My neighbors both work and have 1 child, 3 months older than my 4 year old. They play great together and she's a lovely girl. I enjoy watching her and she's a truly great kid. My neighbors are nice people. They both have MBAs and are a couple of years older than my DH and I. We live connected by a wall and my 4 year went to school and once said "the little girl living behind the wall, I play with her all the time," to the teachers. When I explained we all had a good laugh.

So you can imagine this family probably makes double what my DH makes. At least that's what my DH and I believe. So $400k/year? Probably but at the minimum $300k.

So what happened is I volunteered to keep their daughter 2 full days next week while they work because they don't have childcare. Their private montessori school is out and they can't find a camp to send her to. The other three days they are going to use backup care agency and have a nanny they don't know come to their house. I feel terrible whenever I see that happen because I know the nanny just sits there with their daughter in the house. And she's pretty bored. So yes I always offer during school vacations or days off to take their kiddo with mine. I've been doing this for years. I can't do everyday of the week because of other obligations but I do try my best.

The same problem will occur at the end of the summer when the week before school they were "waitlisted" for the camp they are in the rest of the summer because they didn't register early enough. They registered in January. I'm not sure I'm ready to take her on 5 full days, so I suggested half day camp for the week with my older kiddo and I'll keep her the rest of the day. I have to find a camp I can afford however.

Right now I've signed my kid up for one camp @ $90/week for half days, and I feel super guilty spending that much. I know they could take vacation but they are taking 2 weeks in July when their parents come to visit and have used another week during spring break and more during Christmas. So they do take vacation to care for their daughter, but this is a lot.

But what stunned me? The price of her camp. Okay her montessori school is ridiculous enough at $35k/year. But the camp? Well try $1200/week. Yes a week! Seriously what they are shelling out in camp is about what my family lives on with our extremely expensive mortgage a month!

To be fair they make double what we make. But even doubling our spending to $10k/month when half of it goes to camp? They shop entirely at whole foods and probably never price compare. I know they dress themselves and their daughter in great name brands and they get boxes daily delivered from online shopping. They never shop in real stores. So even while I assume they are saving a lot, they also spend a lot. Their monthly overhead has got to be high.

But on this forum we always talk about spending and money. So I discussed with my DH if I went back to work and we had all this extra disposable income. Every penny would be disposable obviously since we can survive on his now minus childcare. Yes I may pay right now for childcare but that is a transient expense. So would our lifestyle change? I would hope not.

But the real question is would I be able to spend that freely if I made that much? If we were making $30k/month gross and were saving $5k, taxes $10k, and had $15k to spend would I? I think I would be saving every extra penny and would shorten our time toward financial independence.

I realized no I wouldn't. I can honestly say I can see the exhaustion on my neighbors faces. I can see how they can barely play with their daughter. Their actual comment "we are trying to cut back her tv watching." They never go out on the weekends except to eat. They'll send her to the playground with us but they don't join us. The fact that they are struggling to be able to cover watching her because they are already using all their vacation days. Every day they are on the hamster wheel. So perhaps my DH and I are giving up FI and early retirement, but we're also enjoying our life now. We'll get there eventually but it'll be slower.

What would happen if they were on 1 income? Or two part-time incomes? Right now they give their daughter the best of everything. She'll probably go to college of her choice paid, paid wedding, house DP, etc.

I wonder if perhaps it's the catch-22 of the "upper middle class" dual income lifestyle? The people making enough that they feel they should afford everything but can't. And somehow manage to spend an enormous amount on just "bare bones budget" because their choices force them into needing so much money? The cars, the big mortgage, the private schools, etc?

Recently I've definitely made peace with our lifestyle. In the sense before I wondered if I wasn't "achieving" enough. I am not contributing to society by working. I am not using my degree. I am not producing as a fully functioning adult "should" be. I feel inadequate compared to the many high power dual income couples I meet and know. Where I chat with the nannies rather than moms since I know them better.

But this year I've made peace with it. I've made peace with my decision to stay at home. That I do not need to work to validate myself. That even if I chose to work, money doesn't rule my life. So whatever I chose to do I know our lifestyle will be okay. If my DH loses a job we are not going to crash and burn and never retire.

Rather we could possibly "retire" now. Now I feel secure that I do not need $3M at a minimum to retire. I think $1.5M is adequate if not less. And I don't feel pressured that we have to work until retirement or else we'd be shunned for being lazy.

