Lifestyle creep delays early retirement

[Hamlet]

I've been on this board a long time. When I started on the path to FIRE, I was single, and sharing an apartment with a friend. My vision for having enough to FIRE was probably around a million dollars.

I met the right woman and we bought a small 3-bedroom house out in the suburbs that increased our living expenses but not dramatically.

Daughter #1 came along and added massive daycare costs and the desire to move into a better school district once she is school age.

Daughter #2 came along and added insanely massive daycare costs and a compelling desire to get a bigger house.

We spent the last two years or so looking at houses. We had a lot of criteria that made finding something that we considered "affordable" difficult.

We finally found a house we like last week and are now in the process of purchasing it. I'm having a hard time wrapping my head around how expensive our lifestyle has become, and how much longer we will have to work before we can retire.

My plans for FIRE at 45 have become plans for FIRE at 60.

Anyone else in that position?

 

[FUEGO]

We ditched the Honda Civic and bought a minivan. A net of $5400 extra cost for the switcheroo (though ended up with a vehicle 9 years newer).

Does that count?

Otherwise, just the general kid-related expenses of food, utilities, couple hundred on education. Tax deductions/credits greatly offset these expenses.

We still live in the same "starter home" we bought during college which is more than our family of 5 needs, but less than the average home sold these days.

 

[Danmar]

I think to call the changes "lifestyle creep" grossly understates things. You changed your life completely. Sounds like a much better life and I would guess well worth it to retire later. Good for you.

 

[Koogie]

I've been on this board a long time. When I started on the path to FIRE, I was single, and sharing an apartment with a friend. My vision for having enough to FIRE was probably around a million dollars.

I met the right woman and we bought a small 3-bedroom house out in the suburbs that increased our living expenses but not dramatically.

Daughter #1 came along and added massive daycare costs and the desire to move into a better school district once she is school age.

Daughter #2 came along and added insanely massive daycare costs and a compelling desire to get a bigger house.

We spent the last two years or so looking at houses. We had a lot of criteria that made finding something that we considered "affordable" difficult.

We finally found a house we like last week and are now in the process of purchasing it. I'm having a hard time wrapping my head around how expensive our lifestyle has become, and how much longer we will have to work before we can retire.

My plans for FIRE at 45 have become plans for FIRE at 60.

Anyone else in that position?

You're down the rabbit hole, mate. Might as well sign up for a groundskeeper and a BMW lease while you're at it...

Seriously, work hard and retire at 59 if the idea of "early" still appeals to you. That'll still be "early" and nobody can diss you then. Meanwhile, provide well for yourself, your spouse and your family and you will still have done a better job than 99% of the population

 

[RobbieB]

Yeah, 59 is not so bad...

 

[Hamlet]

You're down the rabbit hole, mate. Might as well sign up for a groundskeeper and a BMW lease while you're at it...

Seriously, work hard and retire at 59 if the idea of "early" still appeals to you. That'll still be "early" and nobody can diss you then. Meanwhile, provide well for yourself, your spouse and your family and you will still have done a better job than 99% of the population

Yeah, I'm not bemoaning my situation, I'm just sort of amazed at how much my "needs" for considering myself FIRE have changed in a decade or so.

A spreadsheet with a one million dollar goal has become one with a three million dollar goal pretty quickly.

I was always pretty good at not ratcheting up my desires with my income, and now I'm going to have a 480k house with a mortgage to match.

On the plus side, its a really nice house. My kids will be able to have their own rooms (they currently wake each other up constantly), and we will have room for our respective hobbies. The low rates make it more affordable than I would have thought.

 

[MuirWannabe]

I agree this is not lifestyle creep. This is invasion of the body snatchers....or nest egg snatchers.

Enjoy your new life as a seed pod creature. Cause the old life is long gone. And it sounds like that's okay.

Muir


Sent from my iPhone using Early Retirement Forum

 

[chris2008]

Nothing creeped.
You chose.
The daughters did not come along. You made them.
You are in the driver seat of your life.
And each choice you make FOR something is a decision AGAINST something else.
Over time we all plan and revise plans.
The revised version often is better, more fulfilling, than the first draft.
Enjoy!

 

[LOL!]

What is reverse lifestyle creep?

