The Money Mustache Community
Learning, Sharing, and Teaching => Case Studies => Topic started by: MrSpendy on July 13, 2017, 07:28:23 PM
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Putting this as a journal rather than case study, because spending is so fat that it's very obvious where cuts can be made.
EDIT: decided I won't be writing much flavor so moved to case study
This won't be overly interesting and will be a little messy. But typing things out may help with progress along the way.
Just Married, will file Jointly, no kids, HCOL Area, 28/27
Gross Salary/Wages:
Mine: ($95K + 0-70% of salary bonus, depending on company overall performance)
Hers: ~$23K Stipend
118K gross
-$18.5K 401k
-$4K HSA
$95.5K taxable income w/o bonus
taxes have been highly variable for me given that I've had substantial taxable investment gains and owed about $20K last year and we just got married, so far this year have about $10K of realized gains, but have a big loss that can offset this if i wish to realize it before year end.
But assuming no investment gains or bonus, online calculator says that taxes should be about $28K (Fica, Federal, State, Local), bringing take-home to $67K about $5,800
Normalized for no bonus, no investments
Take-home : $5,800
Spending has been super messy with wedding, honeymoon, etc.
Below is estimated of "normal" go forward that is representative of our general lavish habits.
Rent & Parking: $3,100
Restaurants $800
Travel $500
Groceries $400
Auto $600 ($316 payment on my car, $150 insurance for 2 cars, + miscellaneous)
Everything else $600
$6,000
Cars: fully paid off '07 reliamobile owned by the wife, 2010 facepunchmobile <--i used to own outright, but took a loan out a few years back when had lots of investment opportunities, it worked out, will probably get rid of the loan soon since it's no longer meaningful
Assets:
Taxable Accounts: $314K 100% stocks
private company : $50K at cost, $90K market value (it's only quasi-private)
I-Bonds : $51K
Taxable $415K
loan -$50K (used to buy company)
Car loan: $8.6K
$357K taxable net worth
All non-roths are 100% pre-tax
Work 401k : $33K stable value $9.5K employer contribution, been there a year so mix of tail end of 2016 and full 2017 + employer
Rollover IRA 1: $136K stocks
Rollover IRA 2: $81K stocks
Roth IRA 1 : $73K stocks
HSA : $6K 30 yr tsy's
Roth IRA 2 : $23K stocks
Spouse doesn't have a 401k/403b...we put money from my taxable into her old rollover and converted to roth in 2016 when she had little income
Total retirement: $349K
Total taxable + retirement: $706K
My retirement and i-bonds was "earned" in the sense that all assets in those originate from a paycheck/bonus I worked for. Not saying it was all me given that I was privileged to have no loans and high paying job after super expensive college).
My taxable net worth is not the result of frugality but instead has substantial impact of inheritance (~$200K in 2011).
I've matched market returns in taxable, but have spent a lot of money. I invest in 2-3 stocks at a time in my retirement accounts and have made mid 20's per year which is not sustainable or advisable.
My goal is to not work for the man and invest full time (it's what I love to do). I want to be financially independent with wife's income ($50-$125K when out of school/ramped up , depending on geography). At the time FIRE is not a goal of hers, but I also don't want to be in a position where my desire to not be gainfully employed makes her feel resentful or forced to work.
Breaking my addiction to luxury will accelerate this goal.
More flavor, fewer facts in the future.
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Gonna follow. Looking forward to you killing that restaurant bill ;)
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yep, that's the most obvious and insane (besides rent!).
I am also considering dropping das facenpunchenmobil von Bavaria as it is a ticking time bomb of unforeseen maintenance expenditures. I can ride my bike / uberpool (in the winter...ya ya ya i know) to work for significant savings taking into account insurance and future maintanence , etc. Won't save on parking until lease expires (currently $75/month/car but that was negotiated, it's normally $150!).
I rode every day this week so far.
It's a laughable 2 miles on a gorgeous greenway.
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Do it! If Mrs drives to work, maybe she can drop you on way in winter :)
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End of July (almost) Update, goal this month is to be more precise and understand where it all goes...restaurant addiction remains a real struggle
Personal Capital
July Outflows: $7,200
Reimbursable: - $500
Personal Expenses: $6,700
Rent & Utilities & Parking: $3,325
Restaurants: $1063 <---Good god....wife's birthday celebration where i paid tab and got paid back is inflating by $200
Travel (personal) $560 <--bought tickets for October family reunion + ~$50 of non work related uber
Groceries $473 pretty normal for us, don't see this as an item to cut
Auto $400 ($315 payment on facenpunchenmobil, 1 tank, AAA membership)
"Telephone" $223 (2 months of fast internet & 30 channel cable)
Clothing $170 (wife's birthday, was cool with her purchases, not normal)
Concert $150 (James Taylor = wife's favorite, we go to 1-2 concerts a year, was worth it)
Personal Care $128 ($44 haircut for me, I get it every 2 months, $43 class pass for wife, $41 nails wife)
Wedding Gifts / shower $122 (wife's best friend where she is bridesmaid)
Amazon $75 (all me, primarily investment related books and bike maintenance items)
Take home was $4,600 + $1,800 = $6,400, this represents normal rate when not contributing to 403b (already maxed).
Total NW increased from $717K to $731K for the month thanks to the market.
Hope to look better next month. Rode bike to work almost everyday, but it doesn't really save much until i get rid of the car since the costs of it sitting there (parking, payment, depreciation, etc.) outweigh cost of using it substantially. Still haven't sold it or taken steps to do so.
I recognize this could be a bit more entertaining...
I think I need to work on my withholdings: YTD Pay: $79K (salary + bonus), pre-tax deductions: $18.7K, Taxes: $23.7K
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Just wrote a big detailed august breakdown and then it got lost to the interwebz
Bottom line: Spent $6,700, made $6,600, $736K net worth w/o counting restricted stock gains, $796K counting them.
Remain addicted to restaurants, travel to friends' weddings, living in the high rent uber convenient downtown, etc. Paid off car loan.
Note: Take home pay is higher than projected in first post because that is an average. I front load my retirement and don't have a paycheck for part of the year.
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Okay here's August Breakdown.
Rent, Utilities, Parking $3,348 ($3026 rent, $150 parking for two, $117 electric, $55 gas/water), 1100 sq foot temple of anti-mustachianism
Auto $ 724 (DW's insurance bill $325 + $315 my payment, gas)<-paid off loan to be rid of the bill going forward
Restaurants $676 Improvement! LOL
Travel $625*
Groceries $487
Personal Care $319**
Gifts $127 another wedding gift, apparently July's was a shower gift, not a wedding gift.
Internet/Cable $106
Dry Cleaning $133 Yours truly has spent a whopping $1200 on dry cleaning in 2017, this needs to change, pure laziness
the Rest $188
Total $6733
*Cost of attending friends' Wedding Hotel, $94 personal uber usage, $200 paid for in-laws rental car to visit (they don't have a big car and they hauled our wedding gifts to us so we offered to pay, we had a surprising number of gifts brought to the actual event)
**$240 is related to being a bridesmaid (hair nails on day of, this is pretty standard, I wager we spend $5K-$8K a year on wedding related travel/stuff like this [bachelor parties, tux rentals, bridesmaid dresses, gifts, etc.])$44 is yours truly's snazzy haircut, rest are discounted fitness classes
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re the rent: I hear you. We live a life of luxury and I frankly love where we live; it's definitely not a necessity. Across the street from grocery, above/near restaurants, near awesome trail, 2 miles from work, across the street from SoulCycle and a boxing gym...been spending most my life livin' in a yuppie paradise....it is only 35% of pre-tax in a no bonus year...but my bonus is totally out of my control and not based on my performance so i should live on the assumption that it's $0.
If I had my choice we'd live in a 1/1 in the same building ($2600) the den and the extra bathroom are not necessary; it's great when family/friends visit. we made this decision prior to me having stronger inclinations toward mustachianism and i was all for it, signed a 2 year lease at a 20% discount to where the unit traded a few months before (a few buildings went up at once, creating a price drop). A very dingy poorly located 1BR would be ~$1,500 - $2,000.
It's interesting to me you see restaurants as a use of time. I view them as a (luxurious and convenient) saver of time. I can pick up a $10-12 delicious salad or rice bowl in <5 minutes and have a healthy meal super quickly. It's buying / preparing food that uses time and energy.
Last month's restaurants further broken down
$200 to fill up my breakfast / lunch card, this is $3-$6 a day at work for healthy variety and good food
$92 treated inlaws to dinner
$50 fast casual salad place (3X)
$40 restaurant when traveling for friends wedding (1x)
$38 fast casual chicken (2x)
$32 bar (1x)
$32 frozen yogurt place (3x), did i mention we live by a lot of restaurants
$30 gelato place (that's treating my family after they treated us to multiple dinners)
$25 Panera bread (couple of spouse work lunches, maybe?)
$25 Fast casual rice bowl place (1x
$20 Fast casual place (1x)
$30 coffee shops 1 is from when we were traveling, don't know the other)
$10 chick fil a, purchased on drive to wedding, $5 a meal for delicious chick fil a!
$17 wife work lunch
So it's a death by 1000 cuts situation where convenience and desire for variety conspire to drain us of our wallet as we lavishly outsource our food prep.
Re the travel hacking. I have about 150,000 points after using 200,000 or so on our honeymoon. We usually use points on our annual big trip, never for "routine" / wedding travel. This year's trip was honeymoon (think that will be 2018's too!). My work involves the occasional $15,000 ticket to HK or tokyo which is great.
Thanks for the tip on the dry cleaning.
I know how all this sounds and recognize that this is all a choice. I struggle with what I really want to spend each month. I generally enjoy life and "can" afford to spend how I do (most 28 years olds aren't worth $700K, whether that be the result of my own merit or not). I also know that I'll inherit (from grandparents in their 90s) an educational trust that will take care of future kids education, so I'm not depriving future kiddos by living so lavishly.
But there's no question that our spending delays my goals of freedom and if it grows it will do so perpetually.
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re work breakfast / lunch. Fruit and coffee are free (what i have). Lunch is on our corporate campus and is what cost $3-6 / day, so that's. By "fill up card", I mean I put $200 on the card then will use $3-6 / day. I'd say closer to $6 In total there are 250 workdays a year so it's a $1,500 / year habit ($1,500 minus what it would cost to bring in lunch to be precise). Not great, but it's not the fattest part of the restaurant budget.
Groceries sell froyo?
I should've called it a Mozambiquen-Portuguese Peri Peri Chicken place ; )
Panera's okay...wouldn't be my choice either.
We cook most weeknights amazingly (that grocery money has to go somewhere) there are 30 days in a month and I count 9-10 dinners out. It's going from 20 ---> 25---> 30 that is very difficult for us. And my subsidized work lunch is tough to give up. DW is very good about taking leftovers but there are a few lunches of hers in there too.
Anyways, my friend's visiting and is about to arrive. We're going out to dinner. Got to start september out strong.
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PTF.
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Groceries sell froyo?
Ben & Jerry's has frozen Greek yogurt that is really good.
I should've called it a Mozambiquen-Portuguese Peri Peri Chicken place ; )
Ok, that does sound tasty.
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Anyways, my friend's visiting and is about to arrive. We're going out to dinner. Got to start september out strong.
Oh boy... I hope that doesn't mean a lavish expensive night out...are you sure you're on the right forum?
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I know how all this sounds and recognize that this is all a choice. I struggle with what I really want to spend each month. I generally enjoy life and "can" afford to spend how I do
Can you though?
Bottom line: Spent $6,700, made $6,600
You made $6,600 and yet somehow managed to spend more than that. WTAF?
...are you sure you're on the right forum?
My thoughts exactly, have you checked out Bogleheads? It seems more your style. [Which isn't to say you are not welcome here, just that you don't seem to be drinking what we're serving.]
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All fair criticisms, which is why I originally put this in "journals" rather than case studies. It's not like I'm unaware that spending $12K / year or whatever it actually is to feed 2 people is not insane. The all too slow realization that we work 1-2 months a year to feed that habit is a reason to start changing things up. And I think we bit off a bit more rent than we can chew.
There are clearly other case studies where far most legitimate help is needed that are populated by far more disciplined people.
Others weren't born on third and others aren't doing the moonwalk back to second base with a $13 signature cocktail in hand.
Writing it all out systematically on a monthly basis is a helpful triage. I thought the run rate was $6K, but it's apparently more like $6.5-$7K, which is creeping up into "living on expected bonus" territory, which I don't want to do; bonus is more or less out of my control given how junior I am (I don't drive the decisions that determine if we will get paid).
Assuming no change in market prices, our retirement should increase by about $50K/ year ($18.5K +$9.5K match, $4K + $2K employee HSA contribution, $15K of dividends from stocks in our IRA's, don't own them for yield which is a terrible way to pick stocks, stocks i own just happen to pay a bit more than market). And I have saved $350K in retirement accounts that was 0 at the start of my working career. So I would counter the couple of responses that make it seem like we're burning the furniture. Making some suboptimal choices for sure, increasing our working lives, absolutely. But we "can afford" to spend what we do and I've historically saved bonuses (though expenditures related to our engagement / wedding (truly one time) certainly makes that a little less valid).
Anyways feel free to continue the face punches. Feel free to judge and pity. Hope to put up some more cash flow positive months going forward and not be completely reliant on securities investment / speculation / bonus beyond my control to increase NW.
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Others weren't born on third and others aren't doing the moonwalk back to second base with a $13 signature cocktail in hand.
Writing it all out systematically on a monthly basis is a helpful triage. I thought the run rate was $6K, but it's apparently more like $6.5-$7K, which is creeping up into "living on expected bonus" territory, which I don't want to do; bonus is more or less out of my control given how junior I am (I don't drive the decisions that determine if we will get paid).
That is a delightful way of looking at it, I'm happy to help slow down the moonwalk speed!
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FWIW, you remind me of my DH - likes the idea of FIRE, but makes good money and wants to enjoy it and buy nice things that suit his perceived success, even though that desire conflicts with the first goal; and, of course, you know you have a spouse who will also be making good money, which takes some of the pressure off. You are also in a similar situation in terms of a significant chunk of your income being in your bonus -- which, again feels like another safety net. So there's just no sense of urgency to save more.
