178 comments

Reader Case Study: ‘Stashless in Seattle

seattle_stash_storeIt has been a while since we did a real case study, and many readers have been telling me they are itching for the voyeuristic yet enlightening fun of analyzing somebody else’s financial situation.

But I try not to repeat studies that are too similar to previous ones, and we’ve now covered a pretty wide range: minimum wage, new graduates, ambitious young ‘stashers, mega student loaners, middle-income families, high-income spenders, and even reformed spenders.

But today’s study covers a slightly different niche: a young couple of average income, saddled with heavy debts from earlier times and hoping to get ahead while living in an expensive area.

Dear MMM,

I’ll admit it upfront, this is a case study request. My husband and I are 26 and 25, respectively, and in the throes of trying to rearrange the havoc of our financial past into a more promising future. I was just reading this guy’s case study:

http://www.mrmoneymustache.com/2012/08/31/reader-case-study-portland-man-thinks-hes-doing-well/

And I came to the conclusion that, while his income level does make things interesting, I would like to hear the version for the folks with NO assets, plenty of debt, and mediocre incomes. I.E. most twenty-somethings that I know.

We have read quite a bit of your blog at this point, and had implemented some of your frugality techniques just for survival well before we know about MMM. So we’re at a small loss at where we can improve. Actually, that’s a lie. I know of at least one screaming hole in our finances, which is itemized below.

My husband is makes 27,000 annually and I make $52,000 annually. I would really like to be able to buy a house (I’m good with a fixer-upper in a ‘burgeoning’ urban community) by my 30th birthday. We would also like to be able to have a kid around that time. Retirement would be a nice thing to think about some day.

So here’s the financial picture:

Annual Income: $79,000/yr
Monthly Pay after deductions: $4825

Combined Debt: $54,815 (not including car, which is listed separately below)
Monthly debt payments: $570
(About 90% of that is Student Loans, the rest can be called Bad Decisions)

Car Payment: $293 of remaining $11,784 for our one shared car. We carpool for four miles round trip every day. I work a mile away from my husband, so I walk from his work to mine. Our monthly gas bill is right around $80. Our renters and car insurance is a combined $135

Rent: $1500 – We live in a large apartment and have a dog, which implies a rent premium. We also live in Seattle where there is a shortage of rental units and we’re competing with Software Developers galore for housing. So rent is just darn high around here unless you want to commute.

Groceries CURRENTLY: about $500/month
Eating out CURRENTLY: about $300/month
…we have very high quality fat on our bodies?

Internet: $55/month
Utilities: $90/month
Cell phones (under contract for another 12 months): $135
Bus pass: $30/month
Netflix: $8/month
Treehouse (love it!): $25/month
NPR Membership (the bi-annual guilt trip is too much to handle): $10/month

Our ONE asset is my 401K, which I have a 5% deferral into and 3% employer matching.

Our remaining balance is historically obliterated by stupid spending, leaving us at month-to-month paychecks. But, we only saw the light two weeks ago.

Theoretically, even with the outrageous food bill we should have $723 every month left over. But we never do. I have been debating donating eggs to pay off a nice chunk of our debt so we can start moving forward with our life goals, but I’m curious to hear your thoughts on this picture first.

‘Stashless in Seattle

Dear Stashless,

While you’re not quite on the right track yet, I think you are teetering on the edge of it and will soon click in. You seem to have the desire to change, you’re doing research and starting to track the numbers, and reading Mr. Money Mustache. Even more importantly, you are applying some friendly self-mockery to acknowledge that things can be improved, and I detect no degree at all of complainypants disease. You are ready for the embrace of your fellow Mustachians.

On the bright side, you already have a pretty solid combined income. While either salary alone may sound rather average on its own, when added together you have a healthy number, which is the great financial magic of pairing up (whether it’s in a traditional relationship or taking on roommates for single people).  Also, you live close to work and probably close to many other amenities, which spares you from commuting expenses that can range into the thousands of dollars per month for the long-distance commuters you see streaming into your city on the interstates every morning. So, good job.

What needs fixing? I can see three main things:

1: The Mindset Regarding Debt. In case you hadn’t noticed, you are in an EMERGENCY!! right now. I like to describe financial life as having two stages:

  • Escaping from any cauldron(s) filled with boiling lava and poisonous snakes.
  • After the escape, choose your own pace of savings to continue building wealth until you reach financial independence.

While the second stage will vary depending on your own values (how much you value work vs. free time, your abilities and interests, etc.), the first one should be viewed as non-negotiable. If you have consumer debt (i.e. you borrowed money for anything that depreciates), you have fucked up. A car definitely falls into this category. So it is not Luxury Time, it’s Fix the Mistakes time. Student loans, while more noble in purpose, still need to be paid back before you go out and start hiring people to prepare food and coffee for you, so keep this in mind when making future decisions.

2: The Car: This seems to be a recurring theme in these case studies, but alas, I have to say it again: You can’t afford a car that is so expensive that even the remaining balance is $11,784. Even the Money Mustache family, with no debt and enough savings to last more than a lifetime, has a 2005 car worth less than $7500 – and it is only with a guilty sense of overindulgence that we keep this fancy brand-new thing in the garage, because we don’t really need it.

With your commute being 2 miles – a distance too far to short to consider driving, you can easily sell your car on Craigslist and buy, say, a 1994 Accord wagon (market value about $1700) or similar to accommodate you and the big dog for those rare trips out of town. Savings: About $350/month in payments, insurance, and gas.

 3: The Food: your food spending for two people shall hereby be reduced to a maximum of $300 per month. That’s about my own family’s spending, except scaled down by one person. This will keep you in the mostly-organic-luxury category, complete with grass-fed meats raised by fancy local hippie farmers, wine, beer, and the works, just like we eat here. But you’ll have to learn about Costco, home-cooking, and the concept of cost per calorie. And at least until the state of Emergency is lifted, you won’t be eating out. Because you’re in debt right now, anything you buy is effectively bought on credit. You won’t be borrowing for table service. Savings: $450/month

As for renter’s insurance and cell phones: you might want to at least do a bit of research on this. Does the insurance only protect your belongings in case of weird things like fire and theft? If so, you might want to drop that – your possessions are probably not so valuable that they need to be insured, and non-critical insurance is a bad bet. And ask about the cancellation penalty for your phone service. You could save about $110 per month by switching immediately to $10/month prepaid phone plans like we did, even while keeping our unnecessary fancypants iPhones. If your penalty is a few hundred dollars or less, you get an incredibly quick risk-free payback by making this switch. Potential Savings: $100+ per month.

$100+ per month cell phone bills are wise investments for CEOs who make back the cost with each phone call they make.. NOT for regular people with non-infinite money, and definitely not for people in debt!

As for the $723 per month you wisely say is “obliterated by stupid spending”, that is hard to address in detail other than having you re-read point #1. In a debt emergency, you don’t get to do any optional spending. You’re buying groceries, and any products required to allow you to do your job well. That’s it. No ringtones or iPhones, no purses or video games, and no lattes or salon treatments. There will be plenty of time for those things once you are a millionaire. The upside is that you do still have the right to get yourself a bike, which counts as a high-return investment rather than luxury spending.  Savings: $700+ per month

If you can make these changes, the total improvement to your cashflow will be $1400+ per month, or $16,800 per year. And all of it will get added to your existing $570/month to debt payoff, eliminating all debts within about three years. There’s no need to think about stock investment at this point, as the interest rates on your debt will provide plenty of guaranteed ‘return’, and the constant cashflow drain of debt payments puts a real crimp on your lifestyle options right now. To get the most out of your parenting plans (and avoid the biggest cause of arguments and divorces), you’ll want this stuff long gone with before the first child arrives.

And given Seattle’s high Price:Rent ratio there is no sense saving for a house downpayment while still in debt either – you’d be paying the high interest rate on your debt, while earning under 1% on your checking or savings account. For now, keep all green paper employees working for you, not against you.

At this point, you’ll have a cashflow surplus of $23,640 per year, which is close to 50% of your take-home pay. That puts you on track for financial independence in your late 30s or early 40s, even assuming neither of you ever gets a raise.

But of course, Ramit Sethi would not allow an analysis like this to slip past without pointing out that you can also earn more money. Much more. You live in a city that is sloshing with money and has a permanent shortage of skilled workers, which drives up salaries and demand for all services. Unless you are married to your current occupations, keep working the system and finding ways to earn more.

The benefit of living in a high-cost area is proximity to high-paying jobs. That’s what drove the costs up in the first place. So if you ‘re going to continue living in such an area, at least take advantage of its primary amenity – the money! I like to use $100,000 per person per year as the rule of thumb for when it is worthwhile to focus on earning more. Beyond this level, you reach financial independence so quickly (7 years or less) that there are not many years left to chop, and you can start making other preparations instead.

Building your skills with Treehouse as you are doing is one good technique. Working on resumes, job-switching, and entrepreneurship is another one.

Although the case study presented a few new tweaks, I can definitely hear some familiar ranting in my response. I hope this advice proves enlightening to at least the newer readers in the group, and I wish a Big Stash upon these new Seattle friends.

  • Mrs PoP @ Planting Our Pennies April 16, 2013, 12:31 pm

    Don’t forget to start using Mint immediately. Figure out where that $723 is actually going every month so you can decide it’s not actually worth it. Once you see that you’re somehow spending $100 or $200 at Target (or insert your own vice store) each month and have nothing to show for it can you figure out what places would be best to stop even browsing through.

    Reply
  • Mark Ferguson April 16, 2013, 12:35 pm

    I am a huge fan of real estate. My opinion is to pay off high interest debt first. Then start saving for a home if you have the time to really look for a bargain. If you can find a great Realtor they should be able to find you a good deal especially with HUD, Fannie Mae, Freddie Mac all offering exclusive owner occupied periods on their foreclosures.

    It takes time to research the area and house prices to know you are getting a great deal, unless you know an agent you really trust.

    Optimal situation would be to buy a property that has high rent potential. Live in it a year, then rent out the home and buy another as an owner occupant. This strategy allows a low down payment purchase and great cash flow potential depending on what rent to value ratios are.

    I would also think you could increase your income significantly.

    Reply
    • Pretired Nick April 17, 2013, 8:05 am

      When the time comes for them to buy (not necessarily the right move here in Seattle), they might want to look for a duplex vs. a traditional house. They can get some of the benefits of a house, but greatly offset the monthly cost.

      Reply
      • Mary Ellen April 19, 2013, 12:08 pm

        This is what we did. We are also a comparatively low income couple in high-rent Seattle. We bought a duplex, moved in, and built a third unit in the basement. Now after the rent comes in, our monthly share of the mortgage payment is about 60% of the cost of renting the unit we live in. And we build equity in the whole building every month. It has been wonderful financially, allowing us to both work part time while raising our 2 year old daughter. The trade off is that we live in a smaller space than our friends with traditional houses. But financial freedom is worth a tradeoff like that.

        Reply
  • Joel April 16, 2013, 12:36 pm

    This was one of my favorites! They are like us with lower-than-it-should-be income, substantial student loan debt, and a desire for baby-making. Quite applicable!

