Case Study: YOLO (wife) vs FIRE (me)

[seeyalater]

Hi Everyone. Just discovered this forum a couple of weeks ago and have been reading as much as I can daily.

I'm 45, wife 42 with 4 kids (11, 12, 13, 20) and we're filing jointly. We live in an HCOL area where most neighbors drive Teslas and Range Rovers. I love our house and neighborhood and since the day I purchased this house (10 years ago for $500K) decided it was going to be where I spend the rest of my life. We have one of the least expensive houses in the neighborhood, so it has lots of room to go up in value where other homes are valued at $1M-2M.

We make a decent income, but we never really kept track of our spending. We just bought what we wanted as long as we knew there was money in the bank to pay the bills. This has to stop, and I'm trying to come up with a good game plan so we can manage our finances better. In about 7-8 years, I will not have a Child Support payment and in 15 years no more mortgage. This will free up almost $4000/month. So I would like to be FIRE in about 10 years.

I'm willing to make changes to accomplish this, but not sure how on-board the wife is. I can't remember the last time I came home and was not greeted with an Amazon box on our porch with her name on it.


                                Monthly      Yearly      Comments
Income      
      
Earner #1                            $10,000      $120,000   
Earner #2                            $4,583      $55,000   
Combined Take Home After Taxes   $11,000      $132,000

   
Expenses   
         
Home            
Mortgage                           $2,242      $26,904      15 years left @ 3.875%
Escrow Property Tax/Ins.             $845      $10,140      trying to cancel escrow and pay myself
Property Insurance                $365      $4,381      shopped rates, but this was cheapest by far
Electricity                           $200      $2,400   
Streaming Services                $40              $480              Netflix, Prime, etc
Cleaning Lady                                             $200/mo paid by company
Household; Maintenance        $100      $1,200   
Internet                           $80              $960              just cut cable to save $170/mo
Landscaping/Yard work         $150      $1,800      huge yard, no time to diy
Water System & Pool                $50              $600              Well system. salt, filters, repairs


Kids            
Child Support                   $1,500      $18,000      To ex-wife Ends in 7-8 Years
Child activities                         $200      $2,400      Sports, Dance, etc
Childcare                           $550      $6,600      Afterschool Nanny. No more next year as kids will be older.
529 Pre-Paid College Plan             $98              $1,171      Only 1 kids left. Rest are paid for.
School Misc.                   $30              $360      

   
Auto            
Ford Car Loan                   $0             $0             $551/mo paid from company (36 Months left @ 2.99%)
Infiniti Car Lease                $648      $7,776      Lease ends in 7 months
Car Insurance                                            $485/mo paid from company
Car Tolls                           $10              $120   
Car Maintenance, Registration    $100      $1,200      
Fuel                                  $100      $1,200      some is paid by company


Shopping            
Clothing/Shoes                 $1,125      $13,500      Wife likes to shop
Gifts (Christmas,Birthdays)           $300              $3,600      
Pets (food, Insurance)      $60              $720   
Medicine (OTC + Prescription)   $30              $360              We're healthy for the most part   
Wine/Beer/Tobacco              $50              $600      
Computer (paper/software/etc.)   $30              $360   


Food            
Dining (Lunch/Dinner/Etc.)           $787      $9,444              We just started to cook 6 days per week and bring left overs to work for lunch.
Groceries                         $800      $9,600      
Entertainment, Parties      $100      $1,200   


Personal Care / Health            
Beauty Shop, Haircuts      $100      $1,200      
Dentist                    $30      $360   
Health Insurance                                            $737/mo paid by company      
Life Insurance                 $35      $420   
Medical (Doctor, Hospital)           $100      $1,200      


Other            
Phone (cell)                                            $300/mo paid from company
Subscriptions (Peloton)      $41      $492   
Travel/Vacation         $400      $4,800      yearly average includes one big summer family vacation.

Total Expenses            $11,396      $136,748   


Assets            Liabilities      Value   
House            $315,000      $600,000   
Ford Truck         $20,450         $60,700   
Stocks                      $600,000   
Simple IRA                   $175,000   
Business                     ($300K-700K if I ever sold my business)
total            $351,365      $1,455,200   

Networth ~$1M

[Gin1984]

What's your question?

Sent from my SPH-L720 using Tapatalk

[nereo]

You included a lot of numbers but no questions or goals.  It's clear from your subject line that you strive for FIRE while you believe your wife is a barrier to that. 

