Net Worth Update Mid-2019

July 16, 2019 - 2 Responses

Since we bought our house, I’ve found Net Worth to be slightly less of a useful number than more liquid assets, so I started tracking them separately.

Until a house is sold, that’s not easily accessible money.  There’s also the question of realtor’s fees – an immediate hit of 6% of whatever the house sells for.  And with our time horizon for staying in our current house – a handful more years, or until we retire? – I feel nervous even counting on the sales price of the house.

I’m still deciding whether or not I feel comfortable sharing actual numbers (I mean, you could track my #’s down if you really want to know), so what follows is a summary based more on percentages and trends (as inspired by StackingPennies and Revanche), at least until I’m as brave and badass as Save.Spend.Splurge.

I’ve been tracking my net worth for a LONG TIME – it’s fun to see the growth, although I supposed I also have to thank the longest economic expansion in history.  Up until 2009/2010 it’s just my accounts, which might account for the numbers increasing while the stock market was tanking.

NW_jun2019

The Real Estate values above use the purchase price of our house minus 6% realtor fees and the mortgage balance.

  • According to Zillow, our house is now worth about 10% more than we paid 3 years ago, but there’s no guarantee that this will be true when we move.
  • I expect this to tick up fairly regularly over time, at least until my ultra-conservative brain decides to take the guaranteed 3% return.  Or until we stop having to spend money on childcare and I can throw that annual $30K toward the balance.
  • It accounts for ~15% of our net worth.

Cash & Investments includes everything else: retirement accounts, cash savings, taxable investment accounts, bonds, etc.

  • Over 80% of this number is in Retirement Accounts – 85% of that number is in 401Ks, with the rest in Roth accounts. These accounts are mostly in S&P500 or total stock market index funds, with a small % of international, small cap, and bond funds mixed in.
  • 11% is in cash, CDs, or bonds.
  • We have a comparatively small amount in taxable investments – stock shares from my last company and a mutual fund that Husband invested in early in his career (with a 1% fee, whyyyyyyy!) that would be a substantial tax bill if we sold now.

We are 40-60% of the way to financial independence… there is a pretty wide range of possible FI numbers depending on how conservative I try to be with our annual spending and withdrawal rate.

Do you track your net worth?  Do you find it to be a useful metric, or is there a piece of it that is more interesting?

Sarah’s Grand Unified Theory of Parenting

July 9, 2019 - 4 Responses

I am a person who likes to do things right. Given a goal, whether it’s a simple task like cleaning, or something more abstract like finances, I like to do the best thing. This often means that when I clean, it’s a sweaty, stressful affair where the even the baseboards end up shiny. In my finances, this means I try to earn the most money and spend the least money.

What this also means is that this perfectionism causes paralysis and stress. I can’t clean the house right now because I don’t have time to do a perfect job (and as a result, my house is dirtier than it could be if I just acknowledge that there will ALWAYS be toys on the floor, the couch, and the table). I get stressed about finances – even though we are saving a ridiculous amount of money, there are people on the internet saving 80% of their salaries so clearly we need to STEP IT UP.

Naturally, when I was expecting with my first baby, I wanted to do all the right things. I read a ton of books on sleep training and feeding and discipline and nurturing your baby’s mind. And I vowed to implement it all, even the stuff that was contradictory.

Of course, these things never go as planned. And I wish someone had told me this before he was born:

In parenting, everything you do is wrong.

This is a truth that should be acknowledged before you have kids. And I wish I had known it before my first was born because it is so freeing. After all, if everything thing you do is wrong, then you can pick the best wrong thing for you and your family.

You can feed your kids the best wrong way for your family.
Both of my kids were primarily nursed, but they’ve also both gotten a little bit of formula. Both started solids with rice cereal. We’re not foodies, so most of our meals are pretty simple; we usually have at least one vegetable, but we also sometimes eat dinosaur-shaped chicken nuggets. And sometimes I – gasp – even heat food in the microwave!

You can work or not – both are doing terrible damage to your child.
I go to work, although why did I even have kids if I wanted to have 5 minutes of adult conversation and non-pajama clothes and a sense of personal accomplishment every day? I leave work on time every day, although that is leaning out and is the reason why there are so few female CEOs. Even if I quit, I’d then be depriving my daughter of the chance to see that women can be successful in careers.

You can sleep train in the way that gets you the sleep you need.
Kiddo #1 slept in his own crib after 3 months because we didn’t want to provide him with the loving closeness of co-sleeping. Kiddo #2 slept in our bed most nights, because we didn’t want her to be able to sleep independently.