Money can bring great happiness. But rather being content with what you have is more important.

So I look across the wall and realize that if I went back to work we could be my neighbors. It's possible we'd be financially independent in 2 years. We could possibly save $200k/year or more. But it's also possibly we'd up our consumption just because we'd have to. We'd need more convenience because we have less time. I hope they enjoy their daughter as much as I do. I will say I do have envy sometimes at the thought they could be FI today possibly (not sure about their finances, I think they have a lot in the bank because they make a lot) while we still need to work another 5-10 years to get to where they are.

Have you ever contemplated your money or your life? Did you make a choice to scale back or retire early? Or take a different job or move to slow down? Why?

My DH and I have been discussing the cost of living situation. He just refuses to believe that if we make less and move to a lower cost of living things will work out.

He wants to maintain our current standard of living. He isn't worried so much about what we spend, we don't have a high burn rate for our income. But rather our savings rate, he's uncomfortable with the idea of us saving less. He knows mentally that you make less = save less. You have less income you need to replace, but the idea of going backwards and saving less per year makes him uncomfortable.

His statement to me was interesting, since I'm the one who has gotten more into early retirement. He said never considered us retiring early but the more he thinks about it, the more he wants us to be independent on jobs. He really doesn't want to retire and a lot of self worth is tied to working and what he does. But he doesn't want to be dependent on a job where a job loss will leave us floundering. He's reflected a lot lately and he wants us to be flexible financially always. That we are able to weather storms.

But how do we get there? He said how can I predict we'll have enough? How can we guarantee that our estimates of an annual budget are accurate? How do we know that unexpected expenses won't crop up after we "retire"?

I can't guarantee any of that. I don't know that we won't get sick or need medical care to the tune of thousands of dollars. But I also don't know that we couldn't die young before we get to retire.

And truthfully we aren't saving enough for college and we're both aware of it. But at the same time right now college is taking a backseat to everything because we are so unsure about the future.

I'll write my thoughts on college. For now I'm going to a splash park and enjoying the summer with my kiddos!

I never considered early retirement for DH and I. I still don't. I've always planned for 55 for DH to retire and I join him. I hate planning that far out because it seems weird to assume return rates and that we should have "millions" according to the savings calculators.

But rather I just have lived by the motto, save as much as you can, as early as you can, and see where life takes you.

So we've done that. I guess I should add I am soon to be 35 and DH will be 37 this year. Our financials are stable. But early retirement? We'll definitely hit it by 55. But any earlier? I'm not sure.

Let's assume we live on current budget of $60k/year. Right now that consists of half our mortgage and half our spending. At a Safe Withdrawal Rate (SWR) of 4% we'd need $1.5M. To be extra conservative for retiring early perhaps 3% WR would be better so we'd need $2M nest egg. This is of course assuming we have no Social Security draw. We could split the difference since FIRE Calculator says we'd have 0% chance of failing a 50 year retirement with $1.75M and a $60k/year spend rate. Also I'm assuming we get to spend all $60k on health insurance, health care, car replacement, home repairs, and we'd have no mortgage.

How long would it take us? Well using $475k retirement starting balance, assuming a $30k addition to retirement annually and a 6.5% return we'd have after 10 years $1.3M. We'd be $200-400k short of the nest egg I'd need to be comfortable. However if we looked at 15 years we'd hit $2M, the high end of our number

However that's not looking at our taxable accounts and assuming we're mortgage free. I find it hard to account for all variables because we haven't settled in a final home. We have no idea what our spending budget would be in a final home or how much we could really have saved outside of retirement. I mean our annual spending could go up by a lot over the next 5 years. It could also go down depending on where we live and what sort of house and lifestyle we live.

Just looking at the numbers I'm pretty confident we are securely on track to retire by 55, and possibly by 45 we could "retire" or at least be financially independent where a job loss wouldn't matter. Sometimes it's the knowledge that you could walk away and not worry financially is the best feeling.

Would we retire at 45? I don't think so. While I think we'll be set to FIRE, it doesn't account for the college expenses we'd be looking at after we FIRE. I think we probably need to wait until 50 because our nest egg would be enough solely in retirement accounts and I think our taxable accounts and cash flow at that time will be going to college. Of course I have no idea if our kids will want to go to college or get scholarships. I'm not even sure we're done having kids yet.