There's no question that with your income and assets you could reach FI-hood in just a few short years.  But you've also got a number of clown expenses, including a $648/mop car lease, a $60k truck (wtf??) a $1,125/month clothing budget and $1587/mo for food and entertaining. 

If I read your CS correctly you are spending an eye-watering $11,396 per month.

There are ways you can get your spouse on board - there's even a stickie on it.  It's also highly probable that you share as much responsibility for this high-spend lifestyle as your wife (who drives the infinity?  who drives the $60k ford truck?!).  you already have roughly $750k in liquid accounts without selling your business, so if you wanted to pair down and cash out you could probably do so today and live a very comfortable lifestyle with no need to earn money ever again.  Or you could buckle down, plug the obvious leaks and have an even bigger portfolio in just a few months.

So - what do you want to do?

[seeyalater]

Sorry, I think it posted before I was done typing. Should be all there now.

[Gin1984]

I want to know how your cleaning person is paid by your company?

Sent from my SPH-L720 using Tapatalk

[Gin1984]

Also, start making changes that save you money on things you can control. Let your wife see you have skin in the game and are not just asking her to change.
Next, are you maxing out all tax advantaged accounts? If you are employed do you have a solo 401k or are you a business owner? Is your retirement options through your business the best you can have?

Sent from my SPH-L720 using Tapatalk

[nereo]

A few things

1) check out this stickie on how to get a spouse on board with becoming FI/RE
https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/

2) while it might not seem like it now, you could certainly be FI in far, far less than 10 years.  With your income and your assets I'd say 5 years is not a big stretch at all.  But it will require a common goal shared with you and your spouse, and discipline.

3) Your income is fantastic.  The neighborhood where you live is giving you a warped perception of what is 'normal'.  The barriers to your own financial independence are entirely on the spending side of the equation, and I am certain that you could make big gains there without it reducing your quality of life one iota.  Your cars are an absurd hole where your money is going (a $60k truck? a $8k/year lease??).  Misc spending and dining out are also costing you tens-of-thousands per year, literally.

4) Once you have some of your spending under control (and you could save tens-of-thousands per year while still living more-or-less the same lives), I'd consider what you might do to maximize what your business could be worth if/when you sold it in a few years.  There's a big difference between $300k and $700k; if you could be ensured that it would be at least $750k, at least one of you could  right now with nothing more than what you already have.

[former player]

Probably the worst change you can make is the one that leads your wife to divorce you.  Telling you no lie: there are several cases of people (usually men) who've taken the way of the Mustache on board and posted on this forum only to find that their spouse isn't following them on the journey.  Please take the advice in the thread linked by nereo very seriously indeed -

https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/

[insufFIcientfunds]

Yeah, newer poster here, but def don't want to ruin the marriage here. You have listed your $551/mo truck payment is $0. If you own your own business then that truck payment is $551 fewer dollars that goes into your pocket and bank account at the end of each month.

If you run your business out of your home, I see how/why you apply the cleaning services to your business, but then again, less $$ in your pocket.

When getting your personal finances under control, work on the business too. Double whammy, maybe more $$!!!

Good luck, look forward to following.

[Nick_Miller]

OP, do you and your wife ever discuss goals, short-term and long-term? If so, what do they look like? Is there synergy there, or do you have different visions of the future?

I ask this because, if your wife was like, "Do I want to retire at 47 and have money to travel and enjoy life? Heck yeah!" then I think y'all could crush it in less than 10 years for sure. But you need her on board because your spending is not consistent with wanting to FIRE.

Let's be honest, your housing costs are fairly high (about 35% of take home, which is probably higher than recommended for most folks), and the child support is a huge bite, but still because your income is so high, there's still more wiggle room than most people have. Heck, just the eating out and shopping are $2,000 a month! I ran calculations, and investing this $2000, assuming a 7% return, gets you another $142K in just five years! Now your wife may not WANT to eliminate all shopping. She gets a vote! But I'd argue you could easily save $2000 a month, even if it looks like "cheaper car lease next time" or "cut gifts in half," or something else like that. There are plenty of spending categories to pick from!

[seeyalater]

Yeah, newer poster here, but def don't want to ruin the marriage here. You have listed your $551/mo truck payment is $0. If you own your own business then that truck payment is $551 fewer dollars that goes into your pocket and bank account at the end of each month.

If you run your business out of your home, I see how/why you apply the cleaning services to your business, but then again, less $$ in your pocket.

When getting your personal finances under control, work on the business too. Double whammy, maybe more $$!!!

Good luck, look forward to following.