I couldn’t stand cry it out (I get stressed out if I hear someone else’s baby crying!), but of course that means I am not helping my children develop self-soothing skills. But sometimes my husband let them cry if he was finishing up a shower or a chore, so they’re also learning that no one will respond to their cries.

You can discipline in a way that suits your – and their – personality.
We don’t spank, but we do yell and use time-out, which is simultaneously being way too soft on them while also shaming them and giving them low self-esteem for life.

Dessert and snacks are rarely linked to how much of dinner is eaten or tasted. Which means we are giving our kids food issues because sweets are not special. Sometimes we will withhold dessert or snacks as punishment, which means our kids will have food issues because they see food as a reward.

You can nurture their minds – or not.
We rarely buy toys, because we don’t love our kids, but occasionally we’ll get something they mention, so we also spoil them. They get a ton of toys from relatives, so they’ll never learn creativity and they’ll always be overstimulated.

We don’t generally let them use our phones or tablets, so they’ll never be good with technology, but we also sometimes deploy it as a nuclear option, so they’ll never learn to be bored and they’ll develop ADHD.

We haven’t signed our kids up for Mandarin lessons, which means they will be unequipped to compete in the new global economy and are ising the prime age for language learning. But I am teaching Kiddo #1 how to read before kindergarten, so I’m contributing to the vast achievement chasm between poor and rich kids.

Sometimes we play with them, which will make them dependent on us for fun, but sometimes we make them play alone, which probably makes them feel ignored and unloved.

Sometimes, you can even choose your own wrong thing.
We don’t watch screens on weekdays, but sometimes we do if Mom and Dad are really tired. We don’t have dessert every night, but sometimes we have dessert before dinner. We don’t always get a treat at the grocery store, but sometimes – if we were really good – Mom says OK to that candy bar in the checkout aisle.

What wrong things are you choosing for your family? And be honest – how many of MY wrong choices are you side-eyeing right now?

Working through Work Optional: Part 1

July 3, 2019 - 5 Responses

Our Next Life was one of the FIRE blogs that actually made me seriously consider early retirement.  The attitude of some other big names in that sphere wasn’t much different from the frugality-as-morality blogs that frustrated me so much when I started my own blog in 2008. ONL was the first blog that took a more measured approach to the whole thing.

So of course I pre-ordered Tanja’s book.  And although some of the financial information in the book was old hat to me, the thought exercises were worth the cost of the book and more.  I took notes as I went through, but they were SO LONG I’ve split them into 3 posts:

  • Ideal work-optional life
  • Spending
  • Money Mission Statement

 

Part 1: Your Ideal Work Optional Life

Day In The Life

Question: When are you happiest?

  • Solving a hard problem at work, or giving an amazing presentation.
  • Nailing a new pose in yoga, or finishing a sweaty workout (not during, ha!)
  • Helping one of the kids accomplish something – maybe a high climb at the playground, or reading a big new word, etc. – or getting a big belly laugh out of them
  • Weekend mornings before everyone else is awake, just me + coffee + a book
  • Cooking a healthy, tasty dinner…. and the kids actually eat it!
  • A clean house, maybe with a candle burning on the counter

Question: What do you want to make time for?

  • Yoga or hiking or some other exercise
  • Time spent outside
  • Reading
  • Writing or bullet journaling or something else creative
  • Playing board games with / reading to / doing crafts with the kids
  • TV or other quality time with Chad
  • Volunteering – preferably something to do with DOGS

Big Picture & Legacy / Purpose

Question: What did you dream of doing as a kid?

  • I always wanted to be an astronaut.  Later I expanded the range of possibilities, but generally wanted something that paid a lot of money & that only people who were very smart could do. In my head, that meant lawyer or doctor.

Question: What would you like to accomplish?

  • As I’ve gotten older / more jaded, I figure it’s less likely that I’ll do anything truly meaningful in my career.  I’ve certainly done things that were impressive, but I’ve now realized that money & intelligence are not goals in and of themselves.
  • I’d like to raise my kids to be good human beings.  In an ideal world, they’d find lives of happiness and meaning. Assuming global warming doesn’t destroy the planet.
  • I’d like to donate money (and eventually time) to causes I believe in.  Since having kids, I struggle with images of children starving and suffering more than ever.  On a smaller scale, I’d like to work in an animal shelter or dog rescue.
  • Travel is not very important to me, but I would like to take the kids on trips to other parts of the US and the world.
  • I wish we lived closer to family.  There is a definite tradeoff between this desire and career due to the geographic locations of my industry.

Question: How would you like to be remembered?

