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New Guy - 24 with Piss and Vinegar!
Old 01-30-2008, 04:24 PM   #1
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New Guy - 24 with Piss and Vinegar!

This forum is something special. It's almost the exact opposite of what we keep reading about the average American consumer. It's good to hear the voice of reason.

This is my first post. I am lucky enough to have the old-school advice and wherewithall of my ailing grandfather who as soon as I graduated from college, took me off to the side and discussed a budget. It's pretty crazy that I made it through college without really ever thinking too far ahead. My career would have gotten off to a better start had I done so, and I wouldn't have overdrawn my checking account numerous times while in school.

Getting my engineering degree while playing baseball was quite a load, however. I'm happy to have gotten through, looking back. I lived at home for one year after school, saved up some decent money, worked for a shady employer who ended up sheisting me out of 3,000$ (good to learn that lesson early on), but have gotten off to a decent start. I'm kind of bummed that going on three years now, I haven't saved quite enough to put 20% down on a new house (I'm looking to be in the 200k range), but I've maxed out 2 years of an IRA in addition to my 8% 401k with my new company (1.5 years). My parents the saints payed for most of college excluding one small 10k loan, and I have 5k left on a gas hungry vehicle to pay off (would have changed that purchase looking back). The only reason I'm looking in the 200k for a house range, is that pretty much to not buy a house from the 50s that's a shack, that's how much they cost right now in central Florida. Toast to crashing housing market!

I have read some other posts and FIRE seems to be a great goal. As of now I am on the small end of corporate America, well kind of. I'm in consulting engineering. There's a lot of warm bodies, pays ok (just ok for engineering, I mean). Last year I brought home 60k. For EE with 2-3 yrs experience, its pretty low, especially compared to most I went to school with. But there I go, comparing myself to others.. I like the company, and the people. But I'm a bit of a loner and not much of a salesman, so long term, I'm not sure if this is really the field for me.

I'm single, casually dating (actually another engineer). Those dual incomes would be quite nice for FIRE. Especially down the road. I want to be an executive, and raise a great family. I don't know how to get there, but at some point I hope to climb my way up. I think I've given up the start a business or venture from scratch idea. I got to work on some great projects in undergrad but none were marketable at that next level. I actually thought I was going to be a professional baseball player (really, I did), but a 92mph fastball doesn't do you much good if you hit people with it. Funny, my calculus teacher in high school replied to the question of why he choose his vocation with 'Because I couldn't hit a curve ball.'

My parents are going through a divorce right now and not 'struggling' financially, but I can see that the 4 kids before the age of 26 has taken its toll on their standard of living and retirement planning. Part of me wants to actually help them out (especially my mom) financially, but with her history of debt and poor money management, I don't think this would be wise. Also it didn't that help my dad got a PhD in finance, (so loss of income for awhile) and then choose to do academia. I now know why he has encouraged us kids to stay single until the age of 30. But I think he was speaking only from his experience, looking at things from a single-earner perspective. Is it ok to target a mate that might actually make some money? I almost feel guilty for doing it but at the same time, I wouldn't mind the LBYM for me being pretty comfortable. Actually, I would much prefer this. I almost fell for my last honey, but she was a teacher who didn't even know she wanted to be a teacher (basically she wanted to be a homemaker and spend her hubby's money while looking good), and came out of school with an unknown amount (but a lot) in credit card debt. Looking back, she was the first girl that I loved, but I am so incredibly happy we didn't end up together. It would have been financial disaster. As a matter of fact, to make it work, I would probably have had to abandon my goals entirely.

Career wise, I've been considering a couple other career options. It stinks that my undergraduate GPA was not a little higher, because it will probably keep me out of any top business or law school. Which, I think that patent law would be a good fit for me, and it still isn't impossible to get into, but will just be a lot harder, and I will have to undoubtedly get the experience in a law firm before I were to get a JD to have a shot at a decent firm after law school. However, if the right girl comes along, all my super ambitious ideas of making 150-200k a year will probably go away, to make room for a better balance of life and work and all that stuff.

I know this is a long post, and sorry for that, especially it being my first one and all. But I did want to get some input on something from everyone here.

It involves my housing choice. Basically, I think here in the next half-year, I will be in a position to buy, and timing the market bottom aside:

I will probably net close to 65k this year in income. The house is going to be in the range of 190-200k I would imagine. One roommate committed for at least a year, probably more, for 500$/month. I could get an additional roommate as well. I have 25k saved potentially for a house, but that's where I'm uneasy. It was a lot more, but being open to risk now, I had the money in the markets and it has lost a lot of value (global emerging markets). Obviously, not too smart if I wanted to buy a house with it, but that's what I'm not sure about, if buying a house is even the right thing to do. Best case, the stock market rises 20%, and the housing market goes down 20% in the next halfyear.But even if I only put 10% down, do you guys think this will be best in the long run?