    But even if it hadn’t been so similar to my situation, I think the case studies are always good – even if they have to get repetitive. If hearing stuff once was good enough, pastors would preach only one sermon in their lifetime, and you could’ve quit blogging after a post or two. :)

    Reply
    • Mike @ UB April 16, 2013, 7:37 pm

      Case studies are my favorite too. I get a hell of a lot out of them and realize these are real people’s lives. And MMM pulls no punches. Straight dope without any bullshit. Couldn’t be better.

      Reply
  • Mr. 1500 April 16, 2013, 12:40 pm

    I love the Accord wagon idea. Super reliability and very useful.

    One comment. If their phones are not out of contract, the provider won’t unlock them and they won’t be able to take advantage of your phone plan. I’ve unlocked phones on my own, but that is risky endeavor. In any case, they are paying way to much for this service.

    Reply
    • Mr. Money Mustache April 16, 2013, 12:44 pm

      You can always buy a used unlocked phone – especially non-smartphones are easy to find this way. Anything except Apple-brand ones are reasonably priced used.

      Reply
      • Mike Long April 16, 2013, 3:13 pm

        Yep….if you watch Ebay closely, you can find HTC Aria’s (a perfectly serviceable, small Android smartphone) for $50-$75 in good condition, and Gamestop sells used iPhone 3 models (older yes, but perfectly useable) for $99…..$79 if you’re willing to get a “scratch and scuff”.

        We’re long past the stage of smartphones being prohibitively expensive. If you aren’t a tech writer or a software engineer, you probably don’t have to live on the bleeding edge of tech, and these older(!) 3-4 year old phones still do the job quite well.

        Reply
        • Jacob@CashCowCouple April 16, 2013, 3:26 pm

          I’m not convinced that 90% of individuals need a smartphone. Especially people who carry around a laptop all day and don’t have pressing emails or deadlines. But that just my $0.02…

          My wife and I do fine on flip phones and they cost like $10 new.

          Reply
          • Marcia April 16, 2013, 8:25 pm

            Yeah, I have a $19.95 phone that makes calls and texts. Doesn’t even take or accept pictures.

            I manage a husband, two kids, and a job as a manager in the semiconductor industry without a smartphone.

            Reply
            • Tammy R April 17, 2013, 8:31 pm

              Totally with Jacob and Maria on this one! My husband and I run our own businesses with no smart phone!

              Reply
        • Patrick April 18, 2013, 10:12 am

          Yeah man,
          I ditched my smartie in favor of a $9 cheapie + Tracphone plan. I figure I pay about $3/month for cell phone use, and my life is better. Plus, I noticed my new phone’s battery seems to last weeks instead of about 20 minutes w/ my old HTC ThunderKrap.

          I love the case studies too. Great way to round everything up, and get us back into reality. I always learn something and grow as a result and/or reinforce things I’ve been doing for years.

          Reply
    • madage April 16, 2013, 1:06 pm

      Their phones will work on AirVoice without unlocking if they’re AT&T phones. The same is true with other carriers – just find the MVNO that’s buying access to your current provider’s network and no unlock is needed. Also, the carrier should provide an unlock if the ETF is paid because that fulfills the contract.

      Reply
      • Carbo April 16, 2013, 6:01 pm

        Could you translate this? What is a MVNO and how would I find it? what is ETF?

        Reply
      • Mr, 1500 April 16, 2013, 7:36 pm

        madage-

        Ahhh, thank you. This makes perfect sense. I have Ting now which is a Spring MVNO. That explains why Sprint phones work on their network.

        Reply
      • Jeremy Doolin April 17, 2013, 6:55 am

        My wife is doing this next month. We’re paying the ETF for AT&T. Even paying the ETF, we’ll save a couple hundred dollars. She COULD unlock her iPhone at that point, however we’ve gone with RedPocket mobile, which is an AT&T MVNO, so we don’t even have to unlock.

        I’ve been on RedPocket for a few weeks and all is well.

        Reply
        • Trudy April 20, 2013, 4:41 pm

          Jeremy – does your Red Pocket plan work in various parts of the country – say all the places AT&T does? I want to switch but am a little afraid of that aspect. Need it to work all over.

          Reply
    • Destron April 16, 2013, 2:12 pm

      I paid off my AT&T contract in December and they unlocked my iPhone for me afterward. YMMV

      Reply
    • J April 18, 2013, 9:45 am

      In my experience if the MVNO uses the same carrier’s network the phone doesn’t even need to be unlocked (switched from AT&T to H2O).

      Reply
  • Stephen @ SE April 16, 2013, 12:42 pm

    I think the reader stories provide a nice punch in the face for slacker wanna be mustachians. I think the part about borrowing money for table service cracked me up. As always, these post are a reminder to quit complaining and go back over our spending and see if inefficiencies are creeping in.

    Also, is anyone else still biking this month?

    Reply
    • Mrs PoP @ Planting Our Pennies April 16, 2013, 12:48 pm

      rode my bike to work this morning, Stephen! Thanks for the check-in on biking =)

      Reply
      • TOM April 16, 2013, 1:15 pm

        me too!

        Reply
    • chermysl April 16, 2013, 8:03 pm

      Biking, rain or shine. Exception: lightning.

      Reply
    • Dr.Vibrissae April 17, 2013, 8:24 am

      got rid of my parking pass almost 2years ago,so it’s always bike for me (unless it’s horribly rainy, then I take the bus, but it triples my commute time).

      Reply
    • Dave Galligan April 17, 2013, 2:27 pm

      I am biking this month. Just like every month since 2007. It’s the best part of my work day. Oh, and I live in northern Iowa, and I’m 45. I wish more people in my town could see the beauty of riding year-round. If you haven’t started biking for life what are you waiting for?

      Reply
      • perthcyclist April 17, 2013, 11:11 pm

        I have continued biking to work every day like I have for the last 5 years… but I have been driving more than normal because of a dog that I have taken in as a foster-carer… I still cycle 4x as many kilometres as I drive ;)

        Reply
  • mrfreeze April 16, 2013, 12:50 pm

    I definitely need a case study but I know what it would say. I wish I could rip off the upper-middle class lifestyle bandaid. We are in our early 30s and near the $100k threshold but we still can’t manage to save much outside of a barely above average retirement. We have 3 kids (so far) and are tired of working so much…Ughh. Been reading for 6 months now and still no change, just envy. Need to pull my wife into this blog and see if we are willing to get onboard.

    Expecting complanypants comments to commence…

    Reply
    • Jacob@CashCowCouple April 16, 2013, 3:29 pm

      I won’t call you anything. All I offer is a recommendation that you put on your big boy pants and make the changes. You can do it!

      Reply
    • CL April 16, 2013, 3:35 pm

      I am not going to call you a complainypants. I’m going to give you a very gentle facepunch, which could perhaps be called a facial love tap?

      If you have been reading for 6 months and haven’t done anything, the best day for action was six months ago. The next best is today. Send your wife to the http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ post and then ask her if she would be interested in saving money so both parents can spend more time with the 3 kids. If not, listen to why not. If yes, then start working out the numbers with her.

      Stop telling yourself “I SHOULD do that” and just do it. It will take less than 5 minutes (with this new MMM server upgrade, at least ;)) to do and it could dramatically change your life for the better.

      Reply
      • Patrick April 18, 2013, 10:19 am

        Great comment! I made assumptions for several years that my wife was not interested in money or saving money. I assumed that she justed wanted to spend, spend, spend. I blamed her for a lot of stuff that turns out wasn’t her fault at all.

        Now, my wife is the greatest defensive player I’ve ever known. Simply walking through this stuff dollar by dollar then agreeing on what the outcome is breathes life into a financial independence plan. She’s incredible, and our relationship has taken on a whole new adventurous tone as a direct result of seeking financial independence. It’s made me appreciate her in a whole new way.

        No need for envy — just action. Today.

        Reply
    • Purple April 16, 2013, 3:43 pm

      I think you will just get a lot of empathy. I think there are many people here who recognise that change is a slow process.

      A big part of it is the understanding the opportunities for change, followed by understanding why we (or our partners) are resistant to it. Gradually, gradually the stupidity of our existing habits and the sense in new ones emerges.

      I am proud of the changes my husband and I have made since my immersion in the MMM world – but I am still trying to work out whether some of our big decisions are stupid or sensible. For instance, I really liked MMM’s view on the high rent …. i.e. make the most of the potential ROI it offers.

      Reply
    • Jen April 16, 2013, 5:08 pm

      We’ve already ripped the band-aid off, and I still sympathize with you. It’s HARD. In fact, we ditched our crappy $12/hr jobs in the US and moved to my husband’s home country (Australia) where “normal job” wages are much higher (but then, so is food!). Having to do it with a partner can be tricky – even if they’re on board! Definitely get your wife on board…

      I’ve found it helps to break it down. If I just focus on the “retire in ten years! oh no!” aspect I get all overwhelmed and angsty. I don’t think we’ll be able to retire “young”… but we’ll be able to retire AT ALL, which is pretty good.

      First we did some basic cut-backs and made sure we were more or less debt free (low-interest/interest free student loans work differently in Australia) which gives you SO MUCH freedom in itself.

      Next we’re saving up some f-you money and a down deposit on a house, which will also give us even more wiggle room…. wiggle room to speed up retirement ;) (step three).

      I’ll also say that we are both children of financially… oblivious? middle class parents. My dad is OK financially, but my mom is a disaster; my husband’s parents’ money is tied up in their antique business. We worry about having to take care of them, and it’s annoying to go home and have to buy my mom groceries. Don’t do this to your kids, and don’t teach them to mooch off you (a whole different disaster!). Living within your means and teaching your kids to do the same is an amazing gift.

      Reply
      • Savvy Financial Latina April 17, 2013, 11:46 am

        I will have to take care of my parents. Sigh..it makes my brain hurt. I love them but it’s still a big weight on my shoulders.

        Reply
    • MsSindy April 16, 2013, 7:38 pm

      mrfreeze–
      Quit using your ‘partner not on board’ as an excuse. My DH is not on board for the most part – he has some good Mustachian-like qualities, but he won’t give up his 2nd truck or cancel cable. So, I just focus on all the things that I have control over: food, going out to eat, shopped auto insurance, turned down the furnace, stopped going to Target and spending on crap, etc., etc.

      Start with one thing you want to change and tackle that – for example, if you eat lunch out, commit to bringing your lunch – that’s all about you! Lead by example! It’s what you do at work, right? So, the same thing should apply at home. Don’t expect someone else to do something that you’re not already doing.

      Reply
      • Kenneth April 17, 2013, 8:32 am

        Thank you so much MsSindy for your comment “Quit using your ‘partner not on board’ as an excuse”. My dear wife has some things she does that are NOT very Mustachian. On the other hand, she is basically frugal on most things. Yes, I need to concentrate on the great many things I have control over, and will do so even more than I have. One other thing – I’ve been using my partner not on board excuse regarding my eating habits too. I have about 20 pounds I’d like to lose – I need to quit blaming being around her for this – I’m the only one that decides what and how much enters my mouth at any moment. I need to do better.