We lived in NY in an apartment. Daughter was born. We moved to Texas where McMansion mortgage was less than the rent on our NY apartment, plus salaries were higher because they had to pay more to get people to move to Texas*, and no state income tax, too.

You know; fire ants, scorpions, poisonous snakes, non-blue people, deadly tropical disease-carrying mosquitoes, heat, humidity, tornadoes, hurricanes, floods, etc.

 

[laurence]

My original plan was 45, too. My kids came along and those plans got scrapped, too. We got a bigger house, went on nice vacations, spent a lot on day care and/or sacrificed income to have one parent stay home for a while. Choices made with open eyes and willingly. But we are still on track for a retirement at 55, and one of us might stay home significantly earlier to make life a lot less stressful sooner. But as long as you are LBYM and continuing to increase net worth, you are protecting yourself against future financial disaster, which puts you ahead of 90% of Americans.

 

[Sarah in SC]

Laurence I am so glad to hear that life is still on track for y'all, and it sounds as though you've balanced the present and future needs for your family very well and while still having some fun along the way.
Always delighted to see your posts!

 

[Markola]

You can't know what's going to happen and there is still power in having the clear objective. Keep it firmly in focus and then roll with the punches. When you get raises, park at least half in your 401k every time until you max out, then build up FU money and pay down the mortgage. If you move for work someday, monetize your current house by selling or renting it, then try to get a less expensive house. Do whatever you have to to stay married. Make the choice now to avoid college debt for little 1 and 2 by having them get creative with college tuition themselves or at least send them to fine public schools. Buy 3 year old cars and keep them 10 years. You have a lot of levers to pull, so just be sure you pull them with your strategy in mind. Do that, and you'll get to be 50 like me and see that you aren't ready to FIRE yet, necessarily, but you have far more options than most anyone you know in real life.

 

[Newventurer]

Just think, now you can eliminate the LTC policy costs from your retirement cost plans, cause you know one of those dear daughters will take care of her poppa...oh, pick one and buy her a pony

 

[rodi]

Hamlet - I hear you.

That said - the insanely high daycare prices drop to only crazy high once the kids are potty trained. If your state is like mine - infant and toddler rooms are WAY more expensive than pre-school age rooms.

Then - they go to school - and the rates drop to almost manageable with just after school care.

I remember getting in arguments with friends with teenagers - they were convinced (due to faulty memory) that teens were far more expensive. I quoted my daycare rates when I had an infant and a 2yo... and they conceded daycare costs are higher than teen expenses.

I now have teens - and the costs are there - but NO where near as high as when we had daycare. At the peak - when I returned from maternity leave after DS#2 - we were paying $25k/year for daycare. It dropped to 17K the next year when older son potty trained and moved up to a preschool room. It dropped to $14k when both kids were in full time preschool rooms.

Take advantage of pre-tax spending programs your work may offer. And treat any future savings on daycare as a "raise" and plow it back into savings.

 

[pb4uski]

Yeah Hamlet... welcome to real life!

If you're talking about today's dollars, then $2m should do it unless you are living really high on the hog but inflation may nudge that up to $3m.

Have you sketched out your plan on Quicken Lifetime Planner?

 

[Senator]

My plans for FIRE at 45 have become plans for FIRE at 60.

Wait until you get a second wife, it will cost even more and be FIRE at 70.

 

[RobbieB]

That's cold. Wait...that was you?

 

[nash031]

Hamlet - same boat. DD#1 on the way in September and I'm sure it's going to delay things from the original "potentially 42" plan. That said, in my head I think I had always wanted to try a bridge career, so my thought process has shifted more toward "be able to get a job I want rather than being forced to take a job I need" at 42. That's a form of FI.

Then again, I may go the SAHD route while DW continues to work. We'll see.

Either way, I don't view your situation as lifestyle creep, but I often hear the siren song of actual lifestyle creep myself. So far, we're staying strong and continuing to increase savings. I suggest that's probably going to change come on or about Sept 27th.

 

[HadEnuff]

FIRE is a great concept, but it should not become so important as to deny yourself a life along the way.

Enjoy the family. Hopefully your "criteria" for your house and all of the other things you "need" will allow for you to put something away each year, for that not-so-early retirement, that you can enjoy with some grandchildren to spoil.

Of course having a family will divert money from a really early retirement, but just make sure it doesn't preclude any retirement at all. If it does, you may need to rethink your "criteria"..