You are absolutely correct about the more money my business has, the more money I have. Although my business pays for certain items, it's my business and it's coming out of my pocket one way or another. It's just a little more beneficial tax-wise.

The business has an office, it's not home-based. I just have the cleaning lady that cleans the office do the house twice per month so it comes out of the business.

[robartsd]

Have a few facepunches:

Cars: $1,894/mo, is about 4x what my wife and I were spending on our car 2012 Corolla until we recently paid off the loan (cutting our expense nearly in half). I bike to work to prevent the need for a second car. Cut this budget by 50-75% by the end of the year.

Food/Entertaining: $1687/mo (that's enough for 8 months of eating for a family of 4) - admittedly, it would only last 4-5 months for my wife and I. Cut this budget by 50-75% within 3 months.

Clothing/Shoes: $1,125/mo, your monthly budget is close to our annual spend. Your wife can learn to love shopping at thrift stores instead of Amazon. Cut this budget by at least 90% immediately.

I'd suggest killing the shopping budget starting with canceling Amazon Prime (more as a barrier to easy shopping than purely to save the expense). Add a policy of waiting 1 week from wanting an item and placing it in your basket to checking out, then ship with Super Saver Shipping (I find it often still ships fast). Shopping is fine: start enjoying spending more time and less money shopping at thrift stores.

[ZMonet]

You might want to look into refinancing into a 15-year loan at 2.875% - 3%, the current going rate, if you plan on staying in your house.  Over 15 years I think the savings might be significant.  The property insurance seems WAY high and you seem to count it twice.  Is it really over $5k?   We have $1.1 million coverage for rebuild costs, which I think is way too high given our house has a value of around $600k, and we only pay $1,900/year and I think that is outrageous.  Is there some sort of umbrella product or other insurance factored into that $4,400?  I'd continue to shop around and ask what can be done to lower the cost.  For instance, can you raise to a $5,000 or $10,000 deductible (you really shouldn't be making a claim unless it is over this amount anyway as your insurance will likely go up) and/or lower the percentage covered for a rebuild if you think they are inflating the cost to rebuild (e.g., insurance company values at $1 million for a rebuild and you reduce to 80% coverage, meaning that they'll only cover the first $800k but you think rebuild would only cost $700k anyway).  Just some thoughts...You should walk through the particulars with the insurance agent.

[seeyalater]

You might want to look into refinancing into a 15-year loan at 2.875% - 3%, the current going rate, if you plan on staying in your house.  Over 15 years I think the savings might be significant.  The property insurance seems WAY high and you seem to count it twice.  Is it really over $5k?   We have $1.1 million coverage for rebuild costs, which I think is way too high given our house has a value of around $600k, and we only pay $1,900/year and I think that is outrageous.  Is there some sort of umbrella product or other insurance factored into that $4,400?  I'd continue to shop around and ask what can be done to lower the cost.  For instance, can you raise to a $5,000 or $10,000 deductible (you really shouldn't be making a claim unless it is over this amount anyway as your insurance will likely go up) and/or lower the percentage covered for a rebuild if you think they are inflating the cost to rebuild (e.g., insurance company values at $1 million for a rebuild and you reduce to 80% coverage, meaning that they'll only cover the first $800k but you think rebuild would only cost $700k anyway).  Just some thoughts...You should walk through the particulars with the insurance agent.

I was actually looking into doing this. It would only save me a few bucks per month but would shave 1 year off the loan time and save me about $26K in the long run. I also used to pay my own property taxes ($8000/year) every February, but last year my loan was sold to another bank and somehow they decided to not only Escrow my taxes, but they are collecting $845/month ($10,140 /year) and after several calls, no one can tell me why they are collecting an extra $2000/year and they will not remove escrow because it's a new loan (with them).

As far as homeowners insurance, I pay $4,300/year now. I got 3 quotes on YoungAlfred.com last week and they were $671/mo, $1036/mo and $1464/mo. So I guess I'll stick with what I have.

[Gin1984]

Yeah, newer poster here, but def don't want to ruin the marriage here. You have listed your $551/mo truck payment is $0. If you own your own business then that truck payment is $551 fewer dollars that goes into your pocket and bank account at the end of each month.

If you run your business out of your home, I see how/why you apply the cleaning services to your business, but then again, less $$ in your pocket.

When getting your personal finances under control, work on the business too. Double whammy, maybe more $$!!!

Good luck, look forward to following.

