Rate our 5 yr plan and beyond

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jehovasfitness
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Rate our 5 yr plan and beyond

Post by jehovasfitness » Thu Sep 20, 2018 9:54 am

Our current plan is based upon within next 4-5 years of the wife taking a more local job and a pay cut from current 102K + bonus, to the 40-60k range. This is in part due to a total driving commute of 2.5-3 hrs daily from MD into VA. Personally, I couldn't do it.

The other part of the plan is to prepare us financially for the possibility of having or adopting a kid at the 4-5 yr mark. We are currently way behind where we should be financially. For financial reasons, I'd be perfectly happy not having a kid.

Me: 37 -- Income 56K with a highly stable local gov't job + 4-5% annual raise + side job that provides consistent $6k/yr with little to no increase (independent contractor)

Benefits- 4% automatic contribution from job + 4% additional match (6% match in 2 yrs)... Health insurance HDHP job provides full deductible of current $3k into HSA

Wife: 33 -- 102k salary + bonus (past 2 yrs $1,500 and $4,500) annual salary increase of 2-3%. Job stability tough to say corporate america, been with job nearly 2 yrs... has been laid off 2x in the past 7 yrs from large companies, perhaps the good economy will help stability in the short-term.

Benefits - 4.75% match into 401k

Current savings :

6-9 month EF based upon me keeping my job and wife losing hers and filing for unemployment
401ks/457 combined: $95K

I have 401k and 457: currently putting $18.5 yr total mixed into both. The 401k gets the match, the 457 does not.

Wifes 401k: putting the max in currently

HSA: $8k currently in it... when filing 2018 taxes will put additional $3900 in for this year and max starting next year, I missed open enrollment for it

Debt
Home 325k @ 4.125% $2,200/mo which includes $3500/yr property taxes and about $110 PMI , home value currently $380k... 29 yrs left on mortgage... our 2nd home and the one that we plan to be in until retirement, maybe even after (that's too far off).

Car loan: $46k @ 4% currently paying $1,000/mo to get rid of it within under 4 yrs


Past 3 months of expenses after getting the car loan: $6k - $6,500/mo

Based upon my calculations as a newbie within 4 yrs of doing the above at ages 41/37, we should have about $350k in savings between 401ks/HSA then when the wife takes a huge pay cut we would have to greatly reduce our contributions.

Current long-term goal is for me to retire at age 55 (work will pay half insurance cost until Medicare). I have a feeling if we have a kid I'll have to extend that out to at least age 60. Then look into a part-time or full-time job at a lower pay in a field I've grown more interested in compared to now that doesn't pay as much. That said, working longer at current job wouldn't be an issue. It's very low stress, good work environment, and decent commute.

We're behind, but we're trying to make strides to improve that. Thoughts on current plan and long-term plan?

I don't feel like we're big spenders, but I realize having a $1k car payment says otherwise. Bought a lot of car I know, but we got what we wanted knowing it would be ran into the ground over the next 15 yrs, and it's a Jeep so the resale value even when used up will still have some left in it.

smitcat
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Re: Rate our 5 yr plan and beyond

Post by smitcat » Thu Sep 20, 2018 10:13 am

"The other part of the plan is to prepare us financially for the possibility of having or adopting a kid at the 4-5 yr mark. For financial reasons, I'd be perfectly happy not having a kid."

FWIW - I cannot get past this line. If you folks are planning and want to know the most important thought regarding that plan this line says it all. A plan can adaapt and be refined but if you do not have the same goals with kids the plan is worthless and your problems will be much larger than thsi plan.
Kids are great
Kids are not for everyone
Kids are part of your life forever (if you are fortunate)
Kids will challenge your plans in every way
IMO - I would plan that out first and be on the exact same page as Ms jehovasfitness and the rest will fall into place.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Thu Sep 20, 2018 10:31 am

smitcat wrote:
Thu Sep 20, 2018 10:13 am
"The other part of the plan is to prepare us financially for the possibility of having or adopting a kid at the 4-5 yr mark. For financial reasons, I'd be perfectly happy not having a kid."

