Welcome to this month’s Reader Case Study in which we’ll address Audrey’s questions about her family’s financial future. Case studies are financial dilemmas that a reader of Frugalwoods sends to me requesting that Frugalwoods nation weigh in. Then, Frugalwoods nation (that’d be you), reads through their situation and provides advice, encouragement, insight, and feedback in the comments section (for an example, check out last month’s Case Study).

P.S. Another way to support each other on our financial journeys is by participating in my Uber Frugal Month Challenge! You can sign-up at any time to join the over 9,500 fellow frugal sojourners who are taking the Challenge.

I probably don’t even need to say the following because you all are the kindest, most polite commenters on the internet, but, please note that Frugalwoods is a judgement-free zone where we all endeavor to help one another, not to condemn.

With that I’ll let Audrey, this month’s case study subject, take it from here!

Audrey’s Story

Hi, I’m Audrey! I’m 35 years old and I live in a suburb of upstate New York. My husband and I have been married for almost 11 years and we have two wonderful girls, ages 4 and 6. My husband is a teacher and I work for an insurance company.

We bought our home over 9 years ago and have done a lot of work on it over the years: full kitchen and bathroom renovations, a bathroom remodel, new plumbing, a new sewer line, a new roof, landscaping, electrical, furnace, heat and hot water. We DIY as much as we can, but we do leave certain projects to the professionals.

Our younger daughter will finish day care in June and after that, she’ll be home for vacations and summers with my husband and our oldest daughter. Having a teacher for a spouse offers the huge perk of reliable and free child care! We spend as much time together as a family as we possibly can. One of our priorities for our daughters is to have good experiences as a family, including vacations. They’re both set up with 529 plans and we’re on track to pay for their undergrad at a state school.

As a family, we enjoy local events, day trips, and took our first vacation to Disney World last year. We plan on going back in 2018 to check out the Frozen ride, meet Moana, and enjoy the nice weather when the Northeast is freezing cold. My husband and I also have a trip booked to New York City to see Hamilton.

We’re mindful with our money but we don’t penny pinch on everything. For example, I refuse to budget for groceries. We buy organic and by Saturday afternoon, our fridge is very empty. I try to buy nicer clothes and shoes for the four of us so that they last longer. We also reuse quite a bit of our older daughter’s clothing and winter gear for our younger daughter.

Where I Want To Be In 10 years:

  • Finances: debt-free and retired from my current company.
  • Lifestyle: happy, healthy, raising our two children, and working part-time or in a field that I really enjoy and perhaps involves my all-time favorite hobby: sewing!
  • Career: I don’t mind working, I just don’t want to stay with my current company forever. I’ve been there over 12 years and would like to leave when I have 20 years of service in 2024.

The Exterior Renovation

We have a large exterior renovation planned this June for our house and garage. Currently, we have wood siding and a wood porch, but the Northeast winters have taken a toll on our 80+ year old home. We bid the project out to two contractors and both came in around $70,000. We’ve met with a bank and are applying for a HELOC of $60,000 and our appraisal is scheduled. We’ll be using our emergency fund to pay the $10,000 difference upon the project’s completion, which is estimated for the end of July. Our house is valued at $176,500 and due to the special tools required for this exterior renovation, we won’t be doing the work ourselves. We hope to have the HELOC paid off by 2020.

The project entails removing all of the wood siding from the house and replacing it with Hardie clapboard siding and Restorations Millwork azek trim, replacing the porch floors, columns, and railings, the front door, the garage door and the garage door frame. The project is so expensive because we’re not putting new siding over the existing siding–they’ll be stripping the house and garage, checking for any soft spots, wrapping the house, and re-siding everything.

My husband and parents painted the entire house in 2010 (when I was very pregnant with our oldest) but the paint is chipping and the wood has seen better days. We’re hoping that the house will be more maintenance-free now that my husband will have both girls with him all summer.

Audrey’s Finances

Take-home (Net) Income

Net Income Amount Notes
Monthly combined take-home $8,700 From both Audrey and her husband; health and dental are deducted from Audrey’s check pre-tax.
Annual combined take-home: $104,400

Retirement Savings

Retirement Savings Amount Notes
401k $131,840 I contribute 12% with a 1.5% match. I increase contributions 1% per year. I also have pension with my employer, which peaks after 30 years of service.
403b $8,915 He contributes 10% with a 0% match. He also has a state pension, which will provide 60% of pay upon retirement.
Roth IRA $40,856 Need to finish funding 2016 but we are waiting until our HELOC is established. Monthly withdrawals for 2017.
Total Retirement Savings: $181,611

Children’s Savings

Children’s Savings Accounts Amount Notes
529 Plans (for college) $21,019 Each child has her own account. This is the total saved for both. We hope to cover 4 years at a local public university for each of our daughters.
Savings Accounts $4,783 Each child has her own account. This is the total saved for both. Goal is to have this available when they’re teens and ask us for money for extras. Funded with birthday/holiday money from family.
Total Children’s Savings: $25,802

