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Old 05-08-2015, 09:18 PM   #41
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Originally Posted by soupcxan View Post
We're basically living on one income, but I still think we could do better.

Donations - We give less than 1% of our income away so I'm not too fussed about this as long as we're both employed. Don't you go to church? 1% is much too low.

House - We bought it in the low $400s. There's not much that's significantly cheaper in Houston that works for both of our commutes. I don't see us moving until DS starts school, at the earliest. And yes, HCAD sucks. Houston's one of the two least expensive housing markets in the U.S. You could have spent much less for a perfectly decent house and just driven another 15 minutes to work.

Furnishings - We're not re-decorating for style, we're young enough that we're still accumulating furniture for the house. E.g. a couple of the bedrooms have beds but no dressers or nightstands in them. That is not a priority, but eventually we want to have a couple of pieces of furniture in there. And for this year I just bought a crib and changing table. We inherited more and more furniture as relatives aged. Before that, we were shopping thrift stores and auctions for great furniture for very little money.

Maintenance - I estimated 1% of the houses purchase price. Won't be that much every year, the next major thing to go will probably be the AC/furnace which will be a couple grand. A/C's will cost you more like $4K each, and everyone needs to setup a savings account to accrue replacements.

Appliances - Ours are new so don't expect any repairs/replacement in the near term but I figure eventually they'll start to need work.

Groceries - I know this is too high but can't figure out where the money is being wasted. Most of our shopping is at Wal-Mart. We start shopping at Aldi's, and finish at other groceries buying only sales items. Walmart's groceries are too expensive. Big Star puts yesterday's steaks out every morning at 10:30 at $2 off minimum. We mainly eat chicken and pork--cooked on the grill.

Costco - I started a separate thread a few months ago and most of the replies said my Costco bill wasn't out of line. Coffee beans, paper products, steaks, fish, wine ($10-15/btl), beer, fruit, sparkling water, nuts, cheese, etc. But yeah, you go in there and can't get out for less than $150 per trip. Stay out of Costco's and it'll be like a pay raise. I'm a member, but seldom go in there except for a specific item.

Daycare - The nannies we've looked at have been +$2k/mo versus $1,300 for daycare, so doesn't make sense for only one kiddo. I'm sure there are cheaper nannies if you don't pay taxes or ask questions about immigration status. Shop around churches for better daycare programs.

Clothing - More DW's spending than mine, though I do buy dress shirts and slacks for the office as stuff wears out. DW has to wear suits which cost more. Jeans/polos not allowed for either of us at work. But yeah, we could cut here if we tried.

Personal care - I get a $15 haircut once a month. The rest is DW. I have offered to cut/color her hair but she has declined.

Dining out - We could cut here if we packed our own lunches during the week. We don't always have time for this with work but could definitely do it a few times a week. We only eat out once per week. And we always took our lunches when we worked. The money we would spend on eating out takes us on vacations to far off foreign lands.

Gifts - This is 80% DW. She comes from a very large family and there is always a wedding, baby shower, graduation, birthday, etc. We seldom have such gifts, as a product of being retirement age. It's the thought that counts--not the amount spent. It can be cut back.

Cell phone - We both "need" smartphones with data for our jobs (no, our jobs don't reimburse us for them). Of course, if I didn't want the latest and greatest iphone, this could be lower. The average high line phone costs $621. I bought a smart phone for many times less than that.

Insurance - We just switched carriers and saved +$1k/year. But I don't see it getting any cheaper in the near term.

Electronics - This is all me. I love my computers/gadgets. And digital cameras are a hobby of mine. I'm also a photographer, but you don't need a new camera every year.

Cable/internet - This is just internet service for $50/mo + taxes. We don't have cable TV, just Netflix/Hulu.

Vacation - We're not exactly staying at the Ritz in London but yeah, could be cheaper. We're spending our vacations camping out in the mountains, and the grandkids absolutely love it. We have not been "to the beach" in 25 years. For $5K, we'd spend it in Europe.
Good luck to you in your lifestyle changes. We lived much farther below our means than you guys to finance our early retirement (58 yrs. old.) Changes can be easily done without reducing your quality of life.