FWIW - I cannot get past this line. If you folks are planning and want to know the most important thought regarding that plan this line says it all. A plan can adaapt and be refined but if you do not have the same goals with kids the plan is worthless and your problems will be much larger than thsi plan.
Kids are great
Kids are not for everyone
Kids are part of your life forever (if you are fortunate)
Kids will challenge your plans in every way
IMO - I would plan that out first and be on the exact same page as Ms jehovasfitness and the rest will fall into place.
That's one of the big reasons for this short-term plan as I would not feel comfortable having a kid now financially, let alone in a few years if we don't keep with these improvements.

While most people in my life say "you're never really ready financially to have kids", I disagree.

delamer
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Re: Rate our 5 yr plan and beyond

Post by delamer » Thu Sep 20, 2018 3:57 pm

Are you 41/37 now, or will you be in 4 years? I am asking because of fertility issues.

You could have paid $30,000 for a car and gotten a reliable sedan, or bought a used Jeep.

Best to not kid yourself about the Jeep. It was an indulgence that is interfering with your larger goals.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Thu Sep 20, 2018 4:08 pm

delamer wrote:
Thu Sep 20, 2018 3:57 pm
Are you 41/37 now, or will you be in 4 years? I am asking because of fertility issues.

You could have paid $30,000 for a car and gotten a reliable sedan, or bought a used Jeep.

Best to not kid yourself about the Jeep. It was an indulgence that is interfering with your larger goals.
in 4 yrs, and yes, agreed about the Jeep.

smitcat
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Re: Rate our 5 yr plan and beyond

Post by smitcat » Thu Sep 20, 2018 4:11 pm

jehovasfitness wrote:
Thu Sep 20, 2018 4:08 pm
delamer wrote:
Thu Sep 20, 2018 3:57 pm
Are you 41/37 now, or will you be in 4 years? I am asking because of fertility issues.

You could have paid $30,000 for a car and gotten a reliable sedan, or bought a used Jeep.

Best to not kid yourself about the Jeep. It was an indulgence that is interfering with your larger goals.
in 4 yrs, and yes, agreed about the Jeep.
It must be fairly costly for your wife to drive the jeep 3 hours each day to and from work.
Perhaps she can find a job more local in the near future and those costs would be much less as well.

delamer
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Re: Rate our 5 yr plan and beyond

Post by delamer » Thu Sep 20, 2018 4:18 pm

jehovasfitness wrote:
Thu Sep 20, 2018 4:08 pm
delamer wrote:
Thu Sep 20, 2018 3:57 pm
Are you 41/37 now, or will you be in 4 years? I am asking because of fertility issues.

You could have paid $30,000 for a car and gotten a reliable sedan, or bought a used Jeep.

Best to not kid yourself about the Jeep. It was an indulgence that is interfering with your larger goals.
in 4 yrs, and yes, agreed about the Jeep.
Pregnancy at 37 is no sure thing (and could involve fertility treatments) and adoption has some significant costs.

I assume the idea is to eliminate your wife’s long commute by the time you have a child? While I understand that impulse, I’d rethink waiting. Especially with you closer by, your wife having a long commute is manageable.

Do you have any options for increasing your earnings? Or your wife finding a fed job?

Olemiss540
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Re: Rate our 5 yr plan and beyond

Post by Olemiss540 » Thu Sep 20, 2018 5:22 pm

Did I miss the current combined retirement balance? I saw the "projected" but realize you are one correction or downturn from having 200k at 41.

A house and a car are the two largest expenses a family has and you went high with both of them. They are dragging your budget down and are a remnant of all the bad financial mistakes from your years of not saving. In 4 years you are looking at floating a 2200/mo mortgage on 100k combined take home.

I would say potential kids are the least of your potential financial mistakes. Maybe get rid of your aspirations to own a 46k car and not your aspirations to have a kid.....
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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Watty
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Re: Rate our 5 yr plan and beyond

Post by Watty » Thu Sep 20, 2018 5:42 pm

What are tax brackets?
jehovasfitness wrote:
Thu Sep 20, 2018 9:54 am
Home 325k @ 4.125% $2,200/mo which includes $3500/yr property taxes and about $110 PMI , home value currently $380k... 29 yrs left on mortgage...
What would it take to get out of the PMI?

Not to dwell on the car but it might have been better to have put the money towards getting out of the PMI before buying such an expensive car.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Thu Sep 20, 2018 7:28 pm

Watty wrote:
Thu Sep 20, 2018 5:42 pm
What are tax brackets?
jehovasfitness wrote:
Thu Sep 20, 2018 9:54 am
Home 325k @ 4.125% $2,200/mo which includes $3500/yr property taxes and about $110 PMI , home value currently $380k... 29 yrs left on mortgage...
What would it take to get out of the PMI?