  • As a good mother
  • As someone who was funny & kind
  • As someone who had a cool career
  • As someone who took on meaningful charitable work
  • As a dog lover

Self Worth

Question: Do you feel like you are living up to others expectations?

  • Sort of?  It’s less about living up to expectations and more enjoy the status of being a high earner / rocket scientist.

Question: What do you feel best at in your work?

  • I’m a good teacher / trainer.  I am generally non-threatening and can break down and simplify complex topics.
  • I am good at being gently honest about technical problems (just please don’t ever ask me to criticize a person!)
  • I’m nice to people.  This is a real skill in engineering!
  • I’m comfortable giving presentations, and I’m generally a good writer.

Question: Does the thought of not doing all of the above make you sad?

  • YES

Question: What makes you feel best outside of work?

  • Doing small things that make the kids or Chad happy.
  • Trips to see extended family.
  • Yoga – the feeling I get after teaching a class (but not before…. too much anxiety) or helping someone out in class.
  • I’m starting to be one of those people who enjoys cooking.

Relationships

Question: Who else is part of this vision?

  • Chad and the kids, obviously!
  • My parents, Chad’s parents, my sisters and their families, Chad’s sister’s and their families
  • Further extensions of family… though in smaller doses
  • A DOG

Question: Who do you want to spend more time with?

  • I would like to be able to attend more of our family gatherings without feeling like I am sacrificing all of my weekend chore / relaxation time.
  • I would like our kids to have close relationships with their cousins and grandparents.

Question: What communities would you like to be a part of?

  • I would like a network of moms who take the same relaxed approach to motherhood as me while still wanting careers.  Who meal plan, but sometimes abandon those plans and order Domino’s.  Who want to be stylish but don’t want to be shopping for fun (though I wouldn’t mind playing dress-up with Save. Spend. Splurge). Who want to go to yoga class, but aren’t concerned about mala beads or their gut health. Who will take a hike and split a bottle of wine or grab a beer with me after. Who will go to every t-ball game and practice, but bring store-bought goodies instead of baking at home. I have exactly ONE of these friends, but I want more.

Life Logistics

Question: What are your preferred surroundings?

  • I like to be home, usually, and preferably this is a place with multiple cozy nooks and lots of windows.  A large backyard with space to play sports, a place to read a book or nap, and potentially a wooded walking path just outside the gate.
  • This house is also close enough to family that we can attend any gathering, or schedule an impromptu weeknight dinner, and still sleep in our own beds that night.
  • As an extreme of wishful thinking, we can walk to a grocery store, a coffee shop, a restaurant that serves beer, and a yoga studio.

Question: What would be your preferred timeline?

  • I mean, I want to live this life now, but in an ideal world, this would happen when the kids are in school but still young – we can take all summer off to travel while being able to attend any school function &/or chaperone school trips

What are the common themes of the above?  Any surprises?

Common themes: still working, spending quality time with Chad and the kids, doing yoga more regularly, getting a dog, seeing extended family more frequently, coffee and books and creative pursuits.

The only thing that’s surprising is that cooking has made it onto a List of Things I Enjoy.  I’ve known for a while that I would struggle with giving up my job (and in fact, it’s why I previously hadn’t gotten too caught up in the Early Retirement movement).

Since I read the book, I have tried to find more opportunities to work those happy-making activities into my day.

  • Taking 15 minutes to read the kids a book, or stopping at the playground on the way home – all despite my long To Do list – is a small tweak that pays huge dividends.
  • I gave up Twitter and Facebook to force myself to read during downtime (but you can wrest Instagram from my cold, dead hands).
  • I take time for a weekly yoga class, and when I don’t have any meetings that conflict, I run down to the gym at work for their free classes (sometimes I even teach them).
  •  I take a few minutes in the evenings to tidy up our main living area and sort papers – it usually takes less than 10 minutes but makes a HUGE difference in how I feel.
  • I’m slowly making tweaks to our house to make it feel more like a refuge.  Not too fast – at heart I’m still a personal finance blogger.
  • I took a less interesting job with less crazy hours.  It’s not quite the part-time schedule I hope to work eventually, but knowing that I’ll get to eat dinner at home every night is a nice change of pace.  The crazy hours and copious overtime I thrived on as a young childless person wore thin after the 100th time I had to call Chad in a panic to see if he could make daycare pick-up because I was stuck at work again.

The next post will be focused on our spending, and I have 12 YEARS of old budgets to sort through!

Have you worked through Work Optional? Did the Chapter 1 questions highlight any surprising life goals? Did they drive you to make changes? Let me know in the comments!