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Old 05-08-2015, 10:58 PM   #42
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Originally Posted by FUEGO View Post
Here's my proposed budget for you!
I might change the numbers around a bit but what you laid out is the same order of magnitude of cuts with what I would suggest, too, if the goal is ER or to be able to go to one income.

When we did our budget smack down we kept the house, actually upgraded the cars (newer with latest safety features, better repair records and MPG), kept the home improvements (we'll get the majority back when we sell the house), kept the restaurants and cultural activities but found cheaper avenues and cut out a lot of the depreciating and/or overpriced consumer goods and services.

Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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Old 05-09-2015, 04:19 AM   #43
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One suggestion about the clothing. Where do you shop? DW and I have found very nice clothes, from business to casual attire, at thrift stores. You can find clothing that has never/been barely worn (e.g. someone buys something the wrong size and never got around to returning it and ended up donating it). The person who tipped us off to the best stores in our area are multi-millionaires, but do a lot of shopping at those places.

If you cannot stand that thought, there are plenty of other bargain places to find nice clothes. Low cost does not always mean bad quality.
Current target FIRE date: June 2017 or +50K to the portfolio, whichever comes first
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Old 05-09-2015, 05:07 AM   #44
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Originally Posted by soupcxan View Post
We're basically living on one income, but I still think we could do better.
You are doing fine!
May we live in peace and harmony and be free from all human sufferings.
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Old 05-09-2015, 07:53 AM   #45
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Originally Posted by Bamaman View Post
Houston's one of the two least expensive housing markets in the U.S. You could have spent much less for a perfectly decent house and just driven another 15 minutes to work.
I'm guessing you haven't spent 2 hours/day in Houston traffic...
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Old 05-09-2015, 08:44 AM   #46
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Soupcxan - You and spouse make decent $$, if you enjoy your lifestyle, don't sweat it, enjoy life within reason. Once the little one comes, you will adjust the budget a good few times is my experience.

Some additional thoughts:
Discretionary - all discretionary can be reduced by 25% for 3 months and see if you can. If you are successful reducing, after 6 or 12 months, reduce again. It's what you value more, saving or enjoying.

500 Appliances - is this replacement? can you get a warranty from utility co?
800 Cable/Internet 1,560 Cell Phone - have you shop around? I get unlimited minutes/tests and 2 G of 4GLTE for about $50/month)
1,500 Electricity - CFL bulbs, reduce use of A/C by a few degrees...
750 Dry Cleaning - look out for specials, Groupon or Living Social discounts
2,500 Gasoline 7,000 Groceries & supplies - look for more sales and discount brands

14,424 Mortgage (P&I only) - any room for a refi to a lower rate or converting to a 15 year mortgage?
4,000 House Maintenance - anything you can do yourself or warranty?
15,600 Daycare - is this private home daycare or commerical daycare?
500 Car Maintenance - anything you can perform?
All Insurance - continue to "shop" for a better rate every 2 years
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Old 05-09-2015, 09:08 AM   #47
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Soupcxan - it's definitely possible to reduce your spending from 100k even in a HCOL area. Our typical yearly expense was 70-80k (in san jose, includes property tax) depending on how much travel we did. We don't have kids but our mortgage was about the same as your mortgage+daycare.

Looking at individual items, we were lower on pretty much everything in you listed in discretionary and semi-fixed except for travel & electronics. You've gotten lots of suggestions on what to reduce but I think it's important to cut iteratively and reassess after a while. We never felt deprived and most things we cut out were just not that important for us. Keep in mind that given your high income, a substantial cut in your living expenses might have only marginal impact on time to reach whatever net worth goal you have.
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How to get budget below $100k?
Old 05-09-2015, 09:09 AM   #48
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How to get budget below $100k?