General Savings 

Account Amount Notes
Emergency Fund $25,018 A money-market account with 0.05% interest. I don’t like when it dips below $20,000.
CDs $30,423 5 CD ladder at $6,000 each. Rates vary from 1.3% for 12 months to 2.3% for 5 years. CDs renew in the summer.
Vacation Fund $6,313 Building this to go on trips as a family. Interest rate is 0.75%. Funded with tax returns, small yearly bonus from work, etc.
Total Savings: $61,754

Monthly Expenses

Item Amount Notes
Mortgage (includes escrow) $1,358 $85,225 remaining; 4% interest. 15-year mortgage. Payoff 2025.
Day care $1,067 Average for Jan – June 2017 (last payment will be in June). We use the Dependent care FSA account at $5,000/year pre-tax.
Misc. expenses charged to credit cards $1,000 We charge pretty much everything. This category includes: small home improvements, home and car maintenance, medical co-pays, shoes, gifts, memberships, donations, entertainment, eating out, etc.
Auto Transfer to Roth IRA $917 Split between 2 accounts
Groceries $716
Vehicle #2 payment (2016 Subaru Forester) $570 $22,215 remaining; 1.49%. 4-year loan. Payoff 2020.
Vehicle #1 payment (2015 Subaru Forester) $505 $14,967 remaining; 0.9% interest. 4-year loan. Payoff 2019.
Auto Transfer to 529 Plans $350 Split between 2 accounts
Target (household/hygiene items, home decor, clothing, gifts) $183 I have a Target Red Card for free shipping and 5% off purchases. I want to get this down to $100/month if possible. This is the average from 2016.
Gas $180 For both vehicles
Cell Phones $169 Unlimited data/text for 2 leased (only option with our provider) phones. We do not have a landline.
Utilities $168 Average for Gas, Electric, and Water
Car Insurance $109 For both vehicles. We pay annual premium every July
Cable/Internet $102 Internet and 23 channels
Old Navy/Gap/Banana Republic/JCrew $50 I buy clothes for all four of us from these stores. Our cards get us free shipping/rewards/discounts.
Life Insurance $41 We pay our annual premium every February
TOTAL: $7,485

Audrey’s Questions for You:

  1. I think all of our debt can be paid off by Spring 2022. We’ll start to snowball payments as the cars are paid off (in 2019 and 2020) to the HELOC, and then direct all payments towards our mortgage. Ideally, I would work until 2024 in order to reach 20 years at my current company and then “retire.” I will work after this “retirement,” but I’m guessing it will be for roughly half of what I make now (if even that much).
    • Do our current finances seem like this is feasible?
    • My husband will still work and will be able to carry our health insurance. Right now I make about twice what he does, but his salary will reach my current salary in 5+ years (he is part of a teacher’s union with contracted salaries).
  2. Do you have any tips on our current savings? Should the CDs be moved to something with a higher return? Does the current emergency fund seem like a good amount for a family of four?

Mrs. Frugalwoods’ Recommendations

I commend Audrey and her husband for doing such a great job of examining their finances in a holistic manner. I’m really impressed with this detailed rundown of their assets, debts, and expenses. Well done, Audrey! This also makes Audrey’s an excellent–and fascinating–case study since she has so generously shared her full financial life with us. Knowing where you stand financially–and mapping out a years-long plan like Audrey has–is prudent and smart. Kudos!

I want to preface my advice with the following: If Audrey and her husband both planned to work lucrative jobs until traditional retirement age, I wouldn’t advise they change much. However, the equation changes quite a bit based on: 1) Audrey’s interest in quitting her job and taking on part-time work, and 2) their desire to renovate their home’s exterior.

The Renovation

I know that Audrey isn’t specifically asking for advice about their planned exterior renovation, but, since it’s not a done deal yet, I’m going to share that I advise against their current plan of taking out a home equity line of credit (HELOC) in order to fund this renovation.

In general, Mr. FW and I consider elective renovations (anything that’s not required in order for a house to be safely habitable) to be luxuries. They’re completely fine to do, and we’ve done them ourselves, but they should be paid for just like any other luxury: in full with cash. In my opinion, it’s financially risky to take out a HELOC of this size ($60K) for something that’s not mandatory. It’s kind of like going into credit card debt for a vacation. You can do it, but it’s not the wisest allocation of your resources.

As a fellow New Englander, I completely understand their desire to implement a more maintenance-free exterior. However, Hardie board is the absolute top of the line in exterior cladding. Yes, it’s the best, but it’s also incredibly expensive. Given the value of their home ($176,500), it doesn’t make fiscal sense to spend $70,000 on the exterior. It’s like buying a Tesla when a Prius would suffice. Additionally, if Audrey and her husband have any thoughts of ever moving, it’s highly unlikely they’d get a return on their investment. It’s just too expensive an upgrade for the price point of their home.