Did FIRE turn me into a bad feminist?

June 27, 2019 - 5 Responses

Part of the reason I resumed blogging was simply because it was a chronicle of my life. Even framed in terms of finances, there are some personal memories buried in monthly recap posts.  There are a even few draft posts from shortly after I abandoned my blog – one especially raw post from just after Kiddo #1 was born about my miscarriage and his birth – that I didn’t publish but am glad I can look back on.

I’ve kept a paper journal off and on, though the motivation to write was usually linked to crises I was working through – i.e. they are not very positive.   My Excel budget, which has expenses going back to 2006 (!), has also turned into a weird journal of sorts – remembering gifts given, dinners out, and travels.

But looking at my past posts stirs up some things I hardly remembered, so I’m thankful that they’re still around (even if some of it makes me cringe!).

One thing that struck me in those older posts was how much I was working.  References to overtime, overnight shifts, call-ins and missed holidays.  And though I remembered the stress of those years – I only switched out of that type of work last August, after all – I’d forgotten how much I actually used to love it.  The adrenaline of a ticking clock, hard engineering problems, and knowing that people were counting on me.

And of course, early retirement wasn’t a Thing.  Jacob from Early Retirement Extreme was our only model, and I liked a few more creature comforts than that.  So I drove myself and my career hard, thinking that perhaps someday I’d be an industry expert, called in to help other companies, other countries, before retiring “early” at 55 with a million dollars.

I don’t think it was motherhood that changed me.  I remember a Christmas trip delayed when Kiddo #1 was still in diapers. Racing home to nurse in the middle of a 20-hour shift when Kiddo #2 was refusing a bottle.  Switching jobs after I was denied a promotion for the third year in a row, which I knew was because I was a mom and they thought I’d never leave.

It was that miserable new job that gave me the early retirement bug, and once I realized that we had more money than some of those bloggers who had already retired, that felt like the turning point.  And over time, even though the job itself improved, the work was less important and the parts of my job that I’d loved most became an annoyance.

The stress of dinnertimes interrupted or missed completely. Chad’s career derailed because he couldn’t travel, couldn’t stay late at work.  The relentless cycle of missed weekend plans because I was on call.  Calls at 10pm – just as I’d finished my second shift and settled into bed. I don’t have to do this. The casual sexism of the client with the flashy title. I don’t have to put up with this.  The comments when I left work to make it to daycare pickup on time. I don’t need this job.

I hope I’m still doing good work, but when my new boss asks me where I’d like to be in 5 years, the answer is “working part-time or not at all.”  When I get recognition (I was highlighted in our client evaluation presentation – twice! – and got a bonus after 6 months on the job), it all feels a little meaningless.

But there’s this niggling fear – as I lean decidedly out of my career – that I’m failing my gender.  I refuse travel and leave at 5:15pm on the dot, but I worry that this will poison the well for any women who come after me (though I’ll note that ALL THOSE DUDES working late have wives cooking their dinner, so….).

Ultimately, the pursuit of my own happiness will probably outweigh the commitment I feel toward other female engineers. Although in reality, perhaps it’s not as bad as I think. I can use my lack of fear to agitate for women I admire. I can still do good work, while also highlighting where I see double standards.  And if/when I retire early, I can squash that myth that women aren’t good with money.

What do you think? Do we owe other women badass careers?  Is the pursuit of FIRE anti-feminist? Do we need to do extra to ensure we don’t screw over those who come after?

 

 

 

 

2019 Spending Projections

June 22, 2019 - 5 Responses

I mentioned the voyeuristic thrill of seeing others’ spending, comparing numbers with an air of faint superiority (“how can you spend $800/month for food for two people??”) or incredulity (“how can you spend only $100/year on clothes??”). So it seems only fair that I share mine.

I always try to project conservative amounts for spending and income.  It’s logistically and emotionally more difficult for me to pull money out of savings than to accept a lower savings rate.   I start with a baseline of savings – usually maxed-out 401Ks, some college savings, an HSA.  Mortgage prepayments are low priority (we already have a 15-year mortgage), as are any taxable savings or investment accounts (though my compulsion to hoard cash is ever-present).

With that in mind, here are the numbers:

Housing (includes PITI + HOA): $4140 / month

I actually count about $1280/month of this as savings, which is the extra principal of the 15-year mortgage.  I do this because otherwise it would seem that we save less with a 15-year mortgage vs. a 30-year, and math doesn’t work that way.