You are absolutely correct about the more money my business has, the more money I have. Although my business pays for certain items, it's my business and it's coming out of my pocket one way or another. It's just a little more beneficial tax-wise.

The business has an office, it's not home-based. I just have the cleaning lady that cleans the office do the house twice per month so it comes out of the business.

That is not legal, you need to reimburse your business for the expense. 

[ZMonet]

I was actually looking into doing this. It would only save me a few bucks per month but would shave 1 year off the loan time and save me about $26K in the long run. I also used to pay my own property taxes ($8000/year) every February, but last year my loan was sold to another bank and somehow they decided to not only Escrow my taxes, but they are collecting $845/month ($10,140 /year) and after several calls, no one can tell me why they are collecting an extra $2000/year and they will not remove escrow because it's a new loan (with them).

As far as homeowners insurance, I pay $4,300/year now. I got 3 quotes on YoungAlfred.com last week and they were $671/mo, $1036/mo and $1464/mo. So I guess I'll stick with what I have.

My understanding is that lenders can collect up to a certain percentage over the tax/insurance amount to make sure there is not a shortfall.  If they go over that percentage, they have to refund the difference back to you at the end of the year.  Also, the overage is just held by them but they aren't charging you more.  So maybe it is something you want to look into so you're not giving the free loan, but probably not worth a ton of time.

On the property insurance, can you shop with USAA?  Maybe insurance in your area is just high, but your three quotes are all over the place and so it is possible another could be half the $671.

[seeyalater]

Have a few facepunches:

Cars: $1,894/mo, is about 4x what my wife and I were spending on our car 2012 Corolla until we recently paid off the loan (cutting our expense nearly in half). I bike to work to prevent the need for a second car. Cut this budget by 50-75% by the end of the year.

Food/Entertaining: $1687/mo (that's enough for 8 months of eating for a family of 4) - admittedly, it would only last 4-5 months for my wife and I. Cut this budget by 50-75% within 3 months.

Clothing/Shoes: $1,125/mo, your monthly budget is close to our annual spend. Your wife can learn to love shopping at thrift stores instead of Amazon. Cut this budget by at least 90% immediately.

I'd suggest killing the shopping budget starting with canceling Amazon Prime (more as a barrier to easy shopping than purely to save the expense). Add a policy of waiting 1 week from wanting an item and placing it in your basket to checking out, then ship with Super Saver Shipping (I find it often still ships fast). Shopping is fine: start enjoying spending more time and less money shopping at thrift stores.

I think NEREO said it best "The neighborhood where you live is giving you a warped perception of what is 'normal'"

Cars: It's a lot easier to drive a $5K car if you live in an area where most people drive similar cars. It's a whole other story when you're trying to keep up with the Joneses. As much as I love (or loved) my expensive cars in the past, I would consider getting rid of the $60K truck which has about $40K in equity in it to buy something for like $20K cash. That frees up another $20K and saves me $550/month.

Food/Entertaining: We actually just started working on this 2 weeks ago and have been cooking 5-6 nights per week and taking leftovers for lunch. Wife is on-board 100% on this and is realizing just how much we're wasting here. She used to get Starbucks at least once per day if not more and she's been making coffee at work (free) or at home (Keurig $0.30 each). So we should be able to save lots of $$ here.

Clothing/Shoes: I had no idea until 2 weeks ago when I looked at some AMEX reports just how much was being spent here. But I guess I should not be surprised considering I rarely see my wife wear the same outfit twice, her LV, Gucci purses and $550 belts. She also always makes sure the kids have new, brand of the month clothes to wear to school. I think as she sees on paper just how much is spent here it will sink in. She's basically spending 1/3 her take-home salary on clothes.

[seeyalater]

The business has an office, it's not home-based. I just have the cleaning lady that cleans the office do the house twice per month so it comes out of the business.
[/quote]
That is not legal, you need to reimburse your business for the expense.
[/quote]

I'll get right on that!

[Metalcat]

The business has an office, it's not home-based. I just have the cleaning lady that cleans the office do the house twice per month so it comes out of the business.

That is not legal, you need to reimburse your business for the expense.
[/quote]

I'll get right on that!
[/quote]

How is your business paying for car insurance for both of you?? That seems odd as well.
I would be having a chat with my accountant if I were you.

[Metalcat]

Clothing/Shoes: I had no idea until 2 weeks ago when I looked at some AMEX reports just how much was being spent here. But I guess I should not be surprised considering I rarely see my wife wear the same outfit twice, her LV, Gucci purses and $550 belts. She also always makes sure the kids have new, brand of the month clothes to wear to school. I think as she sees on paper just how much is spent here it will sink in. She's basically spending 1/3 her take-home salary on clothes.