A few alternatives to Hardie board that Mr. Frugalwoods and I brainstormed:

  • Choose a mid-range, more affordable vinyl siding. There are quite a few different options that look vastly better than the dingy vinyl siding of yore. It’s highly durable and comes in different colors and textures.
  • Pay a professional to paint the exterior every 5-10 years. Obviously it’d be cheaper to paint it themselves, but if they don’t want to do that again, paying to have it painted is a fine option. They won’t reach the cost of the renovation on these repeat paint jobs.
  • Sidenote: if they’re going to have all of the siding removed, make sure to add a few inches of foam board insulation in order to reap the benefit of a more energy-efficient home with lower utilities.

If they’re still set on Hardie board, here are our recommendations:

  • First, embrace extreme frugality for the next few years and then pay cash for the renovation.
  • Get more contractors to bid the job and see if they can find a better rate.
  • Do as much of the work themselves as possible (demo, etc).
  • Have the house painted now and wait until the next construction recession. Bid out the job at that time and pay cash for what will certainly be a lower bill.

It’s not that Hardie board isn’t fabulous, it’s just that taking out a HELOC for such an expensive renovation is risky–particularly in light of the overall value of their home.

Expenses and Savings

A gorgeous September sunset over our neighbor’s field

A few top line notes:

  • If Audrey’s husband plans to continue working until traditional retirement, which I believe he does, then their goal in the next few years should be to reduce their spending such that his income alone can cover their expenses.
  • Although Audrey plans to continue working in a different capacity, since she likely won’t know in advance what her earnings will be, it’s best to plan for making $0 and then consider anything she does earn as gravy.
  • This approach will set Audrey and her husband up to robustly fund their vacation account, take more trips as a family, and invest the excess. No one has ever been sad that they’ve earned more money than they anticipated!

At their current rate of spending, they can’t swing it on one income. Even if they pay off their mortgage and cars before Audrey transitions her work, their monthly expenses still hover at $5,052 and, with inflation, will likely be even higher. If Audrey’s husband brings home $4,350/month (half of their current take-home since Audrey reports he’ll be making what she does by 2024), this isn’t going to work. But never fear! We have options!

There are two factors that could make this feasible:

  1. Audrey wants to continue working, but in a more fulfilling job. They could swing this if she’s bringing home enough to supplement her husband’s income. The trick would be knowing how much she’d make in this new job before taking the plunge.
  2. There are plenty of areas where they can cut back and save more money every month.
  3. What I advise is doing #2 and hoping for #1. Better to have more money than expected!
Frugal Hound scopes out our neighbor’s cows

In the same vein, to Audrey’s question on their emergency fund, the only way to know how much you need in an emergency fund is to know how much you spend every month and hence, how much you’d need to cover your expenses in an emergency. There is no magic savings number for everyone–it’s entirely calibrated on how much you spend. Luckily, Audrey has an excellent record of their spending! (sidenote: this is why it’s so crucial to track your spending. I track mine through Personal Capital, which is free and easy to use). If you’d like to know more about how Personal Capital works, check out my full review.

Savings Accounts Side Note

One of the easiest ways to optimize your money is to keep it in a high-interest savings account. With these accounts, interest works in YOUR favor (as opposed to the interest rates on debt, which work against you). Having money in a no (or low) interest savings account is a waste of resources because your money is sitting there doing nothing. Don’t let your money be lazy! Make it work for you! And now, enjoy some explanatory math:

  • Let’s say you have $5,000 in a savings account that earns 0% interest. In a year’s time, your $5,000 will still be… $5,000.
  • Let’s say you instead put that $5,000 into an American Express Personal Savings account that–as of this writing–earns 1.70% in interest. In one year, your $5,000 will have increased to $5,085.67. That means you earned $85.67 just by having your money in a high-interest account.

And you didn’t have to do anything! I’m a big fan of earning money while doing nothing. I mean, is anybody not a fan of that? Apparently so, because anyone who uses a low (or no) interest savings account is NOT making money while doing nothing. Don’t be that person. Be the person who earns money while sleeping. Rack up the interest and prosper. More about high-interest savings accounts, as well as the ones I recommend, here: The Best High Interest Rate Online Savings Accounts.

At their current monthly spending rate of $7,485, their emergency fund of $25,018 would last them 3.3 months.

For me, this is cutting it a bit close. I prefer at least six months worth of living expenses in an emergency fund, because an emergency fund is just that: for emergencies you can’t predict or anticipate. A job loss, a health crisis or any other unexpected expense would wipe out their emergency fund in a hurry.

Based on these calculations and Audrey’s desire to retire early/change jobs, I recommend that Audrey and her husband cut back on their monthly spending.