        Reply
        • Pollyanna April 18, 2013, 7:29 am

          MsSindy and Kenneth, I’m there with you two on the spouse situation. My DH is pretty good financially, we have the same overall goals, but he is less willing to embrace the MMM style to the extent I do. You’re right, I just have to do what I can, what’s within my control, and whatever I save goes to the bottom line. Thanks for the reminder. It helps to know that some of us don’t have total buy-in from our other half, but we’re still on the journey with the right mindset ourselves.

          Reply
    • Diane April 18, 2013, 3:45 pm

      You may want to find a professional who will work with you and your wife on your finances. Thank goodness for blogs like MMM which can really motivate anyone and everyone who wants to help themselves. But alas, many couples just need some coaching and counseling for them to be able to talk to each other about their financial health and to get on the right track. Best of luck!

      Reply
  • cj April 16, 2013, 1:00 pm

    Ramit got us off to a great start last year. We’ve increased our income while erasing a few debts and lowering bills. His book is easy, yet entertaining and frighteningly direct. Glad you recommended it to Stashless, as their situation is somewhat similar to ours of a year ago. Progress can happen pretty darn fast if everyone’s on board and they are serious.

    Reply
  • Danielle Meitiv April 16, 2013, 1:52 pm

    Fabulous example! My husband and I have a combined income only a bit higher than this couple – and two kids – so it was really helpful to hear your advice. We follow most of it already – cheap car, low mortgage debt, etc. – so it was nice to see that we’re right on track!

    Reply
  • Alexis April 16, 2013, 1:55 pm

    Good luck to the Seattle couple! You can do it! My boyfriend and I have been kickin’ our stashes into gear, and I know you two will be able to cut back! We went from spending $500/month on food (groceries and eating out) to spending $300, easy. It just means paying attention :)

    Having a “food” jar with $300 cash in it really helps you stay within budget.

    Reply
    • 'Stashless in Seattle April 16, 2013, 7:21 pm

      What a great idea! We’re going to have to try that. And way to go on your own ‘stashes!

      Reply
    • Elizabeth April 16, 2013, 9:45 pm

      Love your Food Jar idea! We’re going to do that next month. Maybe we’ll use a red Chinese New Year envelope ;) It’ll really help us keep track of how much we’re spending on groceries.

      Reply
      • Clint April 17, 2013, 11:14 am

        I know this has been discussed before, but one more time: When you talk about $300 or so on foot or groceries, are we talking just food? Our budget for groceries remains embarrassingly high, but includes everything from toothpaste to toilet paper, cosmetics, etc.

        Reply
        • Rebecca April 17, 2013, 1:25 pm

          Clint, here’s my budget body-care routine:

          Hair: baking soda and vinegar, diluted in squirt bottles
          Body: Dr. Bronner’s or some other natural soap, and I use a vintage safety razor for shaving (modern cartridges are SO expensive compared to super sharp razorblades!)
          Face: scrub with a wet washcloth then coconut oil (bought in bulk from Tropical Traditions), only gets soap when I’m showering.

          I shower once every 3-4 days. Obviously, other people will have different times they can go between showers, but using gentle, natural products (esp. in your hair) will help. Because I don’t use crazy chemicals my skin stays super clear so I only use make-up once a week or so when I’m dressing up. There’s still toothpaste and deodorant, but they tend to last me forever, and I’ve seen lots of recipes for homemade versions of those.

          Reply
          • Clint April 17, 2013, 4:27 pm

            Wow, I could do that (except for the limited showers thing), but my less-than-true-believer wife and daughter would revolt.

            Reply
          • Amanda April 18, 2013, 12:30 pm

            I also only shower every 3-4 days. I work in a professional office and I’m sure nobody notices. My hair gets a little greasy on the 4th day, but I just wear it up at that point. Not only do my shower products last forever, but my water bill is excessively low. Nowadays, showering feels like a time consuming hassle, haha.

            Reply
          • Rob aka Captain and Mrs Slow April 18, 2013, 1:27 pm

            I second the safety or double edge razor, add in soap and you got dirt cheap shaving

            Reply
  • Rahul April 16, 2013, 1:57 pm

    Common theme with many of these case studies? SLASH THE GROCERY/FOOD BILL PEOPLE!!

    Reply
    • Geek April 17, 2013, 1:31 pm

      I disagree a little bit with MMM on the food. It’s an investment in health. That said the majority of people still eat ‘normal’ diets of carbs and regular meat, and there are savings to be had there :)

      Reply
      • Mr. Money Mustache April 17, 2013, 9:52 pm

        For Eff’s Sake, how many times do I have to repeat that the MMM family eats THE ULTIMATE HEALTHY DIET!!! THERE ARE NO MONEY-RELATED COMPROMISES IN MY ENTIRE LIFE, ESPECIALLY IN FOOD!!!

        It says so right in this article, and every other time I’ve mentioned food on this blog. Please, Geek, direct your criticisms to my actual weaknesses rather than this imagined one you are harping on ;-)

        Reply
        • win April 19, 2013, 11:17 am

          In a future blog post, could you list a week of menus and how much you spent? Thank you.

          Reply
          • Geek April 24, 2013, 6:53 pm

            You’re right of course MMM.

            I could have said my steak and bacon priority is different than yours. I could definitely reign in the budget quite a lot with more chicken, fish, and especially eggs, and still avoid (bleh) beans :)

            Reply
        • Geek April 24, 2013, 9:48 pm

          Yeah, I’m probably just trying to justify all the steak. Apologies!

          Withdraw previous statement.

          Reply
  • Brian April 16, 2013, 2:16 pm

    I also live in Seattle, and I agree that housing costs are way high here. It’s by far the biggest obstacle to retiring early for me. I either need to move or work several extra years. I have coworkers younger than me buying houses for $700k, $800k.

    Reply
    • Mr. Money Mustache April 16, 2013, 3:02 pm

      Yeah.. unless you’re really a master of working the housing market (or have a household income above $250k), it generally isn’t worth it trying to own a house when they are anywhere near that price.

      Rent one instead, as long as you want to live there. Then move somewhere with reasonable house prices (Bellingham?) when you are no longer tied to the area. A good 3-bedroom house can be built for around $300k, given the cost of materials and labor these days.

      So if you’re paying $400k extra for the one-sixth of an acre of land it sits on, there had better be a really good, conscious reason that involved the use of calculators and spreadsheets before the decision was made. When prices are that high, they can be subject to major haircuts in the event of economic change or, say, interest rates rising from the current lowest-in-history levels..

      Reply
      • Net Worth Snowball April 16, 2013, 4:08 pm

        That is precisely my plan, MMM. As an aspiring mustachian living in Seattle, the real estate prices are staggering. A modest 50’s era home in my neighborhood around 1,500 SF runs between $500-600k and you can’t even sniff out a total dump for less than $300k.

        Rather than burden myself with that enormous debt load for the privilege of over-priced homeownership, I opted to rent a 1BR duplex for $650 monthly which is split in half with my girlfriend. While banking and investing the savings, I’m setting myself up for financial independence and will have the opportunity to purchase an affordable home elsewhere after FI. In the meantime, I’ll reap the rewards of the elevated salaries in Seattle.

        Reply
        • Geek April 16, 2013, 9:03 pm

          We got a shiny pretty 6 year old townhouse north of green lake for about 305k.
          A couple months ago we refi’d the (2012, April) 3.875%, 20 year, mortgage to 2.875%.

          There is affordable housing in Seattle.

          And now that my husband works downtown (i’m in redmond) I almost feel justified living on this side of the lake.

          If you want to be by MSFT, you’re going to need to rent for a while though.

          Reply
          • Jen G April 16, 2013, 11:22 pm

            I think we just bought a house in your ‘hood for just a few thousand more. I am thrilled with the urban neighborhood and the price of an almost brand new townhouse. This is our third townhouse (one rental, one purchased in Wash DC) and I’m always confused why more people don’t embrace townhouse living. I love not having to spend my weekends doing yard work (we always make sure it is located near a park for our kids), and I love the savings on utilities and so forth. We have never had trouble with excessive noise or neighbors. Living in a townhouse allows us to live just a couple miles from work (when we would never be able to afford a SFH in the same area). I do miss having a garden, but that is about the only downside I can ever think of.

            Reply
            • Sarah April 17, 2013, 9:26 am

              And this is exactly why I love living in a condo as well. I can still walk to work (< two miles). I'm not a gardener, I have no interest in yard work, and there is an HOA to take care of a lot of things. My HOA dues aren't superbly high.

              That said, when I want to buy a house, I would most likely move out of the Seattle area. I just can't picture buying a house that's worth $600k. It's less about the purchase price and more about the ongoing property taxes. If I only have on kid, I would honestly happily stay in the condo I'm in now. (Assuming that the local schools are good.)

              Reply
            • Geek April 17, 2013, 1:36 pm

              We got a manual push-mower off freecycle for our tiny yard.
              Our big purchase this year for the house was an apple tree. My gardening urge is satisfied.

              I have red shibas, and a blonde boy-style cut, say hi if you see me :) worst you’ll get from other shiba owners is a weird look.
              I did see a moving truck in the ‘hood recently…

              Reply
      • CJ April 16, 2013, 5:34 pm

        I think this would be an excellent topic for a post- When and why to buy a house.

        My guess is that ‘stacheless wants to buy a house by age 30 in order to feel like an adult somehow. The cultural narrative of get a job, get married, buy a house, have kids, work 30 years, retire is strong. In fact, I think for a lot of urban people, owning a home is anti-mustachian, and the pressure to buy is just like the pressure to have a new SUV every 3 years.

        This reader would likely need to move to an area with a much longer commute, spend the entire ‘stache they’ve saved, and then pay more than rent in mortgage, insurance and taxes, risk lost value, and commit to staying in that place for at least 5 years in order to buy.

        Reply
        • Chadnudj April 17, 2013, 11:26 am

          I think it’s more complex than that. Homes/real estate are an asset, and it’s mustachian to want to buy an asset (in this case, a home, via down payment and mortgage) versus having something that is solely a liability (rent). Now, that’s not to say that buying a home is without risk — like any asset, it can increase or decrease in value. And you certainly shouldn’t but an asset like a home if doing so would significantly impact your monthly cashflow.

          But buying is (or at least, can be) smart vs. renting when you consider the fact that you’re building equity in the home with each monthly payment.

          Reply
          • Joe (yolfer) April 17, 2013, 11:40 am

            I’d take it even a step further in complexity!

            A single-family house to live in is historically not an asset in the investment sense of the word. It appreciates in value at about the rate of inflation. In other words it has 0% real returns. It does, however, provide you a cheap place to live once it’s paid off.

            On the other hand, renting is paying for a service. It’s neither an asset nor a liability. A mortgage is also paying for a service. You’re paying interest to borrow money from the bank. So it’s not as simple as “building equity with each payment” since your first decade of mortgage payments mostly go straight into the bank’s coffers, for the privilege of letting them loan you money.

            I’ve both owned and rented in the past. You just have to look at the entire picture, and it’s not only a financial decision. One must also consider intangibles like being able to paint the walls (in favor of owning) vs having someone else deal with broken appliances (in favor of renting).