So if you do decide you want to commit to this, I would recommend rejiggering how you think about your finances. Specifically: adjust your budget so that ALL of your basic expenses AND the savings necessary to hit your FIRE target come out of your take-home pay. That means cutting back on some of the extras (vacations, dining out, hair/makeup/manicures) to create $1-2k/mo. in savings. And then, if you get a bonus, you can save part and then allocate part to some of the fun extras, like vacations and fancy dinners out.
This is both practical and psychological. From a practical perspective, you want to set your "normal" budget -- the budget your everyday life is based on -- based on your guaranteed income. That way you know you are ok even if the company has a down year. And psychologically, that approach helps you re-cast the fancy dinners and trips and such as "extras" that come out of "found" money, not as a normal, expected part of everyday life. Plus I find it helps to make the paychecks feel tight, because I hate seeing my bank account drop month to month.
Finally, I am going to challenge you on the food. Not the special dinners out - the meaningless Panera and the like. Because I do this too. But the core principle of Mustachianism is to focus your spending on things that matter, that improve your life -- not on things that just enable being fat and lazy. There is a difference in my mind between "OMG, I am totally craving that Portuguese/Peruvian chicken" and "oh, crap, it's 6, we gotta eat, let's go out." I have found myself sitting at many a "fast casual" place and thinking, wow, this is mediocre, I am spending money on something that is bringing me no value at all, other than flat-out laziness. And that is just stupid -- doesn't matter how much you have, how much you need, you are wasting it on shit that is bad for you on multiple levels. So come up with some "oh crap it's 6" alternatives -- grilled cheese, tuna or egg salad, a big salad with some grilled chicken, chili that you keep in the freezer, whatever. It doesn't even need to be a "real" meal - if you are going out because you need to put food in your body, just put some damn food in your body for free!
I am very serious that you need to get this under control now, because the longer you stick with this habit, the more it becomes an expectation, and the harder it is to break. I have about 20 years of marriage on you, and two additional mouths to make happy, and I have spent most of those years doing exactly what you are doing - because, hey, we can afford it, and it's easy, and life is stressful, and [insert whine/complaint/justification here]. And now that I have realized how stupid it is, I am surrounded by three other people who see it as their God-given right to eat out all. the. time. - just for the sheer entertainment value of getting out of the house. You really, really want to build healthier habits now, before you have years of history pulling you down and additional people you have managed to spoil into that lazy and spendy expectation.
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Why don't you do a challenge? No eating out for one week? Make keeping to that the priority for the week. If you can extend it to a month.
Don't be afraid, it won't hurt as much as you think.
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...There is a difference in my mind between "OMG, I am totally craving that Portuguese/Peruvian chicken" and "oh, crap, it's 6, we gotta eat, let's go out." ...
An excellent point Laura33. It takes a mindset change, but it can save you hundreds of dollars a month.
And going out for a fancy dinner is more of an event when you normally eat at home (until your cooking gets so good that the food out is worse, but that takes time).
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All your good financial habits seem to relate to before you were married. Now you are "just married" and the end result is spending that is, essentially, out of your control - you are lacking either the desire or the ability to make changes. You are surviving only because of your good income and your existing capital. Given that things will probably only get more expensive from now on (monetary inflation, lifestyle inflation, kids, etc, etc.) you are nicely set in to the American dream of living the good life on credit and the work treadmill. You don't need financial advice, you need a facepunch and a reset of your entitled attitude.
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Laura, I think you hit the nail on the head. While the monthly and annual inflows and outflows in my life have generally amounted to "not that bad" and i'm overall in a great place, objectively, the compounding effects of our current mindset, which involves no amount of sacrifice or normalcy, are starting to become apparent.
It's like I look ten years forward and I'm signing the dotted line on a leased Q7* to take the kids to $30K/year private school and park in my mortgaged up $1.5mm house and my net worth relative to spending hasn't grown at all and level of freedom has not increased; only the velocity of and magnitude of earning and consuming has grown. That is what will occur if we don't change. It's a outcome that most could never dream of, and it's very comfortable and outwardly very beautiful, but it's not one that involves freedom. My boss probably makes ~$600K and boss's boss makes $1mm-$3mm (his comp is public info and highly variable, a more extreme version of mine), but they still work very hard and have all the same stresses I do (if not more) even though they've paid their dues for 1 decade (boss) and 2 decades (boss's boss) longer than I have.
I started out my career on Wall street where all of these numbers would basically be multiplied by 3 (2 years into my career I took a 50% pay cut leaving my job as a trader<--this, along with my writing style is probably identifying info so hopefully no one i knows is reading this, if you are, well you now know my weird internal struggles and that i'm a mini-trust fund baby, something i keep on the down low).
So I already feel like I made the healthy work / life balance / decrease consumption increase happiness trade, but then I read MMM and it made me realize I/ we still spend at an extreme level. If I'd never read about it I'd probably be more content, knowing my balance sheet was fatter than 95% of normal people (though a lot thinner than if I'd continued slangin' complex bonds to community banks and insurance companies). The smug satisfaction of having given up on the NYC/wall street game gave me a lot of confidence in how i chose/choose to live my life. Reading about people rapidly heading toward freedom because they soak beans overnight, bike commute, live in efficiently small places while still making a lot of dough, shakes that confidence. But I haven't made any real change yet. talk is cheap without real change. I think you all will get frustrated with my lack of "cold turkey" commitment to all this and I KNOW for a fact that $30K / year non housing spending or whatever is not the right level for us. But I also think the current level will only compound at the rate of take-home salary (and that the max on tax advantaged accounts will become less meaningful overall) if we stick to the current mindset.
However one wants to quantify the "head start" I've had (somewhere in between $200K and "undefined" when taking into account private school, debt free college, etc.), my taxable net worth growth from 2011 to today indicates that I haven't really saved anything from take-home pay (it's more or less up with the market). When I add up wedding contribution, engagement ring, and a way too nice car, (all of these are on me, my wife did not/does not require those things; my family's own expectation of normal on the other hand has definitely had an undue influence on me and I bear the responsibility of conforming to their views) that amounts to a big differential, particularly since the ring and car came before 2016 when investments did very well.
end somewhat pointless rant, enjoy your labor day y'all and thanks for the input
*or fully loaded Outback; having grown up in a more outwardly spendy and sunny part of the world where BMW's and Benz's are the order of the day, it amazes me how many extremely wealthy people around here have fully loaded Outbacks.
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It's like I look ten years forward and I'm signing the dotted line on a leased Q7* to take the kids to $30K/year private school...
...what are you talking about? You are living above your income. Quite simply, you cannot afford private school.
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Those are the thing I associate with lifestyle inflation. Those are the things that future increases in pay would find their way to funding if I didn't put any thought into it and wasn't lurking around here ( with thought they still might find their way to private school depending on where we live). Those are the next speeds on the working / consuming treadmill.
I'm pretty junior / low on pay scale for what I do. I've performed well and think I'm on track to advance over time. My wife won't be in grad school in the future. As long as I'm employed in the same field, and we don't have kids too soon(plan is in3-4 years), we certainly will be able to afford private school and all the trappings of top 5% life ( good schools, healthcare, nice vacations, etc.); it's all a matter of choice as to how we handle the likely ramp up in take home pay that will occur in the next 3 years or so and the current trend is not at all positive from a mustachian standpoint as pointed out by many here.
I'm not trying to be defensive because there are choices being made that aren't defensible, but just feel the need to clarify.
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But I haven't made any real change yet. talk is cheap without real change. I think you all will get frustrated with my lack of "cold turkey" commitment to all this and I KNOW for a fact that $30K / year non housing spending or whatever is not the right level for us. But I also think the current level will only compound at the rate of take-home salary (and that the max on tax advantaged accounts will become less meaningful overall) if we stick to the current mindset.
However one wants to quantify the "head start" I've had (somewhere in between $200K and "undefined" when taking into account private school, debt free college, etc.), my taxable net worth growth from 2011 to today indicates that I haven't really saved anything from take-home pay (it's more or less up with the market). When I add up wedding contribution, engagement ring, and a way too nice car, (all of these are on me, my wife did not/does not require those things; my family's own expectation of normal on the other hand has definitely had an undue influence on me and I bear the responsibility of conforming to their views) that amounts to a big differential, particularly since the ring and car came before 2016 when investments did very well.
Get frustrated?!? Like in the future? Dude, the frustration is here and real right now. Your spending is obscene. You have basically wasted the gift of your education because you could have just as easily got a non-fancy job and spent all of a lower salary and been just as happy and in the same place financially.
Either take a shit or get off the pot.
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I have good news. there seems to have been a decline in the rental market. 1 BR's in my building (used to be $2,400-$2,700) are now $1,900 - $2,500. There's a unit 1 floor down that's $2,050. So our extra bathroom, den, and 400 sq. feet are now costing us $1,000 / month.
We could move for $500 break fee + hiring some folks to help move furniture. I'm not sure if our parking would re-price to the rack rate, so that would decrease the cost savigns by $150/month if we weren't able to carry over our parking deal.
Going to be hard to convince DW, but $800-$1,000 / month would worth being a little less spacious and making guest get hotels/sleep on air mattresses.
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$12,000 a year buys a very nice hotel room for guests.
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Hi, there, fellow 20's newlywed!
Just thought I'd pipe in - I went to a yuppie Ivy-league college, married a software developer, and work in tech. We have similar net worth values (spouse and I are 25/28 years old, respectively), and are worth ~$800k.
I KNOW how easy it is to fall into the NYC trader lifestyle, because that elite club of six-figure 23 year olds takes some clout to get into, and it's a snazzy place to be. Bonus points if you were recruited directly from your ivy-tower dorm room. Been there. The key point is, it's hard to see the merit in mixing your own laundry soap amidst that lifestyle - what's $1/week saved if your salary is 100k with potential for tripling in a few very long trader years? Plus, it feels high-class and powerful to be getting drunk networking with people who just bought 1 World Trade on credit from JP Morgan himself... I jest, but only a little.
This is more of a plea for you to consider the meaning of life - beyond the money. Money comes easy for us (thanks, mom and dad, for helping us get into/pay for college). The idea is to get beyond it, where that $18 cocktail isn't a status symbol, that $30k wedding isn't worth the Instagram likes, and you can just be. Don't worry about the laundry soap, or other "making paper towels out of used bank receipts" frugality. Just sit down over a cup of tea or something, and think about what your "ideal day" might look like. Write it down. Think about five years, ten years out - an ideal life is made up of many ideal days.
This made us move out of the rat race to cool Colorado - we get lots of "early morning runs" , "long hikes" and "cups of coffee outside" - all components of our "ideal days" - and not so much "paying for expensive wedding travel" - we just said our first "thanks, but no thanks" to that, and man, it felt amazing to give ourselves the gift of time!
Bottom line - you're making money, but not *check out my jet that takes me to my other house in Paris* money. You have the same net worth as us, with similar levels of immense privilege. However, our net worth increases $20k/month on average, (thanks, stock market boom this year) - due to just a bare minimum thought about priorities (the "ideal days"). You're going to have to have hard thoughts/conversations more than hard cost-cutting frugality. Just have them, because otherwise, you'll be living in my worst fear - being 55 with a completely unplanned, wasted life behind you. Do the hard thoughts. The rest will follow.
Good work, good luck! Wall street is tough. the 20-hour days are tough. the salaries are big, but the time and energy is too. feel free to reach out if you want more details about our similar situations or are pondering how to escape the NYC life for some freedom.
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Hi, there, fellow 20's newlywed!
Just thought I'd pipe in - I went to a yuppie Ivy-league college, married a software developer, and work in tech. We have similar net worth values (spouse and I are 25/28 years old, respectively), and are worth ~$800k.
I KNOW how easy it is to fall into the NYC trader lifestyle, because that elite club of six-figure 23 year olds takes some clout to get into, and it's a snazzy place to be. Bonus points if you were recruited directly from your ivy-tower dorm room. Been there. The key point is, it's hard to see the merit in mixing your own laundry soap amidst that lifestyle - what's $1/week saved if your salary is 100k with potential for tripling in a few very long trader years? Plus, it feels high-class and powerful to be getting drunk networking with people who just bought 1 World Trade on credit from JP Morgan himself... I jest, but only a little.
This is more of a plea for you to consider the meaning of life - beyond the money. Money comes easy for us (thanks, mom and dad, for helping us get into/pay for college). The idea is to get beyond it, where that $18 cocktail isn't a status symbol, that $30k wedding isn't worth the Instagram likes, and you can just be. Don't worry about the laundry soap, or other "making paper towels out of used bank receipts" frugality. Just sit down over a cup of tea or something, and think about what your "ideal day" might look like. Write it down. Think about five years, ten years out - an ideal life is made up of many ideal days.
This made us move out of the rat race to cool Colorado - we get lots of "early morning runs" , "long hikes" and "cups of coffee outside" - all components of our "ideal days" - and not so much "paying for expensive wedding travel" - we just said our first "thanks, but no thanks" to that, and man, it felt amazing to give ourselves the gift of time!
Bottom line - you're making money, but not *check out my jet that takes me to my other house in Paris* money. You have the same net worth as us, with similar levels of immense privilege. However, our net worth increases $20k/month on average, (thanks, stock market boom this year) - due to just a bare minimum thought about priorities (the "ideal days"). You're going to have to have hard thoughts/conversations more than hard cost-cutting frugality. Just have them, because otherwise, you'll be living in my worst fear - being 55 with a completely unplanned, wasted life behind you. Do the hard thoughts. The rest will follow.
Good work, good luck! Wall street is tough. the 20-hour days are tough. the salaries are big, but the time and energy is too. feel free to reach out if you want more details about our similar situations or are pondering how to escape the NYC life for some freedom.
Mind if I take you up on this? H and I are 26/28, NYC burbs with an 8 month old, but we're already pretty frugal and plotting our escape from the area...
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Not sure if it would be economically much different than eating out but Blue Apron is a good way to wean yourself off eating out without giving up diversity. You can then create shopping lists for the recipes you like and have Fresh Direct delivered to your doorman.
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Hi, there, fellow 20's newlywed!