I REALLY wouldn't start with this.
You two TOGETHER have built up a lifestyle where you spend a certain amount, to suddenly come down on her spending as somehow bad is likely to be perceived as a personal attack.

Take a step backwards and look at the goal first, get on the same page in terms of your shared goals, and THEN when she's on board with doing her part to work WITH you to achieve shared goals, THEN discuss how she can alter her spending pattern.

Her spending isn't a problem, unless it's working against what you both want for your future.

Have you two ever discussed your future? How do you talk about money? How do you currently make financial decisions? How did she come to understand that spending so much on fashion was reasonable, because somewhere along the way, she clearly got that message.

Don't make either of you "bad guys" in this, it's not about giving up the things you want. It's actually all about getting what you want. If what she ultimately wants is designer shoes and bags and she's truly willing to make the financial trade offs to have them, then work with her on that.

What she will likely find though is that all of the other things she could buy with that money are actually far more interesting, such as more free time, more travel, more whatever.

Find out what she actually wants from her money and her life. Again, this isn't about giving up anything, it's about getting the most of what you really truly want.

[robartsd]

I was actually looking into doing this. It would only save me a few bucks per month but would shave 1 year off the loan time and save me about $26K in the long run. I also used to pay my own property taxes ($8000/year) every February, but last year my loan was sold to another bank and somehow they decided to not only Escrow my taxes, but they are collecting $845/month ($10,140 /year) and after several calls, no one can tell me why they are collecting an extra $2000/year and they will not remove escrow because it's a new loan (with them).

I didn't think the loan servicer (not always the same as the loan holder) could arbitrarily require an escrow account. Many loans are written with a requirement for an escrow account (I know mine is; interest interest rate difference between having and not having an escrow account made it worthwhile to have it overall). Perhaps your loan required an escrow account but your former servicer informally waived the requirement, but the new servicer opted not to waive the requirement.

It is not very uncommon for new escrow accounts to be quite a bit high in the monthly payment (to build up a surplus and because they projected expenses too high). These will be adjusted an the first annual escrow analysis. At the analysis, they will set your monthly payment to 1/12 the projected expenses and refund any amount that would cause the lowest balance of the escrow account to exceed two month's payments.

(ii)Charges during the life of the escrow account. Throughout the life of an escrow account, the servicer may charge the borrower a monthly sum equal to one-twelfth ( 1/12) of the total annual escrow payments which the servicer reasonably anticipates paying from the account. In addition, the servicer may add an amount to maintain a cushion no greater than one-sixth ( 1/6) of the estimated total annual payments from the account. However, if a servicer determines through an escrow account analysis that there is a shortage or deficiency, the servicer may require the borrower to pay additional deposits to make up the shortage or eliminate the deficiency, subject to the limitations set forth in § 1024.17(f).

https://www.law.cornell.edu/cfr/text/12/1024.17

[insufFIcientfunds]

The business has an office, it's not home-based. I just have the cleaning lady that cleans the office do the house twice per month so it comes out of the business.

That is not legal, you need to reimburse your business for the expense.

I'll get right on that!
[/quote]

How is your business paying for car insurance for both of you?? That seems odd as well.
I would be having a chat with my accountant if I were you.
[/quote]

If you plan to meet you accountant maybe talking to them about tax strategies would be helpful. Not sure if you have an LLC, S-Corp, whatever, but there may be ways to reorg your business to get better tax advantage and get more $$ in your pocket. Offsetting revenue with expenses, such as trucks that may not be needed, could be more of a benefit of having the truck than actually realizing a savings in terms of tax liability. You may need the truck to tow, it may be a diesel, a half-ton might not be what your business needs. But if the truck you are talking about is a F-150 Platinum, Crew Cab, all the goodies...I'm not sure. Customers get super judgy when they see a fancy truck too. So not only having a less expensive truck would be better for your pocket, might be better for business. Who cares what the neighbors drive. F* them lol.

Everyone runs their business different. Some use them to cover personal expenses and others use them for other things. If you have no heirs, put your business in the best position to be purchased so you have that cash at the end of the rainbow.

[BicycleB]

The title implies wife has YOLO attitude. Yet I read that your wife is doing some new cost-saving things already. No other description of her feelings is given. Curious to see how this develops. Many possibilities here, including some good ones.