Other than that, looking forward to compound interest, not spending too much except for the important things, and having some fun along the way...
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Old 01-30-2008, 10:40 PM   #2
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A house is a good idea if you're not planning on selling in the next half-dozen years. You also don't have to try and buy at the very bottom. You can look around for good deals over a period of time and wait til you find something reasonable. Don't worry about timing the national market since you're only buying locally.

If you have a couple roommates lined up, your housing expenses will only by around $400, which is awesomely low on your salary.
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Old 01-31-2008, 06:34 AM   #3
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Yeah, take your time and look around. 65k net at 24 is not bad, and you'll build up assets before you know it. BTW, why are you keeping the gas guzzler...babe magnet?

Really though, if you are serious about post-grad, then you will need to decide if you are going to a local school, and how you are going to pay for it...and a mortgage...at the same time. I have always found that it helps me to write things down over a few days, (goals, dreams, what-ifs, incl costs and opportunities), and that helps when the decision might be a little complicated.

Good luck!
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Old 01-31-2008, 07:28 AM   #4
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I now know why he has encouraged us kids to stay single until the age of 30. But I think he was speaking only from his experience, looking at things from a single-earner perspective. Is it ok to target a mate that might actually make some money? I almost feel guilty for doing it but at the same time, I wouldn't mind the LBYM for me being pretty comfortable. Actually, I would much prefer this. I almost fell for my last honey, but she was a teacher who didn't even know she wanted to be a teacher (basically she wanted to be a homemaker and spend her hubby's money while looking good), and came out of school with an unknown amount (but a lot) in credit card debt. Looking back, she was the first girl that I loved, but I am so incredibly happy we didn't end up together. It would have been financial disaster. As a matter of fact, to make it work, I would probably have had to abandon my goals entirely.
I don't think there is anything wrong with targeting a mate who is financially stable. I wouldn't necessarily look at how much $ they can make as your primary guideline, of course, but I think making sure your mate could support themselves without you is important. My DH admits that he only considered girls for long-term relationships who had already been out of their parents home and supported themselves financially (successfully, without being in debt). He didn't want someone who was jumping straight from parents supporting them to husband supporting them. You want someone with the same financial goals and values regarding spending. It's pretty tough to be in a relationship where one person spends recklessly and the other values saving and planning for the future. To me, that's just a divorce waiting to happen.

Oh, on a side note, my DH is an engineer, too. We have found a great way to make/save extra money recently. He signed on to do projects on "per diem" - which means we travel for various projects. His employer pays him a tax-free daily per-diem amount to cover travel/living expenses. If you don't own a home, you can make a significant amount of money this way. Some of his single friends did this for years, moving from project to project. Essentially, they didn't have any living expenses, since they chose to stay in lower priced hotels or even rented furnished apartments for the longer-term projects. You may want to consider this idea before you buy a house, especially since you are single and have no kids.
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Old 01-31-2008, 07:31 AM   #5
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Good advice, SG.

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Old 01-31-2008, 09:50 AM   #6
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Career wise, I've been considering a couple other career options. It stinks that my undergraduate GPA was not a little higher, because it will probably keep me out of any top business or law school. Which, I think that patent law would be a good fit for me, and it still isn't impossible to get into, but will just be a lot harder, and I will have to undoubtedly get the experience in a law firm before I were to get a JD to have a shot at a decent firm after law school. However, if the right girl comes along, all my super ambitious ideas of making 150-200k a year will probably go away, to make room for a better balance of life and work and all that stuff.
Don't sell yourself short here. If you want to be a patent lawyer, you should pursue it. Just because your GPA was not high doesn't necessarily mean you can't get into a top law school. Your LSAT score will be just as important, if not more so, than your 2-3 year old GPA. Your work experience is also a plus. Law schools like candidates who've done other things between undergrad and law school. And, even if you don't get into a "top" law school, there are many other well regarded schools across the country. If you do really well at one of those, you will be courted by top regional law firms as well. You won't make $150,000 out of the gate, but you'll most likely be in the very high five figures with a bonus, and the potential over time is in line with the financial goals you have set for yourself.