I’d reduce/eliminate the following:

  • Their car payments are draining $1,075 every month. I’d find cheaper, used cars they can pay cash for and eliminate these payments entirely. In general, buying a car that’s even a few years old will yield tremendous savings over buying a brand new vehicle from a dealer. We too live in the Northeast and needed an AWD vehicle and so we paid $12K (in cash) for a 2010 Subaru Outback station wagon. More on that here.
  • The $1,000 per month on eating out, memberships, gifts, etc could likely be eliminated in its entirety, if not greatly, greatly reduced.
  • The $50/month on clothing could also be reduced. I recommend shopping used/scouting hand-me-downs for the girls and a clothing ban for Audrey and her husband.
  • I’d find a less expensive cell phone provider, such as Ting, Republic Wireless or Boom, which should cover them both for circa $40/month.
  • I’d eliminate cable and just keep internet. Here’s how we watch free TV.
  • I’d shop around for cheaper car insurance.
  • Groceries are in pretty good shape already so I wouldn’t sweat those too much, especially since Audrey specifically mentioned she doesn’t want to frugalize their groceries.
  • Audrey mentioned she’d like to get the “Target” line item for household goods down to $100/month, which sounds like a great plan.
  • In general, I recommend they read Uber Frugal Month: The Ultimate Guide To Saving More Money Than You Ever Thought Possible for more ideas on how to reduce their spending without sacrificing their quality of life.

Even if all they did was eliminate the $1,050 spent on entertainment, eating out, and clothes, that’d be an extra $12,600 saved each year. If they were able to save this additional amount every month, I think they’d be in a much more comfortable position for Audrey to retire or reduce her income. The beauty of lowered expenses is that you simultaneously need less to live on and you save more. Additionally, they could then invest these savings.


Mushroom grove on our driveway

To Audrey’s question on CDs, I recommend liquidating these when possible and instead investing in low-fee index funds, which have the advantage of being diverse (since they’re invested across the entire stock market) and more aggressive (and thus typically yield a higher return than CDs). CDs are a very conservative and extremely low-yield investment vehicle. Since Audrey and her husband are young, I’d funnel this money into higher risk, higher yield index funds. More on investing here.

Regarding paying off their mortgage early, I know that some folks enjoy the psychological boost of paying off a mortgage, which is perfectly fine, but it’s often not mathematically beneficial. Their interest rate is nice and low at 4% and I wouldn’t try to accelerate payments because their money will be better utilized in investments (see above).


All in all, I’d say Audrey and her family are doing really well and have the potential to do tremendously well if they reduce their expenses, delay/alter/pay cash for this exterior renovation, and find higher rates of return for their investments. I think it’s important to point out that Audrey and her family are in a wonderful position and have made great financial decisions over the years. What we’re talking about today is taking them to the next level of financial security for their future. So, kudos to Audrey and thank you for serving as this month’s case study!

Ok Frugalwoods nation, what advice would you give to Audrey? She and I will both reply to comments, so please feel free to ask any clarifying questions!

Would you like your own case study to appear here on Frugalwoods? Send me your story via email (mrs@frugalwoods.com) and we’ll talk.

Updated May 4, 2018 with Audrey’s decisions:

Retirement: $289,010
Kids’ 529 plans and their savings: $36,497
Savings: $51,966

Monthly income: $7,651
Income dropped due to retirement contribution changes to hit the federal max on our 401k and 403b.

Monthly Expenses: $3,359
Both cars are paid off, day care is done, and we decreased our monthly bills. We continue to simplify at home–bills, purchases, and belongings.

We closed 7 credit cards (they were always paid in full but it was another easy way to simplify) and froze our credit with the bureaus.

Monthly 529 plans and Roth IRA auto transfers: $1,267

Monthly expenses + monthly auto transfers: $4,626

We have about $3,000 extra per month. Right now, this goes to saving for the exterior work we need for the house.

We went on 2 vacations that were funded with our vacation account. We’re planning on another trip later in the year.

From a lot of the comments we received, we are not moving to be closer to work that is about 20 minutes (local traffic) away. There are no sidewalks or walkability in these neighborhoods. The houses and properties are 2-4x the size, purchase price, maintenance, taxes. It does not feel like home there. We do not want land, animals, or a larger home–we are looking to spend less time on household chores and more time with our family and travel. Our house allows us to accomplish our goals and have a peaceful, organized home to enjoy. We are not looking to move away or out of state. We have a lot of family that is close by, we have stable jobs that are in different fields (both have pensions), and the cost of living is affordable. In short, we love where we live!

Exterior work will begin soon, 10% down payment has been paid for. Work will be in 3 phases. Once the exterior work is complete, we will open an investment account that will be accessible prior to 59 1/2 to provide flexibility for our family. We have about 7 years left on our 15 year mortgage (balance is now below $75,000) and we’ll reevaluate my career path once we get closer to being mortgage free.


