Once upon a time, Cat and I lived in an almost new, 2800 square foot house in Georgia. We both disliked the heat and humidity so neither of us ever went outside unless we had to. We had student loan debt, a mortgage, and two car payments. We both had horrible commutes and we both drove SUVs. We knew this lifestyle was catching up with us in several ways, so we had a number of serious talks about what we wanted out of life and decided we needed to:
- get out of Georgia – heat, humidity, traffic, commutes etc.
- lose weight – I could lose maybe 40lbs ….
- get more exercise – we both like sitting on the couch
- downsize – we were spending far too much for just two people
It was a process, but we sold the house, downsized, saved a bunch of money, moved to Colorado and traded both vehicles for one smaller car, eliminating the two car loans, but because we purchased a new car, we did pick up a small car loan.
At the same time we did that, we also managed to move our jobs with us (we are both in IT), so we were both working from home, meaning no commute (hurrah!). Because we were at home, we were making an effort with our food and we got out more, so we were losing weight and my blood pressure was going down.
About the same time, I started reading the MMM blog.
After getting settled and spending some time reading Mr. Money Mustache, I joined the (Cult) forum, and created a case study.
This is the crux of the case study. I am very open about posting our numbers because this blog is essentially anonymous and I also believe people should talk about money. It is by far one the biggest issues we face in life and knowledge is power.
Life Situation: Married filing jointly, No dependents, USA, CO
Ages: 52 (Tony) and 55 (Cat)
T: $ 92K
C: $150k C also gets an annual bonus ~$25k
Individual amounts of each pre-tax deductions (I don’t have the info in front of me but as best I can remember)
T 401k: (27%) – small employer match
C 401k: (15%) – great employer match
With the 401k deductions, we are both fully funding our 401ks including the allowed top up amounts. We plan to continue to do this for as long as we can.
There is no other income.
$ 10,000 Emergency Fund
$ 200,000 401k (C)
$ 64,000 401k (T)
$ 50,000 IRA (C)
$ 9,500 IRA (T)
Liabilities: small car loan at ~$15k
Joint Monthly expenses
$ 35 Electric $ 35 Gas $1,960 Rent inc trash & water $ 250 Phones (3 lines inc data) $ 100 Car Ins $ 10 Renter Ins $ 30 Petrol $ 50 Internet $1,000 Groceries* $ 10 Amazon $ 11 Netflix $ 100 Entertainment $4,581
*Estimated including pet food/expenses, as we own a dog.
$ 11 Spotify $ 11 Spotify $ 15 HBO $ 10 Dropbox $ 7 Britbox $ 3 iCloud $ 7 Dotster $ 25 Boho Box $ 100 Allowance $ 200 Allowance $ 108 Storage $ 800 Work Travel** $ 1290
Take home = 6000+3480 = $9480
total expenditure = 4581+1290 = $5871
Delta = 9480-5871 = $3609
**A note about the travel.
Currently Cat has to pay for her own work travel; it is one of the reasons she gets the big salary. We are working on resolving that issue.
What Does This Show Us?
The case study showed several things:
We need to:
- resolve C’s work travel situation
- investigate reducing our phone cost from $ 250
- investigate reducing our car insurance by moving to a higher deductible
- look into the groceries plus pet food/expenses as $1000 seems really high
- eliminate the storage costs
- pay off the car loan
We also appear to have about $3600 to invest each month. This can get us a long way in getting the car paid off and getting our investments going.
The MMM forum provided a lot of feedback, some of which I sort of understood, but the biggest take away was to have a plan. No plan is a failure, at least with a plan we have targets and a chance of success.