I did it the opposite of you, went directly to law school. While I can't say that I shouldn't have gone, because it has provided me with alot of flexibilty for a good family/work balance (I'm a mom with two kids and work PT), a different career would have suited me better. You may want to speak with some patent attorneys to learn more about their "day to day" professional lives to help you decide if law school is right for you.

Before you buy a house, I think you should take a look at where you want to go/what you want to do with your career.

Good luck!
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Old 01-31-2008, 10:33 AM   #7
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We are alike in many ways. I'm an Elect and Comp Engineering grad who lived at home after school. I was just as unsure about many of the same things you are when I was 24, which was 2 years ago. (Still do have those moments, just not as much now with more responsibility.) My mind kept changing about the girl / marriage / career / homeownership / balance topics which you describe. I knew what I really enjoyed was time with family and friends and the ability to do what my ever changing mind wants to... What is needed to obtain this? FI and potentially RE...

My personal choices were a new employer in the financial industry, part-time mba at a local state school, a condo, and invest as much as possible in the 401k and Roth.

Keep plugging away and let those account balances grow. Diversify, buy a place you can see yourself living for at least the next 5-7 years while still investint for retirment. (Home funds should be in a savings account, though.) Or if you want to go back to school full time, don't buy the home right away. As mentioned, see if you can gain perspective from those already in the fields you're interested. And definitely keep coming back here, there's a lot to learn about the most important topic... FIRE!
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Old 01-31-2008, 12:00 PM   #8
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Abreutime: Yeah, I've heard that the 5 year thing can make homeowning worthwhile, and roommates will definitely help. As for timing the market, I don't want to try to get it at rock bottom, but I also don't want to get in 20,000 too early. Although, building the equity with roommates could make up for that pretty quick like you said.

Rambler: Honestly, the gas guzzler is taking its toll, especially with my 20-25 mile commute to work currently. However, one of the big reasons I bought the thing is that I am a tall, big guy, and my SUV was listed on a list of vehicles for tall people. Works for me. And it's pretty sharp. As for getting babes, well, I've always thought that the kind of babes you get with a good car but wouldn't without are not the kind of babes you want anyways. I guess the problem is, if you actually want a decent ride, you won't have that filter in place for the babes that are just judging you based on superficial criteria, like a car. Concerning graduate school, I would love to go to school along with work. My job doesn't pay for that though, and I honestly have no idea how I would do graduate school while buying a house. And although I'm pretty frugal, I fear that I've gotten used to the ability to spend money randomly that comes along with having a job.

simple girl: I've joked before about finding a suger-mommy. I don't think this would actually work for me as my mind is too active and I'm always feeling like I need to be doing something. But it's very strange growing up in more of a patriarchal family. I can feel those expectations kicking in, that basically I should be the breadwinner, that I should be able to provide a life for a wife who will stay at home and raise children. I do want to get there, I really do, but at the same time, I know that I am not likely to be happy doing this. I've been talking to my dad, who is having a rough time with this divorce and changes in his life now, and I realize just how much sacrifice he has made over the years, trying to be essentially the sole breadwinner over the years. There are plenty of things that I fault him for, and he made plenty of mistakes, including infidelity and not taking care of the family's budget, but at the same time, I get it. He fell in love with my mom because she was/is a beautiful woman with a big heart. But I don't think they were ever on the same wavelength or for that matter responsible financially. Looking back, from the 150 dollar baseball gloves, to 300 dollar bats, to occaisionally 2 video game systems for Christmas, we spent too much as a family. I remember even at a young age I would almost chide my mom for her spending habits but to no avail. She would always 'understand' but never do anything about it. I look at a close friend who their parents didn't have high power jobs or anything, but always seemed to make responsible choices, and their family isn't scattered about the country like ours.

GoodWife: Thanks for the encouragement. It really does mean a lot. I am studying for the USPTO Patent Bar exam right now. This to me is a hedge for my current job/career path. I don't think I'm cut out for upper management in a field where personality wise, you have to be a salesman it seems to get ahead. In the technical/engineering side of it I believe I have the capacity to excel.

On a sidenote, I have no idea on a lot of these achronyms that are being thrown around. From reading, I have picked up on LBYM and FIRE, but is there a guide to reference for a lot of this stuff? DH means, something husband?