            Reply
            • Kevin April 17, 2013, 5:54 pm

              Joe you are absolutely 100% right in this. The 100 year average return for real estate is .4% above inflation. That .4% above inflation is probably due to properties that are in areas that are highly in demand over the longer term. As a resident of Seattle I can think of a few neighborhoods that fit that bill, like Clyde Hill, but outside of location inflation and incomes determine the value of homes in the area.

              Reply
              • Giovanni May 4, 2013, 5:16 pm

                Kevin & Joe you are right on about historical housing returns. The big thing that makes people feel like they’re getting rich on their home is that they ignore or wish away the true maintenance costs of owning a home*.

                On another site last year was having the same type of conversation and so I built a .xls with an interactive chart that models the real cost of owning. It allows you to model different growth rates, mortgage rates, costs for insurance, taxes and maintenance & repairs. It’s posted here: http://ashworthpartners.com/rent-vs-buy-and-the-great-myth-of-homeownership-as-an-investment/ Full disclosure: Part of my day job is figuring out the true cost of owning real estate, mostly apartment buildings so if it comes across as nerdy it’s the author’s fault ;)

                *Granted doing as much of the repairs and maint. yourself is a total stashian thing to do but it still represents a real cost in either lost wages or time spent living… unless you live to mow your lawn. In that case let me send you my address!

              • Mark ferguson May 4, 2013, 7:19 pm

                I agree buying your personal house may not be the greatest road to wealth, but buyin rental homes can be. My new goal is to purchase 100 rental homes buy January 2023.

    • Marcia April 16, 2013, 8:33 pm

      Expensive housing costs are a real bummer. I live in Coastal So Cal. It’s been up and down with this market. A 2BR, 1 BA 1100 sf house in my neighborhood (which is not a good school district) is about $700,000. At the peak it was about $870k.

      The advice I give other friends who think about buying (and who aren’t high income or wealthy) is to just rent unless they REALLY REALLY want to own here, in a “give up your gas guzzling SUV” kinda way. If I could go back 9 years, I probably would not have bought my house. Luckily our incomes can handle it.

      Reply
    • Dogs or Dollars April 16, 2013, 8:38 pm

      Totally depends on where you are looking in Seattle. I admittedly have a big, fat mortgage, and much too much house for 2 (almost 3) people and a passel of dogs. But, it ain’t that big and fat. I am technically 2 blocks outside of city limits proper. Most of my friends live within a 5 mile radius. Their mortgages, also not that large and in charge. 700k-800k is Swanky-McSwankerson. And completely unnecessary. Even for people wanting to be centrally located.

      Reply
  • Chipamogli April 16, 2013, 2:29 pm

    Yes I was surprised at the grocery and eating out numbers too. What kinds of restaurants do they go to, and how often? I won’t lie, I do love my local sushi place, but I never let it get out of hand. I currently spend about $30/week on groceries (for one person) but I know it could be less.

    Reply
    • 'Stashless in Seattle April 16, 2013, 7:27 pm

      Part of our problem is that I have a big family (siblings, parents, etc.) and they are over quite often for dinner. Another part of the problem is that our ‘grocery’ bill doesn’t often ONLY reflect groceries since we shop it Costco: it can include linens, or movies, or the random pair of pants, or a pack of underwear, or a pan. Etc.

      We don’t eat at expensive places, but we seem to be in the habit of buying other people’s food fairly often. And we get drinks. And eat lunch out A LOT.

      Reply
      • Marcia April 16, 2013, 8:53 pm

        Ah yes, you’ll want to start tracking non-food items from Costco separately. And definitely start packing your lunch.

        I started to get really good about packing cheap lunches. Then I realized that we felt like we were “missing out” on eating lunches out. So I’d occasionally throw in a “nice” homemade lunch that was a bit fancier. Instead of eating lunch out frequently, my husband eats out 2x a month for lunch and I do about once every month or two.

        Can you get your families to do pot luck?

        Reply
      • TOM April 17, 2013, 5:42 am

        Well there’s 3 things you can cut back on / eliminate!

        My friends have never done the “one couple will get the check” bit. Maybe a couple of times we’ve averaged out the bill for simplicity. You can be charitable in other ways.

        Drinks: limit yourself to <2, preferably 0. Remember, $2.50 at a restaurant for a soda is like $0.25 at home. $5 for a beer is probably $1.20 at home.

        Pack a lunch! If you don't have a fridge, pack something that can exist at room temperature. I would guess that even lunch meat safely lasts longer at room temperature than you would expect.

        Reply
      • Alex April 17, 2013, 9:05 am

        You might consider dropping movie purchases entirely if you are subscribing to Netflix.

        Reply
      • Vanessa April 17, 2013, 6:14 pm

        It’s time to tell your parents and siblings that you are on a budget and will no longer be eating out anymore. But they are more than welcome to come over your house with food. You will expect everyone to contribute their fair share. It’s time to toughen up if you are serious about making a dent in your debt. Plans your meals, shop smart – that means no expensive organic shopping, cook healthy meals and brown bag your meals.

        Rent from RedBox instead of going out to movies. No Netflix until you get your expenses under control.

        Reply
        • Giovanni May 4, 2013, 5:22 pm

          Vanessa, if RedBox is $5 a pop and Netflix is $10 a month, how are they saving by having to go to a RedBox location?

          Reply
      • Lindsay April 17, 2013, 9:32 pm

        To Stashless, I know exactly what it is like to feel the need to pay for other’s meals and “take care” of your family when they come over. I used to do this very thing – like other types of financial advice, just try once to not cover their meals – you don’t need to feel like you are going whole hog and stopping covering them, but just try it once. It’s amazing how freeing it might feel to have everyone cooking together, potluck style, or to just go dutch.

        I cannot believe how much money I used to spend this way because I knew I made enough money to cover others as well, but at the same time, i was barely even saving for my own retirement. Good luck!

        Reply
      • Rob aka Captain and Mrs Slow April 18, 2013, 1:41 pm

        Understand the problem but there is nothing wrong with asking people to bring food over. Also a friend with 4 growing kids (man can they eat wow!!!!) not only keeps his food budget low but also managed to reduce his food bill by about 10% by doing several things. Number ne is not wasting food, nr two buy (mostly) no name brands etc

        But the number one I noticed how people cut food costis to shrimp big time on stuff. For example the above mentioned person, made lentil stew in the slow cooker ingredients 1 kilo (2 lbs or so) lentils, 2 carrots 2 patatos and two sausages, (along with the usual spices) and that feed 7 people.

        I on he other hand put in halfhearted lentils and way way more of the other stuff

        Good luck. rob

        Reply
    • Marcia April 16, 2013, 8:51 pm

      You know, I started down the frugality path in around 2002, right around when I started losing weight. My husband had always really been into using Quicken to track our finances.

      In 2000 and 2001, we spent $860 a month on food! We were spending $460 on groceries and $400 eating out. And it didn’t seem like we were going out that much! Spending that much is very easy to do.

      Within a year I’d slashed that to…I don’t even remember, but I think it was about $350 on groceries and $100 on eating out a month. Pre-second baby, we were coming in around $5000-5500/year.

      Reply
  • Giddings Plaza FI April 16, 2013, 2:39 pm

    hey fellow Seattleites–great that you’re thinking of these issues while you’re pretty young. One huge suggestion I have (and that I bore people with at parties ALL THE TIME) is to get rid of your car and do car sharing. It’s especially easy in Seattle. I live in Ballard, and after quitting my eastside job, I also donated my car. I estimate I’ll be saving thousands every year. http://giddingsplaza.com/2013/03/01/goodbye-saturn-sl1-hello-carsharing/

    Reply
    • Mr. Money Mustache April 16, 2013, 3:06 pm

      Good point – for this couple, they could start by selling the financed car immediately, with the reassurance that a Zipcar is always right around the corner for emergencies. Then the immediate savings would accrue to pay for a used car in cash within a few months. So you don’t have to replace the car before selling it.

      And that’s just the sales pitch to get them hooked. If they find life is actually quite tolerable during those few months, they could elect to keep pushing back the car purchase. Maybe it would never happen!

      Reply
      • Joe (yolfer) April 16, 2013, 3:51 pm

        A competitor to Zipcar just launched here in Seattle, called Car2Go*. I ride my bike so I don’t use either, but competition is always good for driving prices lower!

        * I call it “Car 2 Go Broke” since it’s very expensive (on par with a taxi) and only to be used in extreme transportation emergencies

        Reply
        • 'Stashless in Seattle April 16, 2013, 7:29 pm

          Car2go is a huge factor in us seriously considering ditching the car entirely. What an amazing service!

          Also, I’m all geared up for Seattle’s Bike to Work month. :-)

          Reply
          • Geek April 17, 2013, 9:54 pm

            Nice! You should have a meetup with the rest of us nerdy Mustachian wannabees in the area sometime :) :)

            Reply
            • 'Stashless in Seattle April 17, 2013, 10:27 pm

              Definitely! Is that meeting posted in the forums somewhere?

              Reply
              • FiveSigmas April 17, 2013, 11:58 pm

                I don’t know if there’s another one planned, but the last one (with MMM) was a lot of fun and very well attended. Lots of folks from many different walks of life.

              • Joe (yolfer) April 17, 2013, 11:58 pm

                There’s a perpetual forum thread of “we should meet up” but nobody has actually gotten around to organizing something (except the day MMM was in town):

                http://www.mrmoneymustache.com/forum/meetups-and-social-events/seattle-oz/

                Maybe having a Seattleite as the subject of a MMM case study will provide the impetus.

          • Joe (yolfer) April 18, 2013, 12:01 am

            You’re gonna love it! I’ve been a bike commuter here in Seattle for years. Let me know if you have questions about your route, or anything else. My commute is about the same length as yours, and despite the hills, it’s one of the highlights of my day (even on a rainy day).

            If I didn’t have 3 kids we’d have ditched our car years ago and done bikes + occasional zipcar. Ditch the car while you can! Once you have kids it becomes an excuse to keep it around.

            Reply
  • Laurie @thefrugalfarmer April 16, 2013, 3:13 pm

    MMM, this is the first time I’ve taken a good look at your site, and all I can say is “Thank you!!!” . I love your “get real” approach here – it helped us a lot too as we work our way out of a serious debt emergency. I love what you said about our money not belonging to us- any of it – until we’re out of debt. Thanks much!

    Reply
  • GeorgiaS April 16, 2013, 3:28 pm

    Because this is a couple, they may not want to have a roommate . . . but it is an option! My boyfriend and I share a two bedroom apartment with a roommate, and the rent savings funds our travel.

    Reply
  • Yabusame April 16, 2013, 3:32 pm

    Here are my thoughts, though you probably won’t like some of them:

    1. Get rid of the car. Buy two bicycles. Cycle to work every day, in all weathers. Saves you a small fortune on car-related costs, gives you a short workout twice a day (gym membership? What gym membership?), and it makes you a real badass ;-)

    – I sold my car nearly 2 years ago and cycle to work everyday (4 miles each way)

    2. When not cycling, take the dog for long walks. There’s some more exercise for both you and the dog.

    3. No eating out, unless its a special occassion (no, special occassions do not occur every month).

    4. Find out how much it will to get out of your mobile phone contract. If its less than you will be paying over the next 12 months (including any payment to a different plan) then cancel it and move to the cheapest, most appropriate, plan you can find.