Not to dwell on the car but it might have been better to have put the money towards getting out of the PMI before buying such an expensive car.
I doubt we can refi any time soon for a lower rate or to get rid of PMI where it would be worth it.

Paid 350, put 5% down to bring it to 332k at the time now around 328k.... so a long way ;)

delamer
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Re: Rate our 5 yr plan and beyond

Post by delamer » Thu Sep 20, 2018 7:54 pm

What are your priorities?

Is it for your wife to be able to find a job with a shorter commute, even if it means less money? It is to be able to afford a child in 4 years? Why 4 years? How will you afford child care with a reduced income? Is it for you to be able to retire/take a pay cut at 55?

Is there a reason that the $350K in 4 years is important?

You asked for thoughts on your current and long-term plans. My basic reaction was that old expression “you can have anything you want, but you can’t have everything you want.”

It is great that you are contributing the max to your retirement accounts, but whether that is enough is impossible to tell.

As you acknowledge, your Jeep is an expensive option. But it is a relatively finite expense. Your house is an expensive option, given your other goals, and your stuck with those costs for a long time.

smitcat
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Re: Rate our 5 yr plan and beyond

Post by smitcat » Fri Sep 21, 2018 8:05 am

Do you have two relatively expensive cars or only one?
Who is putting on the large commute and mileage each week and on which car?

If you can save a bunch weekly it will go a long ways to making cuts to the home expenses.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Fri Sep 21, 2018 8:30 am

delamer wrote:
Thu Sep 20, 2018 7:54 pm
What are your priorities?

Is it for your wife to be able to find a job with a shorter commute, even if it means less money? It is to be able to afford a child in 4 years? Why 4 years? How will you afford child care with a reduced income? Is it for you to be able to retire/take a pay cut at 55?

Is there a reason that the $350K in 4 years is important?

You asked for thoughts on your current and long-term plans. My basic reaction was that old expression “you can have anything you want, but you can’t have everything you want.”

It is great that you are contributing the max to your retirement accounts, but whether that is enough is impossible to tell.

As you acknowledge, your Jeep is an expensive option. But it is a relatively finite expense. Your house is an expensive option, given your other goals, and your stuck with those costs for a long time.
Priorities are financial security, low stress, travel, dogs, cars. That's basically my life how I've designed it minus the stress of finances.

The $350k is just a projection based on current plan, no need to hit it specifically.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Fri Sep 21, 2018 8:32 am

smitcat wrote:
Fri Sep 21, 2018 8:05 am
Do you have two relatively expensive cars or only one?
Who is putting on the large commute and mileage each week and on which car?

If you can save a bunch weekly it will go a long ways to making cuts to the home expenses.
Just the one. Other car is a paid for 2012 Honda Fit w/75k miles that is the main commuter car at almost 20k miles/yr. Based upon current projections, I'd say it has another 5 yrs with routine maintenance, longer if the wife's commute is shortened in 5 yrs. 35 miles each way for her, but tons of traffic.

smitcat
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Re: Rate our 5 yr plan and beyond

Post by smitcat » Fri Sep 21, 2018 8:36 am

jehovasfitness wrote:
Fri Sep 21, 2018 8:30 am
delamer wrote:
Thu Sep 20, 2018 7:54 pm
What are your priorities?

Is it for your wife to be able to find a job with a shorter commute, even if it means less money? It is to be able to afford a child in 4 years? Why 4 years? How will you afford child care with a reduced income? Is it for you to be able to retire/take a pay cut at 55?

Is there a reason that the $350K in 4 years is important?

You asked for thoughts on your current and long-term plans. My basic reaction was that old expression “you can have anything you want, but you can’t have everything you want.”

It is great that you are contributing the max to your retirement accounts, but whether that is enough is impossible to tell.

As you acknowledge, your Jeep is an expensive option. But it is a relatively finite expense. Your house is an expensive option, given your other goals, and your stuck with those costs for a long time.
Priorities are financial security, low stress, travel, dogs, cars. That's basically my life how I've designed it minus the stress of finances.