The general picture suggests you're a man of action and you've both been living the high life. If you both get on board together, change could happen fast.

That said, I'm also baffled. You're spending 136k out of 132k takehome, by your own account. You're losing money. How did you get to 1.4M net worth in the first place? (Maybe there's some lesson there about what works for the two of you. Anyway, wishing you the best.)

[Bernard]

Your post resonated with me, because much of what you wrote applied to my wife and me. I'm a 50% business owner (LLC), so I can shift expenses around. I too live in a HCOL area. My mortgage is about equal to yours. My income is a bit lower, but I don't have to pay child support. There are enough similarities to give me goosebumps.

Until I saw the light, the wife and I spent what we made. It was "normal" and that sentiment is enforced by living in an upscale neighborhood. After we discovered FIRE and I dug really deep into it, I was able to slowly get the wife onboard. It was a smooth transition, where I said, "honey, we're bringing home $10K per month, and at the end of the month it's all gone. That's just insane, isn't it?"
So I fired up my self-made EXCEL spreadsheet and started tracking every penny going in and out, then, a few months later, the wife and I sat down and figured out where to change things. That was the daily Starducks, gym membership, private tennis lessons, DirecTV, going out for breakfast and dinner several times a month, etc. All these changes have added up to a gigantic reduction in expenses. All the money saved went straight into investments.

Step two was to reduce what was left. Instead of shopping mindlessly at Whole Foods and other fancy stores, I first checked Vons and Ralphs, then Trader Joe's. We buy lots at CostCo as well. And the final step for me was to set foot in a 99 cent store. I felt out of place, but now I actually enjoy buying my vine tomatoes for 99 cents and Anderson's pea soup for the same price. After I got what I can get for cheap, I go to Vons, buy the $1.99 special-of-you-buy-5 stuff. Only stuff I can't get anywhere else I buy at Trader Joe's (box wine, etc.) or Sprouts. That change in buying behavior has resulted in hundreds of dollars of savings per month in groceries alone. Going out to eat is now reserved for special occasions, and I visit a Starbucks perhaps once every 3 months if I'm on the road and can't brew my own coffee. That's it.

The fact that we are saving money gives me satisfaction. I enjoy it, and the wife is now on board with me, which is the coolest thing ever!

You'll have to get your wife on board, sit down, with her and make your case. Don't be a Joneses person, but the millionaire next door. I'm a lawyer-turned-classic-car-dealer, and I can take the fanciest cars home. I rarely do that anymore. I drive a cheap car and so does my wife. My neighbors have the newest, fully financed cars in the driveway, and instead of admiring them I feel sorry for those suckers. They haven't seen the light because nobody has shown them the path. Eventually they may wake up, like you did, or they may not.

Once you feel that the wife is with you, you can do what we did. You should be able to free up thousands of dollars per month, while still staying in your forever home. Drastically reduce eating out, switch to more affordable vehicles, shop for better insurance rates, and so on. Do this step by step, and you may feel enjoyment from the success you are experiencing. The most important step is the first one, recognizing that "normal" is bad for your financial health. Once the fire is on, it will get more powerful.

Good luck.

[seeyalater]

Thanks Bernard. It's good to read stories from people in similar financial situations. Gives me hope!

2-WEEK UPDATE:

• We've been cooking dinner at home 5 days per week and bringing lunch to work every day. Saving around $100/week...$400/Month...$5000/Year
• No more Dunkin or Starbucks. My wife treats herself to one on the weekends only now. Saving us $30/week...$120/Month...$1440/Year
• Switched car insurance from Allstate to Progressive, with more coverage (4 cars), and went from $5760/year down to $2598/year. Saving us $3162/Year

That's almost $10K per year in savings just by discovering this forum a few weeks back!

[insufFIcientfunds]

That’s great news. We try and have fun cooking at home. Watch a lot of Chopped and try to get good ideas to spruce up a normally “just okay” meal.

[Nick_Miller]

Thanks Bernard. It's good to read stories from people in similar financial situations. Gives me hope!

That's almost $10K per year in savings just by discovering this forum a few weeks back!

Looking at it another way, that's $250,000 LESS of a stache you need now. Excellent!

[Malum Prohibitum]

Thanks Bernard. It's good to read stories from people in similar financial situations. Gives me hope!