It's pretty weird to think about that it seems that most people that I know and talk to seem to think that I really have it together, yet there are so many things that I'm considering/worrying about. I suppose that that is appropriate when first starting to plan a career and life, but I wonder, does it get better? I always have to think to myself about balancing commitment with self-interest. Sometimes it seems that being more committed is better in terms of self-interest. (ie: not burning bridges, not being a job-hopper, etc) But I've been advised to look out for #1 first from most people, that is, in today's job environment, don't expect to do any favors or be loyal to an employer. I think this is because some people see me almost as too idealistic and giving, and this might put myself in a position to be taken advantage of.

Thanks again for all the advice I look forward to reading and learning more.
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Old 01-31-2008, 03:14 PM   #9
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On a sidenote, I have no idea on a lot of these achronyms that are being thrown around. From reading, I have picked up on LBYM and FIRE, but is there a guide to reference for a lot of this stuff? DH means, something husband?
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Here is a link to the acronyms: http://www.early-retirement.org/foru...rum-19058.html
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Old 01-31-2008, 07:50 PM   #10
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It's hard at 24 to know what you want to do. If you aren't sure about law school, I wouldn't consider an expensive top tier school. You can get a good education at a state school for much less. My DH did very well in his career with a ba and an mpa from a state school. I, on the other hand, spent way too much on an international mba that I barely used. I would not do it again given the chance. And don't get into debt for it.

My DH also had money put away for the house or phd, but hadn't decided yet. We used it to pay for the wedding and honeymoon. (He's glad he didn't get a phd) Great to start off with no wedding debt except a little left on my car and that damned student loan. DH did pay the last 1k on my credit card before we got married. My attitude toward money has changed completely since I got married. It does happen, so I wouldn't rule somebody out because of that. You have to pick someone who is open to change and learning something new.

Money you are going to use in less than 5 years doesn't go in the stock market. Put it in a money market.

Read some good books. My most life changing financially was Your Money or Your Life by Joe Dominguez and Vicki Robin. For looking at relationships, dating and family and even for work, read up on personality types. Get to know yourself very well. I like Please Understand Me II by David Keirsey.

Welcome
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Old 01-31-2008, 07:56 PM   #11
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Oh by the way, if you want to be an executive or a lawyer, you won't see that great family you say you want very much. If you're working 80 + hour weeks, you don't see your kids for days, trust me. So plan to have your kids later and retire as early as possible. and you may be happy for that stay at home mom, so someone who loves your kids can see them and be with them. You really do have to make choices and sacrifices. You don't get it all.
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Old 02-01-2008, 11:44 AM   #12
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There are executives and lawyers out there who are there for their families. And to an extent, I think it is responsible as a parent to show your kids through example what hard work is all about. I don't know - I guess I'm content with making decent money as an engineer and being moderately wealthy, compared with going for the gold. Good to know I've got the choice, but I've said it before, it'd be nice for some all-knowing figure to TELL me what to do. Take the onus off me already!
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Old 02-01-2008, 06:22 PM   #13
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rjgoebel,

As you begin to delve into this board, you will begin to realize that LYBM is important, however, that who you pick as your life partner is just as important. If you find someone who has the same financial temperament as well as meets the other criteria, your goal of RE will be much easier. You are young and as you age you will realize why your father says to wait. Hormones and eyes can mislead you regarding your coupling decisions. Experience and understanding of yourself lead you to make better long-term decisions. Time is your friend right now, both for dating/mating experience and saving money. Use it wisely. And Welcome!!
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Old 02-04-2008, 11:15 AM   #14
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I'm on board with this. The hormones won't go away, though. I seriously would love if I could be temporarily nuetered. This would make things a lot easier.

I just had an experience with meeting a young secretary at a doctors office who explained to me that her name came from one of the 9 muses from Greek mythology.

The whole time I was thinking to myself, wow you are cute enough that I want to take you out to dinner and have you talk about muses all night. But that'd be 50$ I could never get back.
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Old 02-07-2008, 01:30 PM   #15
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I'm on board with this. The hormones won't go away, though. I seriously would love if I could be temporarily nuetered. This would make things a lot easier.

I just had an experience with meeting a young secretary at a doctors office who explained to me that her name came from one of the 9 muses from Greek mythology.

The whole time I was thinking to myself, wow you are cute enough that I want to take you out to dinner and have you talk about muses all night. But that'd be 50$ I could never get back.
Welcome to the board. You have come to the right place to get ideas on what is possible and a variety of ways to get to FIRE (Financial Independence, Retired Early).

One thing to remember as you progress in your career and your life. Balance. Try to shoot for some balance in your life or you may miss out on actually living your life. Being a slave to your goals or to an employer drains the life out of you and your absence from home and family cannot be regained. It is time lost forever. Balance in work time vs home time is important. Take it from one who learned it too late.