The $350k is just a projection based on current plan, no need to hit it specifically.
"Priorities are financial security, low stress, travel, dogs, cars"
Perhaps it would be very helpful to combine your wife's goals with yours and then put it in priority order.
That would likely be a good start to a 5 year plan.

smitcat
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Re: Rate our 5 yr plan and beyond

Post by smitcat » Fri Sep 21, 2018 8:41 am

jehovasfitness wrote:
Fri Sep 21, 2018 8:32 am
smitcat wrote:
Fri Sep 21, 2018 8:05 am
Do you have two relatively expensive cars or only one?
Who is putting on the large commute and mileage each week and on which car?

If you can save a bunch weekly it will go a long ways to making cuts to the home expenses.
Just the one. Other car is a paid for 2012 Honda Fit w/75k miles that is the main commuter car at almost 20k miles/yr. Based upon current projections, I'd say it has another 5 yrs with routine maintenance, longer if the wife's commute is shortened in 5 yrs. 35 miles each way for her, but tons of traffic.
Everyone is different but I do not understand this - in our case the spouse with the long commute would take the most safe, comfortable and reliable car to commute.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Fri Sep 21, 2018 8:41 am

smitcat wrote:
Fri Sep 21, 2018 8:36 am
jehovasfitness wrote:
Fri Sep 21, 2018 8:30 am
delamer wrote:
Thu Sep 20, 2018 7:54 pm
What are your priorities?

Is it for your wife to be able to find a job with a shorter commute, even if it means less money? It is to be able to afford a child in 4 years? Why 4 years? How will you afford child care with a reduced income? Is it for you to be able to retire/take a pay cut at 55?

Is there a reason that the $350K in 4 years is important?

You asked for thoughts on your current and long-term plans. My basic reaction was that old expression “you can have anything you want, but you can’t have everything you want.”

It is great that you are contributing the max to your retirement accounts, but whether that is enough is impossible to tell.

As you acknowledge, your Jeep is an expensive option. But it is a relatively finite expense. Your house is an expensive option, given your other goals, and your stuck with those costs for a long time.
Priorities are financial security, low stress, travel, dogs, cars. That's basically my life how I've designed it minus the stress of finances.

The $350k is just a projection based on current plan, no need to hit it specifically.
"Priorities are financial security, low stress, travel, dogs, cars"
Perhaps it would be very helpful to combine your wife's goals with yours and then put it in priority order.
That would likely be a good start to a 5 year plan.
Same priorities minus the cars to a degree. She did want to splurge on the Jeep, she's indifferent to sports cars which I'm selling one (our current 3rd car) to fund travel for the next few years ;)

I didn't include that in the OP to keep things more simple.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Fri Sep 21, 2018 8:43 am

smitcat wrote:
Fri Sep 21, 2018 8:41 am
jehovasfitness wrote:
Fri Sep 21, 2018 8:32 am
smitcat wrote:
Fri Sep 21, 2018 8:05 am
Do you have two relatively expensive cars or only one?
Who is putting on the large commute and mileage each week and on which car?

If you can save a bunch weekly it will go a long ways to making cuts to the home expenses.
Just the one. Other car is a paid for 2012 Honda Fit w/75k miles that is the main commuter car at almost 20k miles/yr. Based upon current projections, I'd say it has another 5 yrs with routine maintenance, longer if the wife's commute is shortened in 5 yrs. 35 miles each way for her, but tons of traffic.
Everyone is different but I do not understand this - in our case the spouse with the long commute would take the most safe, comfortable and reliable car to commute.
Well, the Fit is a pretty safe, albeit small car. Handles very well, brakes well, and for a Honda with 75k miles it's reliable. Better traffic car than the Jeep imo, granted the jeep does have steel bumpers. It also gets about 10-12 mpg better in traffic.

smitcat
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Re: Rate our 5 yr plan and beyond

Post by smitcat » Fri Sep 21, 2018 8:45 am

jehovasfitness wrote:
Fri Sep 21, 2018 8:43 am
smitcat wrote:
Fri Sep 21, 2018 8:41 am
jehovasfitness wrote:
Fri Sep 21, 2018 8:32 am
smitcat wrote:
Fri Sep 21, 2018 8:05 am
Do you have two relatively expensive cars or only one?
Who is putting on the large commute and mileage each week and on which car?