2-WEEK UPDATE:

• We've been cooking dinner at home 5 days per week and bringing lunch to work every day. Saving around $100/week...$400/Month...$5000/Year
• No more Dunkin or Starbucks. My wife treats herself to one on the weekends only now. Saving us $30/week...$120/Month...$1440/Year
• Switched car insurance from Allstate to Progressive, with more coverage (4 cars), and went from $5760/year down to $2598/year. Saving us $3162/Year

That's almost $10K per year in savings just by discovering this forum a few weeks back!

That's great.

Given that school has already started, can you discuss a "freeze" on clothing spending for 30 days while reassessing what is important to the two of you?  This seemed like a large item that was not being budgeted or tracked, just a credit card bill paid for after the fact.  Will the kids or wife (or you) go without clothes if this category is $0 for the next month?

[Linea_Norway]

Thanks Bernard. It's good to read stories from people in similar financial situations. Gives me hope!

2-WEEK UPDATE:

• We've been cooking dinner at home 5 days per week and bringing lunch to work every day. Saving around $100/week...$400/Month...$5000/Year
• No more Dunkin or Starbucks. My wife treats herself to one on the weekends only now. Saving us $30/week...$120/Month...$1440/Year
• Switched car insurance from Allstate to Progressive, with more coverage (4 cars), and went from $5760/year down to $2598/year. Saving us $3162/Year

That's almost $10K per year in savings just by discovering this forum a few weeks back!

That's great.

Given that school has already started, can you discuss a "freeze" on clothing spending for 30 days while reassessing what is important to the two of you?  This seemed like a large item that was not being budgeted or tracked, just a credit card bill paid for after the fact.  Will the kids or wife (or you) go without clothes if this category is $0 for the next month?

Could you carefully play the environmental card? Wearing clothes only once is environmental waste. Wearing them out for many years or buying used is much better.

Try to ignore your children's objections in this discussion. They might be used now to always wearing the latest fashion. But it sounds like your wife is seeing the light already. Maybe she can come up with good ideas how to save money on this category? A challenge of a month without buying is grate. Many people here try a whole year. Otherwise just budgeting for an allowed spending in clothes could be an option.

Some people do it like this:
Your income = x
Your not optional spending = y (you are working on lowering these)
Your wanted savings = z
Your optional spending = x - y - z. Then that pot can be used for clothes, hair, dining out, starbucks ect.

[seeyalater]

1-Month Update:

• Just sold my truck for $60K and walked away with $40K after paying off loan. My plan is to buy something smaller for around $20K cash. This puts the remaining $20K into stocks or mutual funds, saves me a car payment and should reduce car insurance slightly once I find a replacement car.
• Wife is slowly getting on board and has even mentioned posting some of her clothes, purses, shoes she doesn't wear on Poshmart to sell. There's probably thousands of $$ in stuff she never wears.

[Dicey]

The business has an office, it's not home-based. I just have the cleaning lady that cleans the office do the house twice per month so it comes out of the business.

That is not legal, you need to reimburse your business for the expense.
[/quote]

I'll get right on that!
[/quote]
Google Leona Helmsley if you haven't fixed this already. Or even if you have.

[feelingroovy]

1-Month Update:

• Just sold my truck for $60K and walked away with $40K after paying off loan. My plan is to buy something smaller for around $20K cash. This puts the remaining $20K into stocks or mutual funds, saves me a car payment and should reduce car insurance slightly once I find a replacement car.
• Wife is slowly getting on board and has even mentioned posting some of her clothes, purses, shoes she doesn't wear on Poshmart to sell. There's probably thousands of $$ in stuff she never wears.

Congrats! That's great progress.

Your wife's car lease ends in just a few months. You may want to earmark the $20k to replace hers too. Then you will have no car payments. Or did I see you have 4 cars for 2 or 3 drivers already? So you won't need to replace the Infinity at all?

[golfreak12]

Your post resonated with me, because much of what you wrote applied to my wife and me. I'm a 50% business owner (LLC), so I can shift expenses around. I too live in a HCOL area. My mortgage is about equal to yours. My income is a bit lower, but I don't have to pay child support. There are enough similarities to give me goosebumps.

Until I saw the light, the wife and I spent what we made. It was "normal" and that sentiment is enforced by living in an upscale neighborhood. After we discovered FIRE and I dug really deep into it, I was able to slowly get the wife onboard. It was a smooth transition, where I said, "honey, we're bringing home $10K per month, and at the end of the month it's all gone. That's just insane, isn't it?"
So I fired up my self-made EXCEL spreadsheet and started tracking every penny going in and out, then, a few months later, the wife and I sat down and figured out where to change things. That was the daily Starducks, gym membership, private tennis lessons, DirecTV, going out for breakfast and dinner several times a month, etc. All these changes have added up to a gigantic reduction in expenses. All the money saved went straight into investments.