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  1. I’d actually recommend a different tact with the cds. Don’t liquidate them, Ther make a fantastic emergency fund. Take the emergency fund and combine it with the cds by buying cds with early withdrawal penalties. Do so up to at least a five month buffer. Your emergency fund will earn more interest over the long run but still be accessible if you need it. Take the rest of the emergency fund and invest it or put it into your project.

  2. Hi Audrey, thanks for serving as a case study! I agree with the Frugalwoods recommendation to pay cash for things like rennovations. I also live in New England (CT) and when I moved into my home 11 years ago it had three different types of wood siding. We opted to have vinyl siding put on, and new windows installed to replace the 40 year old ones. With all the supplies and the labor it came to under $20k total which we paid for in cash. I’m glad we didn’t have extra debt to worry about!

    Also I agree with Full Time Finance to keep much of the CD’s as a “second tier” emergency fund. The first tier can be your savings accounts with about 3 months expenses, and you can keep another three months in CD’s. If you have more above and beyond that, I’d cash only those out and deploy them to buying a cash car to replace one of your existing cars. For example, if you sold the 2016 Forester, paid off that loan, and used the extra money from your CD’s to buy a cash car you can save the $570 per month for another car.

    Best of luck to you!

    1. The cars aren’t up for debate at this point- we had a 2006 and a 2003 and both were on their last legs when we turned them in. These are the first new cars we have ever purchased and plan on driving them until our kids are ready to drive. We both need them for commuting purposes. I have to travel about 150 miles round trip 1-2 times/month for work. My husband’s work is about 25 minutes one way every day. They are not luxury vehicles by any stretch of the imagination and we won’t compromise our family’s safety (especially in the winter). We actually have priced out new insurance- with the bundle of auto and umbrella and a discount with work, this is the best we can get given the area we live in.
      I will point out that day care is almost done- that’s $1,067/month. The last bill will be in June when our youngest finishes up pre-k/day care to move onto kindergarten. Our total day care expenses will be almost $85,000 for both children over the span of 6.5 years.
      Our appraisal of the house is next week- we’re going to see what we get before we fully commit to the exterior job. We have a tough time embracing vinyl siding- our house has historical character and that was one of the biggest things we love about it. We did have a certainteed estimate that came in at the same price. It’s not just siding for the job- there is garage framing work, a brand new porch, new front door, new garage door, all new trim/columns, etc. We can look into a paint job- I believe the estimate we got a few years ago was $18,000 and that did not include some of the wood siding that would need to be replaced. My husband didn’t mind working on the house when we didn’t have kids, but he will have both of them over all holidays/breaks starting in June so his time will be extremely limited.

      1. Sounds like a lot of cool improvements. Could you have a realtor give you an idea of how much that would increase the value of the home?

      2. Have you considered moving closer to one job and then getting cheaper cars? That’s a ton of money in commuting costs, and with the upcoming housing expenses it might make financial sense to sell the house, get rid of a car payment, and have one parent bike commute. In terms of safety, cutting time on the road will yield greater benefits than any sort of car. Most modern cars have great safety features. If you want a new car, that’s a lifestyle choice, not a safety choice, which is a personal decision. I too bought a new car (in cash), but a used car would have been equally safe.

        I live at 7000 feet out west where they rarely plow, and snow tires make it possible for us to have one cheap, two wheel drive car (Corolla) and one AWD (old Subaru), much like the Frugalwoods. Obviously snow tires are our biggest safety feature, not the type of car, age, or model.

        Good luck with your fabulous plans!!

        1. No we’re not moving. To move closer to our places of work, the houses start at about $250,000 and the taxes are about double what we pay. It’s also not the area we really like- deep in the suburbs with no sidewalks/winding track houses with carpet, vinyl flooring. Our entire home (excluding baths) has hardwood floors or ceramic tile, sidewalks, friendly neighbors, places to walk, it’s a great location.

          My 150 mile commute 1-2 times/month is to our HQ…. I am reimbursed for mileage.

          1. See Mr. Money Mustache on commuting. Even if you had to finance an extra 80k to move, you would pay this off in time and money saved – and in the health benefits cycling year round. Other alternatives are ride sharing & public transit. Cars cost a lot, not just gas & insurance, but depreciation and maintenance. Run the numbers for the next 10+ years.

        2. Tom, I ran the numbers when I bought my $25,000 house. It did not pay to buy a house elsewhere. I think Audrey might be in the same situation because of the far more expensive houses closer to work plus the huge increase in taxes. It also sounds like the houses closer to work are not built as well, which may cause problems in the future. It is truly a dollar and cent issue, and also depends on other factors, such as the fact that I have to commute constantly for my job to our five different counties, no matter where I live. I picked the cheapest place to live given that. I also would like to point out that it is not as safe for women to bike. Men do not always get that, and Audrey cannot be biking at dusk nor dawn with two kids.

