Hi all,
First post on here! Been an MMM reader for a year or two (can't remember exactly) but a long-time reader of financial blogs/books/etc.
Here is our situation... I am 27, and my wife is 29. I have always been very frugal, and have slowly convinced my way to have a similar financial outlook to me (for the most part, at least). I am an accountant by trade and handle most to all of the family finances.
Quick backstory - I graduated from college and got a job right away, and worked there for about 6 months. After that, my wife was moving back to Colorado (where she is from) so I decided to quit my job and follow her, with a few thousand dollars in the bank. I was fortunate to land a great job at a great company, and have been working there ever since. This was in November 2010, and I have been fortunate that my salary + bonuses is about 3x what I made when I started!
We have saved a lot of money both in savings and retirement, and I am guessing if I stayed at my current job, the company stayed stable, and I kept getting my raises/bonuses similar to what I've been getting, we could probably retire in 5-7 years (or at least semi-retire, with help from the market). However, we've decided to try a different route! We know we will want kids, but we also love to travel... so the plan we hatched was to quit work and take a year off to travel before we try to have kids, but still put ourselves in good financial position when we return. Here are our goals, planning to be quit around the end of October 2015:
- We would like to save for a down payment on a house, obviously shooting for at least 20%. I'm guessing we would look at houses in the $200K-$250K range (highly dependent, of course, on where we live and want to settle down... we aren't really too sure yet), and we are probably about 75% of the way to this goal.
- We have enough saved up for a good used car, though hopefully we won't need to use. We have one car - a 2003 Chevy Cavalier with 175K miles. However, we do like to take long road trips, and I am not the most mechanically inclined, so a replacement car may be needed at some point relatively soon (next year or so).
- We are shooting for $40K saved for a year of travel... I'm sure we could go for a lot less but we also want to be very much on the conservative side.
- Would also like some additional money saved for any emergencies or when we return (if we can't find a job right away, etc) and are shooting for $10K there. We are probably 25% of the way to this goal.
- As mentioned, we know we also want to have kids. My wife will be a high-risk pregnancy due to a medical condition, so we are aiming high and hoping to have $10K-$15K for child expenses.
- I also max out Roth IRA and contribute a significant amount to a 401K, and our total retirement savings are nearing the six figures.
- Debt free as well as I paid off my student loans last year.
I have run the numbers many times, and at current savings rates we would fall a little bit short of the goals, but I hope to make up the difference with side income/expense cutting/possibly a job for my wife (she works PT here and there but she is looking for something more FT). Also, I hope that by aiming high on some of the savings goals, such a trip will still be possible even if we don't quite make those benchmarks.
We are pretty excited at the prospect of a trip, and that is a good motivator for savings. However, it's always tough to sacrifice even with a big goal like this, so I figured I would start this thread as further motivation for myself!!
Any tips/comments/similar experiences are of course welcome!