Choosing a life-mate is not easy task. An important consideration is mutual goals and ideals. If you marry someone with very different goals on spending and saving you will have a miserable life. Been there done that and have the scars to prove it. Love is a wonderful thing but love with shared goals is as good as it gets.

Go to school now. Once you get older and have a mortgage, kids, more cars, life insurance, health insurance, etc. it gets harder to break away and do it.

I wish I had started saving earlier in my life but it was not to be until after my divorce. I had to squeeze my savings and investment plan into 15 or so years. Remarried a woman who shared my LBYM and FIRE goals so it worked out.

Life has a way of throwing sliders at you so don't take too much for granted. Do stuff while you can along with your FIRE plans.

Good luck.
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Old 02-07-2008, 07:01 PM   #16
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I'm with you on the balance thing, hopefully.

I don't want to be at that point where I feel like I'm too busy for a girlfriend or family.

Our first company rule is to maintain balance between life and work. However, this doesn't seem to be the case for most engineers I work with. 50-60 hour weeks aren't condusive to balance.
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Old 02-07-2008, 09:53 PM   #17
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I'm with you on the balance thing, hopefully.

I don't want to be at that point where I feel like I'm too busy for a girlfriend or family.

Our first company rule is to maintain balance between life and work. However, this doesn't seem to be the case for most engineers I work with. 50-60 hour weeks aren't condusive to balance.
You can still balance family and work at 60+ hours. It gets harder to do and the quality of your time becomes more important than the quantity of your time. It can be done and is everyday...it just takes a lot more effort and planning to make it happen.
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Old 02-09-2008, 06:25 AM   #18
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I don't think there is anything wrong with targeting a mate who is financially stable. I wouldn't necessarily look at how much $ they can make as your primary guideline, of course, but I think making sure your mate could support themselves without you is important. My DH admits that he only considered girls for long-term relationships who had already been out of their parents home and supported themselves financially (successfully, without being in debt). He didn't want someone who was jumping straight from parents supporting them to husband supporting them. You want someone with the same financial goals and values regarding spending. It's pretty tough to be in a relationship where one person spends recklessly and the other values saving and planning for the future. To me, that's just a divorce waiting to happen.
I think this is an excellent post. To the original poster, I wouldn't think of it as marrying someone who makes money, but think of it as choosing a partner that shares your values about financial responsibility. Money can cause many arguments in a marriage if the partners don't agree on how to save/spend, etc.

I married at age 34, and my wife was 38. Only marriage for both of us. As we were dating, we discussed such things as part of our courtship. The last thing you want is to get married, wake up the next day, and you say to her that you were hoping to go sign up for an IRA that day while she wanted to take out 4 credit cards so she can buy purses and shoes. Having such conflicting ideas will ruin a marriage.

I'd suggest that you be flexible about who you date originally....in other words...don't rule out women who don't work. However, early in the dating process, be sure to get this into the discussion as far as their goals in life, their spending habits, and whether they are a person who needs to "keep up with the Jones' ". If you feel differently from them, then don't let the relationship move towards marriage.

My wife and I have now been married for 11 happy years. Sure, we have some disagreements on money...but we can work through them. Overall we are both savers, not spenders. We have a few "rules" we agree to follow and a system that goes like this:

We have three separate bank accounts. One joint account and then we each have a separate account. There are no secrets...each of us can open any mail and look at any balance.

We both work, so we do a full budget each year. This allows us to know about all "shared" expenses, such as housing, utilities, grocery, eating out, vacations, home repair, yard care, etc. We tabulate all these and determine how much per month....let's say it's $3,000/month.

Then we take our incomes and ratio them. For example, say she makes $50k/year and I make $100k, therefore she makes 33% of the household income and I make 67%.

We take the $3,000 x 67% and get $2,000...which is the amount I must have direct deposited to our joint account each month. She then has $1,000 deposited. Any remaining amount from our check goes to our personal account and we can use this for whatever we want without asking the other person. However, for any non-routine spending out of the joint account greater than $100, we must consult on the decision. For example, if she thinks we need a new gas grill but I don't think so...she can't just go spend the money...we talk about it and reach an agreement.

Keep in mind that we both save the same % for retirement also.

Using the above rules/system, we have been successful and we like it. It gives each person the freedom they need to have some money for their own hobbies and interests while still ensuring all the household expenses are met. It also forces us to talk...for instance we must decide on how fancy of a vacation we're going to take next year so we can budget for it....this is excellent.

Dave
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