Apologies ...can't live on under $100k? You're kidding right? We don't need to tell you where the fat is - you already know. What you're looking for motivation to stop giving $4k in gifts etc, Your on the consumer treadmill ...time to get off.

Formula to brown bag your life
1. No $4 cups of coffee
2. No getting nails done.. My haircuts cost $13 including tip every 3 weeks
3. We get pizza or Chinese every Friday ... 20 bucks...that's it. Unless there are leftovers that have to be eaten.
4. We buy on sale and clip coupons
5. Unless you have to wear a suit each day your clothes budget is too high
6. House repairs? Did you ever hear of YouTube? It is awesome.

Exactly how much do your sneakers cost? Mine were like $40.
Do you have an emergency fund?

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Old 05-09-2015, 09:12 AM   #49
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I've worked 31 years in child care and I would cut lots of places before making a change in your arrangements just to save money. If you and your children are happy, then I would look to dining, clothes, gifts and other discretionary spending to save.

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Old 05-09-2015, 09:31 AM   #50
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Consider looking at it from a different angle.

First off, paying off the mortgage principal is not an expense in my book. It is saving/investment. I know from a cashflow perspective it doesn't look that way, and you need to plan for it, but it's not spending. So you spend maybe more like 65k vs. 78k.

Fixed/semi-fixed is meaningless, as no cost is truly "fixed", just a bit harder to change.

Categories at highest level you might sooner go with this (your spend level approx. in brackets).
  • Housing (20k) - excluding principal payment (13k?)
  • Transportation (5k)
  • Healthcare (5k)
  • Communications (1.5k)
  • Food (6k)
  • Travel (5k)
  • Everything else (22k) - includes daycare (16k) and costco (2k)

You can certainly go 10k lower, e.g.:
  • A 6k food bill for two can be halved, while still eating healthy (i.e. don't eat rice&beans every day)
  • Your communications cost can be reduced with 33% - Don't go for a top of the line smartphone, and keep it for 4 years instead of 2.
  • Travel: hiking in a tent vs. flying to hotels.
  • Tune down the gift giving. Give meaningful, not high amounts
  • Buy clothes when you need them. Easily -50%.
But let's be honest, your biggest buckets are housing, transportation and daycare. Together they kill your budget (41k / 65k).

Now you say most of these costs are fixed, I beg to differ. You can move closer to work (get rid of one car), change jobs, move closer to family (reducing daycare), work parttime or from home, get a more economical car, ..

None of this is easy and a big step, but as long you won't touch those three categories drastically, you are pretty much stuck at your current spend level.

My two cents.
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Old 05-09-2015, 09:55 AM   #51
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Totoro, I agree with you. But the trouble is most people I know (no reference to OP on this) want you to find this one or two simple, painless, quick fix simple flaw in the budget and magically the problem is fixed. Only the truly zealot or desperate will make the changes. Too many areas are automatically off limits once they are questioned.
Budgeting is a lot like dieting and fitness. Many try, but most fail and return to their usual habits.

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Old 05-09-2015, 10:20 AM   #52
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A number of people, including myself have commented that budget can be trimmed about $20K without much trouble. To implement this change, I suggest opening a taxable brokerage account (if you don't already have one) and having $1500 per month automatically transferred from you checking/savings account to the brokerage. You can't spend what you don't have, and will need to make adjustments to your spending - problem solved.
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Old 05-09-2015, 12:19 PM   #53
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OP: you live on one salary and save the other, have stated that $4000 donations is less than 1% of your income....and you want to get your budget under 100K? Why? If my math is correct you are saving/ investing over 200K per year and living on half of that. Do you plan on retiring at 40? What's your goal? Your savings rate is way above average. You make good money-- it's okay to enjoy it a little!
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Old 05-09-2015, 01:26 PM   #54
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Of course, any of us can cut expenses if we want to. Rather than give you my opinion, I thought I would give you a few hundred opinions all at once.

