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  • Saving vs Living

    So this topic seems to come up not infrequently but didn’t see a thread to join without hijacking the discussion.

    I’m 37, ER, married, 2 kids (2,4 no more planned unless the urologist screwed up), single income living in the southeast.

    Kids have recently started back to daycare/pre-k and I’m bored out of my mind when I have days off and they are gone.

    Really enjoy working out but only so much of that one can do in a day. Looking to start up some hobbies, travel, etc to fill the time but I feel somewhat restricted by my current savings rate.

    Love my job, stable sustainable practice, don’t really want to retire early (obviously a long way off irregardless)

    1099 income 350-400k

    Assets
    Retirement Savings (SEP, IRAs, rollover 401k from prior employer, wife’s 401k/IRA/Roth) - approx 670k
    HSA - 40k
    Taxable account - 65k
    Savings HYSA - 50k

    Liabilities
    House - 450k @ 2.59% fixed 15 yr (150k of equity)
    Student loan - 65k 0.93% variable, 3 years left

    Monthly savings / fixed expenses
    SEP - 5,250
    HSA - 633
    Wife IRA - 500
    529 - 1000 (plan on public school until high school)
    Taxable account contributions - 2000
    Taxes - 6500
    Mortgage - 4700
    Childcare - 2000
    Insurance (health, life, car, etc) - 2600

    Add in all the misc expenses and pretty much am net even every month (could add these but didn’t want to get in the weeds). Could probably find a few places to save some money here ~ $500

    Upcoming expenses
    Will need to buy a car for my wife in the next few years but no rush in this car market.

    So I guess my question is should I try to cut back on some of my savings (wife’s IRA , taxable contributions, or 529) to pursue hobbies, interests?

    I realize the majority of this forum leans towards aggressive savings and trying to reach FI. How do you balance savings rate vs living in the moment?






  • #2
    Just wondering why your taxes and mortgage are so high? Seems much higher than I would have anticipated, even given your income level. We live in a high-property tax state and our mortgage is pretty comparable and still pay much less for mortgage (even less if we weren't adding extra payments).

    That being said, we are just entering our first full year without student debt (which was very high). We have a lot more expendable income each month and still am getting used to spending some of it. I think a lot of it depends on your long-term goals with savings. Between your SEP and taxable accounts, that is quite a bit of income each month being saved. Are you hoping to retire early? Also, any reason you aren't doing the backdoor Roth IRA?

    I think you probably have more wiggle-room in your budget than you imagine. Just depends on where you see more flexibility in the budget.

    Comment


    • #3
      Retirement is about 20% I excluded your taxable.
      Days off travel does not make a ton of sense.
      You have room for the car and hobby in your taxable. You said you have some room in misc expenses.
      What hobby are you looking at? You have room, regardless. Family decision. Spend or save.

      Comment


      • #4
        Why daycare of $2K per month and you state you are single income couple. Could the spouse not be able to take care of the children at home and save that $2K.

        Comment


        • #5
          I like mountain biking as an inexpensive hobby. Buy a nice bike and it lasts for many years, even with heavy use. And going out in the woods to ride the single track is free.

          My other hobbies are in a whole other category. Sailing and skiing can be moderately expensive or very expensive. As long as the retirement savings are in place, you can do what you wish with the rest. If paying off the loans in 3 years will free up more cash flow, you could possibly lower your savings rate a bit for now, and then ramp it up again once the loans are paid off. Unfortunately, however, that can be a risky move. Sometimes spending more for today and decreasing savings can become a one way street.

          Comment


          • #6
            Originally posted by NumberWhizMD View Post
            Just wondering why your taxes and mortgage are so high? Seems much higher than I would have anticipated, even given your income level. We live in a high-property tax state and our mortgage is pretty comparable and still pay much less for mortgage (even less if we weren't adding extra payments).

            That being said, we are just entering our first full year without student debt (which was very high). We have a lot more expendable income each month and still am getting used to spending some of it. I think a lot of it depends on your long-term goals with savings. Between your SEP and taxable accounts, that is quite a bit of income each month being saved. Are you hoping to retire early? Also, any reason you aren't doing the backdoor Roth IRA?

            I think you probably have more wiggle-room in your budget than you imagine. Just depends on where you see more flexibility in the budget.
            He/She Can't do a BDR since they have a SEP IRA

            Comment


            • #7
              Originally posted by White.Beard.Doc View Post
              Sailing and skiing can be moderately expensive or very expensive.
              Whenever I hear the word sailing all I can envision is the raspy voice of Rod Stewart belting out " I am sailing......"

              I wish I could have learned to sail but unfortunately i could not swim however hard I tried and the fear of being washed overboard prevented me from taking up that sport. A hematologist colleague who I had covered for in the past used to be an avid sailor, sailing from Charleston to Bahamas. He offered to take me aboard quite a few times but the fear precluded it each time. In hindsight I should have donned a life jacket and jumped at the offer.

              Comment


              • #8
                Money spent on hobbies is well spent imo as long as you actually develop those hobbies. I know some people whose hobby becomes buying stuff for theoretical hobbies but they never develop the actual hobby, just keep buying stuff. The good thing for you is that there are a ton of people out there like this, so a never ending supply of hardly used hobby equipment if you know what you are interested in and where to look. The hard part is knowing what you want to do.