Utilities: $500/month

This includes basic utilities, internet, and also our unlimited-data cell phone plans.  Those plans are bonkers at $160 per month (for both me and Chad), but I consider it to partially be a payment for the reduced cognitive load of worry about data usage.  Chad uses up to 18GB per month (I HAVE NO IDEA HOW), so we at least get our money’s worth.

Entertainment: $70 / month

We are homebodies, generally.  And if we want to go somewhere during the weekend, there are plenty of free options. Spending that gets assigned to this category includes alcohol / beer (for home and when I can be bothered to itemize receipts, at restaurants), movies at home or at the theater, outings with the kids (e.g. June will include a trip to play mini golf). Last year we used this account to rent a jet ski while on vacation.

Food: $500 / month

This includes groceries and some bakery items (e.g. we buy a challah at Panera every Friday).

Eating out: $125 / month

If more than one person eats at a restaurant / gets takeout, it goes in this category.  If Chad and I get lunch on our own or with friends, that’s counted in our own personal spending categories.

Auto/Transportation: $450 / month

About half of this is property taxes (Virginia is weird) and auto insurance. The rest is gas, oil changes, other maintenance, tolls, etc. We generally do not spend the whole amount, but I remember $4/gallon gas and do not wish it to derail our plans.

Household / Toiletries: $450 / month

Usually Target/Walmart runs go here (when I’m on top of things, food items are stripped out to the Food category), as well as house repairs, furniture, décor, etc. Last year we spent at least $1000 less than this amount (despite buying some furniture and still having a kid in diapers), but as home repairs are unpredictable and expensive, my conservative budgeting accounts for it.  Also, there are parts of our house (think textured 1990s wallpaper and your grandma’s window valences) that we’d like to update/upgrade this year.

Personal Spending Accounts: Me: $150 / month, Husband: $250 / month

Anything that benefits a single person is here: gym memberships and fitness classes, outings or meals with friends, electronics, books, clothes, etc. It all goes here.

Why is my monthly amount less than Chad’s?  The simplest way to answer this is because I’m the one interested in early retirement.  Chad is naturally a frugal person, but if he wants something, he just buys it.  My journey is not his journey.  I’ve also constrained myself on purpose – to limit thoughtless expenses (especially fast fashion), and to meet savings goals.

Ultimately, money fights with your spouse are the worst and the whole reason I want money is happiness.

Gifts: $2000 / year

This is self-explanatory.

Medical: $200 / month

I never know how to budget for medical expenses. I adjusted this year’s to be a little high, but this is one categories that I figure will cost what it costs.  If a kiddo needs to get stitches, I’m not worried about the budget!

Travel: $6700 / year

I’ve coined this The Year of Travel.  We haven’t spent over $1000 on travel since 2015, but this year We are taking a 10-year wedding anniversary trip AND we both have solo trips planned with friends and family.  The solo trips have been planned by others, so cost control is limited.  Our anniversary trip is a big enough deal that we were willing to go all out, though we did use travel points for some of it.

Childcare: $31,000 / year

It is what it is.  I try to project 2 price increases into this, as well as extra fees.  We have a wonderful daycare with lots of outdoor space, loving teachers, and a good mix of free play and learning.  The amount will drop slightly once Kiddo #1 enters kindergarten, but I suspect that money will instead flow to the next category…

Kiddos: $250 / month

Kids don’t have to cost much, but we find it does add up.  This includes extra classes for the kids (Kiddo #1 is in karate), sports fees, clothing, toys, diapers (when I can be bothered to itemize Costco/Target/Walmart receipts), etc.  Daycare costs have been creeping down as these costs creep up.  Their birthday party costs are also included here, which includes food, décor, space rental (we paid $500 for a bounce gym party for Kiddo #1 this year, much to my chagrin), and presents.

This is one of those categories where it seems so high but then I look through expenses and most of it seems reasonable (or, as noted above, not worth a fight).

Charity: $200/month

Like StackingPennies, I wasn’t raised to give to charity and my history with it is pretty spotty.  I tend to have years where I donate a lot (last year we gave $7300, but the years before that were between $1200-$2000 with one year that spiked at $5000).  Much goes into our donor advised fund first since I’ve been burned by charities selling my information (I get 2 – 3 letters per week asking for donations from charities I’ve never supported).

However, Matt’s post made me realize that I’m making excuses.  I’m glad I’ve been flexing the giving muscle a tiny bit, but we can – and should – give more. I may end up increasing this number with the money left over in our spending categories.

 

Total spending: $122,000 / year  <—— Holy sh**********t

Total spending minus childcare: $93,000 / year

Total spending minus childcare and mortgage (FI budget): $53,000 / year

 

2019 Savings Order of Operations

June 10, 2019 - 4 Responses

In math and in computer programming, the order of operations defines how you solve problems and prioritize the order in which you perform procedures.  In the spirit of, “You can do anything, but not everything,” below is my Savings order of operations for 2019.