    – I pay £1 a month for my mobile phone contract. Find a simple, cheap, tariff that matches your own needs.

    5. Netflix is a luxury. If it saves you spending on more expensive luxuries then that’s fine, personally, I’d dump that monthly cost.

    – You need to look at EVERY SINGLE monthly expense and ask yourself if it is truly ncessary. If it isn’t, then get rid. If it is, then try and reduce the cost.

    6. What is the bus pass for? If it’s to get anywhere within a 10 mile radius, then use your bicycle.

    As MMM says, you have debt so this is an EMERGENCY! Cut every expense to the bone. Do without wherever you can. Put every spare penny you have to your debts. Get them done then move on to building your wealth, buying houses, having a family. But get out of debt before you start those things. Let those goals guide you in your decisions.

    Whatever you decide to do, track every penny. Actually, I think this is so important for people in the debt-stage that I’ll repeat it… TRACK EVERY PENNY. I use a zero-based budget (YNAB) but others recommend Mint. Do whatever works for you, but be in control of your money. Decide where you want your money to go, don’t let it slip through your fingers on stuff you don’t even remember.

    Both of you should agree on a plan and hold each other responsible. Oh, and celebrate small milestones along the way (inexpensively, naturally – walk in the park, run through the meadow, swim in the ocean.., you know what I mean)

    Once you’re debt-free, then the real fun begins…. That’s when everything you learned whilst getting out of debt starts to have extra meaning for you in building your stash and achieving your goals. But you have to go through the learning process (debt payoff) first.

    Reply
    • MrMonkeyMustache April 21, 2013, 10:04 pm

      I’d upvote this comment, but this isn’t Reddit…
      Thanks for re-laying the smack down. Though I should be debt free by the end of the year, you just reinspired me to double down and track everything more carefully. It made a huge difference when I was doing this before I even found MMM!
      I’m reconsidering getting YNAB as well. The $60 is pretty steep, but maybe it’ll help me stay focussed!

      Reply
  • rjack (Mr. Asset Allocation) April 16, 2013, 3:44 pm

    I really like the way MMM declares these situations as a DEBT EMERGENCY. Dial 911. Do not pass go.

    In general, I think huge debt has become so common that many think of it as normal or even healthy. It isn’t. The best investment you can make in yourself and your future is to work like hell to annihilate your debt.

    Related to the phone, you may want to consider Ting as an option. They sell used smart phones for as low as $59. Screw the iphone.

    Reply
    • Mike @ UB April 16, 2013, 8:23 pm

      Yeah, I’m in my 50’s and all my 50’s friends have debt. That these young people could learn and get out of debt now will put them far ahead of their peers.

      And the divide will only grow as the years go by.

      I did a post in the MMM forum about 20 somthings and asked how they found MMM. These young people got it together and I’m very impressed.

      Reply
    • Gmaxwell April 17, 2013, 7:27 pm

      I’ve had ting since January after finding it in the MMM Ultimate Superguide thread and been really happy with it— for me and my partner almost all our (rather low) usage is laptop-tethered data and the combination of pooled multi-device and reasonably granular usage based billing made Ting really well priced for us. They also seem to be a pretty sane company with good attitudes on billing practices, a good online interface, and sane policies on tethering.

      If you need two or more devices, have need for reasonable data prices, and are in a place with good sprint coverage I highly recommend it. For other usage patterns (e.g. no data, single device) the AT&T MVNOs looked better.

      (also, they have a nice referral program which credits both the referee and referrer $25,)

      (MM edit – had to remove the referral code since it’s not cool to put these in comments, but definitely hook up with other Ting users via the forum if you like!)

      Reply
      • Clint April 18, 2013, 11:05 am

        I’m on Virgin Mobile and have looked at Ting, but I wonder why the same smartphones are so much more expensive on Ting. They’re both offering unsubsidized phones, no?

        Reply
  • kiwano April 16, 2013, 4:23 pm

    Did I actually see car ownership recommended to a city-dweller for “rare trips out of town”?!? Screw that noise and rent cars when you need them instead. I take driving trips out of town as often as twice a month at times, and I still pay less on rentals than I’d pay simply to park a car if I owned it (never mind insurance, maintenance, and depreciation). I know this because someone once offered to give me a car FOR FREE, and it still wasn’t worth it.

    As an added bonus, by renting a car when you need it, instead of owning, you get a small army of servants at the rental company washing your cars, making sure the oil gets changed on time, and even providing roadside assistance.

    Quite simply, unless you live out in the sticks, have money to burn, or someone is paying you to own a car, it’s just not worth it.

    Reply
  • Jen April 16, 2013, 5:20 pm

    Their income is very similar to ours, and the expenses we have in common are very similar (we don’t have any debt or the car)… so I ran through the numbers. They should have nearly $1100 left over – not $723! I checked twice, I don’t think I missed anything…

    Reply
    • Jason April 16, 2013, 6:58 pm

      Jen, Some of that could be state taxes…I’m not sure.

      The biggest step is admitting you have a problem…the difference between success and failure is convincing your spouse you have a problem. Conquer those to things and then it’s just a matter of “want to” and time.

      Reply
    • 'Stashless in Seattle April 16, 2013, 7:32 pm

      I’ve increased my withholding and 401K contributions somewhat this year so we can’t completely screw ourselves. That could have something to do with it?

      Reply
  • Mark April 16, 2013, 6:41 pm

    Food spending … I guess they are in the debt emergency, so that’s different. However, I don’t see the need to be so emphatic about spending so little on food. I spend $200-$250 every month for one person. If I only ate from the grocery store and had no alcohol, I could probably cut that closer to $100-$125, but eating out even a few times a month puts a huge dagger in there!

    Reply
  • SomeYoungGuy April 16, 2013, 11:51 pm

    Just a little different angle, elaborating on the theme of your husband’s salary. Now is the time, before children and buying a house, to analyze if his job is his passion or if his work has enough growth potential to make the future trade-offs make sense. In comparison, MMM is ‘retired’ and is probably making around this income doing what he loves on his own terms. Start to think about the idea that he may be a SAHD when a child comes in to the picture – I would highly, *highly*, recommend focusing on that goal now of being FI-enough for one parent to stay home. So, along these lines, maybe he could start a side hustle now or allow you to focus on growing the ‘main salary’ in preparation for going one income… Don’t know his situation, so I’m just tossing this out there, in addition to all of the fine comments above…

    Reply
    • 'Stashless in Seattle April 17, 2013, 7:49 am

      I really wish I could just ‘like’ this comment.

      Reply
      • Geek April 17, 2013, 5:06 pm

        If you’re using treehouse, are one or both of you going to be software engineers in the near future?

        Reply
        • 'Stashless in Seattle April 17, 2013, 5:12 pm

          The short answer is yes.

          I’m a Graphic Designer and have a BFA, but I frequently find myself at least needing to understand code and ideally be able to implement it to streamline projects, so that’s why I started. BUT I’m finding that I’m enjoying my side projects enough these days that I really want to expand my understanding of at least web and application development, and see where that takes me. My goal is to finish all of the main Treehouse content by the end of this year at the latest. So far I’m ahead of schedule!

          Reply
          • curtis April 18, 2013, 7:19 am

            Treehouse is a great product but as MM said you are in a debt emergency. Considering the amount of free education out there to learn code (codecademy.com, learnpythonthehardway.org, etc.) might it make sense to circle back to Treehouse when budget permits?

            Reply
            • MD April 18, 2013, 8:53 am

              Curtis, I think your recommendation is short-sighted. Treehouse is a bargain-priced service which could greatly enhance career/salary prospects. Let’s not be penny-wise but pound-foolish.

              Reply
            • Patrick April 18, 2013, 10:34 am

              https://www.coursera.org/

              I’m signed up for a free Python course right now. The future is in what you can DO, not what credential you can get.

              Build a portfolio of work.

              Reply
          • Fred Ross April 19, 2013, 6:06 pm

            I’m a programmer in Seattle. If you want, I’d be happy to go over what you’re working on and things that are useful and help you plot out some study if you really want to make that transition without Treehouse. (You can email me by following the link that is my name on this post, clicking on one of the articles on that site, and sending email to the link at the bottom of the article.)

            And welcome to the ranks of bike commuters. It’s fun. Just get yourself some good rain gear (raincoat, pants, waterproof–not neoprene!–booties) and obey the traffic law.

            Reply
    • George April 18, 2013, 11:41 am

      I second SomeYoungGuy’s comment.

      First of all, your retirement does not have to be in some distant future. In can be in about 10 ten years from today. It is possible to be out of debt in 3 years, and have a paid-off house with some passive income to cover the bills in 7 years (if you move outside the city and can get your salary just slightly higher and implement good frugality habits). Alternatively, you could also stay in the city and have the passive income completely cover the rent.

      This is big that hardly anyone else has pointed out what SomeYoungGuy said. Your husband makes 27k annually in one of the most prosperous, high-salary cities in American.

      I don’t blame him at all. I do know that opposites attract and usually in a relationship one partner is the logical, numbers oriented person, and the other is more of an experiences and feelings type person (not that one is not any better than the other).

      It sounds like, that as a couple, you are an airplane with one engine is constantly pushing forward (you) and the other (your husband) is pushing other random directions. I speak from experience on this one. For example, in your case study, it seems you alone are the one doing most of the stuff to improve finances. Your efforts alone will not be enough to reach peak life no matter how hard you try.

      I don’t know him, but I can take a shot in the dark that maybe he has a job where the feel-good experience is more important than the pay? For example, maybe he works for a non-profit, i.e. a youth minister, or works in an exciting field with a slim change of being celebrity (i.e. cooking, athlete, artist, musician, writer, DJ, photographer, or something along those lines), or he is doing some type of fun job like teaching kayaking or leading hiking tours or something.

      Thus, while $10 phone plans, and $300 a month grocery shopping plans are good things, unless he is fully on board, you aren’t going anywhere.

      You need to both have the same flight-plan; please review MMMs posts about talking to your spouse about this, they are helpful;

      One thing you might want to try is to gently explain that by doing some short term sacrifices now, he can have even better experiences later on. Don’t force frugality down his throat; instead relate this to his world and how saving money makes it better from his perspective;

      For example, if he works outdoors for a living, explain that by saving money you both can reach FI and thus have all the time you want to travel all over the country on long trips (outside Seattle) hiking outdoors (thus having far better, richer experiences than he has now at his work). I think maybe repeated, gentle messages would be the best way. Also, talks about your futures may help, talk about how by saving money now, you will have more time to spend with your kids as well.

      Reply
  • 25 Hour Human April 17, 2013, 12:54 am

    Reading the bit about the car actually stings a little bit. I owe $9600 on a brand-new car I bought right before I started trying to take control of my finances, and right before I discovered Mr. Money Mustache. At the time, I found all kinds of ways to convince myself it was the more frugal option, and now I’m weighing the pros and cons of selling it and picking up something much older.