If you can save a bunch weekly it will go a long ways to making cuts to the home expenses.
Just the one. Other car is a paid for 2012 Honda Fit w/75k miles that is the main commuter car at almost 20k miles/yr. Based upon current projections, I'd say it has another 5 yrs with routine maintenance, longer if the wife's commute is shortened in 5 yrs. 35 miles each way for her, but tons of traffic.
Everyone is different but I do not understand this - in our case the spouse with the long commute would take the most safe, comfortable and reliable car to commute.
Well, the Fit is a pretty safe, albeit small car. Handles very well, brakes well, and for a Honda with 75k miles it's reliable. Better traffic car than the Jeep imo, granted the jeep does have steel bumpers. It also gets about 10-12 mpg better in traffic.
"Well, the Fit is a pretty safe, albeit small car. Handles very well, brakes well, and for a Honda with 75k miles it's reliable. Better traffic car than the Jeep imo, granted the jeep does have steel bumpers. It also gets about 10-12 mpg better in traffic."
Certainly not a view I share - but if it works for you two that's great.
BTW - are you off work today?

Texanbybirth
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Re: Rate our 5 yr plan and beyond

Post by Texanbybirth » Fri Sep 21, 2018 9:10 am

smitcat wrote:
Thu Sep 20, 2018 10:13 am
"The other part of the plan is to prepare us financially for the possibility of having or adopting a kid at the 4-5 yr mark. For financial reasons, I'd be perfectly happy not having a kid."

FWIW - I cannot get past this line. If you folks are planning and want to know the most important thought regarding that plan this line says it all. A plan can adaapt and be refined but if you do not have the same goals with kids the plan is worthless and your problems will be much larger than thsi plan.
Kids are great
Kids are not for everyone
Kids are part of your life forever (if you are fortunate)
Kids will challenge your plans in every way

IMO - I would plan that out first and be on the exact same page as Ms jehovasfitness and the rest will fall into place.
+1,000,000

If you think the biggest change in your life when you have kids is going to be possibly making you work 5 more years, then you've got a problem of perspective: they're not an accessory you just add to your life, or a block of cells (pun intended?) you add to your financial planning spreadsheet.

Are y'all on same page about other goals? Your wife is a saint to have a 3-hour daily commute, I couldn't do it either. Does she want to continue doing that, even if just for 4 more years?

And that Jeep just goes to show that y'all are bigger spenders than you think. :happy

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jharkin
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Re: Rate our 5 yr plan and beyond

Post by jharkin » Fri Sep 21, 2018 9:22 am

smitcat wrote:
Thu Sep 20, 2018 10:13 am
"The other part of the plan is to prepare us financially for the possibility of having or adopting a kid at the 4-5 yr mark. For financial reasons, I'd be perfectly happy not having a kid."

FWIW - I cannot get past this line. If you folks are planning and want to know the most important thought regarding that plan this line says it all. A plan can adaapt and be refined but if you do not have the same goals with kids the plan is worthless and your problems will be much larger than thsi plan.
Kids are great
Kids are not for everyone
Kids are part of your life forever (if you are fortunate)
Kids will challenge your plans in every way
IMO - I would plan that out first and be on the exact same page as Ms jehovasfitness and the rest will fall into place.
+1,000,000

You need to get on the same page about having kids... and if it comes down to a money factor than maybe kids are not for you. Being a parent is a lifetime commitment with no do overs or take backs....and money is only a small factor in what it takes.

...

Other thoughts... You guys have an awful lot of debt for your income level... especially the auto debt. And the rate is high too, I know they have gone up but you should be able to refinance that closer to 3% at least.

Im all for doing as much retirement savings as one can but in your case I think you need to deleverage first... you are carrying a LOT of risk right now. I would cut back retirement savings to just get the match until you can eliminate the car laon and pay the house down enough to drop PMI, only then would I go back and max.

jehovasfitness
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Re: Rate our 5 yr plan and beyond

Post by jehovasfitness » Fri Sep 21, 2018 9:24 am

jharkin wrote:
Fri Sep 21, 2018 9:22 am
smitcat wrote:
Thu Sep 20, 2018 10:13 am
"The other part of the plan is to prepare us financially for the possibility of having or adopting a kid at the 4-5 yr mark. For financial reasons, I'd be perfectly happy not having a kid."