          1. I’m sorry to hear that this is the case where you live, that really is a shame! I guess that’s something wonderful about Toronto that I never realized before. Here cyclists have become fairly evenly split gender-wise in the past few years. And the ‘young, male courier speed-demon’ is far more likely to be the ‘middle aged professional in mixed work and biking attire’ 🙂

      3. I think the house is a tricky issue. Our house is also 70 years old. And we are in a much milder climate. Still we had the roof replaced two years ago and there was a great deal of other work to remove and replace rotted wood. So while the “exterior” of the house may not be a “need” per se – it might actually be. It’s not until you tear off the wood that you see the state of the framing, the porch, etc. I would definitely place a premium on fixing any structural issues, and maybe less on the siding. (My inlaws are in upstate NY and I love the older homes there.)

        I can’t imagine that a 2006 car would be on it’s last legs (2003 in the northeast, yeah) depending on what you buy. The snow and salt are hard on cars – but I still know plenty who are able to drive Toyotas and Hondas in the northeast safely for 15 years. I think frugalwoods point of replacing a 2003 or 2006 with a 2010 (not a 2015 or 2016) was a good one. If you do that much driving, then you really only need a single car. (Then again, our 2006 Toyota is the one we take on long car trips. It’s the workhorse in our family.)

        As far as your husband and home improvement goes…it’s going to be super tough over the summer. My husband did a lot of work on the house pre-kid. Now ours are 4 and 10, and good luck with that. He can do it, but only when he’s not working AND when I’m there to entertain the kids. So I feel you there.

      4. Hi Audrey – in reference to the vehicles – especially since it seems you’re driving big mileage every once in a while – I just downloaded this app called MileUp (check it out at mileup.ai) which gives you points for each mile driven. Once you reach 1000 points you’re eligible to redeem gift cards from several retailers, including Target. It’s likely not going to amount to massive savings, but I remember you mentioning that you wanted to cut that Target bill by a bit each month.

        Could be something worth looking into.

        Best of luck with this adventure!

      5. Oooh Oooh I have Honda stories!!! We helped our oldest daughter with the purchase of a Honda Civic in May of her Junior year in high school. We signed the loan and paid $100 a month of the payment. That was in 1996 at the age of 17. She drove that car until she was 34 years old when she bought a 4-wheel drive Honda CRV! She drove it in Klamath Falls, Oregon (with the accompanying snow) and continued to drive it in Reno, Nevada after moving there for her 4th year internship and subsequent decision to stay. She did have snow tires that her dad insisted on her buying. My middle daughter also bought a Honda Accord in 2000. She was broadsided by an uninsured motorist in 2001 or 2002 I can’t remember, and had to fight Geico to not total the Accord. She drove that fixed, wrecked Honda across the country from Reno to South Carolina two or three times. She was still driving it, but probably unsafely in Reno when we gave her my (used purchase) 1999 Toyota Camry in 2012, when I purchased my second used Camry, a 2006.

        1. Maybe it’s a Japanese car thing. I bought my first car in 1982, when I was 23. I got a 1974 Datsun 610 for $1800. The mileage was somewhere in the low-mid 50s, and it was in South Carolina so rust was not a problem. I later moved to the Washington, DC area with it., and altogether I drove it for 9-1/2 years, so my purchase price came to less than $200 a year! Four years after I bought it, I was in an accident and the insurance company totaled it. I wanted to keep it, so they gave me a cash settlement. I asked my mechanic to do only what was necessary to keep it running and safe, and his bill (which included body work) came to almost the exact amount of my cash settlement. For the remainder of the car’s life, it had a fender that didn’t quite match the color of the car because I spray-painted it myself, but the car ran and that’s what mattered. I finally had to get rid of it when the transmission reached the end of its life. I donated the remains to a non-profit organization and cried when they towed it away.

        2. Some cars are better than others, some household needs are different than others. I had a 2005 Scion xA (Toyota) that I thought would last 10+ years. At 9 years I discovered that the rear passenger side foot well had rusted through (WTF?) and had that repaired. Possibly due to a faulty windshield replacement in the first year, maybe not. Then the next year the battery kept dying. Had that replaced under warranty. With a 4 year old it was just not reliable enough anymore so I bought a Certified pre-owned car and sold the Scion to my dad who fixed it up and sold it to another gal a little younger than me. So Yes, that 2005 Scion is still going strong, but wasn’t up to snuff for our family with two commuting adults and a child. A ” fixed, wrecked” car that I could be “still driving it, but probably unsafely” wouldn’t work for me and probably for Audrey the original poster.

          I think that’s the line between needing transportation, and needing _reliable_ transportation. I am currently paying extra (insurance, car payments) for peace of mind.