    Reply
    • Ms. W April 17, 2013, 12:54 pm

      I was in the same boat. Had bought a new car back in 2011, still owed ~$7,250 on it when I sold it last weekend and bought a 2000 Honda Accord with cash. Pocketed about $175 in the exchange. It wasn’t the easiest decision I ever made, and lots of people have told me it was a stupid one. But I think it will be the best decision for me financially in the long run. Time will tell, but I feel good about it now!

      Reply
      • bluprint April 17, 2013, 10:04 pm

        “lots of people have told me it was a stupid one.”

        Well then it was probably the right one.

        Reply
        • Jess April 18, 2013, 2:47 pm

          I think MMM should do a post on the buying used cars off Craigslist thing that he advocates. I’ve got a 2002 Honda Civic coupe that my dad bought for me back in 2006 when I had to drive to school (don’t judge), and I’m hoping it lasts for YEARS on from now…or at least 5.

          HOWEVER – I am terrified of the idea of buying a car from some random on Craigslist. To me, the fear is that these cars must have something wrong with them. What if it’s a complete lemon? I don’t have the mechanical skill to evaluate it, nor do I know anyone with that skill.

          Anyway – MMM, if you’re listening, I’d definitely appreciate a post on this topic!

          Also

          Reply
          • Mr. Money Mustache April 18, 2013, 7:05 pm

            Jess – how about this golden oldie from when I first started this blog? http://www.mrmoneymustache.com/2011/04/19/how-to-come-out-way-ahead-when-buying-a-used-car/

            Craigslist should be viewed as the BEST way to buy and sell cars, not some scary underground. I have bought and sold many vehicles through that beautiful website, and never had a bad experience.

            The key to avoiding lemons: pick a well-made car in the first place: http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/

            And then evaluate the seller just as you would evaluate someone applying for a job to work for you: are they meticulous, intelligent, reliable, and with a folder of good service records for the car? Those are the types of people who maintain their cars well.

            Reply
            • bluprint April 19, 2013, 11:51 am

              Someone in good physical condition also is more likely, on average imo, to take care of their cars and other things.

              Reply
            • Leah April 19, 2013, 8:50 pm

              Craigslist can be good, but it’s also full of a lot of crazies. I can’t understand why this happens, but you can post a perfectly respectable Audi to sell and you’ll get any number of crazy questions, like “would you trade that for a forklift and a goat?” umm, no. And sadly, crimes are becoming more frequent. Be careful. Meet in a public place.

              Reply
              • Ms. W April 25, 2013, 8:00 am

                I had one bad experience a few years ago on Craigslist, and I admit, it made me scared to do much on it since. And there’s been a lot of attacks in my area related to Craigslist. It sucks that people have to turn something so good into something bad!

  • DaneMMM April 17, 2013, 1:27 am

    I really enjoy the reader-case-studies. It would be great with a follow-up-post on the ones that have been featured so far. Are they on the right track? And if not – what went wrong?

    Reply
    • Random Hangers April 17, 2013, 10:09 am

      I was going to say the same thing. I assume most people won’t follow ALL of MMM’s recommendations–at least not all at once–and it would be fascinating to see what they could/did change.

      Reply
  • My Financial Independence Journey April 17, 2013, 3:53 am

    Some thoughts:

    – They might be stuck paying the renter’s insurance. My apartment requires that I pay renters insurance. Almost all apartments where I live do. Just a feature of living in this area. I certainly wouldn’t pay for it if possible as my stuff isn’t worth that much.

    – Your food bill is crazy. I spend a lot on food (More than MMM) because I love food, and my bill doesn’t come close that.

    – I don’t understand how you have so much in stupid spending or what that spending even is. You need to track this if you aren’t already doing so and start figuring out some way to stop paying for it.

    Reply
  • KSquared April 17, 2013, 6:07 am

    The fact that you are trying to find the holes in your spending suggests to me that You Need a Budget. Someone else suggested mint, but I would suggest you try YNAB (www.ynab.com). There is a 34-day trial and then a $60 cost, but it will be the best $60 you spend to get control of your financial life. Disclaimer: I don’t work for YNAB. I’m just a happy user and it sounds like it could help you take control.

    Reply
  • Pretired Nick April 17, 2013, 8:09 am

    I just finished reading all posts and comments! Now I feel so empty… ):

    Great post. I’d disagree on rental insurance. It’s so cheap for the coverage, I’d say it’s worth having.

    Also, while rents certainly are relatively high here in Seattle, many people whine about expensive rent but live in fancy parts of town like Ballard, Wallingford, Fremont, etc. Rents are quite reasonable in places like Beacon Hill, which is very nice and is right on the light rail line into downtown. You can rent an entire HOUSE for $1,700!

    Reply
  • Johnny Moneyseed April 17, 2013, 8:43 am

    Wouldn’t the world be a great place if everyone would ask for advice from people that know what they’re talking about, and actually follow through with it? The hardest thing about giving advice (I think) is that people will always say “we couldn’t do that” or find other complainypants ways of making the situation seem unrealistic. My sister goes out to eat all the time. She has $30,000 in student loan debt. Her boyfriend has $100k in student loan debt. They’ve asked me how we save so much before, and the concepts just fly over their heads. I wish Stashless (and others who are trying to get out of debt) the best of luck.

    Whenever you think you should “treat yourself” for all the hard work you’re doing paying off your debt, just realize that you’re already treating yourself BY paying down your debt. Every dollar counts.

    Reply
    • InDifferentCircumflexes April 17, 2013, 10:10 am

      Two points:

      1. You’re DAMN right they’re treating themselves BY (re)gaining their liberty!

      2. There are frugal ways of treating oneself – bake a cake, whip some cream (do NOT add sugar!), make some good coffee, put cream on still-warm pieces of cake, and: Let the treat begin! (Things to add: Berries, pieces of fruit, or a sprinkling of grated dark chocolate!)

      (My favorite food is ……… food.)

      Reply
      • Johnny Moneyseed April 17, 2013, 9:14 pm

        Learning how to cook (and bake) well can save you a shitload of money. Paying the tax of convenience for eating out makes no sense when you’re broke, or in debt. My parents were the worst role models ever. They have always spent flagrantly, because they have pensions to fall back on. Great lessons to teach your kids who will never see a pension in a million years.

        Reply
        • Ms. W April 25, 2013, 8:04 am

          My boyfriend and I have disagreements that relate to that! There’s a large age difference between us. He makes good money, and has a pension on top of that. He could retire in a year (early), and not be far off from what he’s making now. Even if I made the same amount, I’d still have to worry about my future retirement. It makes it harder for him to relate to why I’m working so hard for the future. Simply put, he never had to!

          Reply
    • Geek April 17, 2013, 11:19 am

      Agreed.
      When I choose not to take advice, it’s really painful but I say “I appreciate your advice, and I know it’s good advice, but I probably won’t take it”.

      It’s even more painful to admit to myself that my priorities are probably fucked up if I’m not taking good advice after complaining about something. And then admitting that I knew the good advice anyway, and only hearing it from someone else even made me confront the issue.

      Reply
  • TJ April 17, 2013, 9:19 am

    Well hopefully that advice puts off any idea she had about selling her eggs! There’s a reason that it’s illegal in a number of states and provinces! I had a friend that went through this to pay off her student loans, and deeply regrets it.

    Here’s a link to check out, in case you are still thinking about it:

    http://www.eggsploitation.com/faq.htm#commoncomplication

    Reply
    • Mr. Money Mustache April 17, 2013, 9:47 am

      Indeed.. and plus, until the frivolous stuff like restaurants and driving are trimmed, you wouldn’t really be selling eggs to get out of debt: you’d be selling them to maintain a regular schedule of eating out and having an expensive car.

      It’s worth putting priorities into harsh language like that to make sure they really are in line with what is important to you.

      Reply
    • Jess April 19, 2013, 7:41 am

      Agreed. I had severe OHSS for a couple weeks after donation that required a couple of trips to the doctor to be drained of fluid. It was scary and not fun. I never recommend egg donation for this reason.

      Reply
  • MarkT April 17, 2013, 9:37 am

    I’ve been reading for a long time, and MMM finally got me on this one. I might be missing some deductions from your salary for healthcare or insurance, so let me know. I can recalculate.

    Here is my breakdown of your salary:

    Salary: 79,000
    401k: -2,600 (5% to 401k)
    AGI : 76,400
    Taxable: 56,400 (Std Deduction: 12,200 MFJ and Exemptions: 3,900*2)
    Federal: -7,568
    FICA: -6,043 (7.65%)
    State: 0
    Total: 65,389 (5,449 per month)

    Did you get a big refund this year? Check my math, change withholding and pay off the DEBT EMERGENCY!!!!

    MarkT (I might be addicted to Excel)

    Reply
  • KB April 17, 2013, 11:35 am

    I think just selling the car and getting a less expensive one and then cutting the $300 eating out to maybe the similar amount of going out but cheaper places or take out should make a huge difference.
    I have to say my husband and I led a very similar life to MMM and wife in our twenties but then we went the other direction – upgraded our house twice, bought 2 cars instead of 1, then got fancier cars, then had 3 kids and the early years are not that expensive – it’s the later years that get expensive in my honest opinion. Have lots of free fun, spend tons of time with family, friends, travelling, hobbies, side hustles, whatever but save as much as you can because it gets harder once you buy a house and start having babies!

    Reply
  • Peter Eller April 17, 2013, 12:15 pm

    Treehouse is a total waste of money if you want to learn to be a coder or web designer everything you need to learn is freely available on the web already. With treehouse you’re just paying for nice packaging . if you need tree house to learn this stuff then you should take a hard look at yourself because you may not have what it takes

    Reply
    • Mr. Money Mustache April 18, 2013, 9:16 am

      That’s a rather grumpy way to bring up an interesting point: is it worth paying for something you can get for free elsewhere, if it is packaged well?

      I sure think so – pretty much all of the world’s information is now available for free in one form or another on the Internet. But most of it is shittily presented. Read through any of the longer Wikipedia articles – you’ll find repetition, poor writing, and inconsistency that will make you dizzy and sleepy, even while the underlying information might be great from a technical perspective.

      The barrier to efficient learning is thus not whether or not the information exists, but whether or not you can find it arranged in a way that streams easily into your brain for assimilation.

      Take this blog as an example. Am I the first person to ever spend less than he earned and then retire early? Of course not.. but a certain percentage of people find this blog to be an interesting re-packaging of the material. They already pay me for it by occasionally clicking an ad or using a recommendations link. But later I’ll repackage it into a book which will cost at least five bucks, and some people will pay that too, getting more than five bucks of value from the transaction.

      The decision should not be “free/not free”, but rather “is the quality of arrangement and packaging worth the price I’m paying?”. Given that improving yourself can pay dividends of millions of dollars over a lifetime, it’s important not to insist on everything being free.