                So first thing, what do you want to do? I think looking back to the things you loved as a kid before medicine and the business of life squashed your creativity/ability to look outside the immediately practical is a good place to start.

                Comment


                • #9
                  Originally posted by Kamban View Post
                  Why daycare of $2K per month and you state you are single income couple. Could the spouse not be able to take care of the children at home and save that $2K.
                  Weve tried lots of different arrangements for childcare and not as simple as just having the kids stay home with the extra strain that put on my wife and her overall mental/physical/emotional health.

                  Everyone has different arrangements that works for them but for us this is a necessary expense for our overall well being as individuals and a family.

                  Could possibly save a little money by switching to part time (currently they only go part time but pay for full time) but the cost difference is negligible ($300ish)

                  Props to anyone who can be a full time stay at home parent of small children because god knows I couldn’t do it.

                  Comment


                  • #10
                    Originally posted by NumberWhizMD View Post
                    Just wondering why your taxes and mortgage are so high? Seems much higher than I would have anticipated, even given your income level. We live in a high-property tax state and our mortgage is pretty comparable and still pay much less for mortgage (even less if we weren't adding extra payments).

                    That being said, we are just entering our first full year without student debt (which was very high). We have a lot more expendable income each month and still am getting used to spending some of it. I think a lot of it depends on your long-term goals with savings. Between your SEP and taxable accounts, that is quite a bit of income each month being saved. Are you hoping to retire early? Also, any reason you aren't doing the backdoor Roth IRA?

                    I think you probably have more wiggle-room in your budget than you imagine. Just depends on where you see more flexibility in the budget.
                    Mortgage is so high because it’s on a 15 year and while overall cost of living is not too high here we live in a more expensive part of town so we can use the public schools when the time comes.

                    Taxes are a little over what I actually end up paying but rather have extra saved rather than scramble come tax time. Usually throw the extra at loans or taxable account

                    Agree there is probably more flexibility that I realize I just keep falling into trap that all extra money must be put into savings

                    Comment


                    • #11
                      Originally posted by White.Beard.Doc View Post
                      I like mountain biking as an inexpensive hobby. Buy a nice bike and it lasts for many years, even with heavy use. And going out in the woods to ride the single track is free.

                      My other hobbies are in a whole other category. Sailing and skiing can be moderately expensive or very expensive. As long as the retirement savings are in place, you can do what you wish with the rest. If paying off the loans in 3 years will free up more cash flow, you could possibly lower your savings rate a bit for now, and then ramp it up again once the loans are paid off. Unfortunately, however, that can be a risky move. Sometimes spending more for today and decreasing savings can become a one way street.
                      Actually have a Transition Scout bike I need to get out more. Looking at some other hobbies to do when the weather sucks (ie cold/rain)

                      Would be interested in sailing but that seems like a expensive upfront cost.

                      Would be nice to have the extra cash flow from no loans but at 0.9% hard to argue paying early

                      I guess just overall my default has been to save and I feel guilty if I’m not maximizing savings. Trying to develop a more healthy balance

                      Comment


                      • #12
                        Originally posted by Anne View Post
                        Money spent on hobbies is well spent imo as long as you actually develop those hobbies. I know some people whose hobby becomes buying stuff for theoretical hobbies but they never develop the actual hobby, just keep buying stuff. The good thing for you is that there are a ton of people out there like this, so a never ending supply of hardly used hobby equipment if you know what you are interested in and where to look. The hard part is knowing what you want to do.

                        So first thing, what do you want to do? I think looking back to the things you loved as a kid before medicine and the business of life squashed your creativity/ability to look outside the immediately practical is a good place to start.
                        Thats good advice and definitely do not want to fall into that trap. All my current hobbies are active outlets (working out, running, biking) but trying to find something else for the days when the weather is not great or I’m too physically tired.

                        I like the thought of going back to child hood and looking at hobbies through that window. Will have to give it some thought.

                        Comment


                        • #13
                          Are you handy? If I had whole days with kids at school I would be tackling my home to do list.

                          Exercise is a good one and you are right there is a limit to how much you can do but try to do the more fun activities like join an adult league sport or find some nice hiking/biking.

                          You might already do this but yank a kid out of daycare individually and do something fun with them. I have kids that age and trying to do something with both a 2 and a 4 year old can suck. But just a 4 year old would be a blast! Even just a 2 year old would be fun. You can tailor the activity to the kid. It gets better as they get older and their interests become more interesting but than you have to mess with the school schedule.

                          There are lots of free/cheap hobbies out there. Figure out what you like. Being bored can be dangerous.

                          Comment


                          • #14
                            Pickleball. Underrated activity, low barrier to play/entry. Almost always games around. Cheap and outdoors

                            Comment


                            • #15
                              Being bored sometimes is ok as well. The "always having to do something" can be dangerous, the most obvious way that manifests is all of us constantly on our phones/electronics. I appreciate the irony in my post as I am commenting on an internet forum.

                              Comment

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