Just thought I'd pipe in - I went to a yuppie Ivy-league college, married a software developer, and work in tech. We have similar net worth values (spouse and I are 25/28 years old, respectively), and are worth ~$800k.
I KNOW how easy it is to fall into the NYC trader lifestyle, because that elite club of six-figure 23 year olds takes some clout to get into, and it's a snazzy place to be. Bonus points if you were recruited directly from your ivy-tower dorm room. Been there. The key point is, it's hard to see the merit in mixing your own laundry soap amidst that lifestyle - what's $1/week saved if your salary is 100k with potential for tripling in a few very long trader years? Plus, it feels high-class and powerful to be getting drunk networking with people who just bought 1 World Trade on credit from JP Morgan himself... I jest, but only a little.
This is more of a plea for you to consider the meaning of life - beyond the money. Money comes easy for us (thanks, mom and dad, for helping us get into/pay for college). The idea is to get beyond it, where that $18 cocktail isn't a status symbol, that $30k wedding isn't worth the Instagram likes, and you can just be. Don't worry about the laundry soap, or other "making paper towels out of used bank receipts" frugality. Just sit down over a cup of tea or something, and think about what your "ideal day" might look like. Write it down. Think about five years, ten years out - an ideal life is made up of many ideal days.
This made us move out of the rat race to cool Colorado - we get lots of "early morning runs" , "long hikes" and "cups of coffee outside" - all components of our "ideal days" - and not so much "paying for expensive wedding travel" - we just said our first "thanks, but no thanks" to that, and man, it felt amazing to give ourselves the gift of time!
Bottom line - you're making money, but not *check out my jet that takes me to my other house in Paris* money. You have the same net worth as us, with similar levels of immense privilege. However, our net worth increases $20k/month on average, (thanks, stock market boom this year) - due to just a bare minimum thought about priorities (the "ideal days"). You're going to have to have hard thoughts/conversations more than hard cost-cutting frugality. Just have them, because otherwise, you'll be living in my worst fear - being 55 with a completely unplanned, wasted life behind you. Do the hard thoughts. The rest will follow.
Good work, good luck! Wall street is tough. the 20-hour days are tough. the salaries are big, but the time and energy is too. feel free to reach out if you want more details about our similar situations or are pondering how to escape the NYC life for some freedom.
BTW, I appreciate the advice and perspective. To be clear, I already left Wall Street / NYC and that level of HCOL and spending about 4 years ago (though many here will point out I may have never truly left that level of spending). I took a 50% pay cut to enter a somewhat related field in an awesome city that I love/d; it was also a bit of a step back in terms of status/prestige in that I now work in a part of the financial world that not as associated with being the cream of the crop. I moved about a year ago to another high cost of living area to be with my wife while she's in grad school. I only just made it back this year to my total comp of my 2nd year on wall street; had I stayed, I'd be making (and spending) a lot more. I think my issue is that I've taken the habits of eating out when I was paying $850 / month in rent (in city #2) and kept them relatively constant now that I'm paying $3,174 and the restaurant prices are 30-40% higher. We hope to escape to a lower cost of living place in the future but the narrowness of my field (and inflexibility of her path to becoming fully qualified in her profession 5 years post u-grad education + 1 year residency like year) makes this a challenge and us changing our habits more important.
The hard conversations you speak of are ongoing and thus far the 1/2 w/ den -->1/1 trade conversation isn't going particularly smoothly (and a couple of the open units have been taken, which re-prices the remainder to $2,200-$2,600. The dynamic pricing model the large apartment buildings use is really cool from an inventory / occupancy management standpoint but can be quite annoying as a potential renter. We aren't going to move to save $3K / year (after break fee and other frictional costs like the re-pricing of parking). I want to move if we can save $10K+. There are still a couple available that would allow that and I'm trying to get us to tour one this weekend to see precisely what having less space looks like; the commensurate decline in stuff owned is also an exciting possibility, but also a scary one given that we just acquired like $10K of wedding registry stuff. I've tried to think of potential compromises / carrots. 1 is the savings would help us pay for dog walker / food. I've resisted getting a dog due to our work and travel schedules necessitating a level of expense and complexity that I believe outweighs the benefits of companionship. But I don't want to rob the rent gods to pay the dog/car/whatever else; I want to actually save the money. I think I brought it up at a bad time and there may be more progress in the future.
Zoe2dot,
We love to cook and usually do cook (that may be a surprise given the restaurant spending) and have used blue apron a lot in the past. I nixed it because I thought we just did better from a meal simplicity and deliciousness standpoint relative to cost and prep time by cooking things ourselves and wife agreed...We felt like we spend a half hour chopping and spend $8 / meal or whatever it is and the reward was not great; they'll probably be out of business soon given their customer acquisition cost, declining quality and increasing churn. Blue apron is this unappealing part of the spectrum of food where it costs almost as much as eating a decent meal out and the overly complex menus make them a hassle on the weekdays. we'd rather spend $12/meal for fast casual or just cook. In the past week I've made this https://cookieandkate.com/2014/quick-vegan-chana-masala/ and this http://www.myrecipes.com/recipe/fontal-polenta-with-mushroom and wife made some delicious sweet potato avocado and black bean rice bowls with the left over rice from the chana masala. An area where we NEED to improve is just being okay with making bigger portions and therefore eating the same thing again. Like last night the polenta and shrooms made us dinner and my wife's lunch (3 servings as opposed to the advertised 4 and there's no reason why I couldn't have doubled it...I don't think at least) and the chana masala was 1 meal for 4 (we hosted 2 sets of guests this weekend); easily could have thought to double that up too.
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Hey Mr. Spendy, another late 20s "high income/high networth" living in a HCOL person's opinion:
Echoing bouldertechwarrier...Where do you want to be in 10/15 years? It sounds like you don't want to wake up and have the loan on the Q7 and private school bills etc. etc. Maybe your goal isn't full ERE or FIRE, but what are your goals? Do you want a house some day, what about kids.. right now you couldn't "afford" daycare.
Have you looked at the cost of buying a condo? You seem like a pretty smart dude so I'm assuming the math works better for renting.
Also, your grocery+restaurant total seems high (I know other people have talked about the restaurant spend). I think the $200 for lunches per month at your work is probably the best deal for you, (although homemade lunches tend to be closer to $2/meal, which is an approximate savings of $625 a year..which is a flight somewhere cool), but if all your lunches are taken care of, and the the other restaurant meals why are you still spending $400 in groceries every month. Check to see how much food you are wasting.
What stands out to me is the assumption of "what is needed" in your life. For example, when detailing the move to a smaller condo, you say "we would need to hire people to move". Why? Get your spendy pants friends to come over, and help move stuff. Buy pizza and beer. Done...plus it is a free workout :D.
So here is what I would do. (YMMV). (Math is rounded)
Savings listed per month:
Move to a smaller place: $1000
Sell one car: $300+$75 for parking (I'm assuming the related other savings could be spent on a transit/taxis/car to go/rental bikes etc.)
Cut restaurant and food to a total of $800 a month: $300-$500 a month
Cut personal care spending in half for the year (a $44 dollar hair cut every 2 months?? Seriously? Also, since you are spending so much on mandatory stuff for weddings, does your DW need to get her nails done extra to that): $60
Cut dry cleaning costs in half: $50
Cut the phone/internet/cable bill, you should be able to find something for the 2 of you closer to $150 a month: $75
Additional:
Consider the amount you are spending on gifts..being a bridesmaid+ a $122 shower gift +$127 wedding gift is VERY generous. Even if you cut wedding spending by 25% (maybe skip one party or one shower), you are saving $166 a month of your total yearly spend.
TOTAL SAVINGS PER MONTH: $2126
If I was feeling REALLY frugal I could probably squeeze another $500-700/month out of your spending, but I think the above is a more realistic approach.
Oh also, sell some stuff...sounds like you got a bunch of amazing wedding presents..do you really need all of them?
Oh btw, in my HCOL city, that $2162 goes directly to child care, so if you are planning kids, it is probably better to get used to this "savings" now vs later.
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I think at this stage in your life moving (to another floor) should be on the table for almost any price savings. It should have almost no upfront costs. If it takes 10 hours and saves 3k that is $300 per hour. Still way more than current salary;).
I have found one of the side effects of living by uninspiring restaurants is that when we eat out less we enjoy it more. I would make a challenge to eat home cooked food for x days and then go out.
The constant wedding invites will go away. It is your current season in life.
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Do you need a car or could you downsize to one? I recall that you live two miles from work and have lots of conveniences nearby.That might help to make your pricey digs a mustachian type expense.
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car isn't necessary. I drove less than 3K miles last year and that included a LOOOONG road trip. my car is almost strictly a commuting tool and we never use it on the weekends (thanks to aforementioned well located apartment and zero tolerance for drinking/driving) with the exception of driveable weddings which are few and far between. My bike trail just got closed for construction for the next 5 years : ( (I thought NIMBY-ism would delay it perpetually<--some of you now know where I live), so it's either ride the streets, uber pool, or walk ~45 minutes (the bike path is a lot more direct than streets, another reason we picked apartment).
the car in question is a 2010 BMW 528xi w/ 75K miles. It's beautiful and in good condition though I got hit at very low speed in a hit and run a couple years back which kills the resale (replace quarter panel and a few other things $3K of damage paid by insurance); it's probably worth $9K - $14K.
I've driven it for 50K (used to drive a lot more mostly road trips to/from DW) with nothing but oil changes and other routine maint; it's been a surprisingly reliable facenpunchenmobil. It's a ticking time bomb of expensive future repairs. 4 years ago when I bought it, I was going to buy a smaller used car (specifically a 3-4 year old 3 series, not going to act like I was perusing craigslist for a corolla), my parents called me from the dealership and said "you're buying this car, we think it's safe and the right car for you and we'll pay half"...a very generous offer. so my $36K car cost $18K. It also cost me some feelings of independence and if I sold it there'd be some strife ("we didn't buy the car for you to sell it...when was the last time you had it waxed...we thought our grandkids would be in that car"). But woe is me, these are not real problems by any means.
DW needs the car. Mass transit not an option for either of the two places she works. It's a 10 year old Toyota w/ 80K bought from my grandpa for 1/2 off; he took good care of it.
I just paid off the BMW loan to be rid of the bill and as a first step to potentially getting rid of it.
Keep Car
$900 Parking (market rate is $1,800 / year)
$1040 insurance (can be lowered by $120 / year to increase all deductibles to $2K), $260 / year to get rid of collision and comprehensive, if I keep the car, I'll probably go the middle route. the logical probability weighted choice is to forego collision and comprehensive completely, but if the car was totaled and I lost us $10K, I'd feel kind of dumb, losing 38 years of savings at 1 fell swoop.
???? Maintenance
I use like 1 tank every 2 months not counting road trips...Call me Mr. Money Mustache!
Get rid of car
1 way uber pool is $7-$10. So if I did this every single day, both ways it would be $5K / year. But uberpool can now be put in a pre-tax commuter account up to like $2400 a year so that decreases the effective cost by $700 or so. So the maximum cost of ubercommuting is $4,300 / year (less any times I choose to run/walk, less any times I could theoretically bike, but honestly not sure if I'd bike the streets to work).
I think uberpooling would work out to be cheaper, even if I did it almost every day, because of the maintainance time bombs of the 8 year old bimmer. And it absolutely would be cheaper if I walk/run/bike a material % of the time. 50% muscle over motor rate gets to like $2K / year. Winter is coming and I'm unsure of uberpool availability / pricing then, but am in process of testing it out. And selling the car would give me a couple years of uberpooling cost in cash.
I don't think getting a different car makes any real sense because parking / liability insurance are the biggest components of my car costs so even if I had a beater, it wouldn't be mustachian and I wouldn't get a lto of value for the fixed costs.
Here come the facepunches.
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what about kids.. right now you couldn't "afford" daycare.
very true. we can't afford a dog, much less a kid. I had this discussion this weekend w/ DW and she said that we won't have kids before I get promoted / she is on the tail end of her many years long journey of post u-grad education and reminded me that I get a bonus in most years.... I heard me speaking when she said that.
"ya that's expensive and we can't afford it but don't worry you'll make a lot more $ in the future"
on the other hand, there's been some buy-in on the grocery / restaurant front....very little on the moving front...think putting all attention to car / food /dry cleaning / gifts / travel is best in the near term.
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OMFG get rid of the fucking Beemer. Giant catastrophe waiting to happen.
I personally don't care if you replace it with a cheap city-appropriate car* vs. ride the streets vs. walk vs. uber or whatever.** But get rid of that thing before you have to start forking over $2-4K/yr in maintenance (which for me was right about the 7-yr/60K mi. mark -- at 8 yrs it blew up).
You guys are doing great. You don't need an expensive douchemobile to prove it to anyone. And anyone who matters wouldn't be impressed by it anyway.***
* If you are driving a couple of miles in city traffic, and you have alternatives if the car breaks down on you, why not buy the cheapest little POS you can find? Like a 10-yr-old Geo Metro or Toyota Yaris or something? That way you won't care if it gets dinged in traffic or the parking garage, you can dump all but liability insurance because (again) you won't care if it gets totaled, and it will run on regular gas and at least drop your fuel bill a few bucks. Or buy your DW's car from her and let her get a reliable newer one since she actually needs it and you don't.
**Yes, you know what you should do, but I am ok with baby steps -- it's a long life, you have time to get there.
*** Full disclosure: I am a total car girl and drive the ultimate 60-yr-old-man-midlife-crisis-mobile, because I just fucking love driving. But I am also 50+ and FI, and I paid cash. :-)
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Laura33. I love you.*
That is all.
*In a completely platonic, mad respect, on a online forum, way.
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I wish I had discovered MMM when I was your age. I'm in the same "we're comfortable and can afford it" type of spendypants mentality thinking. Complete with 8 year BMW and pricey restaurant/grocery spending. Only we're older and have a kid. I think the sooner you make the changes the better off you'll be because it really is about getting into the habit. We end up eating out way too much because we're both stressed from work and lazy when we get home and that seems the simpler option. I'm trying to do more meal prep on the weekends and have food frozen so that when we have those lazy, stressful days that we have a cheap eat at home option that is easy. Still working on the bringing food to work thing too. It really is about stopping to think about what you want and making a conscious decision. But sometimes it's easier to just ease into it a little bit at a time.
