Help find balance between saving vs spending: married and 3 young kids

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gr7070
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Re: Help find balance between saving vs spending: married and 3 young kids

Post by gr7070 » Fri Feb 14, 2020 9:49 pm

ZMonet wrote:
Fri Feb 14, 2020 5:07 pm
As others have mentioned, if you want the exotic warm vacation and don't want to have to pay a ton you need to look into travel hacking (i.e., credit card signup bonuses). Look into the Southwest Companion Pass as well as the Chase Saphire cards. Your wife being a hairdresser will likely qualify you easily for some business cards. You'll have to put in a little bit of work but you'll get the vacation you want for a much smaller sum. It takes some of the guilt out of taking some great trips, although my savings rate is closer to 35%-40% (wife works FT and only one kid will do that).
FWIW destination is probably a better "travel hack". Check out South America and SE Asia over the Caribbean/Central America for inexpensive travel - as much as I like the Caribbean and CA.

travelnut11
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Re: Help find balance between saving vs spending: married and 3 young kids

Post by travelnut11 » Fri Feb 14, 2020 11:08 pm

OP, my family lives in Wisconsin and my sister's family is in Minnesota and last year we rented a house on Marco Island, FL for a week with our kids aged 1, 2, 4. We walked to the beach in the morning and played in the pool all afternoon. It was so great we're doing it again this year! We flew into Fort Myers and our tickets were about $300ish on Southwest direct but I know my sister paid less out of the Twin Cities. Like <$200 I think on Sun Country? The house rentals in Marco seem more affordable than other places we looked into like Clearwater. Gulf side is great for little kids...not too wavy and nice and warm. We did a dolphin boat tour and the kids still remember it. If you have another family go with you it can make the house rental more affordable plus we were able to swap childcare with the other couple so we could each have one night our with our spouses.

I'm with you that travel is really important to my family but as others say it doesn't have to be super expensive if the spending is causing you anxiety.
Travel is fatal to prejudice, bigotry and narrowmindedness ...and many of our people need it solely on these accounts. - Mark Twain | | Life is either a daring adventure or it is nothing. - Helen Keller

JoinToday
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Re: Help find balance between saving vs spending: married and 3 young kids

Post by JoinToday » Fri Feb 14, 2020 11:42 pm

JB2013 wrote:
Fri Feb 14, 2020 9:18 am
.... but my wife just recently went back to work one day a week working as a hair stylist. She receives no benefits. With her added work, we now are projected to make around 130K this year.

We are both 35 years old, have three children ages 6, 4, and 1.
......
I didn't read all the replies.

1. your wife makes 25K/year working 1 day a week as a hair stylist? Wow.

2. at ages 1, 4, and 6: go camping. 1 year old won't know, 4 and 6 year old would have the best time playing/digging in the dirt, a short hike, throwing rocks, etc. Save your money.
I wish I had learned about index funds 25 years ago

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CyclingDuo
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Re: Help find balance between saving vs spending: married and 3 young kids

Post by CyclingDuo » Sat Feb 15, 2020 7:25 am

JB2013 wrote:
Fri Feb 14, 2020 12:22 pm
CyclingDuo wrote:
Fri Feb 14, 2020 10:48 am
JB2013 wrote:
Fri Feb 14, 2020 9:18 am
Hi all. I'm wanting to get some feedback from folks regarding my struggle of saving money vs spending it with my family. I typically have been the only one working making around 105K a year, but my wife just recently went back to work one day a week working as a hair stylist. She receives no benefits. With her added work, we now are projected to make around 130K this year.
One day a week of your wife working will boost your income $25K annually? Dang, that's $480 a day x 52 = $25K

Maybe she should seriously consider working 2 days a week!!!!!

:sharebeer
JB2013 wrote:
Fri Feb 14, 2020 9:18 am
We are both 35 years old, have three children ages 6, 4, and 1. I know it's very little compared to most around here, but we just broke the 100K for our retirement accounts so felt really excited about that. I just maxed out both her and my Roth IRAs for 2019, and just contributed $3,500 into my Roth for 2020. I'm hoping to have both of them filled within the next 6 months.
Breaking $100K is not insignificant at all. Although, Fidelity's journey which is based on retiring at your FRA of 67, receiving SS, contributing 15% of your income per year, and living until age 93 suggests that at age 35, you should already have 2x your salary saved by this point. $210K based on your $105K salary, and bump that up to $300K if you include your wife's new income.

Image
https://www.fidelity.com/viewpoints/ret ... -to-retire
JB2013 wrote:
Fri Feb 14, 2020 9:18 am
At my job my company matches me 50% up to 4% of pay which I take. I know this needs to be increased with my wife working now. They also give me a lump sum in March of each year around $4,000 that they deposit into the account. I have very good vanguard options in my plan.