But I'll reevaluate every year. Of course the other factor is everything I budget off of now is based on living where we live. That I plan on changing sooner rather than later.

As I mentioned in our previous post something had to be done to leave where we currently are. And I think at 34 and 36 we are going to "Early Retire" and switch from "high cost/high pay" to something else. Our current savings will give us the freedom to move.

It was mentioned that we may not want to move away from an exciting HCOLA, but I honestly I don't think any of the locations we are considering are "boring". I actually think they fit us better than NYC-BOS-DC does. We're more nature, outdoors, relaxation people.

This weekend we biked and hiked with the kids and I wish we just had better location to do it in. I was worried the entire time biking about being hit by cars. I'd like to also be able to take the kids to hike more somewhere closer. Perhaps one day.

As an only child with three step siblings, and the knowledge my dad will predecease my mom, I worry about my mom. I know that she'll have more than enough money.

But I also know that my parents have always made bad financial decisions but out earned stupid. No matter what bad decisions they've made they've always earned enough to not worry about it. They've leased cars, taken trips every month and lived a great life. But they've never done any home repairs and literally gotten rid of cars because they didn't want to fix it.

My dad still works at 83 and has been forced to take RMD from his IRAs and SS. My mom has a pension and is collecting now SS. With everything they are making too much to qualify for Roth IRA which my mom still does since my Dad still works. So financially good.

The real bad? Well here are a couple of examples. First my mom finally sold a house in July 2012 after it sat empty for 3 years because she had to "clean" it and have it recarpeted and new window treatments to sell it. The people who bought it flipped it in less than a year for $50k more. Sigh. I told her to just dump it and stop worrying about it. She refused and said she had to "fix" it to sell.

Second my parents have a large house they live in part-time. Large as in 5000 sq ft. I worry about my mom trying to clean it, they no longer have a cleaner come in since the one we had got too old. My mom doesn't trust anyone else so she's been trying to clean the house herself. I try to suggest finding someone new but she said they "steal". This house is literally leaking in the roof. When we were there for Christmas we were using buckets all over the house and my DH considered getting up there to hammer in shingles himself.

So my mom promised to fix the roof. I went back earlier this month and it still hasn't been done because she's too busy and it has to be coordinated with tenting for termites and re-roofing. I suggested calling and organizing for her, or even coming back to do it, but she said she has to "clean" and pack up everything. I suggested hiring an organizer/cleaner. But she says they steal and wouldn't do it right.

It's not about the money. She told me that she has $80k in her checking account waiting to do the roof and termites. But how can anything be done if you live in perfect weather and yet almost 6 months later a roof can't be done?

I want to hire someone to come in and just start cleaning the house up. I suggested getting a dumpster put outside so she can stop saying she has to drive to the dump.

This doesn't account for the fact that my parents have a condo they live in part-week as well. Stuffed to the brim. Everytime I visit I am lucky to fit a gallon of milk in the fridge. I have a photo I took as proof of salmon in my mom's freezer from 2001. Yes it's dated. For 2 people they have 2 refrigerators and a freezer.

Every time I suggest downsizing I'm told they can't sell the house it's not sellable. They have to clean it up first.

Mind you my mom had physical therapy for her rotator cuff in the past year so I'm worried about her cleaning toilets, lifting heavy things, etc. She's in overall great health and so is my dad, but seriously? Why do they need 3 cars for 1 driver?

I read on another blogger talking about taking over the checking account. So I worry. I wonder when do the roles reverse and the child starts taking on parental roles?

Is it worth it to live in a HCOLA? Does the income you can potentially earn outstrip the costs? Maybe.
But the truth is that there are more expenses than just a large mortgage although I'll get to that later.

I hadn't realized all the extra expenses but the small stuff all adds up. Our heating expense are $3k/year, $2500/year electricity, $4800/year for gas for cars. Small differences in price could give us financial freedom somewhere else. Saving on heating and electric bills or even gas could be diverted to paying for an individual health insurance plan.

But what really made me start looking at our financials and future plans was we decided to look at houses. We've been in our townhouse for 9 years now. Bought at the peak in 2005 and we've been happy. As I explained in an earlier post we never expected to stay here past 1 kid. Turns out we're still here with two.

But the truth is we started looking at homes this year. We decided why not make the jump, we've been prudent, paid down our home and increased income. Truthfully we can't afford it. Insane you say? I agree.