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I've spent a lot of time cleaning up personal capital.
$64K of normalized run rate expenditures, approximately $7K / month ($1K more than I originally thought and consistent with the prior two months).
At 45% of our spending and 54% of our take home, mathematically, the rent is our problem....no traction on the rent/moving...the idea of moving is a hugely stressful to DW and "absolutely not happening before summer/while in school/TA'ing/working/researching etc."
My wife basically has 4 part time jobs and probably works longer hours than I (and I clocked a solid 15 hour day last week, usually work 8AM to 6PM and then 4-6 hrs on the weekend though which isn't bad at all); she works super hard and my thoughts toward her chosen career path are a blend of admiration and frustration. 5 years funded grad school ($24K), 1 year internship ($25K), 1-2 years post-doc ($40-$50K) is a boat load of schooling/low pay work for a profession that generally pays $80-$120K if you get one of the handful of very competitive good jobs, not to mention the geographical matching issues with my career. I don't view her career path as entirely "rational", but it doesn't involve a ton of debt either and will diversify the family's source of income beyond my somewhat volatile one.
The grind of grad school (and grad school related unpaid internship) seems to be discouraging to DW to change our lives (our nice home / restaurants/going out is our entertainment/escape), whereas the grind of working and seeing 95% of my take home go to rent and restaurants wants me to change our life. That's the tension.
Meanwhile, at the ripe age of 28, I am learning to iron. It's not my idea of a great time, but hey it will decrease my expenditures by 1%...and watching my silver spoon ass (firm believers in Taylorism, my family always had an ironing lady) fumble through that exercise is more "symbolic/be the change" than anything.
We've pretty successfully stopped going out to eat during the week, but $'s on restaurants hasn't decreased at all this month because of a somewhat disastrous labor day weekend when 2 sets of friends visited. Cutting the fast casual during the week has been easier than thought (making bigger portions). Cutting the Friday/Saturday night dates and outings with friends doesn't really have any real traction.
In 4 days the last $15 on my car loan will be paid.
No real or lasting changes will be made until we are a team on this.
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Hey Mr. Spendy, just a couple of suggestions. I would also encourage you to move. Maybe tell your wife you will do all of it. Even if you spend a few hundred on movers to pack you out, still totally worth it.
Ironing: I hate it, but I do like using my steamer. Maybe check them out. That plus a few no iron shirts and you should be good.
Congratulations on embarking on this journey!
I have been thinking a lot about social signaling lately, and I feel this forum community offer a marvelous counterweight to life in an HCOL. I read this NYT article about poor families getting themselves out of poverty: https://www.nytimes.com/2017/08/15/opinion/poverty-family-independence-initiative.html
And one of the things that made a big impression was the role social signaling has on choices. Coming here, and basing my choices on mustachian, as opposed to big tech/VC money, mores has made all the difference for me, and in turn for my family because I drive the spending, saving and investing. Maybe something to consider as you make decisions grounded in a new ethos for you.
Edited to fix a misplaced comma
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No real or lasting changes will be made until we are a team on this.
Look, I feel you on this -- my DH and I are on different pages as well (if it were up to me, we'd be FIRE'd already). But it takes time and patience. If you think about it, you've really pulled a bait-and-switch on her -- when she met you, you were big high-pay job, ambitions, let's live it up with a great apartment and vacations and eating out all the time, etc. And now you are on her about how all that is too much -- wtf?
Also: if my DH suggested moving while I were in the middle of working 14-16hr days running after 4 jobs, my response would not be printable -- even in this forum, where the "fucks" fly freely. Especially if he were sending me the vibe that he doesn't think the career to which I am currently dedicating my life is worth it.
My advice: back WAY the fuck off on her. You have fixated on the apartment -- objectively very reasonable given the costs, but clearly it is not something that she is willing to even consider right now. So drop it. Wait until your lease is about to end, until she is in a better place with school and work and all, and then you can talk about a better choice for your next place. Remember that this is a marathon, not a sprint: you are all fired up to change your lives, so you want to jump on it RIGHT NOW. But really, this is just the same "I want it now!" impatience that led you into your spendy lifestyle in the first place! You have many, many years ahead of you; taking one or two of those years to give your wife time to adjust is better than pushing too hard and FIREing alone.
In the interim, do whatever you can do. If she is working more hours, then take 100% responsibility for grocery shopping, menu planning, and cooking. SELL THE STUPID CAR, take over her beater, buy her a cheap, reliable used car that is still nicer than what she is driving now. Clean the apartment yourself on the weekend. Do some research on W-Th on free/cheap events around town for the weekend. Ride bikes, get out in nature, away from your climate-controlled life. Etc. Read the "how to convert your SO thread" and implement; then read it again and do more. Lead by example so she can see how fun and fulfilling your lives can be without throwing money away on stupid stuff.
Yes, it sucks to take all that on yourself. But you're the one who wants to change the rules.
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Laura, you have a habit of reading my mind and diagnosing the situation perfectly. We recently had this very discussion where I acknowledged the fact that my attitude toward money had totally changed and I didn't want it to seem like I "tricked" her; going from "hey we're 23 and it's Saturday night in NYC, let's go to Buddakan/Nobu/Fig&Olive/whatever" to "maybe we should watch how much we eat Sweetgreen" to "so rice and lentils on Saturday?" Is a bit of an about face and a change, and somewhat hypocritical given the flashiness of the rest of my life: driving the BMW to my job where i have a bunch of delicious food and fly first class around the world and get to see Hong Kong, Tokyo, Singapore in a year (or at least office buildings and hotels in those places LOL). It's all bit unfair to her; I get to be wined and dined even if we spent $0 on restaurants and travel. I commute 10 mins, she has a hellish 40 minute commute. I have an office on a leafy corporate campus (deer come up to my window sometimes), she's in a cube or a classroom or a hospital.
The "I know I've flipped the switch on you, but here's what I'm thinking and why and here are some changes i hope to gradually make" approach is immeasurably more productive than the "we need to deprive ourselves while we are working super hard so that we can amass more dough for me to play with" approach.
One thing we both are working on is taking advantage of more free forms of entertainment (i.e. Enjoy our apartment's proximity to trails and parks rather than it's proximity to restaurants), like you mention and hosting friends for meals/drinks instead of going out. There's concensus there.
thanks for the tips, everyone.
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I commute 10 mins, she has a hellish 40 minute commute.
Well, there's your sales pitch for the next apartment: swap your commutes. :-)
And, yeah, her resistance makes a lot more sense in that context, too -- it's very much an "easy for YOU to say, YOU still get the fancy restaurants and first-class travel," isn't it?
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September
Outflow: $8,495
Reims. Work Travel -$2,025
Spending $6,470
September 2017 Monthly Avg
Rent, Parking, Gas $3,215 $3200
Restaurants $933 $811
Groceries $486 $376
Grad school fees $449
6 mo.Auto Insurance $430
Healthcare $160 $51
Travel $134 (uber) $560
Electricity $130 $90
Liquor Store $101 $74
Credit Card Fee $95
Gasoline/Fuel $94 $104
DW car Oil/filter chan $77
Kayak Rental $32
DWNails & Classpass $32 $210 (personal care overall)
Gifts (DW's friends 30th) $31 $54
Postage & shipping $23
Charitable $20
Amazon $14 $150 (clothing, shoes, general merchandise)
Netflix $8
Takehome was $6,738 for a whopping $268 of positive cash flow.
Restaurants: Surprisingly we've made progress here in one sense: we cooked all our meals during the week and are doing a good job of not eating out after work and didn't really go to restaurants (the two of us) w/o decrease in happiness; I had to cook more than I wanted and DW had to eat the same thing a little more than she wanted but overall not bad.
$600 of the $900 = social outings, probably the most social month of the year; $500 was from labor day weekend. Basically the number of line items (times we went to restaurants) decreased by over 50%, but actual spending didn't. need to change the way we socialize with friends.
Groceries: higher than usual, i think it's because we bought fish twice and hosted a party.
Auto insurance: BMW, raised deductibles to decrease significantly, bmw title is in the mail and arrives next week
Healthcare: i hadn't been to a dentist in 3-4 years. 1st consult and x rays and shit were expensive. it was in my insurance, so surprised by how much. DW recommended said normally like $30 for routine stuff.
Travel: no trips! mostly getting around town after nights out, which is another component of restaurant spending : (
Liquor store: previously in "groceries". we don't spend $450/month on groceries, we spend $375 on groceries and $75 on alcohol. could probably decrease significantly. But this helps explain part of the "how do you spend that much on groceries we spend $250 and you spend $450".
CC fee: blue cash preferred which is worth it because 6% on groceries and 3% on gas. 6% on $4500 = $270 + 3% on $1200 = $36 = $306 benefits from the card - $95 = $211 /$5700 = 3.7% which is better than no fee cash back cards, correct?
No dry cleaning! nothing really bought at a retail store!
In the end, rent and restaurants are the vast majority of spending and it's all baby steps there. I feel like we actually are making progress elsewhere (this month we spent less than the prior two months with semi annual insurance and grad school payments), but rent/restaurants is more material than everything else and we also "cheated" by not having any compulsory travel.
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need to change the way we socialize with friends.
Realizing this is a major step forward for you. When we were two high-income DINKs (~$180k income) in a HCOL city, it was hard to curtail our restaurant+bar spending when almost everyone in our peer group (even people who made a lot less than us) routinely spent hundreds of dollars on restaurants/fast casual food/UberEats/etc.
It sounds like you have enough space in your apartment to host guests for small dinner parties. You might get weird looks the first time you propose a potluck, but you also might find that some of your friends are actually interested in spending less on restaurants.
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We have another family that we used to eat out with almost every Friday night. After a while, we switched it to a rotating dinner at home on Friday nights. This has been awesome. We all acknowledge that we save a ton of money. Also, since we rotate, everyone knows they get a "night off" every other week. We stick to simple menus, and we really enjoy hanging out in the relaxed atmosphere of a home. And we save a ton of money on dining out.
Maybe you have some friends you could rotate dinner with? You can position it as having a more relaxing meal, as opposed to saving money. Saving money is just the upside result!
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I don't see how you can convince your wife you're serious if you don't sell the BMW.
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Today, I e-mailed 6 nearby honda dealerships for their lowest all-in cost lease quote for a new Honda fit.
this took <10 mins and is the beginning of the process. My plan is to establish this as the basis of comparison for all potential replacements of das facenpunchenmobil.
I realize there are cheaper means of acquiring basic transportation. I will admit to not wanting to drive an absolute beater w/ no collision ins and without 5-10 years of safety advancements;
DW's '07 highlander seems perfectly safe / reliable (9.3/10 safety rating), but when I go down into the 10 yr old econobox range for my potential replacement vehicles, I'm a little leery, even when my commute is average mph of like 30. And then when i go newer, there's only like a $5K difference between used and brand spanking new.
If the choice is a brand new fit @ $16K versus an out of warranty 5 year old Corolla w/50K at $9K versus a 1997 corrola at $4K, it's hard for me to not pick new and no worries.
we'll see what they come back with and go from there.
Perhaps this is a facepunch-worthy way to start and not quite badass, but for a guy who got a loaded g35 for his 16th birthday, it's a step.
So far 1 has gotten back to me with
2017 Fit
$2,400 DP ($66 /month)
$129 / month
36 months
All-in of $195 / month.
I figure that's about what the bimmer is depreciating at from here and i completely mitigate repairs risk and laura33 won't call it a douchemobile!.
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well that car has a salvage title. in my area the equivalent ($8K) gets you a 2009 with 70K miles, which is probably totally fine, but just saying that the car you posted has a salvage title discount.
But I'm not going to argue with you that leasing is a cheap way of owning a car (because it isn't).
it may be a reasonable semi-moustachian alternative for my current life situation though. $4K / yr (75 parking, 70 insurance, $200 of depreciation) total of car costs is about what it'd be if I uberpooled to/from work every day. going the "beater" (8 yr old fit isn't a beater, but you get my point) route may reduce that $200 to say $80/ month ($1000 a yr). At this time, the incremental $120 / month isn't worth it to me. (I'd rather eat out 1 less time / month). the bimmer has depreciated by about $480 / month ($36->$10K) over its ownership (though $148/month for me because of parental teat sucking since they paid for 1/2), so locking something in at $200 (hopefully less) has its appeal.
The real savings would come from moving next to my work and getting rid of a car completely but that's not happening for now. Neither DW nor I want to live near either place she works for crime/quality of life reasons (also she works two places that are 30 mins apart). Her place of work is "safer than 17% of cities" to put a little objective stats to it. it's objectively dicey.
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I think the idea of buying a used Honda Fit with low miles beats out leasing. It might cost more that that particular ad, but you're still going to come out ahead over leasing. You don't have to get a beater. You can get a later model Decent car and still come out ahead.
Unless you can expense or write off those lease payments, I don't see how leasing makes much sense.
There are a zillion reasonably priced used cars that would be more cost effective than the BMW.
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As a counterexample to your car experience:
When I was 16 I got a 6 year old Corolla with 55k miles on it. Had it for 5 years and other than 2 tires and normal maintainence it was perfect (until it got totaled). I got a 3 year old Corolla with 70k miles on it 7.5 years ago. It's got 118k now and other than routine maintenance and 4 new tires, it had been trouble free and I have no plans to get rid of it any time soon.
Sent from my Pixel using Tapatalk
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Buying a second hand car is not as scary as it sounds. Its really a mind game. Don't buy a complete beater, but there are lots of good second hand cars to be had at a big discount to new. I bought my first new car prior to finding MMM and drinking the cool-aid, and went back to a 4 year old used vehicle after the new car got written off. I've had no problems: it cost me the insurance payout.
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well that car has a salvage title. in my area the equivalent ($8K) gets you a 2009 with 70K miles, which is probably totally fine, but just saying that the car you posted has a salvage title discount.