      Reply
  • Savvy Financial Latina April 17, 2013, 1:16 pm

    All the comments are inspiring as always. :)

    Reply
  • ashley April 17, 2013, 1:55 pm

    You might want to call and see if you could lower your student loan payments. They have a number of options. This might give you breathing room to pay off the bigger interest debt and your car. Also, there’s a website andthenwesaved.com that I love. I don’t get paid to tell people about it but do anyway. She talks about a debt diet and debt fast and it sounds really hard but after a while of not spending on anything extra you really start to get used to it. You could put all that extra money towards your debt. Kids will only make your debt worse. If it’s all student debt the money can go to that and retirement unless you love your job so much you want to work til you die.Some people do. I have an uncle who retired at 80 and went back to work and he’s rich so he didn’t have to.

    Reply
  • zhelud April 17, 2013, 2:27 pm

    A car payment, and a bus pass payment, and they live only 2 miles from work? Now there is some low-hanging fruit…

    Reply
  • Jen April 17, 2013, 2:30 pm

    I have a couple of follow-up questions about cell phones.

    1) If one pays the ETF and switches to, say, AirVoice (I’m currently an AT&T customer), can one keep their phone number?

    2) If one is in a hair-on-fire, running-and-screaming DEBT EMERGENCY (hello, long-held student loan debt), and one unexpectedly comes into exactly the same amount of money it would cost to terminate their cell contract early, should one liberate their cell phone or apply that money toward the debt?

    Thanks!

    Reply
    • Mr. Money Mustache April 17, 2013, 9:46 pm

      Hi Jen – yes, you get to keep your phone number. And yes – invest the money into cancelling the cell phone, then use the phone plan savings to pay down the debt.

      (because paying, say, $200 to end a plan and save $100/month is like earning $1200 per year on that $200 investment. That’s 600% annually before compounding, and even the worst debt is only 10-25% interest these days. Always invest money where it pays the highest return).

      Reply
      • Jen April 19, 2013, 5:42 pm

        Thanks!

        Reply
  • stagleton April 17, 2013, 2:50 pm

    can’t get over the cars people drive. People need to learn to see the beauty in beaters! Whenever they start up and go from A->B, it’s a beautiful thing.

    Also tiny cars are super cool. At work some dude drives a car with a 200 cc engine, gosh I need to get one of those. An SUV was parked right next to it and I swear it could have fit in the back.

    Reply
  • chris April 17, 2013, 6:33 pm

    I would not skip renters insurance. Most renters ins. covers lose of. Use , and personal liability too. Replacing all our stuff is you have a loss sucks BTDT.
    I debated this topic with DH lots of times. He insisted. We were self insured
    And our stuff was mostly junk anyway. He is now greatful I wasted two hundred bucks on insurance. Our totally legit claim is going to cost our ins company six figures and we will still have uninsured loss.

    Reply
  • Scott April 17, 2013, 7:04 pm

    “[...] we should have $723 every month left over. But we never do.”

    Best thing to do there is to make sure you never get the money to spend. Up your direct-to-investments contribution (5% 401k is too low), and you’ll not notice it’s not there.

    Reply
  • Auburn April 17, 2013, 7:18 pm

    Why can’t this couple decamp to the Seattle suburbs and commute to work using public transit? The rents in the Seattle burbs (esp. So. King Co.) are FAR less than the rents in Seattle. For example, you could rent a 2 bedroom apt. in Auburn for less than $1K a month (a friend of mine rented a 2 bedroom/1 ba apt. in Auburn for $790/mo; I think the pet deposit is like $450 which you pay when you sign the lease) and take the Sounder train to Seattle each day for $175/month (that’s full price, no subsidy). The train commute from Auburn to downtown Seattle on the Sounder is only 30 minutes, which is not too bad of a time commitment, and on the train you can do a variety of things to amuse yourself and not have the stress/cost of driving (read MMM’s blog for example). Even considering the cost of public transit (assuming no employer public transit subsidy, this couple could save at least $500/month, which would help greatly accelerate paying off the debt. Seems to me that this would be something to seriously consider.

    Reply
    • Mr. Money Mustache April 17, 2013, 9:37 pm

      That sounds like a losing trade-off to me: two people spending an hour every day on a train, to save $500/month.. when that time could be spent getting some essential cycling exercise before work, getting home earlier, and furthering your career by reading at home.

      I encourage many cost-saving measures, but long-distance commuting is rarely one of them. http://www.mrmoneymustache.com/2012/10/18/why-your-time-is-worth-way-more-than-25-per-hour/

      Reply
      • Kevin April 18, 2013, 12:30 pm

        I think that public transit (especially trains that have wifi) is a really good middle-ground between a self-powered lifestyle and a car-based one, when your short to medium term options are limited.

        For instance, I commute from the Boston suburbs to downtown, and I get MOST of my email and other morning drudgery done even before I set foot in the office. For me it’s a huge deal to get that kind of time to work and pay a pretty stiffly discounted cost-per-road-mile out of it (0.145 dollars/rm!)

        Reply
        • MrMonkeyMustache April 21, 2013, 10:18 pm

          Except I have to point out that when you are working on the train you are essentially giving your time to work for free. I don’t suppose that they pay you extra for the time you spend doing it?

          Reply
          • Mr. Money Mustache April 22, 2013, 7:09 am

            I think it’s fair to insist that your work time counts as work time and credit yourself for it. So if you work for an hour in the train and another hour home, and you arrive at the actual office 9am, that means yo’re homeward bound at 3PM. Evening and weekend work from home counts too. Many people put in more than 40 hours of work at their jobs and never even try seeing what happens if they reduce it to, say 37.5 better-quality ones. It’s very unlikely you’ll get fired, and you might even start doing much better work.

            Reply
            • Kevin April 22, 2013, 9:49 am

              I don’t mind putting in extra hours as I am fairly careerist and still looking for that six-figure MMM earnings goalpost. It’s really a matter of 1) personality and 2) a fair assessment of the future payoff. I have a reasonable expectation that the earnings I “spend” working on the train will be recouped in the future. Maybe that’s rationalization on my part, but I’m sticking with my FI savings goals so I’m not really all that put out by it?

              In any case, I do think commuter rail can make sense for a lot of people who want to save on both housing and transportation costs, as long as it’s done carefully and with a “investment” frame of mind as opposed to just doing it because it’s there.

              Reply
  • AmAnda April 17, 2013, 7:49 pm

    Im very jealous reading of all the low cell phone plans in the states. I have found nothing that compares here in Canada. Paying for unlimited data with caller id and all the bling is usually around 100+ dollars here. When I tell people that I dont have caller id or internet on my phone they think Im crazy. Im a real nut when I tell them Im considering getting rid of the thing altogether.

    Reply
    • Mr. Money Mustache April 17, 2013, 9:23 pm

      One of our readers did contribute a bit about Canadian cell phone options – see this post: http://www.mrmoneymustache.com/2012/10/25/cheap-cell-phone-plans-in-canada-and-beyond/

      Reply
    • Ascension April 19, 2013, 1:30 pm

      I don’t even OWN a cell phone… How crazy is that? Yet, I seem to be able to live my life quite well.

      Reply
      • MrMonkeyMustache April 21, 2013, 10:23 pm

        Assuming that you are not yet FI. You must have a huge sense of stability in your life. I and a lot of my under-30 peers feel that the opportunity cost of not having a cell is not worth it. Things like being unable to make finance related calls to my bank during bank hours when I have an epiphany after reading a new MMM article. Or missing a call from a potentially higher paying job during off-peak hours would be not worth the disadvantage of only having a phone at home. In fact I have a cell INSTEAD of a home phone.

        Reply
        • Ascension April 23, 2013, 7:58 am

          I am not FI yet, but I do indeed have a good deal of stability in my life. Not sure why you would need to call your bank so often when most bank/finance operations can be done online (at least in my case), but I certainly understand what you mean for the work situation. If I were in the private sector or working as a freelancer, I’d most likely have a cell phone.

          Things may change in my case though, and if I come to a point where I find that it would be very useful for me to have a cell phone, I will go out and get one. I actually looked into acquiring a cell phone plan, but with the costs involved and the limited use I plan on making of it (mainly for emergency situations while I’m out on big bike rides), I didn’t manage to find a deal that was worth it in Canada. The main thing is that I don’t want any of the texting/internet/integrated microwave options as I find that many people actually create time-wasting needs when they purchase a smartphone. They end up spending crazy amounts of their free time on pointless things. It seems that no one offers the basic ‘cellphone’ that I am after anymore.

          Reply
  • andrea April 17, 2013, 9:18 pm

    mmm does it again: hilarious and helpful all at once.

    Reply
  • Mr. Bonner April 17, 2013, 11:21 pm

    I like the classic MMM advice.

    One of these days it would be interesting to post a case study then let the commenters do the advising to see how the MMM community responds. To take it further MMM could rate the comments as stache-less, better luck next time / peach fuzz, on the right track, but not quite / mega-stache, right on!

    Reply
  • Peggy April 18, 2013, 7:10 am

    You are very similar to the young couple whose story I used to start off my book (The Naturally Frugal Baby), except that you haven’t yet shot your plans for reproduction in the foot by buying a house.

    I haven’t read the other comments, but this is what I’d add to Mr. Money Mustache’s advice:

    Work hard to get your husband into a better-paying career. This will help you pay off debt more quickly, and will give you more options for the future, especially considering that you plan to have a child–options to take an extended maternity leave, or even have one parent stay at home. Biologically, having a child is much harder on the woman than on the man, and being the main breadwinner on top of that is not an easy load.

    Now, before you have children, is the time for you to get ahead financially–paying off debt and scrimping and pinching every penny until it bleeds. These things are much harder to do after you have a kid, and you should plan for your financial progress to almost stall then. But five years of DINK should be plenty for getting out of debt and building up some serious savings.

    You’re young, and have a lot of financial goals that can’t all be met at once. Buying a house may have to wait until later. (The young couple in my example story bought the house first, and then found that they could no longer easily afford to have children.)

    Instead of selling eggs, concentrate on cutting expenses, paying down debt, and building frugality skills–these will pay off much, much better for you in the long run. Even people with few assets can make “microinvestments” of time, money, and energy that give excellent returns. In your case, you’re spending a crapload of money every month on food and eating out–anything that you can learn now about cooking nutritious meals that you like from scratch with simple ingredients will immediately pay off fabulously for you, and will continue to pay in the future.

    Reply
  • Fiddlybee April 18, 2013, 9:55 am

    I donated eggs to a friend many years ago. I’m very happy that I did it, because I am close to the family and the kids are wonderful. It was not something that I personally would have done for a stranger or for money.

    The extraction process hurt quite a lot. The hormone therapy was kind of scary, but it was also a very cool and interesting science experiment. Bonus: I can give myself injections now without flinching. As for the other possible problems mentioned in the ‘eggsploitation’ link: nope none of them happened. I was however a bit sore once a month for the next couple of years.

    I agree with MMM on this one: There is no need to consider donating eggs, when there are so many easier things you can do. The lifestyle changes will pay you back forever since you will develop frugal habits and techniques that can be applied any time.

    Reply
    • bogart April 19, 2013, 8:42 pm

      I “donated” eggs myself, repeatedly — to myself, as my husband and I needed to use IVF to conceive (I wasn’t a good candidate for treatment, thus the repeatedness of the experience; it took a number of tries). And — yeah, in the overall scheme of things, not a big deal (well worth it, certainly). I’ll call your unflinching self-injection and raise you “intramuscular, in my own rump.” But yes, the egg retrieval day stinks: the stuff they knock you out with, not good fun.