Where I struggle is that growing up I went on many vacations to the Caribbean which I loved doing, and it was largely possible with my mom working in the airline industry. To me, I would love to be able to do these with our kids as well where they are at an age where they still love being around us, and my wife can't stand cold weather.
Let's unpack the "struggle" and the implications. Your mother worked in the airline industry, so you received discounted tickets - or perhaps even free vouchers - to make it affordable. Did your mother or father also have jobs that included a company pension plan? You are in the scenario of having to create your own pension with retirement savings - so there is a stark difference if they had pension plans compared to your scenario. What amount, or percentage of your parents' income was directed at a vacation?

Unfortunately, most Americans are taking vacations they cannot afford. What is the percentage one should spend on a vacation? Is it built into your budget? Although your childhood memories of these vacations is understandable, you need to weigh your own situation, household cashflow, savings, budget and whether or not the patience of riding out the continental climate for three months is more prudent than an expensive brief week or ten day escape to warmer weather for a spouse that claims she cannot stand cold weather. Buying a warm coat/hat/gloves/boots and turning up the heat will always cost less during those three months than a trip to a tropical location. I think if your accumulated assets were already more in line with the Fidelity journey for your retirement assets, your education funds were up to speed for your three children, and you had saved enough in your remaining budget to afford the travel - then go for it. However, it looks like you have some catching up to do on the retirement savings front if you want to fund your retirement phase years.
JB2013 wrote:
Fri Feb 14, 2020 9:18 am
The trouble I have is that I"m so focused on piling money away in order to secure retirement and not work until I'm 65-70.

I get two payouts each year, one in February and the other in July where they pay me money that I earned the company, but I haven't seen the money yet. This is anywhere from $5000-6000. When I get these deposits I immediately think to save and invest it since I think, "Well sure we could go on a vacation, but if you invested the money it would be worth XXX in 25 years."

In essence I talk myself out of it as I'm very good at delaying gratification. We've very casually discussed possibly going somewhere in March 2021 to either Mexico or Caribbean which the kids would love and have seen the pricing around $4,500-5,500 for All inclusive and flight. Our current 1 year old would then be 2 so would feel more doable with her being slightly older. I know these are first world problems since some can't even afford food so I hate to sound like a snob.

Any help on how to go about finding some sense of balance with this? Thanks so much for your help and looking forward to the responses.
The balance is important. If you can set aside for your retirement, the education funds, cut household expenses and save enough to plan for 2021 vacation - do it. March 2021 is 13 months away. Going with your $5500 estimate, sock away $423 each month between now and then in your budget without backing off on your retirement and education account savings to accomplish it. Find ways to make cuts in the rest of your budget to do it.

In the meantime, we'd champion your wife working a second day a week to pick up an additional $480 a week for sure.

:sharebeer

CyclingDuo

Edit: Although it is not linear, after the first $100K and continued contributions (example shows $10K a year) - you can see the math of how things advance...

Image
https://fourpillarfreedom.com/the-math- ... DMwzsQ8gTY
Yeah, my wife at times makes $650 in one day but that does not include any taxes taken into account. Adding in a 2nd day probably won't happen until my youngest starts some form of preschool since it would require another day for our parents to help watch the kids.
Easy solution: she adds a Saturday each week to work while you watch the kids.
:sharebeer
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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JB2013
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Re: Help find balance between saving vs spending: married and 3 young kids

Post by JB2013 » Sat Feb 15, 2020 5:54 pm

I want to thank everyone for their responses. Your replies have brought me down to earth of what’s feasible with our finances. I looked into some Airbnb options and found some great options for around $100 per night on the gulf coast. Plus, with a $59 flight to New Orleans this isn’t even 1/4 the cost of what the all inclusive options would be. Only $28 a day to rent a car too. Liking this more frugal way of taking a vacation. Looks like we could swing this whole thing for around $1,900 which I’m loving. Thanks so much! And, just increased the 401K contribution to 15% from 4%!

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Sandi_k
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Re: Help find balance between saving vs spending: married and 3 young kids

Post by Sandi_k » Sat Feb 15, 2020 7:02 pm

JB2013 wrote:
Sat Feb 15, 2020 5:54 pm
I want to thank everyone for their responses. Your replies have brought me down to earth of what’s feasible with our finances. I looked into some Airbnb options and found some great options for around $100 per night on the gulf coast. Plus, with a $59 flight to New Orleans this isn’t even 1/4 the cost of what the all inclusive options would be. Only $28 a day to rent a car too. Liking this more frugal way of taking a vacation. Looks like we could swing this whole thing for around $1,900 which I’m loving. Thanks so much! And, just increased the 401K contribution to 15% from 4%!
Good job!

One small suggestion: can you wife work one more day per MONTH (not week). Even if that is $400 pre tax, $300 after tax x 12 months = $3600 for the vacation fund!

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