We looked at our monthly budget and decided okay we'll increase our payments a little, loosen the purse strings, and cash in some home equity. We bought our current townhouse for $575k and can sell it for $729k low end. With what we owe I estimate we'd have comfortably $300k in equity to put down on our next place or 20% and bank the rest.

Well we started our budget search at $750k. After looking around we realized no way in hell were we going to be able to buy a house. We upped it to $800k and started to finally see homes sort of. We looked a house 0.5 miles from us 3 bd/3ba 1500 sq ft on a 3400 sq ft lot listed at $749k went in a bidding war the first weekend with 10 offers, 3 over $800k and settling at $830k. Um no thank you bidding war.

Well that meant our budget needed to head to $900k to get into the market at an "entry" level home that might need work. So we stepped back.

Trust me as you read you're probably screaming move the f$*% out LAL! You're insane. But my DH I think wanted to cry because he loves his career, he wants to continue at it, but the reality of us living here is a tough pill to swallow. Yes DH loves his job, but even if I go back to work we'd be one job loss away from losing the house if we took on a huge mortgage. And honestly we'd be working for what? To make more money to spend it on housing and living expenses. I pointed out we are constantly chasing a lifestyle that people in lower COL already have. It was time to reevaluate the true financials.

Honestly I wasn't comfortable spending so much and getting so little. I didn't like the idea of DH or potentially me being a clown car commuter where he drove at least 1 hour or at "least" an hour on public transit. What's the point of having a family you don't see? Why should he get up and leave the houose at 7 before the kids do to come home by 6 and maybe see them 1 hour??? Why live so far way to afford a home? Then we'd be better off staying put. But do we want to raise our kids in a townhouse forever? Do we want to yard or indoor playspace?

These questions are what ultimately lead us to the hard decision that we need to move. That we need to reevaluate and restock our life. We need to consider working smarter. We've amassed a pretty sizable pot of money, perhaps it's time to maximize what we can do with it.

The next step? Early retirement...but not quite what you think.

Yesterday I got my teeth cleaned during my semi-annual cleaning. I've been going to my dentist for 7 years now and they are very good. The dental hygienist is great and she's a lovely lady. Tells me awesome stories about growing up in a military family and she's lived all over the world.

She tells me she recently turned 65 and was asked if she was going to retire. So I said "will you?" She got offended. Now she's married but without children unless you count two golden retrievers.

She says to me if I retire and take SS I only get 33% of my income. If I wait until 70 I get 45%. I need every penny I can get. My mother is 95 and still alive. I'm going to live a long time. And I want to live in the lifestyle I'm accustomed to. And I don't have enough money. I'll still be short when I do decide to retire. She says it's so hard to save money.

I sit there unable to really comment as my mouth is being worked on of course. Good thing it was because I really wanted to ask, how much money does she really think she needs to retire? 100% of her income? Does she spend every penny she makes?

I sit here now thinking, on these forums everyone touts saving at least 15% for retirement so you can adjust to living on only 85% of your income. But I've been seriously looking at retirement numbers and I've wondered do people really need to replace 85% of their income? I mean if they have a paid for home? Then the mortgage if it's say 20-30% of their income, then perhaps it goes down to 5% repairs/maintenance.

So couldn't someone in retirement live on 65%? And then less taxes because they are in a lower bracket, say saving 10% federal? So is the truth that most people could afford to live on 55% in retirement?

Or it that people are just spending every penny they make? So that the thought of living off what they saved is impossible?

I don't know but I found it sad that she is 65 and worried about retiring and replacing her income. And she can comment that SS won't be enough for her.

Is this what is waiting for most Americans?

Recently my DH and I made a big decision. We are leaving our current location for a new place. We decided that for non-financial reasons we want to move. However we finances has of course complicated our decision.

Do we move without jobs? Do we move to somewhere that we could possibly get jobs in our fields? Do we take jobs in something different with a lot less pay? Do we move somewhere else a lot less expensive?

My preference is to move somewhere less expensive. I think that we can likely get jobs paying enough to cover our basic expenses and if housing is cheap enough we could manage on a lot less.

We certainly don't have enough to retire early but I am not sure we want to. My DH isn't comfortable with that jump. Perhaps when he's 45?

I guess that's the reason why I'm blogging again now. To document our journey for this big change in our lives. I don't know what the future holds but I am excited.