      I also know a number of families who have become parents thanks to egg donation and would never dream of criticizing someone generous enough to do this for another person. It is a wonderful gift.

      But, yeah — for the money? Definitely not worth it. A wonderful gift (and worth remuneration for the hassle and risk, don’t get me wrong), but not a good way to earn money. Pack your lunch and get a cheaper car!

      Reply
      • 'Stashless in Seattle April 19, 2013, 9:01 pm

        My sister is a donor, and part of the reason I’ve considered it (the money is at least 85% of the reason, let’s be honest) is that she’s actually found it to be rewarding in a lot of ways. We’re lucky enough to have great genes — our parents’ fault, it has nothing to do with us — and it actually does help someone. So it’s not necessarily off the table, but if I DO go forward with that, it will be because I adjusted the aforemnetioned percentages.

        Reply
  • Rob aka Captain and Mrs Slow April 18, 2013, 1:59 pm

    Regarding cars Andrew Hallman in his must read book Millioniare Teacher in chapter one has a great article on how to pay almost nothing for a car. His gist buy a fully deprecated car drive it for a year or two and sell it for what you paid for and then buy another one.

    Let someone else pay the deprication

    Rob

    Reply
  • jack April 18, 2013, 7:37 pm

    This case study sounds a lot like my family… with one problem… we made a terrible decision two years ago a bought a car we could not afford (we put no money down and rolled in 5000 debt from the car we traded in into the loan). So we are underwater on the car (owe about 18,000 and the car is worth 10,000). We would like to sell the car and get a cheaper one but don’t know how since we owe so much more then the car is worth and would need to have money for the new car as well. Advice???

    Reply
    • Mr. Money Mustache April 18, 2013, 10:46 pm

      Start saving! Get the money to pay off the debt that will remain on your car after you sell it for maximum value on Craigslist. Maybe you’ll even get more than $10k?

      If you can survive for a while without a car, you can take that step as soon as you have the required $8,000.

      If you absolutely need a car, you could wait until you have $10k: $8k to pay off the loan, and $2000 for a basic replacement car that you will own, happily, payment-and-debt free. And you will celebrate, because even if you ever replace that car, you’ll do it without debt and Never have a car payment again!

      To get the $8-10k quickly, you’ll need to go into Debt Emergency mode. Which is actually quite fun. I almost WISH I had some sort of debt emergency, just as an excuse to go to hardcore frugality mode and optimize everything to the maximum level. Have a great time!

      Reply
  • Jacob @ iHeartBudgets April 19, 2013, 2:16 am

    Gah, looks like my previous comment was a tasty morsel for the spam filter. Just wanted to say I really dig your case study here, and going into depth on someone’s personal budget is sweetness! I agree, kick the car, lower the cell plans and don’t step foot in a restaurant (outside of your $300/month food budget) until that debt is killed. Seeing as how MMM just brought you $23k extra a year to throw at the debt, you’ll be debt free and investing 40% of your income, which is ridiculous!

    I personally, am working at a much slower pace with a big mortgage and not much margin, but after reading through about 50 posts in the past week, I’ve been inspired to start growing my stubble and making some decisions to kill my SL debt MUCH quicker than anticipated. Thanks for the badassity as always, MMM!

    Reply
  • Loama April 19, 2013, 11:38 am

    Stashless…I highly recommend checking out the Grocery Outlet. For those of you not familiar the grocery outlet sells near expiration and manufacturing overstock.
    I shop at the one in Madrona and its awesome, there are several in the Seattle area. Large contributer to cutting my grocery bill in half, between there and Costco most of my needs are met. They get a fair amount of natural and organic stuff. Cheese selection is awesome. They are locally owned and also get stock from surrounding companies e.g., essential bakery, franz bakery, eastern WA fruit and vegetables

    Reply
  • blindsquirrel April 19, 2013, 8:35 pm

    Stashless, you are getting your stuff together. That is a start. It is not a sprint and it does not happen overnight. You did not get in the muck overnight and you will not get out of it overnight. Once you hit the elbow of the compound interest curve when it is loaded with assets in your favor, you will be shocked in a positive way.

    Reply
  • Jeremy @ Go Curry Cracker! April 20, 2013, 8:15 pm

    My wife and I were in Seattle before we retired and started traveling. I think across the board our expenses were lower

    We lived in the U-district and paid $980 a month for rent. Utilities were about $75 a month, including Internet. This was a step up from our small apartment in the International District at $485/month

    We owned 2 bicycles and no car. I biked to work most days, either 8, 21, or 23 miles 1-way, depending on route. We had no renters insurance, since nothing we owned would be missed. A bus to anywhere was a block away

    DVDs from the library, 5 blocks away, eliminated the Netflix bill

    Most of our meals were made at home from ingredients grown in our P-Patch or from a CSA, with additional items from the farmers market. Sadly farmers market prices are high, but we weren’t in debt emergency mode.

    It’s a taboo subject, but it’s also worth considering how much you are spending on your 3rd family member, the dog. Personally I would likely not find a new home for a dog for financial reasons, but its worth knowing how much it is costing you, from food to vet bills to increased rent.

    Reply
  • Jeremy @ Go Curry Cracker! April 20, 2013, 10:21 pm

    On the topic of buying a house, Seattle is a pretty horrible place to buy but a great place to rent

    I figured it would cost us more than $1000 a month MORE to own a typical house in Seattle than what we were paying for rent, which begs the question: why ever put yourself in that situation

    The really smart guy over at jlcollinsnh.com recommends putting your money into a Vanguard REIT instead
    http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/

    (Here is my own analysis for the Seattle market: http://www.gocurrycracker.com/living-large-in-a-small-space/)

    Reply
  • Alice April 21, 2013, 2:18 pm

    When at Costco, buy only bulk groceries. Get a CSA for veggies/fruit. Cook at home. Meal plan. This reduces your food cost. I like the pot luck idea for family dinners. Bring your lunch daily. Healthy and quick.
    Also bike or public transit in Seattle is so easy! Try it. Sold my car in an urban city 5 years ago and only use zipcar to visit friends in faraway suburbs occasionally.

    Donating eggs can be a wonderful gift to someone else, however, if you have no intention of changing the habits, all the hormonal issues associated with it are not worth it. There is more than enough $ in your budget to trim, especially since you have an unknown $700+ floating around each month. Mint (has an app) or a pen and notebook can be used to track spending.

    You said you increased your withholding. Why? Are you trying to get a big refund as a means of forced savings? You would be better off using that money to pay off debt instead of loaning it to the government at zero interest.

    Good luck!

    And MMM, the reader case studies are my favorite. I enjoy seeing how others live, especially since I am just a beginner Mustachian.

    Reply
  • Freeyourchains April 22, 2013, 8:04 am

    There are unlimited wants in the Universe, this is the fundamental truth and difference between Wealth and poverty, greed and simplicity, freedom and financial/king/governmental slavery.

    Below just my opinions and critiques.

    Rent: Need for living in very functional, pleasant shelter. More pets than 1/person become wants, not needs.

    Groceries: Half buying of needs, half buying of wants like cookies, soda, chips, or healthy pre-made fruit smoothies, though you could make all of these your self for much cheaper per week, if you still want them.

    Eating out: Mostly a pure want, though to some couples a needed romantic experience per month.

    Internet: Need, best investment of all needs besides filtered water supply, requires modern need of electricity.

    Utilities: Need, though could save a lot of money by getting off the grids and save on all those “customer surcharge fees” that raise 30% every other financial quarter.

    Cellphones: Only need standard, don’t want the smartphones. $40 Vs $135.

    Treehouse: an Investment in better education Want, versus searching online forums for free. Kind of like a gym membership, not needed if self-motivated, but can easily become a waste if not used.

    Bus pass: Need.

    Netflix: Want, be creative and make your own collection/database from realizing you already have all the shows or there are other places to find them, then relax and watch them.

    NPR Membership: Want.

    The best investments: Investing in yourself by learning more knowledge and mastering skills, and growing anything from trees to business models to stocks to self-sufficient bio-domes to your latest inventions and their associated potential gains for humanity and your future generation’s stache.

    Reply
  • Mark Ferguson April 22, 2013, 9:19 am

    I have learned a lot about saving money from this blog, but I am also a little amazed at the extremes people will go to.

    What I want is to be able to afford anything and everything I ever want to do. I want to be happy and live life to it’s fullest. At the same time I save money where I can on things that are not important to me or do not effect my happiness.

    I spend the majority of my free time focusing on ways to increase my income, not save on expenditures. I think there is much more potential income out there than there is possible savings. I have to admit one of my vices is cars. I love them, I love old cars and fast cars and have since I was a kid. For me to give up my cars would make me extremely unhappy and unhealthy. In order to afford nice cars I have to come up with new ways to make money and better ways to invest my money. I have chosen rental properties because of the returns I am getting(over 24% on all 7).

    I think the key to life is being as happy as possible and in that pursuit we have to balance what is worth the money and what is not. To me living a frugal bare essentials existence does not make me happy.

    Reply
  • Carla April 23, 2013, 7:19 am

    Hi!
    The single best thing I did to eliminate stupid spending was disconnecting my credit card from everything but Amazon (I get my cat food Subscribe and Save- you should try it!) And while I know Mint.com is king around here, I strongly prefer YouNeedABudget.com.

    Reply
    • Greg May 2, 2013, 12:49 am

      I agree YNAB (YouNeedABudget.com) is better than Mint for planning your spending. My money used to just disappear each month. Now I plan where I’m going to spend it and I don’t spend on what I haven’t planned. All of a sudden my debts are getting paid down rapidly and I know where every penny goes.

      Reply
  • Joe (yolfer) May 1, 2013, 10:59 am

    I know a lot of Seattle folks commented on this blog post so I just wanted to let y’all know that we’re doing an MMM blog reader’s meetup in a couple weeks.

    Here’s the scoop: http://www.mrmoneymustache.com/forum/meetups-and-social-events/seattle-meetup-may-18-gas-works-park/

    Reply
  • Aleks July 10, 2013, 12:27 am

    The most important reason to have renter’s insurance is for liability. If you or anybody else causes extensive damage to the property, then the building’s owner may sue you to recover the damages. If you don’t have insurance, then you can suddenly find yourself liable for hundreds of thousands of dollars.

    Every Seattle apartment that I’ve lived in has required that all residents have renter’s insurance for exactly this reason.

    The good news is that renter’s insurance is amazingly cheap. I pay $10/month, which includes something like $100,000 in liability coverage, and $60,000 in property coverage. (I don’t think I own anything close to $60,000 worth of stuff, but my agent and I found out that $10/month was the minimum price that Safeco would offer, so we might as well maximize the coverage.)

    I’m guessing that the vast majority of that $135 is for the car, not the apartment.

    Even so, I would recommend that everyone contact an insurance agent. You may be surprised at how much money they can save you. I was originally paying Geico $45/month for my scooter, but my insurance agent got me a new policy for $15/month, with the same level of coverage.

    Reply

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