Step two was to reduce what was left. Instead of shopping mindlessly at Whole Foods and other fancy stores, I first checked Vons and Ralphs, then Trader Joe's. We buy lots at CostCo as well. And the final step for me was to set foot in a 99 cent store. I felt out of place, but now I actually enjoy buying my vine tomatoes for 99 cents and Anderson's pea soup for the same price. After I got what I can get for cheap, I go to Vons, buy the $1.99 special-of-you-buy-5 stuff. Only stuff I can't get anywhere else I buy at Trader Joe's (box wine, etc.) or Sprouts. That change in buying behavior has resulted in hundreds of dollars of savings per month in groceries alone. Going out to eat is now reserved for special occasions, and I visit a Starbucks perhaps once every 3 months if I'm on the road and can't brew my own coffee. That's it.

The fact that we are saving money gives me satisfaction. I enjoy it, and the wife is now on board with me, which is the coolest thing ever!

You'll have to get your wife on board, sit down, with her and make your case. Don't be a Joneses person, but the millionaire next door. I'm a lawyer-turned-classic-car-dealer, and I can take the fanciest cars home. I rarely do that anymore. I drive a cheap car and so does my wife. My neighbors have the newest, fully financed cars in the driveway, and instead of admiring them I feel sorry for those suckers. They haven't seen the light because nobody has shown them the path. Eventually they may wake up, like you did, or they may not.

Once you feel that the wife is with you, you can do what we did. You should be able to free up thousands of dollars per month, while still staying in your forever home. Drastically reduce eating out, switch to more affordable vehicles, shop for better insurance rates, and so on. Do this step by step, and you may feel enjoyment from the success you are experiencing. The most important step is the first one, recognizing that "normal" is bad for your financial health. Once the fire is on, it will get more powerful.

Good luck.

Great Advice here.

[golfreak12]

I have nothing to add but we do have similar salaries but we have no kids.
- I make $120k-$130k per year.
- My wife makes $48k + 401k matching.

On a bad month, our expenses will be around $5k. Good month $4k.
I couldn't even imagine ourselves living in a $500k house.
I know we are not in similar situations but its an eye opener seeing people's expenses with similar salaries.

Great job in cutting down your expenses.

[BicycleB]

1-Month Update:

• Just sold my truck for $60K and walked away with $40K after paying off loan. My plan is to buy something smaller for around $20K cash. This puts the remaining $20K into stocks or mutual funds, saves me a car payment and should reduce car insurance slightly once I find a replacement car.
• Wife is slowly getting on board and has even mentioned posting some of her clothes, purses, shoes she doesn't wear on Poshmart to sell. There's probably thousands of $$ in stuff she never wears.

Congratulations on your progress!

Since we're halfway through another month, just thinking of you and hoping for the best.

[seeyalater]

Not too much to update. We're still on the same path, cooking at home, bringing lunches to work, etc. The wife actually sold a couple of "fancy" purses that she hasn't used in a while. So I thought it only fair, I sell one of my Rolex watches. I have a few nice watches, but rarely wear them since getting an Apple Watch a couple of years ago. So it's going on eBay as soon as I snap some nice pictures.

I've also sold a bunch of miscellaneous items on Offer up. Nothing crazy, but probably $1000 all together.

[BicycleB]

Thumbs up!

[ysette9]

1-Month Update:

• Just sold my truck for $60K and walked away with $40K after paying off loan. My plan is to buy something smaller for around $20K cash. This puts the remaining $20K into stocks or mutual funds, saves me a car payment and should reduce car insurance slightly once I find a replacement car.
• Wife is slowly getting on board and has even mentioned posting some of her clothes, purses, shoes she doesn't wear on Poshmart to sell. There's probably thousands of $$ in stuff she never wears.

Fantastic

[snorr]

Great read, seeyalater, a nice, calm change :)

Hope you'll continue on this path and reach FI and get to RE soon.

[formerlydivorcedmom]

We had a lot more luck slashing our spending when we started paring down our belongings.  Like you, we sold a lot of stuff.  Gave away a lot more.   There's a neat psychological effect - when you have a ton of stuff, adding more to it isn't a big deal.  When you don't have as much, then you tend to think more about each purchase.

My husband and I also budgeted a set amount for each of us to spend on whatever we wanted.  That has helped us not to nitpick each other as much.  We are each accountable to the amount we set as our personal budget.