  3. Can’t argue with anything the Frugalwoods are recommending here. Things that stood out to me were the very expensive reno for probably very little ROI. For that price, you could pay someone to paint and upkeep the existing for years and years to come. Also, for your income the two newish vehicles with large car payments stand out as a problem. If you could get rid of one and replace with a used small Honda or similar, that would save tons.

    1. Funny you should mention a Honda! I only had Honda civics since I started driving- the new booster for my oldest (my youngest will need a new one ASAP) could barely fit in the back seat of the civic and I could not see out the back window. Having the forester provides the correct height and clearance to be able to drive safely with my family.

      1. Your reply made me chuckle Audrey, because it’s soo true. I have been driving the same 2-door Honda Civic for 12 years. Car seats/boosters + civics are not a good equation. I’d drive that car forever if only it was more child-friendly!

        1. I would too- I was so sad to leave my civic! I love those cars- they are amazing for people without kids (that need car seats/boosters). I’ll tell my girls to get a civic when they need to purchase their own car one day 🙂

          1. Was it a two door? Our 4 year old is in a booster in the back of a Honda Civic (4 door), no problems whatsoever. You have to find the right carseat. (We’ve got Britax).

            But a 2-door might be a different issue entirely.

            Our “big” car is a Toyota Matrix. We were able to have two boosters and a rear-facing bucket seat or convertible in that car. We’ve always been able to get two carseats in the Civic also (though not three, but we only needed 3 for carpooling).

      2. Wouldn’t it be less expensive to buy a different booster rather than buy a different car? Plenty of people drive children in Honda Civics.

        Still, if your cars are non-negotiable, you just have to cut elsewhere.

        1. Agreed- plenty of folks have smaller cars with kids. If that’s what you want, that’s what you want, but it truly is a lifestyle choice not a safety choice. No one is knocking that- we all have things that are important to us, but a should out to the people who drive Civics with different booster seats- yes, it’s safe, no matter what American car-company propaganda has you trying to believe.

          1. I had a Honda Accord- 4 door- but when I got pregnant with our second child there was no way I could fit two rear-facing car seats in the back seat and still be able to drive. I LOVED my Accord but it just didn’t work. It might have to do with the fact that I am 5’10” and my husband is 6’5″. If you have to put the Honda front seats all the way back for leg room then the car seats don’t work, at least not in my experience. We switched to a Ford Escape hybrid and the car seats fit in fine even with the front seats all of the way back. It’s not always a lifestyle choice but sometimes an actual physical necessity.

      3. I have three convertible, high-back car seats in the back of my 2003 Honda Civic, and they fit just fine! I think it depends on the car seat that you are using. We have 3x Diono Radians. They were almost $400 each, but that’s still WAY cheaper than replacing the car!

  4. Audrey, it’s already a great step that you guys have such a solid handle on your net worth and what you spend every month. It really sounds like you’re ready to hear advice and you definitely came to the right place for it!

    It sounds like you’ll be okay “retiring” when you hit 20 years, since your combined salaries will be about the same as they are now. Cutting some expenses would, of course, put you in a much better situation and leave you with more options, and it does look like there would be some pretty easy places to cut (cars, phones, and renovations jump out to me).

    Also if you were to start categorizing your monthly spending in more detail, like Mrs. Frugalwoods does, you might find that some expenses automatically disappear just because you’re keeping track of what you’re spending instead of buying mindlessly 🙂 Good luck!!!!

  5. I understand buying quality clothing, however I would suggest buying those same brands second hand. The savings would add up to way more than your card rewards. I know, I used to love my Gap card. 🙂

  6. I also think there are plenty of areas where you could cut back, and I would also start with transportation. What I want to address is the exterior home renovation. We are restoring and renovating our house which was built in the late 1800s, and we live in WNY. I understand the desire to reduce maintenance, and I LOVE old houses. I think it is worth exploring how important this Hardie siding is to you regarding cost, historic preservation, the look of the house, etc… Living in a historic/old home fixer-upper requires a constant juggle of these types of questions, and seeing the pictures of your interior renovations, I think you might feel the same way. (Beautiful, BTW!) Sometimes, the work is more a labor of love vs. a sound investment in the traditional sense. There are areas of our home project where I am simply not willing to compromise.

    That said if the money isn’t there, it isn’t there. I have reservations about the HELOC because we’ve been hit twice trying to sell a house during a housing slump. It was purely coincidental, and we had to sell due to a work move. The first time was rough, and we spent five years digging out from that. The second time, we had been smart. We bought super low, ignored the crazy projections of our home’s worth, did all renovations via cash, and when everyone else was upside down in their mortgages and HELOCs when the bubble burst, we were fine. It took two years to sell our house, but financially, we were fine, and we ended with a nice profit.

    If you choose to prioritize the exterior renovation with Hardie siding, I would cut costs in other areas, pay painters, and put your project off for a few years until you have all cash or a significant chunk of it up front. Another idea is to see if you can apply for a grant for your siding. There are historic preservation grants available if your home fits the criteria. It might take some hoop-jumping, but it could be worth the exploration.