But I'm not going to argue with you that leasing is a cheap way of owning a car (because it isn't).
it may be a reasonable semi-moustachian alternative for my current life situation though. $4K / yr (75 parking, 70 insurance, $200 of depreciation) total of car costs is about what it'd be if I uberpooled to/from work every day. going the "beater" (8 yr old fit isn't a beater, but you get my point) route may reduce that $200 to say $80/ month ($1000 a yr). At this time, the incremental $120 / month isn't worth it to me. (I'd rather eat out 1 less time / month). the bimmer has depreciated by about $480 / month ($36->$10K) over its ownership (though $148/month for me because of parental teat sucking since they paid for 1/2), so locking something in at $200 (hopefully less) has its appeal.
The real savings would come from moving next to my work and getting rid of a car completely but that's not happening for now. Neither DW nor I want to live near either place she works for crime/quality of life reasons (also she works two places that are 30 mins apart). Her place of work is "safer than 17% of cities" to put a little objective stats to it. it's objectively dicey.
1. That $129/mo. would more than double what you had left over to save last month. 50%+ improvement isn't "worth it"?
2. You'd rather eat out one less time per month. Except you haven't done that and you won't do that, because as you yourself have identified, this is your social hour.
3. You do not yet know what you actually can afford, because every month you are still "surprised" by new expenses -- every month, you start out with grand plans; and every month, the money is gone by the end of it because of something else you didn't anticipate. In the real world, every dollar matters when your outflow equals your income.
4. Sure, you can rationalize the lease as cheaper than your current depreciation loss on the Beemer, but that won't improve your cash flow. In the past few months, you have gone from spending @$300 more than you make every month to having $250 left last month. You now want to commit to additional debt that will suck up more than half of your leftover cash (assuming that the +$250 is a "real" change and not just a monthly blip). This is two steps forward, one step back.
4.a. You are not even making this trade-off for an asset. You are forfeiting half of the leftover cash you worked for months to find, just for the "experience" of borrowing someone else's car for a few years.
4.b. You live/drive in a city. The spanky new car is going to get dinged, and you will pay more to cover the damage when you turn it in.
5. The proper comparison is also not to how much Ubering to work would cost. It is to how much biking would cost. Yes, yes, your pretty trail is closed. But you still have streets. You can do it, even if you don't want to. The baseline cost of what you actually need is $0.
6. Don't kid yourself. You like the idea of a lease because then you won't be stuck with a cheap car after the lease ends. By then, your DW will be out of school and into her well-paid career, and you can upgrade again to a fancy car. Right? Tell me that's not what was running through your mind. I would put money on that.
This is not a wise fiscal decision. This is not semi-mustachian. This is your spendypants bad angel trying everything it can to avoid doing what you know you need to do, while easing your conscience because it is "only" a Fit, which is of course beneath your awesome deserved place in the world.
I was sympathetic on the prior post; when you feel like you are trying so hard, you do all this cooking and shopping and planning, and then you find you didn't really save much, because more eating at home = higher groceries, and you still had lots of fancy dinners out with friends, etc. etc. etc. I was going to say something like, hey, this is a marathon, not a sprint, you're building better habits, you've identified a weakness so now you can figure out how to address it, etc.
But what you've been telling us is how your DW loves the apartment, how she loves to eat out, how she loves to get her hair and nails done, and all that, and how you're working hard to save where you can by taking over more shopping and planning and cooking and all of that. But now comes the first decision that you can make, truly 100% on your own, and you are rationalizing a fucking brand-new car. That you're not even going to own.
FFS. Look hard at yourself. Think about how much you are willing to commit to changing the way you think and act, or if you just want to find a way to stand pat for a few years until your DW's fabulous new salary solves all your problems for you.*
You are smarter than this. You are better than this. You know you don't need a car at all. So if you are going to get one, suck it up and get a fucking beater.
*Please read irony font here. You have already demonstrated that you know higher income just gets sucked up by more expensive "needs" if you don't change your mindset.
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Why do you need a car? You're living in a high rent location because it's convenient to everything, and then still carrying the costs of living like you're not conveniently located.
You said before that you could bike to work but it wouldn't save much money because of parking/insurance/etc. The solution is to become a 1-car family. Your wife can keep commuting in the Highlander (depending on what kind of gas mileage she gets, you might want to sell this car and trade for a something like a 2007 Fit) and you both share the car for weekend trips, grocery shopping, etc.
Maybe the weather is shit and you end up needing an UberPool or taking public transit 10% of the time. This would still massively cut your commuting costs.
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after sleeping on it and with the facepunches here, i decided that the new fit idea is the "sweetgreen" of transportation options (the number 1 consumer of our fast casual dollars).
it feels good and healthy overall, it doesn't seem that expensive and then when you look back for the year you find you've spent $500 (1-1.2x a month of groceries) on 20 meals.
i'm not going to bike on the street my employer is on. the tail risk of death and severe injury is not one that i wish to underwrite. You only get 1 body and brain. love you guys, but it's not happening.
carpooling tuesday - thursday with DW (when her work is not out of the way) and some uberpool on mondays and fridays is the better option; this would be about $2,000 / year (roughly what parking and insurance costs) assuming $20 / day on the 40% of 250 workdays that I couldn't hitch a ride; there'd be some slippage given that sometimes i work past 7 or 8 (after DW comes home) a bit and there'd be some gains on the days i'm going to airport (3/ past 10 workdays my transpo has been covered by travel reimbursement). so selling the car for $10K would pay for 5 years of this.
uberpool was a bit slow in my trial period, but i could just get up a little earlier.
walking and or public transit would take 40 mins to go 2 miles (time is valuable; i can iron my clothes once a week to save $100/month, but 80 minutes of commute time a day is too much). walking would be safer than biking given the sidewalk.
the reason my time horizon was 3 years is because we each have 2-3 more years in our respective locations of work, so there's a strong chance we change cities / jobs. I'm up or out in 2 years (get gently sent elsewhere or get big promotion) and DW is done with school in 2 years (but will then only make $25k as an intern), her comp doesn't ramp for 3-5 more years. so it wasn't really "to upgrade" as much as it was to solve a 2-3 year problem of getting to work.
you all are helpful in that you approach things with a "zero-based" budgeting mindset, which is basically "what's the lowest cost most efficient way to do this", and I'm still working on this.
leasing does appeal to me because in general, i don't like to own or maintain things.
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walking and or public transit would take 40 mins to go 2 miles (time is valuable; i can iron my clothes once a week to save $100/month, but 80 minutes of commute time a day is too much). walking would be safer than biking given the sidewalk.
It would take you 40 minutes to walk 2 miles? Also, do you exercise at all? Time is valuable and walking back and forth to work at 4 miles per day is the best use of your time because it kills two birds with one stone. I've got my 2-mile walking commute down to about 30 minutes each way. I would love to be able to do it more often, but I have a daycare drop off.
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It's 2.4 miles. I ran a half marathon last year and am in "decent" shape, but fitness has suffered in new job (don't really work out during the week).
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First, good second-thoughts and good insight.
Second, ditto Jezebel. At least try the walk for a month -- commit to it, give it a fair shot. You might be surprised to find it gives you a chance to get your head in the game in the morning, and to decompress before you get home at night (at least that was my experience). The exercise is a decent mood regulator.
Finally, don't think of it as a 40-minute time suck. It's really 40 minutes minus whatever Uber would take you -- and depending on how bad traffic is and whether your times mesh with the Uberpool, it might not actually end up costing you more than a few minutes each way. Especially once you get those walking muscles in shape and get that time down to 30 mins. ;-)
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You started this thread a few months ago saying that you really want to be financially independent and employed only to yourself as your own money manager. You seem to track your expenses to the dollar (something I have never bothered to do). But you don't make any real changes; you just write endlessly about all the reasons why you can not.
Yours is a complex, and admittedly fascinating, scenario. You're saving enough by most people's standards. You have family money, and you'll have more of that before you really need it. You don't have to make any changes if you don't want to. If your bonus pays out only every other year at only 50% funding, that will still be enough to give a nice boost to your investments, assuming you invest it. You know all this, and whenever someone here pushes you, which is presumably what you've invited them to do, you cite some combination of these facts as a form of defense, both against the criticism and to assure yourself.
On the other hand, something keeps bringing you back here. I've not paid extensive attention to this forum, but I've never seen a case study in which the presenter is so meticulous with the data, the problem is so clear, the answers are so obvious, yet nothing ever changes! Why do you keep coming back to post updates of what is essentially the exact same situation you outlined in July?
This isn't really about fast-casual restaurants or Honda Fits. You want something different in your life. I understand where you're coming from. You're 28, almost 30. You're doing great; then again, the expectation that you were raised with was that you were truly exceptional. And you're not sure if you're really there, or if you're ever going to be there. You're ambivalent about the work and lifestyle treadmill before you. You see the two kids, the leased Q7, and the private school. That lifestyle, because it will come with other accoutrements, will require every bit of the $600k that your boss is making, assuming you get his job in a few years. Your wife's income, and probably even some of yours, will go straight to childcare. And you can continue this thread for the next 20 years, with monthly updates showing that you're spending what you're making, with some withholdings to traditional retirement savings. It will look exactly the same as it does now, just add an extra digit.
Part of you doesn't want to go down that road, as you see it as 30 or 40 more years of futilely treading water. Then again, part of you does. Maybe your new wife expects that. I also think your parents expect that, and you seem a little more concerned about their approval than your typical 28-year-old would be. They also seem quite controlling - the anecdote about the BMW was telling.
You also have certain material expectations for yourself that you're not quite ready to shed. You were the 16-year-old with the brand new Infiniti. You were the Wall Streeter. You're asking yourself WTF you're doing on this board with a bunch of people who talk about saving seven cents by soaking beans overnight (believe me, I ask myself the same question sometimes).
I think you just have to figure out where your priorities and your values lie. It's always an ongoing question, as I'm almost 10 years older than you, and I'm still working on it. It's not going to be answered overnight. But in the meantime, I think you could do a little bit better setting yourself up to have more options, and you could do this pretty painlessly. That's what all the prior suggestions that others have made have been pushing you toward.
You're doing fine, but you're not achieving the objective of financial independence that you laid out at the beginning of this thread. I think you should decide if you were serious about that or not. It's OK if you're not. But the next 10 years are going to pass faster than you can possibly imagine. And 10 years from now, when you do have the lease payments on a Q7, when you have two kids in private school, when you have a big 30-year mortgage on a big house, when you have a nanny who expects to be paid, when your family is accustomed to vacationing a certain way, when the kids are in expensive activities like horseback riding, and a thousand other "whens" we could come up with, it will be too late. You won't get off at that point. You may think that you and your wife won't end up like this, that you'll be able to avoid those temptations. But you can't even sell an old car, or move from your overpriced apartment. Grad school might go away, but there will always be some excuse, especially with kids. You'll both be very quick to say that you deserve the house, or the Q7 does have the highest safety ratings. This isn't to be mean, it's just to point out that without some drastic shift in your mentality, nothing is going to change, as neither of you has much willpower for it. You're 20-something newlyweds with no kids. It doesn't get any easier than this.
If you want to give yourself options and freedom, you have to change now.
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It's 2.4 miles. I ran a half marathon last year and am in "decent" shape, but fitness has suffered in new job (don't really work out during the week).
Great, there you go, fitness/commute solved. It's nice when the answers are this simple. You'll have the walk down to 30 minutes in no time.
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Wait, weren't you biking to work? What happened to that? 2.4 miles is the perfect bike commute. I have about the same commute (and two kids to pick up from daycare) and we're a one car family and it's not even on my radar to drive to work. Like "it would barely save me any time" not on my radar, not "I am so mustachian I can't even imagine" not on my radar. I'm guessing based on our car costs and your stated parking/insurance costs you're looking at saving about $3300 by getting rid of the car. Then bike 9 months of the year and Uberpool during the winter and you've cut your commuting costs to $100ish in bike maintenance and $900 in Uberpool (20 work days/month * 3 months * .75 since it's pre tax).
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I was biking.
Trail was closed for construction for 5+ years. I am unwilling to bike on the street on which my work is (the trail bypassed that street). Having almost plowed into some bikers myself despite being a relatively capable and alert driver, I believe my lack of willingness to bike this particular street is rational from a not getting killed standpoint and don't wish to argue that point.
I could walk or run given there is a sidewalk and you all are right to call me out for that
I've seen some bikers racing down said sidewalk to avoid the killzone of the street, so there's that but I think they'd be dodge-able and the tail risk of being hit by a bike is certainly lower downside than that of a car (technically one could get hit by a car on the sidewalk, but if that happens I guess I just had it coming).
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You started this thread a few months ago saying that you really want to be financially independent and employed only to yourself as your own money manager. You seem to track your expenses to the dollar (something I have never bothered to do). But you don't make any real changes; you just write endlessly about all the reasons why you can not.
Yours is a complex, and admittedly fascinating, scenario. You're saving enough by most people's standards. You have family money, and you'll have more of that before you really need it. You don't have to make any changes if you don't want to. If your bonus pays out only every other year at only 50% funding, that will still be enough to give a nice boost to your investments, assuming you invest it. You know all this, and whenever someone here pushes you, which is presumably what you've invited them to do, you cite some combination of these facts as a form of defense, both against the criticism and to assure yourself.
On the other hand, something keeps bringing you back here. I've not paid extensive attention to this forum, but I've never seen a case study in which the presenter is so meticulous with the data, the problem is so clear, the answers are so obvious, yet nothing ever changes! Why do you keep coming back to post updates of what is essentially the exact same situation you outlined in July?
This isn't really about fast-casual restaurants or Honda Fits. You want something different in your life. I understand where you're coming from. You're 28, almost 30. You're doing great; then again, the expectation that you were raised with was that you were truly exceptional. And you're not sure if you're really there, or if you're ever going to be there. You're ambivalent about the work and lifestyle treadmill before you. You see the two kids, the leased Q7, and the private school. That lifestyle, because it will come with other accoutrements, will require every bit of the $600k that your boss is making, assuming you get his job in a few years. Your wife's income, and probably even some of yours, will go straight to childcare. And you can continue this thread for the next 20 years, with monthly updates showing that you're spending what you're making, with some withholdings to traditional retirement savings. It will look exactly the same as it does now, just add an extra digit.
Part of you doesn't want to go down that road, as you see it as 30 or 40 more years of futilely treading water. Then again, part of you does. Maybe your new wife expects that. I also think your parents expect that, and you seem a little more concerned about their approval than your typical 28-year-old would be. They also seem quite controlling - the anecdote about the BMW was telling.