The first column below is the average of all DINKs with mortgages in the Consumer Expenditure Survey. These people do detailed spending diaries and interviews, the gov't conveniently accumulates the data for us.

I've tried to match your categories. Of course, there are always some classification issues.

I notice that you don't list "car replacement". That's a big expense for a lot of people.

1,824 …… 5,000 Clothing
3,493 …… 4,000 Dining Out
1,630 …… 4,000 Donations
476 …… 2,500 Personal Care (hair, nails)
2,288 …… 4,000 Gifts
2,071 …… 1,000 Entertainment
2,573 …… 5,000 Travel/Vacation
349 …… 1,000 Electronics
2,066 …… 1,000 Home Furnishings
16,770 …… 27,500 Subtotal

…… Semi-fixed
321 …… 500 Appliances
1,374 …… 800 Cable/Internet
1,619 …… 1,560 Cell Phone
1,672 …… 1,500 Electricity
753 …… 250 HOA Dues
710 …… 600 Natural Gas
elsewhere …… 400 Streaming services
691 …… 1,400 Water & Sewer
elsewhere …… 750 Dry Cleaning
3,405 …… 2,500 Gasoline
5,161 …… 7,000 Groceries & supplies
elsewhere …… 3,500 Costco
15,706 …… 20,760 Subtotal

…… Fixed
13,389 …… 14,424 Mortgage (P&I only)
2,113 …… 4,000 House Maintenance
3,388 …… 8,500 Property Tax
No Kids? …… 15,600 Daycare
1,287 …… 500 Car Maintenance
elsewhere …… 250 Car Registration
255 …… 200 Car Tolls and parking
1,392 …… 1,400 Insurance Auto
elsewhere …… 400 Insurance Flood
3,002 …… 3,000 Insurance Health
elsewhere …… 500 Insurance Dental
588 …… 2,400 Insurance Homeowner's
elsewhere …… 200 Insurance Umbrella
elsewhere …… 200 Dentist
1,187 …… 1,000 Doctor
elsewhere …… 200 Prescriptions
517 …… All Dental and eyecare
27,118 …… 52,774 Subtotal

Items you did not list separately. Some may be included above.
6,097 …… Cars, net purchase + lease
405 …… Vehicle finance charges
483 …… Education
779 …… Alcohol
379 …… Tobacco
1,004 …… Gifts - Tuition
676 …… Life and other Pers Insurance
1,935 …… All Other
11,758 …… Subtotal

71,352 …… 101,034 Grand Total
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Old 05-09-2015, 02:31 PM   #55
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I live in SoCal with one kid on approx $65k-70k in expenses. I eat out quite a bit and live pretty comfortably. I'm posting my avg monthly budget, hope it helps.

Housing: $2370
-Mortgage, prop tax, ins: $2100
-Utilities: $250
-Gardening: $20 (yes I got a deal because the gradner put in a new sod)

Transportation (two cars): $680
-DMV fees: $50
-AAA: $10
-Gas: $230
-Repairs: $50
-Car payment: $265

Food: $700
-Groceries: $300
-Eating out: $400 (lunches everyday)

Pets: $150

Child support, school, etc: 800

Misc wants: $300-500
- Amazon Prime, Netflix
- Cell phone - $70 total (but also get a $40 stipend from work so $30 usually)
- Clothing
- Toys
- Electronics
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Old 05-09-2015, 03:03 PM   #56
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Have you read anything by the late Thomas Stanley such as The Millionaire Next Door or Stop Acting Rich: ...And Start Living Like A Real Millionaire?

At this point in your life this may be a worthy endeavor to help you figure out your true goals in life.

I was sure happy that I found these works early in my career.

I could try to nit-pick your budget here and there to try to save you 20% or so, but if you are unhappy in the end, have we really accomplished anything.

Reading the above books may change your high level thinking on things and actually facilitate changing your values. In the end you may not change anything but at least you will be going forward into the rest of your life with your eyes open.

Meyers Brigss: INTP - I like to work on the big issues

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