FWIW - I cannot get past this line. If you folks are planning and want to know the most important thought regarding that plan this line says it all. A plan can adaapt and be refined but if you do not have the same goals with kids the plan is worthless and your problems will be much larger than thsi plan.
Kids are great
Kids are not for everyone
Kids are part of your life forever (if you are fortunate)
Kids will challenge your plans in every way
IMO - I would plan that out first and be on the exact same page as Ms jehovasfitness and the rest will fall into place.
+1,000,000

You need to get on the same page about having kids... and if it comes down to a money factor than maybe kids are not for you. Being a parent is a lifetime commitment with no do overs or take backs....and money is only a small factor in what it takes.

...

Other thoughts... You guys have an awful lot of debt for your income level... especially the auto debt. And the rate is high too, I know they have gone up but you should be able to refinance that closer to 3% at least.

Im all for doing as much retirement savings as one can but in your case I think you need to deleverage first... you are carrying a LOT of risk right now. I would cut back retirement savings to just get the match until you can eliminate the car laon and pay the house down enough to drop PMI, only then would I go back and max.
I've thought about that cutting back to get the match, but it seems the hierarchy of this forum is the auto is a relatively low rate and we are in the 22% tax bracket.

smitcat
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Re: Rate our 5 yr plan and beyond

Post by smitcat » Fri Sep 21, 2018 9:31 am

jehovasfitness wrote:
Fri Sep 21, 2018 8:41 am
smitcat wrote:
Fri Sep 21, 2018 8:36 am
jehovasfitness wrote:
Fri Sep 21, 2018 8:30 am
delamer wrote:
Thu Sep 20, 2018 7:54 pm
What are your priorities?

Is it for your wife to be able to find a job with a shorter commute, even if it means less money? It is to be able to afford a child in 4 years? Why 4 years? How will you afford child care with a reduced income? Is it for you to be able to retire/take a pay cut at 55?

Is there a reason that the $350K in 4 years is important?

You asked for thoughts on your current and long-term plans. My basic reaction was that old expression “you can have anything you want, but you can’t have everything you want.”

It is great that you are contributing the max to your retirement accounts, but whether that is enough is impossible to tell.

As you acknowledge, your Jeep is an expensive option. But it is a relatively finite expense. Your house is an expensive option, given your other goals, and your stuck with those costs for a long time.
Priorities are financial security, low stress, travel, dogs, cars. That's basically my life how I've designed it minus the stress of finances.

The $350k is just a projection based on current plan, no need to hit it specifically.
"Priorities are financial security, low stress, travel, dogs, cars"
Perhaps it would be very helpful to combine your wife's goals with yours and then put it in priority order.
That would likely be a good start to a 5 year plan.
Same priorities minus the cars to a degree. She did want to splurge on the Jeep, she's indifferent to sports cars which I'm selling one (our current 3rd car) to fund travel for the next few years ;)

I didn't include that in the OP to keep things more simple.
"Priorities are financial security, low stress, travel, dogs, cars."
"Same priorities minus the cars to a degree"
I believe you missed the largest one on the list - kids.

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jharkin
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Re: Rate our 5 yr plan and beyond

Post by jharkin » Fri Sep 21, 2018 9:39 am

jehovasfitness wrote:
Fri Sep 21, 2018 9:24 am

I've thought about that cutting back to get the match, but it seems the hierarchy of this forum is the auto is a relatively low rate and we are in the 22% tax bracket.
Doesn't matter, you are massively over leveraged. If your wife gets laid off longer than a year and you cant make the payment they will come repossess the car and foreclose the house. All that money locked up in a 401k wont help much at that point.

Sorry to be blunt but your are piling bad decisions on top of bad decisions...
- not saving for years
- then only put 5% down on a house when we are probably close to another housing bubble pop (if its the "2nd" house, didn't you have some equity from selling the first house to use? or was that underwater too?)
- Then buying a car that probably cost a years salary
- and you mentioned having a 3rd car (some sports car) and you would sell that to fund more spending (vacations)

I hope there isn't CC debt in there as well...
Do you have adequate life insurance?
A plan for what to do when major home expenses come up like a roof replacement or furnace repair?
A plan for what to do if 2008 repeats and you are unemployed longer than your 5 month EF?