1. 401K Contributions
This cuts our taxable income and lets us save for retirement. With all of the ways to access retirement funds early, if needed, this is our #1 item.

2. Roth IRA / Backdoor Roth IRAs / Mega Backdoor Roth IRAs
We dance around the eligibility limits for Roth IRAs, but these tax-advantaged accounts are better than regular taxable accounts.  We have a fairly large cash position, so it’s not necessary that we access this money quickly.

3. HSA
This ends up happening no matter what through employer deductions, but I’ve changed my thinking about the HSA vs. Roth IRAs in the past few years. If I can’t fund a Mega Backdoor Roth via normal cash flow / income (and I rarely/never can), I will pull money from the HSA to do it. Once the money is in an HSA, pulling it out to put into a Roth IRA offers the same benefits without the recordkeeping headaches. (Um, and it’s tax-free money into a Roth!)

4. Kids’ college funds
This ends up being weirdly tied with #2 and #3 above. My savings target is the maximum untaxed amount for our state, per kid (so $4K each). I’ve saved “extra” over the past few years, and also sort of cheat this since I simply fund it with invisible-to-me Dependent Care FSA reimbursements.

5. SEP IRA
I have an underperforming yoga teaching side hustle which allows me to contribute to a SEP IRA or Solo 401K.  The SEP IRA required no extra paperwork, so I went with that.  This conflicts with a backdoor Roth, though, so I have to strategically roll it into my 401K before I convert my tIRA.

6. Taxable Investment accounts
We don’t usually made it this far down the list, but this would be tied with #7.

7. Mortgage Prepayment
We have a 15-year mortgage already and our rate is amazing (3.125%), but I still do not like that huge balance hanging out there.  Ideally, we’d contribute extra and then recast – protecting that awesome low interest rate while having annual payments that are slightly less onerous.

Checking In

June 7, 2019 - 6 Responses

I almost titled this post, “Restarting the Blog,”  but since both of my previous attempts failed, that may be too optimistic a title.  Even now, this post feels like little more than throwing some words into the void (but isn’t that any new blog?).

My first baby, my rainbow baby, starts kindergarten in the fall.  Preschool graduation was last week, and though I don’t usually fall for pointless ceremony, I may have gotten a little choked up at this one.

Baby #2 will be 3 later this summer.  We are almost out of diapers, though poops in the potty are still a challenge.

I switched jobs.  The new job is a project engineer role, which means less of doing the actual work and more of coordinating others to do it for me.  In some ways, this should be the perfect fit (I’ve always been a very good big picture person).  However, my fingers get twitchy to do the work myself, especially when it comes to using modeling software and fun problems. It should be reasonably easy to move around if I decide to revert to regular engineering.

Money is interesting again.  The added wrinkles of our lives – daycare costs (over $30,000 per year, which should seem crazy but at this point I’ve seen folks paying that much for one kid) and a 15-year mortgage of half a million dollars (PITI + HOA of $50,000 per year) – mean we cannot do all the savings anymore.  We still save more than the average American, anywhere from 40 – 60%, depending on which calculation I pick.

I’m still following some of my favorite blogs, the ones who are still around, anyway.  Some of their blogs have exploded, some are posting monthly(or less frequent) updates.  I guess that’s what made me want to write again… If I enjoy this voyeuristic peek into lives I’ve been following for over a decade at this point, maybe it’s time I give back.

Assuming this doesn’t become another one of my biannual life summaries, I want to start talking about some life changes that are coming up, give folks an idea of our spending, and talk about some trade-offs I’m currently making.  I used to be pretty bad at protecting the fact that I had a blog, so TBD on whether or not I will get specific with numbers (though perhaps any IRL folks deserve to be rewarded if they’re checking in 2 years later!).

Abandoning Early Retirement

January 7, 2017 - 2 Responses

I mentioned that I went on a brief early retirement kick a few months ago.

At the time, I had just switched to a new job that was proving to be completely unfulfilling. The pay was amazing, but I’ve learned that no amount of money can really make up for a boring job. Although I knew realistically that I could leave whenever I wanted (my old bosses wanted me back, and I had offers from another company), the day-to-day reality of waking up and going to that job wore me down.