You also have certain material expectations for yourself that you're not quite ready to shed. You were the 16-year-old with the brand new Infiniti. You were the Wall Streeter. You're asking yourself WTF you're doing on this board with a bunch of people who talk about saving seven cents by soaking beans overnight (believe me, I ask myself the same question sometimes).
I think you just have to figure out where your priorities and your values lie. It's always an ongoing question, as I'm almost 10 years older than you, and I'm still working on it. It's not going to be answered overnight. But in the meantime, I think you could do a little bit better setting yourself up to have more options, and you could do this pretty painlessly. That's what all the prior suggestions that others have made have been pushing you toward.
You're doing fine, but you're not achieving the objective of financial independence that you laid out at the beginning of this thread. I think you should decide if you were serious about that or not. It's OK if you're not. But the next 10 years are going to pass faster than you can possibly imagine. And 10 years from now, when you do have the lease payments on a Q7, when you have two kids in private school, when you have a big 30-year mortgage on a big house, when you have a nanny who expects to be paid, when your family is accustomed to vacationing a certain way, when the kids are in expensive activities like horseback riding, and a thousand other "whens" we could come up with, it will be too late. You won't get off at that point. You may think that you and your wife won't end up like this, that you'll be able to avoid those temptations. But you can't even sell an old car, or move from your overpriced apartment. Grad school might go away, but there will always be some excuse, especially with kids. You'll both be very quick to say that you deserve the house, or the Q7 does have the highest safety ratings. This isn't to be mean, it's just to point out that without some drastic shift in your mentality, nothing is going to change, as neither of you has much willpower for it. You're 20-something newlyweds with no kids. It doesn't get any easier than this.
If you want to give yourself options and freedom, you have to change now.
I'm dissatisfied with the current path and have spent the past 10+ years (in terms of friendships made, choices taken, etc,) building that path; how do you not buy dinner for your best friend who has hosted you at her vacation homes multiple times and travelled to come see you (answer: you have a real conversation with your friend and say "I would love to buy you dinner as an appreciation of your visit, but am trying to change our lifestyle or you prepare a beautiful spread at home...what mrspendy did: reach for the check and had two bourbons at said dinner)
It feels like I've been writing on here for a very short time and that progress is being made, but I can see how outside looking in that is not the case and I've been a member of this board and read MMM blogs a couple years ago when someone on an investment board said I was nuts for thinking I'd need $6-$10mm to retire and pointed me to MMM; it's been pretty slow.
We still are not spending less than we take home on a normalized full year basis (since my paycheck is $0 for the first two months or so of the year to fill up the workplace tax advantaged) and we we had the convo about cutting restaurant expenditures pre-September which was really bad from a restaurant spending perspective. I'm on here because you all make me feel shitty about that and no one else in my life does.
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lol, well I'll keep following to see what happens.
For the record, I'm planning on $6 to $10 million to retire, and likely closer to the 10 than the 6, and letting it grow from there.
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I'm on here because you all make me feel shitty about that and no one else in my life does.
You're welcome. ;-)
[Exactly why I am here too, btw]
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I could walk or run given there is a sidewalk and you all are right to call me out for that
Sell your car, save all that money. When you have to pay the Uberpool every day it will hurt more than the passive/hidden costs. That will help motivate you to use your alternative options, of which you have many! Carpool with your wife when possible (2-3 days), walk (1-2 days) and if you uberpool the rest, that's fine. Who knows, maybe you can bike if you're ever going in at odd times with low traffic, or get a kick scooter!
I've been biking to work this summer, and by that I mean 1-2 times a week, in good weather, if I didn't have a commitment after work, I would bike/bus to work, and bike home. It's a start, and I'll be ready for more next season!
Don't let the perfect ("my awesome bike trail") be the enemy of the good!
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If other people are biking on the sidewalk, why don't you?
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If other people are biking on the sidewalk, why don't you?
Exactly. I commute 3 miles, which involves riding my bike 2.5 miles and then taking 2 buses for the last 0.5. This takes me 40-60 minutes, depending on how I hit the buses. Driving would take me 20 minutes door-to-door. The reason I continue to bike is what everyone else said: it's often the best part of my day. Riding my bike to work this morning in the golden light, seeing the trees start to change color, feeling the crisp air on my face brought me much joy.
If it bothers you to ride your bike on a sidewalk, you can walk your bike for that stretch. Or just walk your bike past pedestrians whenever you see any.
For such a short commute, I find that I can ride in almost any condition with ~$200 investment in good bike lights and rain gear. In the last year, the only exception was maybe snowstorm, which happened on 2 days here. I could ride in the rain, in the dark, when it got down to the teens, without buying any other special gear. I just put on a few wool sweaters under my puffer and wore two pairs of gloves for the cold. Overheating isn't an issue for such a short distance.
I also ride a 12-year-old beater bike that runs like a dream. For my short commute, I've found that the biggest factor in how well the bike "runs" is my own physical condition.
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Just to say, a salvage title car is not always a bad idea, as long as the category of write off was the lowest and the repairs were done properly. I have a salvage title car which was nearly 3 years old with only 10,000 miles and a Category D (lowest end) front shunt into a lamppost which damaged a number of panels but left the frame and engine unharmed. I saw the car before the repair, the repair was done by a local repair person first recommended to me 14 years ago, and I'll keep the car until it dies so don't care about resale. I've had a completely trouble free 5 years with it so far. A real bargain.
You say you want to spend less and then get sniffy about the ways in which to do it. Entitled, much?
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27 minutes. it takes 27 minutes to jog/walk the ~2.5 miles to get my entitled out of shape ass home. and 1 pleasant ride with DW to get to work.
no updates hogging the top of the case study section until i sell car.
in other annoying (but hilarious in the grand scheme of things) news, I destroyed about ~$300 of dress shirts / khakis leaving some pens in my pocket in the washer. i am woefully incompetent wannabe mustachian.
EDIT: mapmyrun tells me the precise distance was 2.3
EDIT 2: my autotrader instant cash offer is $7,100...wow...carmax / craigslist can hopefully get me better, but that comes out to $600 / month of depreciation. any non-mustachians out there want a 2010 bmw 528? pristine interior, mostly highway miles! i think it's influenced by the hit and run that i got into at extremely low speed.
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One other thought is can you ride your bike a block over on a less dangerous street?
The shirt thing stinks! Try working your frugal muscles by looking for gently used replacements.
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Hairspray will sometimes get ink out. Also WD40 or Swarfega. Only use if the shirts are clearly ruined otherwise.
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Hey mrspendy! Just as a perspective check, I walk 40 minutes to work and 40 minutes back every day. 3 miles, mostly flat. Come rain come shine :)
For a while I amused myself trying to get the time down, jogging portions of it if necessary. But in the end I find it most satisfying to think of my walk as a combination of exercise, relaxation/leisure, and learning or introspection, so I set my pace to roughly 'purposeful walk' rather than 'as fast as possible'. I also do errands on the way.
My tip - find a podcast series you enjoy and only listen to it on your new commute. You can find all sorts of podcasts with deep deep archives, so even if you get through an episode a day it will take months to work through them if you like them. If you find yourself taking a longer route because you want to keep listening, you know you've chosen well.
I also recently installed an app called 'jobspotter'. It pays you for taking photographs of 'help wanted' signs in local businesses that might not have jobs posted online - corner shops, restaurants needing wait staff, barbers, tailors etc. I've earned £30 in my first couple of days which is fun, but what's even better is that it's incentivised me to vary my route to check out new streets, and keep my eyes peeled as I walk around, getting to know my local area as well as the inside of my head/phone.
Other people I know collect photographs of different types of plants and flowers, to similar effect.
I'd be really interested to hear more about walking as a regular feature works out for you!
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Wife and I were married almost 2 years ago and now have a little one. Believe me when I say this: get ahold of the lifestyle inflation BEFORE having kids. It makes it that much harder to change. Our mistake is that we bought an easily affordable house based on both of our incomes. See where this is going? Now that the kid is here, it's going to be difficult for one of us to stay home with her. Horrible planning on our part.
Your situation is different, but you can easily figure out where to go from here. My advice: live the life you want to live, now. Sell the dumb car (I sold my dream car after a couple years of ownership) and get a beater. After all, all cars are used cars once you drive them.
Anyways, I'm done rambling, and wish you the best.
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27 minutes. it takes 27 minutes to jog/walk the ~2.5 miles to get my entitled out of shape ass home. and 1 pleasant ride with DW to get to work.
no updates hogging the top of the case study section until i sell car.
in other annoying (but hilarious in the grand scheme of things) news, I destroyed about ~$300 of dress shirts / khakis leaving some pens in my pocket in the washer. i am woefully incompetent wannabe mustachian.
Good on you for walking! It's such a short distance, you can likely do it under any condition.
+1 to attempt getting the stains out. If lost cause, +1 to gently used. Or try going without. Or minimal replacement (1 khaki + 2 shirts).
Edit to add: the most effort-free way for me to buy gently used is to search for the exact item and size on ebay.
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My thoughts when reading your case study is that Rent is your biggest problem. You know that, but it's pretty much a fixed cost so you'll have to tighten up in other ways.
So we come to the car, and the food. Also you know this, it has been said over and over. Here are my ideas: sell the car for the $7000 ish and keep doing the combo riding with your wife, walking, and biking the 2 miles to work. You can get off and walk the bike on the sidewalk in sketchy road situations. It sounds like you're coming around to these ideas.
The food- something that i didn't see anyone else mention is that restaurant portions are HUGE. One way to cut your restaurant budget in half is to make it a habit to eat half, and take the other half home for left over dinner And have it later in the week. It's simple but people don't think about it.
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Your case study is fascinating. For a reality check on where you might be in 20 years, look at the case study by jimbooker. 50 something, $1.3M house, spendy lifestyle and no chance to FIRE even though he has some savings in the bank. The way your parents set you up here is another interesting piece of this puzzle. Obviously, they tried to give you everything. A new g35 for your 16th Birthday! What they don't realize is that spoiling you has basically made you miserable. Keep this in mind when you have kids. It is very hard to resist giving your kids all the latest and greatest. A great book to check out is The Opposite of Spoiled by Ron Lieber. It's a great way of looking at money and kids.
One thing that will be critical is for you and DW to get on the same page before you have kids. If your wife is truly expecting you to live the Q7/private school/manicures every month and new 1k handbag whenever she wants it, you are headed for a train wreck. Don't bring kids into that.
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$6,312 spending for October, $158 smackeroos less than September. (about $420 of positive cash flow, but still above run-rate take-home which is lower given filled up retirement and HSA early in the year)
Progress on restaurants offset by purchase of November & December's Holiday Travel Plane Tickets. $1,300 after using points for one leg, despite a suboptimal conversion rate; we'll probably get reimbursed by my rents for $600-$800 of that since they usually volunteer to pay for the leg of the trip to see them, but I don't want to build their largesse into the budget. I couldn't bring myself to dip into the points to a greater extent given how bad the conversions were. We failed to plan ahead better and book our travel earlier; the night we bought them was a bit depressing.
Goal for November is to be below $5,000 (basically repeat/improve October's less crazy restaurant spending, but without the plane tickets). This would be a 53% drop from 2017's average non-rent spending. Not a complete transformation by any means (and I recognize it's the average of all the months that counts), but would represent actual progress.
After 4 calls with my credit union they found my car title and sent it to me, came in the mail late last week.
I'm not going to list out all the details of the small victories and failures. Suffice to say, I think we're doing better on food (but loads of improvement left to go), better on my dry cleaning, am getting more used to car free commuting (but still need to sell the damn thing) and there's still ample fat in things like personal care.
Lucky, thanks for the book recco. I think I have been very blessed to have great parents who are incredibly loving and supportive. They are also a bit controlling and frankly have lost a lot of perspective over the years as they've had great financial success through their hard work. I would definitely not say they've made me miserable. I'm stressed out by work demands (isn't everyone?) but otherwise live a very nice life. My wife grew up much more middle class than I and doesn't expect a Q7, went to public school and things they are A okay. I'm a snob and have never and want to be able to pay for whatever is best in whatever location we are in. She does like to get a $25 manicure but has never bought a handbag (or a $1000 one!) for herself in the 6 years I've known her. I don't think we are headed for any kind of trainwreck. She may think we're saving enough and want to stay in our apartment, but that disagreement does not a trainwreck make. Our spending is a group effort. She got a $100 massage this month with a friend who's getting divorced and went out to eat with her after that. I don't have credibility to object (particularly under the sad circumstances), because in a pinch before a meeting and with 2 months of shag on my head, I went to my usual place and got a $50 haircut. I am not being the change...other than cooking and walking/carpooling to/from work. I've been cooking up a storm lately.
EDIT: more walking and cooking, a little less drinking, has helped shed 3-5 unnecessary pounds, so that's cool.
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You restaurants category has gotten way better, good job! This category is hard because there are so many variables and also so many opportunities in the day to spend on restaurants compared with other categories of spending.
I would suggest that to make this expense more steady, you and your wife decide on a monthly amount to spend on restaurants, then pull it out in CASH for each month and put it into an envelope. Use only the money in the envelope for restaurants. When you run out for the month, YOURE DONE. You won’t starve, I promise. You can split the cash between the two of you if you want to be fair. You will train yourselves to be pickier about what restaurant experiences you are willing to spend on. I think if you are eating daily at work for a good deal on a meal card, some of that cost should be deducted from groceries too.
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As someone living in an HCOL city with a very demanding job, I can definitely relate to this case study.
Sounds like you're making a bit of progress, but my impression is the overall picture for you is bleak. Expenses increase faster than wages, both naturally as you get older and assume more responsibilities, and because the CPI 1-2% figures are a joke. You are very close to living paycheck to paycheck now. It's a good thing you're maxing retirement savings, but you probably won't be able to maintain that for long. You have a great nest egg, but spending it down to support your current lifestyle is almost inevitable.
You don't need to do anything drastic, it's a matter of optimizing the big things and developing some new habits.