The next dot-com or banking crisis could leave you financially devastated for life. I know many of us sound harsh but we are trying to help you avoid that. Trust me I've been there, made some huge mistakes in my 20s and just plain got lucky - avoided some layoffs by the skin of my teeth that could have ruined me... don't be me :)

FlyAF
Posts: 178
Joined: Tue Jan 23, 2018 11:14 am

Re: Rate our 5 yr plan and beyond

Post by FlyAF » Fri Sep 21, 2018 10:07 am

jharkin wrote:
Fri Sep 21, 2018 9:39 am
jehovasfitness wrote:
Fri Sep 21, 2018 9:24 am

I've thought about that cutting back to get the match, but it seems the hierarchy of this forum is the auto is a relatively low rate and we are in the 22% tax bracket.
Doesn't matter, you are massively over leveraged. If your wife gets laid off longer than a year and you cant make the payment they will come repossess the car and foreclose the house. All that money locked up in a 401k wont help much at that point.

Sorry to be blunt but your are piling bad decisions on top of bad decisions...
- not saving for years
- then only put 5% down on a house when we are probably close to another housing bubble pop (if its the "2nd" house, didn't you have some equity from selling the first house to use? or was that underwater too?)
- Then buying a car that probably cost a years salary
- and you mentioned having a 3rd car (some sports car) and you would sell that to fund more spending (vacations)

I hope there isn't CC debt in there as well...
Do you have adequate life insurance?
A plan for what to do when major home expenses come up like a roof replacement or furnace repair?
A plan for what to do if 2008 repeats and you are unemployed longer than your 5 month EF?

The next dot-com or banking crisis could leave you financially devastated for life. I know many of us sound harsh but we are trying to help you avoid that. Trust me I've been there, made some huge mistakes in my 20s and just plain got lucky - avoided some layoffs by the skin of my teeth that could have ruined me... don't be me :)
Agreed. Another '08 financial disaster and you guys are sunk. Think bankruptcy and living with your folks sunk. That Jeep, what a terrible decision. 5% down on a house and a 46k new car purchase. Wow

I also find it alarming that your wife (who happens to be the earner) has been laid off twice during a time of economic prosperity the likes of haven't been seen in decades.

You need to find financial Jesus, so to speak.

delamer
Posts: 6107
Joined: Tue Feb 08, 2011 6:13 pm

Re: Rate our 5 yr plan and beyond

Post by delamer » Fri Sep 21, 2018 12:50 pm

smitcat wrote:
Fri Sep 21, 2018 9:31 am
jehovasfitness wrote:
Fri Sep 21, 2018 8:41 am
smitcat wrote:
Fri Sep 21, 2018 8:36 am
jehovasfitness wrote:
Fri Sep 21, 2018 8:30 am
delamer wrote:
Thu Sep 20, 2018 7:54 pm
What are your priorities?

Is it for your wife to be able to find a job with a shorter commute, even if it means less money? It is to be able to afford a child in 4 years? Why 4 years? How will you afford child care with a reduced income? Is it for you to be able to retire/take a pay cut at 55?

Is there a reason that the $350K in 4 years is important?

You asked for thoughts on your current and long-term plans. My basic reaction was that old expression “you can have anything you want, but you can’t have everything you want.”

It is great that you are contributing the max to your retirement accounts, but whether that is enough is impossible to tell.

As you acknowledge, your Jeep is an expensive option. But it is a relatively finite expense. Your house is an expensive option, given your other goals, and your stuck with those costs for a long time.
Priorities are financial security, low stress, travel, dogs, cars. That's basically my life how I've designed it minus the stress of finances.

The $350k is just a projection based on current plan, no need to hit it specifically.
"Priorities are financial security, low stress, travel, dogs, cars"
Perhaps it would be very helpful to combine your wife's goals with yours and then put it in priority order.
That would likely be a good start to a 5 year plan.
Same priorities minus the cars to a degree. She did want to splurge on the Jeep, she's indifferent to sports cars which I'm selling one (our current 3rd car) to fund travel for the next few years ;)

I didn't include that in the OP to keep things more simple.
"Priorities are financial security, low stress, travel, dogs, cars."
"Same priorities minus the cars to a degree"
I believe you missed the largest one on the list - kids.
My first thought too. Your initial post says that part of your plan is “to prepare us financially for the possibility of having and adopting a kid.” Yet that is not on your list of priorities. I suspect that is because you said “For financial reasons, I’d be perfectly happy not having a kid.”

I think your wife’s priority is radically different than yours in that she wants a kid. And that you jointly are making decisions that are sabotaging your finances because you aren’t on the same page.

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