Enjoy the children. They'll be grown in a flash. ( Today just happens to be my son's 38th birthday. Where did the time go?)

 

[Closet_Gamer]

OP:

Good for you. Life isn't a balance sheet exercise. Life is to be lived with intelligent money management as a component of a well lived life. It's a means to an end rather than an end unto itself.

As another poster mentioned, you didn't undergo lifestyle creep so much as mission creep. You changed the mission which changed the resource requirements. Watching a good friend go thru a similar transition.

Suggestions:

1) Be very careful who you surround yourself and your kids with. "How well am I doing?" is so often answered by comparing to those around you. Choose houses and schools based on being comfortable in your surroundings and grounded in the facts that they are good schools -- if you see a surplus of BMWs in the "must have" school district run away. Ten years ago we moved and everyone was telling us we HAD to live in a certain part of town because it had the #1 schools. Driving around it became apparent we would also HAVE to own a Mercedes. We bought in the #3 school district instead. Kids are fine, my daughters have no expectations of owning a new car in high school and they are well poised for college with good heads on their shoulders re: money.

2). Double and triple check your insurance and emergency cash stash. In addition to having greater long term responsibilities, you also now have greater near term responsibilities. If something goes sideways you really want to be able to protect your kids

3). Double down on #1&2 so that you don't get trapped into a job. A lot of people I know who are miserable at work have built a family lifestyle that makes losing their jobs a near term catastrophe. Make sure you have near term security and you will have greater career flexibility -- which is valuable both financially and emotionally

Enjoy the ride!

 

[ivinsfan]

Well, it's simple you weren't happy living in a small 3 bedroom house with 2 kids.Why did your kids have to share a bedroom. And that's fine, It also sounds as if you might have spent more then planned on your new house.

A lot of people who feel they need to upgrade homes have the habit of collecting too much "stuff"which costs more money to buy and maintain. Your comment about having room for your "hobbies" , which also tend to drain money makes my point. Now there is nothing wrong with doing any of these things, but it does kind of point out that ER isn't your number one goal.

Our oldest DD bought a cape cod in an established close in suburb when she was 25 years old with a 15 year loan. It's a great high demand area, 2 kids later they are about 12 months from having it paid off at 40. They have 3 bedrooms and she is great at watching what she puts in the house and when the kids were small very proactive about weeding out toys and such to keep down the clutter.

A smaller house saves you money in the buying clutter department, there is no doubt about it.It's also cheaper on the utilities.

 

[txtig]

I agree this is not lifestyle creep. This is invasion of the body snatchers....or nest egg snatchers.

I actually think the term "lifestyle creep" is pretty accurate, at least in my case. Thinking back on almost 40 years of marriage, work and raising a family, there were never any big changes in lifestyle that happened quickly, or even noticeably. But, comparing today vs. when DW and I first started out, I find it hard to believe we got by on so little. Now, if we had maintained our pauper life style, we could have FIRE'd long ago (we're looking at two or three more months of w**k for me and three more days for DW ). But, I think we struck a pretty good balance of enjoying our accumulation phase (even if it was longer than most on this forum) and now ready to move on to the next phase. So, no regrets for the lifestyle creep or even invasion of the body snatchers.

 

[eta2020]

Well, it's simple you weren't happy living in a small 3 bedroom house with 2 kids.Why did your kids have to share a bedroom. And that's fine, It also sounds as if you might have spent more then planned on your new house.

A smaller house saves you money in the buying clutter department, there is no doubt about it.It's also cheaper on the utilities.

Average US Family spends majority of income on Hosing and Transportation. This is area that one needs to trim if he/she wants to FIRE ASAP.

BTW Family of 4 could live very comfortably in 1500 square foot house IMO provided house is located in good school district.

We own things and things own us.

 

[gayl]

FIRE is a great concept, but it should not become so important as to deny yourself a life along the way

 

[Andre1969]

If it's any consolation, my original goal was 45 as well. Well, here I am, 46, and still at w*rk. I've bumped my goal now to 50, maybe 51. And yes, lifestyle creep has set in. I've started casually looking at houses in neighborhoods in the adjacent county, that I'm interested in moving to. And it's amazing how much more house an extra $100K will get you. And then, how much nicer one another $100K over that is! I figure once I get really serious about moving though, I'll scale back my delusions of grandeur.