Since you rent and are contemplating downsizing, why limit it to your current building? Why not pick a spot that makes it easier to arrange a car-free commute for one of you? The best thing I ever did was buy an apartment that's a 20 minute walk to work, and 5 minutes to a bus that takes me to visit my mother in the suburbs. No more public transit monthly passes, which have been zooming up in price every year. By the way, consider the actual time spent driving to work. You have to clear snow and dirt off the windshield, keep the car filled with gas and tires inflated, get the oil changed regularly, and find a parking space when you get to your destination then walk to the front door. Walking is overhead-free, except for getting your shoes resoled occasionally. Also if your commute is flat, you could get yourself a scooter and likely easily match your driving commute time.
As far as lunches/meals out, that's just a matter of working out a bagged-lunch system. I throw leftovers into a container when I'm making dinner, which takes about 5 seconds. Next morning it's grab and go. If I don't have leftovers I cut up fruit and vegetables, cheese, and hard salami and throw them in a baggie. That admittedly takes longer, i.e. all of about 3 minutes. You can still go out to lunch if you want to, but no longer out of necessity and certainly not every day.
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$5,369 for November, +$1,400 of positive cash flow excluding some ridiculous gift money / holiday travel re-reimbursements we received.
Not quite the $5,000 goal. Non Rent Spending of $2,167 vs ~$3,500 in the first few months of tracking/effort.
Averaging out the past few months (to include things like Holiday travel, insurance, etc), we're spending about 100% of normalized take-home. We've cut restaurant spending dramatically. This month's $383 includes $90 for my work lunches, $23 for a networking thing, and $52 of treating the in laws, not that those aren't actual expenses because they are, but just saying that we've been exercising our cooking muscles a lot.I'm trying to optimize grocery spend, which I realize is quite high given that it doesn't include my lunch.
There's still plenty of non-rent fat to cut from a mustachian point of view, but the real savings will come with a re-location; we're both kind of reaching a plateau in terms of things we want to cut from a non-rent point of view.
Lots of points accrued this month! $11K of work travel = ~80K of airline miles and 33K chase points.
And no, I haven't sold the car...I am a weak man!
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December: $5,926 including purchase of gifts, $5,050 w/o gifts.
~$700 of positive cash flow from work earnings (excluding gifts received and including cost of gifts given). Received more in cash / gifts than expended but don't want to build that into the revenue number. Will be updating quarterly, since it's a matter of implementation from here and this is getting quite boring w/o radical action taken by yours truly.
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Make it not boring by selling the BMW this week.
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It looks like expenses are pretty tight (for a HCOL area), but there are two categories that might yield some easy savings: Personal Care and Telephone. Can you break those down some more?
You can attack the restaurant bill with a few easy tricks: 1) Bag lunches to work are a must, see my suggestions above. 2) Order one dish and one small salad or appetizer and share it between two people. 3) Get in the habit of taking leftovers home.
I agree that dumping the car and moving to a more optimal location are your biggest potential sources of savings.
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Why would it get boring? I'd say it actually just started to get interesting now you're making your first progress! You've made it below your baseline take-home now, now let's see how much further you can go.
Any options on relocating/downsizing? There's still plenty to win in the car field. And how are you doing with walking/jogging to work?
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Personal Care and Telephone. Can you break those down some more?
For 2017 Personal Care
$1800 total
Us: $277 Boxing Classes for the two of us (we stopped going to these)
Me: $273 my haircut, $50, every other month (I bear responsibility for not finding a replacement)
Her: the rest, salons & nails & fitness classes
$452 of this was in May, which is because of 2 weddings in which she was a bridesmaid.
the reality is I'm not going to debate our $150 / month (some of which is mine) on personal care with DW. She looks great and is in great shape and derives lots of utility from the de-stressing (from her PhD program) from the occasional soulcycle or nails w/ a friend. She has become quite the contributor to the cooking at home effort. Asking her to forego these things is not worth the stress or the savings. Call that anti-mustachian, call it what you will, I have deemed these things worth the life energy* expended; it's this type of stuff that the balance sheet helps (updated: $860K of NW) makes me sloppy/apathetic on. better bang for buck elsewhere.
"Telephone" is $1,312 ($109 / month) for 2017; some months show up higher because they get two bills in one. this is our internet and cable. I think about $70-$90 of that is for fast internet and the balance is a pretty basic cable package. I could do without cable, but this battle falls in the same category as personal care.
I know I'm super slow to change. I'm trying to make sustainable changes that we both want to do and are on board with and I'm still grappling with whether I actually want to be semi-mustachian or just am dissatisfied with my current job (they're related but not the same).
I'm fighting a lot of work battles right now and walking in the 10 degree weather versus cruising in my heated chariot seems like an overwhelming task. I know I need to get over it.
re-location not happening as of yet. Lease ends in june or july so I'm trying. I half hope our landlord jacks up our rent to make it such that we literally can't afford it.
*yes I read YMOYL, my god was that a tedious book...MMM blog much better
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IMO (FWIW), those things you're talking about are the compromises you make to stay married. So I'm not going to jump on you for that (given that I am in exactly the same boat). It sounds like she has come a long way in a short time. You want to praise and reward her for that, not tell her it isn't good enough (a/k/a animal training 101). And you need the lifestyle you choose to be sustainable for both of you long-term; it's not a race to see who spends the least.
What I will say is that at this point, it's the apartment that is killing you. You know that. It is more than half of your budget here and is definitely the biggest, lowest-hanging fruit you have left. Take that out of the equation, and you guys are spending $2-3K/mo., which is pretty damn good, especially when you are still adjusting from a much more luxurious lifestyle. So, yeah, you are making the right call to back off of her on the little stuff, and use that energy to keep pushing on the apartment -- maybe even bribe her by telling her she can have another $100+/- every month for that sort of thing if she's willing to cut back to a less-fancy home. :-)
And sell the damn car already! ;-) You know it is going to kill you with a giganto maintenance bill sooner rather than later! Even if you aren't willing to walk every day, replace it with a POS econobox (or scooter?) that will at least be reliable and not eat you alive in depreciation, insurance, repairs, and maintenance. Or get your wife something newer and take her POS, since she needs reliability and you don't drive much anyway. I mean, damn.
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It seems like you have come pretty far, as I myself am guilty of buying a new car (prior to finding MMM, while still having student loans and a low salary *facepunch*) and ending up selling it at a loss to correct that stupid mistake. Please learn from my mistake and also, don’t do a lease – trying to fix a mistake with another mistake is not going to solve your problems long term! I would definitely recommend selling your car ASAP and carpooling/walking/biking/ubering on bad days/etc. for your super short commute!
Other than that I just wanted to congratulate you on your progress and to encourage you to keep working on the mindset and communicating future goals with the DW! It’s okay to have a personal spending allotment each month to keep the peace and not feel deprived imo.
“We cannot solve our problems with the same thinking we used when we created them.” – Albert Einstein
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I've been following this case study for the past 4 months and commend you on making progress, albeit slowly.
Your non rent spending is not that ridiculous (to me). My fiance and I spend ~$48k in 2017 but our rent (which includes utilities) was $1,100/month. If we had your rent payment, our spending would actually be higher (gulp).
When will your wife be done with school and making a larger income? As long as you guys don't let lifestyle creep get the best of you, that additional income should boost your after tax savings rate quite a bit.
This thread is motivating me to look at potentially selling my sports luxury car as well.
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Wow. TLDR but have strong thoughts about your postings. Firstly, kudos for posting and asking questions about the direction of your life. It appears you have made some progress. Congrats. Am not sure how to proceed. My background is full of all sorts of privilege -- grew up in Manhattan and Beverly Hills, elite private schools, elite private college, exclusive vacations, very expensive hobbies, etc. Worked on wall street, DH also worked there -- he grew up in CT. We are very familiar with all sorts of privilege.
Your posts reek of privilege and self indulgence. You cannot help your family background, none of us can. You need to overcome this deep sense of privilege and self indulgence, they will ruin your life. Your life is full of conflict. You are a trader and meticulously track your expenses. Yay. However, the fact that you are constantly outspending your income means you are constantly 'going the wrong way'. It doesn't matter what car you drive or what you eat -- it is an extremely simple math problem. If you make more money or get a bigger bonus, this problem will continue. In fact, because of your spendy tastes more money will make your problem worse. There are always better houses, apartments, cars, restaurants, trips, etc. You seem smart enough to have perceived these verities. A fool and his money are one big party. You have received excellent advice on this forum about how to cut your lifestyle. Use it.
The inheritance you are planning on will be frittered away. Easy, peasy. Happens every day.Hmm. I have not considered how much is frittered away by heirs but I would not be surprised to see people spending $100m in inheritance in a couple of decades. We have had friends go through $25m before they were 50 years old. I am not sure how much you are planning on getting but this is a very old song. We also have lots of friends that are going through this now -- they are the last generation to have any money or (god forbid) they are the first generation in 5 or 6 to 'work'. You must be familiar with people who have blown through all of their money -- there are so very many of them, all over the country. Their lives are not happier for this choice.
You claim to have done really well by having investments in the 800k range (at least I think that was the initial number mentioned) with $200k from inheritance. Wowser. I think this savings rate is lousy given your income. Your savings rate needs to be incredibly high (40%+) because your income is so high. Am not sure if you have looked around the trading floor and noticed lots of older folks still working those phones? Traders usually don't work until they are 'old' -- and it's not because they have saved so much money they don't have to work. They are forced out and have to keep working at places further down the food chain.
Sadly, you appear to be wise enough to suspect that the system you are operating in is dysfunctional but not wise enough to develop serious self discipline to avoid the bad fates that are awaiting you. You have received a bunch of face punches here. I hope you don't mind me adding to the pile. I believe this is also my first punching post. I hope it was not too painful but that it galvanizes you to look in the mirror -- take responsibility and action.
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I should have added to the car suggestions in my earlier post. We drive older Volvos. We have many teenagers at home. Last year we bought 2 of them -- one was 2004 and the other a 2006 (I think). It took us a couple of months to find each one. Each cost around $5k and had less than 100k miles. They should last us at least a decade. BTW Volvo seldom changes the body style so they don't look 'old'. They ride very nicely, are luxurious and safe. They are also very acceptable at the country club, etc. You will need to find a local Volvo mechanic. They are in most larger cities. Hope this helps you to overcome the stigma of a 'cheap' car.
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Laura33: yes, the rent's the problem. I'm working on it.
Wayward/2birds: we've made some changes and thanks for the kudos, but you're also seeing seasonality at work (starting in spendy summer/wedding season and ending in the dead of winter). the true tests of how we've changed will come in the warmer months of 2018.
ubermom:
- I'm not a trader (my salary/bonus at 29 is way too low for that).
- I'm planning on an inheritance that will pay for my unborn kid/s' college from gp's that are in their 90s, which is amazing and i'm very lucky/eternally grateful! Nothing else. I hope my parents live to 100, so their potential inheritance is way beyond my time-horizon for life planning; it's a potential retirement safety net, but I want to stop working for the man before they die (30+ years, hopefully); it isn't built into anything.
- I've done decently well investing* and my savings rate has not been great (hence why we are trying to do dinner parties instead of nights out, eating in during the week, actually using my points earned in the job for travel, and why I am trying to get us to move). My parents worked for their money (1 still is @ 63 but is finally retiring!).
- overall: face punch received, I am privileged and like to indulge and see 40 year old us running that consumption treadmill, which is why i'm here. i don't mind the face punch so much, but reserve the right to make the above factual corrections.
all: the chorus about me getting rid of the 8 year, $8K car** grows louder...I know I suck for hanging on to it thus far and that while it costs next to nothing in cash flow it will bite me in the ass on a repair soon.
*i actively manage my portfolio which is frowned upon here so I don't really go into detail as to what i do, but it's nothing exotic. 95-99.9% of people should index, but indexing requires people like me to set prices, so thank me for my service. (<--this is a joke)
** I could've said luxurious BMW 5 series, but my mustachian street cred is higher the older/cheaper the car is.
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Your actively managing your portfolio and the confidence you exude about it seems to tie into the overall picture. Just imagine what happens if you happen to be wrong at some point and all this becomes much worse?
I'm not face-punching, just fascinated by the psychology of doing the same thing over and over, observing it and declaring it, yet still doing it. Kudos on the progress.
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Spent portions of the day reading the thread. As a guy married for 20+ years, I know all about maintaining marriage harmony. My advice is to set the example in your home. Sell the car already. Find great lightly used, high quality dress clothes on eBay, find a shoe repair store to re-sole dress shoes when you wear holes into them, find a chain hair cut place for $15 (and use a coupon). Once your wife sees you making an effort I imagine she will question her own choices as well.
I truly believe that wealth is built over many $10 decisions we make every day. Our net worth is many multiples of yours, and I question every dollar I spend to determine if the purchase will make my life better.
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Good thread. I think one thing people are missing is you are maxing your yearly donations which is a lot better then most people do. I think the main thing you guys should focus on is not INCREASING your lifestyle as you get raises and your wife’s income goes up. Stay at current levels which you clearly seem to need to be happy and throw all growth income directly into savings. Also just as a minor facepunch since I’m mostly going easy on you where the hell so you get your hair cut? $50 good lord your a guy that should be $20.
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I know I said I wouldn’t update, but hit a new record low this month without really trying, so that's cool.
July $6,700
August $6,733
September $6,470
October $6,319
November $5,369
December $5,926
January $5,079
The pro’s: Non-Rent: From $3,500 to $1,880 over the tracking period. Restaurants have become special occasions, have hosted friends for dinner parties, utilizing more free entertainment, no real decrease in general happiness. in general just more thoughtful about spending/ asking is it worth it?
The cons: I’m still rollin’ hard in the maintenance time-bomb bimmer without excuse for doing so. No progress on moving. There’s some seasonality effect going on here and we haven’t cut our lifestyle in half like the drop in non-rent spending would suggests. Progress has been made, just not quite as much as the numbers would suggest.
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Regardless of all the work still to be done, you deserve big congrats for making such a big dent in your non-rent spending (and hopefully adding some nice padding to the savings/investments). Way to go! Now when you do take action on the car/rent, you will be in an even better position :)
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Excellent progress mrspendy! Your life has gotten a lot less wasteful and I'm glad you took the effort to give us an update on your new record low. Take your time to figure out the big guys like the car and the rent and you'll be rich in no time ;)
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I know I said I wouldn’t update, but hit a new record low this month without really trying, so that's cool.