The timing for this malaise was especially bad since we’d just bought our house and wanted to try for Baby #2.  I punched number after number into J Money’s Retirement Calculator, tweaking the numbers for every possible eventuality. I started reading blogs like Freedom 35 and Early Retirement Extreme and even Mr. Money Mustache, at least until the hyper-frugalism and frugal smugness grated too hard.

Early retirement is only slightly easier to plan for than regular retirement.  Would we keep the house or sell and move to a lower cost of living area? Would we downgrade to less demanding jobs or work part-time or just be bums? Every set of numbers had a different set of assumptions, and this can make the answer really different.

Interestingly, though, one truth became clear: people can retire – are retiring – on what we currently have saved.

And like a baby sucking its thumb or hugging a teddy bear, my calculations were soothing to me.

I’d done something similar when I hated my first job and considered going back to school full-time.  Calculating living expenses vs. savings and knowing that I could quit at any time and still finish school made it easier to go to that soul-sucking job every day.

(Of course, I’m older and wiser now and more skilled and more likely to speak up for myself.  I went to my boss and told him it wasn’t working.  He immediately changed my duties to be more in line with my experience and the job I hated quickly became a job I loved. Early retirement suddenly seemed way less important.)

Still, the knowledge that I really wasn’t tethered to a job – any job – was a little eye-opening.

Realistically, I get way too many of my feelings of self-worth from working. I also have a pretty neat job in a really cool industry where I get paid a healthy salary. And even if admitting this makes me a  terrible mother, I’m also way more partial to working than to childcare (sometimes it’s just nice to sit and drink a whole cup of coffee while it’s still hot, you know?), though Mom Guilt often sneaks in and it’s hard to balance everything.

So what do you do when you’re sort of financially independent except you’re risk averse and not interested in not working?

I was inspired by a former coworker who worked 2 days a week for about 10 years. Her resume has no gaps, and I doubt any future employers will ask her if she worked 40 hours per week during those years. I wasn’t interested in working quite that little (plus we depend on my benefits too much).

Our solution is for D and me to each work 4-day weeks.  This gives each of us a chance to get chores and errands done, or to spend an extra day with the kids. With the arrival of Baby #2, it was a good opportunity to ask our bosses for these reduced schedules.

My concern in the short term will be my control freak tendancies at work and the lack of understanding from our coworkers.  I found that three days a week was too hard – too hard to get my work done, too hard to meet with other employees, and too hard to be as involved as I wanted to be with our projects.  I also got a little bit of pushback from some coworkers. Why can’t we have a meeting on [day you’re taking off]? Can you cover XYZ that’s not only on your day off but also at 8pm? How long are you going to be part-time? Etc.

In theory, this does make our nominal budget very tight, especially since the two biggest line items – mortgage and daycare costs – are relatively fixed. That said, we can always work more if money becomes a problem.  Right now, the lowered stress and extra time with our kids seem to be in far shorter supply.

What would you do with almost financial independence but with a lot of uncertainty?

 

4 years later…

November 18, 2016 - 2 Responses

*cracks open wordpress, bats fly out*

It has been nearly 4 years since I wrote an entry.  I had no plans to stop blogging, though by that point I think my updates were coming monthly.

When I wrote that last post, I didn’t even know I was pregnant.

I lost that baby.

It was already dead, though my body (for whatever reason) decided to hold onto it for an extra month.

At the time, we’d been struggling with some fertility issues. Minor surgery corrected the problem, but we’d been trying for nearly 2 years by that point.

It was a blow.

I didn’t realize then how common miscarriages are.

At the time, I think I considered writing a post about it, but it was still so raw.  As time stretched on, it seemed exhausting to go back and share everything.  Finances didn’t seem important (and by that point, as DINKS with engineer salaries, it was a steady drumbeat of automated savings… fun to watch it grow, but nothing interesting to share).

I got pregnant again.  I held my breath, keeping it a secret as if that would keep this baby safe.

He’ll be three in February.

Baby #2 was born in August. I go back to work on Monday.

We bought a house.  We bought another new car. I switched jobs after my promotion was denied 3 years in a row. I started teaching yoga classes. We’re inching closer and closer to major net worth milestones, we surpassed various salary milestones. We itemized taxes for the first time.

I’ve wanted to blog again, now that there are so many more things to think about.  How we’ll pay down our mortgage.  How we’ll afford $30,000 for daycare for both kids. How we’ll handle college savings.  How we’ll manage to keep our house clean with both of us working full-time.

I’m still reading most of the blogs I used to (the ones that are still going), though I don’t think I’ve commented.  I was also reading a lot of Early Retirement blogs for a while, though I’m off that kick now.

I don’t know that I’ll blog again, but that’s what has been up with me.

Miss you.

