing very well. The NW number is quite impressive with a single income.

Congratulations on going AF. You are going to see some major health, weight improvements here.
« Last Edit: April 10, 2024, 05:34:18 PM by CowboyAndIndian »