Congrats! Sometimes I wonder if not trying so hard can be more effective, because it means you're not thinking money-money-money all the time -- sort of like how when you diet it's become obsessed with food, and of course the more you think of it, the more temptation there is. I sort of did the same thing on groceries: last year did the grocery challenge, and it felt like month after month of failing; so I said I wouldn't bother this year, and my groceries/household went down this month!
Honestly, I think you have made very good lifestyle changes, and now is the time to just settle into those and let them become habits, your new "normal." You are in the fortunate position of making excellent money and having significant savings, so you don't actually need to sell the car or move if you don't want to. Of course, you should anyway. :-) But the point is that this is all voluntary for you -- it is more about finding a purposeful life/avoiding wastefulness/not seeking happiness through material things/avoiding mindless lifestyle inflation, and less about cutting your budget back to the bone. It is not an emergency for you, so you don't need to rush into more dramatic changes if you or your DW are not ready for them -- and honestly, you probably don't want to, since as we all know crash diets usually lead to future binges.
I'm guessing you guys are not ready to make more drastic changes right now. Why? Look at the lumps you've gotten here about the StupidCar and the apartment. But they're still around. I understand the apartment, because of the lease. But there is no actual reason for hanging on to the car -- and yet you still own it. So that tells me that for whatever reason, you're not ready to let go of that level of luxury yet.
So I'm going to change my earlier advice and suggest you stop trying to force change and just sort of be for the next 6 months or so. Let your current lifestyle settle in, see what it feels like over the longer term, and see what this "new normal" is really costing you. Then you can take those numbers and plug them into the spreadsheet and figure out how many more years of your life you need to work to support that. And then you can take that number and talk it over with your wife and decide if you want to trade even more years for more luxury, or cut back on the lifestyle to get more years back.
Remember, the point isn't to race to the cheapest overall budget; it's to find the balance between Current You and Future You that maximizes your overall lifetime happiness, to spend your money consciously, and to avoid mindless lifestyle inflation. And if where you are now feels comfortable, and you ultimately decide you're not willing to cut back on your remaining luxuries, so be it -- it's not super-Mustachian, but it's still better than the vast majority of the population.
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Great read and great progress. I am in a similar, albeit significantly older position than you. I own not one, but two beamers, have struggled to get DW fully on board, so we still spend about a grand a month on restaurants/bars, a ton on travel, etc. I'm hoping to get the spending under control this year so I can be part of the 2018 FIRE cohort. We'll see. Your post about "can't afford a dog" hit home a bit. We have a dog & a cat and spend over $400/month on them. {Punches face silently}
I made a joke in my journal about the fact that I could probably have a post per week in the anti-mustachian hall of shame. ($27 bag of lamb lung treats? check. $250 sushi & martini dinner? check.)
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oh man...procrastinating on a late night project has brought me here after many years.
a lot's changed over the years and it's truly shocking to look back at this thread. it all seems so quaint in terms of numbers. I bought a (mustachian in size and age, but not in price) house, changed jobs 2x, and we had a kiddo! with all that life changes and the inflation of 2017-present, we're making/spending/have a lot more money, but definitely not at "freedom". far far far from "freedom". the earning and spending treadmill increased greatly in speed. I don't know if funny is the right word to describe the feeling of looking back and seeing me celebrate spending in a month on EVERYTHING less than we spend today on our nanny, but it's something.
6 years after writing the original post, here's where things stand.
$1.3-4mm house
$0.73mm mortgage @2.875%
$570K-$670K home equity
$860K taxable account
$100K Private RE investment (this may be worthless, may be worth $300-$400k, ask me in 10 years)
$850K retirement assets
~$2.2-2.5mm net worth, ~$1.7mm ex the home equity/private RE
~$1.1mm inherited trust $50K/yr distribution, technically flexible use, but spirit/intent is $$$ to be used for childcare / education and intend to use as such out of respect for grandparent. if we go public K-12 then it will be too much for just college, if we go private and have >1 kid then it won't pay for all of private, which ins this area is $40K/kid, for now this helps w/ nanny expense. I don't control or possess this money, but it will be distributed to me upon death of both of my parents, hopefully 30 years from now. .
~$3.3mm - $3.6mm total net worth inclusive of trust, $2.7mm of stocks/bonds for 4% rule calc.
we own 2 paid off reliable cars that should be good for 10+ years.
Income
~$290K Salary + $130K wife = $420K salary
My bonus is 50%-175% of salary. so $145-$500K. There's no such thing as "typical" because in relatively new role at this level of pay (our collective salary has basically 3x'd since 2019 and I've made 1 big bonus). I
Spending
~$4.5K PITI
~$6K Nanny
$6-$10K everything else, let's call it $8K
$18.5K / month , $222K / yr
I swear to myself that "everything else" number is lower, but Personal Capital doesn't lie.
I think of our financial life as salary of $400K * 0.6 for taxes and 2 full 401k's = $240K, the bulk of which is spent. then bonuses and investment gains are saved / compound. included in the spending is $70K/year for 401k's with my match and $19K/yr of mortgage amortization is saved on an automated basis. so we're saving somewhere between $100K and "a lot more" (if i get a bonus) every year.
by most normal standards we are responsible hard working contributing members of society with a financial house that's in good order. by mustachian standards, we spend like drunken sailors.
So what the hell am i doing here on a frugality forum? Am i humble bragging? Maybe. But I don't think I have great reason to. The growth in my NW from when i started this thread 6 years ago isn't impressive. there's probably plenty of you with better "stats" on far lower incomes and head starts. And I didn't do anything to get my now largest asset, the extra $1.1mm other than have a very generous grandparent.
I guess one reason is to let everyone know that the folks who didn't expect me to really change were right.
Another reason is I still just struggle with what the right path is. I like a lot about my life. I love my family. love our neighborhood, love the area we live (other than the expense). I want my little guy (and potential future progeny) to have a great life and to provide the best opportunities I can for him. We're in a geographic and financial place where he can go to some of the best schools in country, public or private. but I also want to be able to spend more time with him and to work on what I'm most passionate about, which isn't my job. The expense side has gotten a bit out of hand and I've grown overly complacent if I want to accomplish freedom at an early age. I simultaneously feel incredibly blessed and secure, while also a bit trapped by my own addictions to luxuries and own misgivings about living in anything other than the little high achieving hard working hard spending bubble in which i find myself.
apologies for the terrible writing/punctuation. it's 1:40AM. I'm going to sleep.
I may write some updates in the future. i may not. I don't even know what if anything I should expect in response from the community of mustachians. but here i am.
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Fascinating. Thank you for coming back to the forum.
I am only going to make one point: you are not going to be in a position to do for your grandchildren what your parents and grandparents have done for you and your child.
That is all.
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Fascinating. Thank you for coming back to the forum.
I am only going to make one point: you are not going to be in a position to do for your grandchildren what your parents and grandparents have done for you and your child.
That is all.
yea this is a big thing for me. Like it may be rational for me to send kids to public school rather than drop $40-$80k/yr on that for 20 years, but if my parents paid for my fancy education and I inherited a bunch of dough from my hardworking grandparents who really valued education, am i not obligated to seek the absolute "best" for my kids? We can debate what is actually best. I can point to plenty of counterexamples/anecdotes in my personal life / argue either way. But if I paid off my mortgage tommorow, wife stopped working / got rid of nanny and we went public so we could retire in 10 years, then I feel like I'm letting the prior generations down.
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It looks like you've basically hung steady on the financial front -- when you first posted, you had about 3.5x annual salary invested, now you've got about 4 (if you don't count bonus/inheritance).
So the real question is: are you happier now than you were then? You've increased your salaries quite dramatically, but you've also increased your spending in line with that.
At heart, you just really need to figure out what you want. And not in some magical thinking kind of way. No, you cannot give your kids private schools, private college, All The Things, and still expect to retire early. You cannot earn $500K and have tons of free time to play with your kids. You cannot spend all the grandparents' money on your kids and expect to leave a similar legacy for your own grandkids. Etc. Etc. Etc.
I'd suggest doing some serious thinking about how you want your life to play out. Because inertia means that if you don't think and make conscious decisions, you'll keep focusing on earning more and finding more things to spend it on. Evaluate all of the options before you -- and I mean the real options, not the magic-bean options. If you stay on this path and can buy your family everything they need and more and more of what they want, what will your life be like in 20 years? Will you be happy with so many years of busting your ass? Will you have had time to build the relationships you want with your wife and kids? Or your own side interests? What will your health be like if you project from your current lifestyle?
OTOH, if you step off the path, how would you feel not having the big-money job? There can be a lot of self-worth wrapped up in job titles and income, so you need to seriously think about how that would make you feel. How would you feel about selling, moving, and living somewhere cheaper? How would you feel in 15 years if your kids were "relegated" to state school? Are there other less-demanding jobs you might be interested in that would enable a higher lifestyle, or would you want to quit entirely and live off your current investments?
One thing I would very much recommend you re-evaluate your biases on is what "give your kids everything" actually means. You, like most people, are very clearly defining "everything" in terms of external markers of success -- the "best" schools, the "best" colleges, All The Opportunities. But "costs more" does not equal "best." It is very, very clear that in the vast majority of cases, the so-called "quality" of schools is directly tied to the socioeconomic status of the kids they teach -- they're riding your coattails, not carving an independent path to academic excellence. If there's a specific program or approach that one of these private schools provides, or if it's a pipeline to a specific college your heart is set on, consider if it's worth the cost. Otherwise, default to your free options first and see if they are good enough before you commit yourself to ridiculous annual costs that may provide no benefit whatsoever (except the ego boost of the brag sticker on your car).
And the flip side of all of those "opportunities" is pressure. If you always live in the "best" neighborhoods and send your kids to the "best" schools, they will be constantly surrounded by other kids from the same background and with the same parental expectations. Kids can put a lot of pressure on themselves to succeed and make their parents proud, and the "Ivy or you're a failure" attitude gets internalized very easily, even if that's not what you personally care about. It can also lead to crazy lifestyles as you run your kids from sports to lessons to clubs, trying to offer every opportunity (and of course create that college resume that shows your kid is so awesome in all these different areas). Some kids thrive with that; others see that as a version of hell. So when you're evaluating what opportunities you want for your kid, and how much those opportunities weigh against other priorities, be sure to do it from the perspective of your specific kids and their specific personalities, not just on what you think they'd want or what you'd want if they were you.
ETA: you've clearly internalized some very specific messages from your parents and grandparents about what it means to be a "success." That's what you need to start with. If you make decisions based on whether you'd be letting your parents/grandparents down, you are living your life for other people. The way to a happy family is to make your decisions based solely on what's best for the woman you married, the kids you have, and you personally. Those are the only people that matter enough to have any kind of voice in the decision. If you struggle to get there, it's worth seeing a therapist to work through all that, because meeting other people's goals will never make you yourself happy.
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It's like I look ten years forward and I'm signing the dotted line on a leased Q7* to take the kids to $30K/year private school and park in my mortgaged up $1.5mm house and my net worth relative to spending hasn't grown at all and level of freedom has not increased; only the velocity of and magnitude of earning and consuming has grown. That is what will occur if we don't change.
Seems like your prediction is on it's way to becoming true!
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OK, I lied. Having read Laura's sage advice I do have one thing to add to it, which is: before you start thinking about making any changes to your lifestyle, please think about the extent to which your marriage depends on keeping that lifestyle. If you start to think about upending things without having your wife fully on board you may very quickly find yourself in the middle of a very expensive divorce. In which case, steady as you are may be the better option.
If you are serious about change, this thread has some useful advice -
https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/
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I'll just ask: how do you know this isn't the "best"?
But if I paid off my mortgage tommorow, wife stopped working / got rid of nanny and we went public so we could retire in 10 years
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Another reason is I still just struggle with what the right path is. I like a lot about my life. I love my family. love our neighborhood, love the area we live (other than the expense). I want my little guy (and potential future progeny) to have a great life and to provide the best opportunities I can for him. We're in a geographic and financial place where he can go to some of the best schools in country, public or private. but I also want to be able to spend more time with him and to work on what I'm most passionate about, which isn't my job. The expense side has gotten a bit out of hand and I've grown overly complacent if I want to accomplish freedom at an early age. I simultaneously feel incredibly blessed and secure, while also a bit trapped by my own addictions to luxuries and own misgivings about living in anything other than the little high achieving hard working hard spending bubble in which i find myself.
Take comfort in the fact that you have enough money for you and your family to live a great life now. Choosing to accumulate more to continue your current lifestyle is entirely your decision. If you're happy currently, keep the status quo. If not, make changes. You seem a bit anxy?
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doing some thinking and not going add much of anything at this time, just wanted to thank everyone for the perspective thus far.
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Wow, this really is a fascinating thread!
OP, how you find yourself burdened by the expectations of your upbringing? Someone on this thread wrote that you are doing great but you were raised with the expectation that you'd be exceptional. That pressure comes part and parcel with the expensive neighborhood, schools, etc.
If so, have you considered lightening that burden for your child(ren) by—rather than spending more and more on the most exclusive x, y, z—not raising them in the same vein of expensive, exclusive surroundings that you were raised in?
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Here's something to consider: the vast majority of people are average in every way. They make an average income, live in an average house, went to average schools, drive average cars and have average kids. Do you really think that they are all terribly unhappy and yearning to be richer, smarter, more educated, and be able to brag about their kids more? The vast majority are not. They are basically happy with their lives. Happiness does not depend on any of the fancy stuff.
I spent my career working with the intellectually disabled, a fate many of us would shudder at. But they were generally happy people. The parents of some of the most handicapped kids you can imagine were generally happy people, once they got over the initial shock of realizing their kids' lives (and their own) would not be what they had planned. Simple things became more meaningful than big achievements.
Isn't it the main goal of parents to have happy children? Are all the bells and whistles necessary for this? I doubt that most kids with fancy, expensive upbringings are any more satisfied with their lives than average kids. In fact, it may be somewhat the opposite, with all the pressure and hyper busy lives. You really need to examine who it is you're trying to cater to - your actual kid(s), your own ego, or your "lineage," both backward and forward.