2012 In Review

January 3, 2013 - 2 Responses

2012 was a year of great uncertainty. Last January, we weren’t sure when D would finish school, if he’d find a job, if we’d buy a house, etc. You all remember when D got his job offer, so at least that’s one question answered. We’ve deferred the house hunting until 2013, though, so the uncertainty isn’t going away any time soon (have you ever tried to make a budget without knowing how much one of your major expenses will cost? It’s impossible!).

This was a year of mixed blessings. D got a new job, but his commute currently takes about an hour. We bought a new car, but we struck a compromise between my insistence on fuel efficiency and D’s desire for space, with the result being that I think the car is a gas-guzzler and D thinks it’s too small. I still enjoy my job, but I had a promotion get turned down and I’m struggling with some bitterness about that.

I don’t mean to sound ungrateful. We got to take a couple of great vacations this year, and we’ve been visiting family more than ever. I never want to forget that I am very lucky and my complaints are really very small.

Overall, I had a good year. But I’ll be honest – I didn’t look at my goals at all this year. I should start doing a review at least halfway through the year. I met my financial goals (which is probably just the result of setting conservative goals and having a higher income) but epically failed on being the kind, charitable, minimalist type of person I want to be. Below, a summary.

Financial

1. Max out retirement accounts.

I maxed out my 401K, and we currently have money set aside for our Roth IRAs. I have just been lazy about actually making the desposit! D doesn’t become eligible for his company’s 401K until late 2013, so no deposits made to his.

2. Save/earmark an additional $15,000.

We put just over $45,000 into savings, but $30,000 of that was money we took out to pay for the car. I feel OK about this number since D only worked part of the year and because we cashflowed all of the things that were supposed to be earmarks.

I’m going to be honest – this was a strange goal when I set it. That said, I can’t really complain about our savings account balances.

3. Stay under personal budget.

I haven’t run the numbers for December yet, but I’m pretty sure I came in under this budget item despite higher spending on fitness stuff (yoga classes are expensive, yo!) and books/music.

4. Donate $100/month to charity.

I set aside the $1200, but I’ve found it hard to pull the trigger on any one charity. Charities I’ve donated to in past years just keep sending me fundraising information. I’m have so many address labels (with my maiden name), calendars, stickers, etc. I’m a little bit grossed out by it all, to be honest. I’ve been wanting to find a charity that’s not spending their money on mailings and salaries, but even Charity Navigator isn’t really helping me.

I’m weighing several options for using this money, but that’s a topic for another discussion…

Career

1. Get at least 4/5 on my year-end review.

I got a 5/5, but it was bittersweet because of #2.

2. Ask for a promotion.

Asked for it, and it got rejected by a nameless executive who has no idea what I do.

I tried to write a post about this several times. I’m struggling with a lot of bitterness about it. Our department had a LOT of turnover this year, and my bosses leaned on me very heavily, counting on me to do work far above my current level. So when the promotion got rejected, it was pretty demotivating. I’m embarrassed, because I really think I deserve the promotion, so this made me feel as though I’ve overestimated my abilities. My bosses have promised me a promotion in 2013.

3. Train on at least one new task/discipline.

Done, in spades.

Fitness

1. Work out 4 days per week.

Done! There were a few weeks where I might have worked out 3 times, plus there was a two-week period where I was on crutches and didn’t work out at all. Still, I’m pleased with how well I did this year, and I have actual muscle tone in my arms for the first time… ever.

2. Take an extra yoga class.

I have definitely taken a lot more yoga classes this year! I abandoned the cheaper 8-week series in July for multiple reasons, but I found another studio with awesome classes, even if it costs quite a bit more than $5/class.

2013 will include more yoga goals!

3. Set one food-related goal per month.

I’m going to be honest – I totally forgot about this goal until I reread my 2012 goals post! I know I made them for a few months, but consistently failed to meet them. Then I think I stopped, and never restarted.

Being Better

1. Work 15 hours for a non-profit.

I didn’t do this AT ALL. The animal shelter that I decided on wasn’t taking new people in January, and then I just… never looked again.

2. Read 100 books and jot down a quick summary/review.

I read about 80 books (which is close to my 2011 total) and created a GoodReads account and started off the year jotting down note in a small diary. And then I left the diary at my sister’s house. And then I basically avoided the internet for a few months. So, fail all around!

3. Institute a one-in-one-out shopping rule.

I explained earlier about my weight loss this year. I still think it’s temporary (and my unhealthy holiday eating habits might have pushed me back up!), so I haven’t donated anything. I have put some things into storage, but I don’t think it counts.