    1. I could not have said it better myself about home projects. We’re struggling with the cost but we know how much worry about the outside will be lifted when/if it is complete. Our porch isn’t even usable given the condition of the wood and my husband replaces as many boards as he can without having to put the porch ceiling up on stilts. It is coming to the point where we just want to have it fixed and complete so we know it’s safe and can move on with our lives. We’ve been thinking about taking 18-24 months and using our youngest’s day care bill (will be gone in June) to save up for the renovation. Also maybe work with the contractor to repair things in sections- our garage is detached so that could technically be its own project. We’ll have to look into grants- we’re not in the city.. just outside of it, so we are probably limited there.
      Moving in all honesty is not an option. My husband is a teacher in one of the best school districts in WNY- you can’t get much better than that. We have an amazing support system here and I have been with my work for 13 years now. I get calls/emails/etc for work/consulting out of state quite a bit, but it’s not worth it for us to leave our family. Our children and their upbringing are the most important thing to us- it’s not something we will compromise on for a new job.

      1. Im also in WNY with a 1880s home. So cool to see others here! Our house needs new siding and floor stabilizing but we have to wait for now until we have the cash. Would love to connect with you both!

  7. I love your recommendations Mrs. Frugalwoods! I know it can seem like a lot to cut out, but one thing I always like to remember is that nothing is permanent. Simply reducing the dining out/entertainment budget to $100 for one month for example, might illuminate which of the former entertainment spending wasn’t really worth it. A cut back, even temporarily, provides valuable perspective.

  8. Thanks Audrey for opening yourself up and sharing. It was very courageous of you. I loved all of Mrs. Frugalwoods recommendations. You shared that you are not comfortable with your emergency fund dipping below $20,000 and I totally understand and for that reason I would not do the renovations as it would cause you to take $10,000 from that account and put you below your comfort level. You can’t put a price on peace of mind 😊. I also don’t think it would yield a good ROI.

    I agree with Freedom Guy 40, I would sell one of the newer vehicles (preferably the one with the higher balance and interest rate) and get a less expensive car that you pay for with cash. I like the idea of liquidating the CDs. However, I would use the funds to fully fund my emergency fund (like Mrs. Frugalwoods I like 6 months) and put the rest toward paying down the balance on the remaining car loan. That should leave you with an almost paid for brand new car!

    Much success to you and your family! I LOVE the bathroom Reno and sewing room!

  9. Just a small savings compared to what everyone is saying here. I agree with mrs. Frugalwoods regarding buying your clothes at thrift/resale shops. The stores you mentioned really don’t match the quality of higher end stores and products which often can be found gently used if you look around. I feel like I find much better clothes than I could ever afford by looking at thrift stores. Just an idea! I’m quite jealous of how detailed you are — it’s a great incentive, though. Thanks so much Audrey!

    1. I know about thrift/resale shops- the issue is time. I can buy a bunch of clothing online and have it shipped to my home or I can spend a Saturday away from my kids hunting for clothing at a thrift store… for us, it comes down to what do we want to do with the 2 days we have together.

      1. Thanks for sharing your family’s plan! One option is a website called ThredUp-they have used name brand clothes (like Gap, Old Navy, etc) in good condition. Likely a little more expensive than thrifting, but way easier (and less expensive than full price online). They will also send you a closet clean out bag and you can send your clothes in for some credit!

        1. Agree with this recommendation for ThredUp. I have bought really nice suit jackets for work, an evening gown, jeans, accessories, shoes, etc. A lot of items are even new with tags. The information on size and condition is reliable, the photos and web design make it easy to shop, and returns are easy and free if you accept store credit. I find the best deals on things like wool sweaters, tailored jackets or dresses, or other items that may start at $100+ retail. Everyday items like cotton tee shirts, you can probably do just as well with your store cards.

          1. I will definitley check out thred up- I have never heard of it before this so it will definitely be easy to shop online at night. Thanks for the tip!

      2. I find kids clothes at a thrift store don’t take much time, for a number of reasons. With kids second hand stuff they don’t need to try it on, much like shopping online. I go at lunch and pick up everything in my daughter’s size that’s the right season, looks nice and is good quality (taking into account what she has at home). Easily accomplished in under an hour a few times a year. Frankly she gets much nicer stuff than if I bought new.

        I use kijiji or a local mom’s facebook group for bigger ticket items like snowsuits (though you will find them used). Those kinds of sites will sometimes have someone offering a bag full of clothes in a certain size, and paying under a dollar an item is quite standard where I am. It’s a bit riskier, because you have to like the other person’s taste. So I just pay retail for last minute necessities (bathing suits right before lessons start), certain colour shirt for Christmas photos, or undies/socks.

        I’ll also very occasionally take my daughter with me to a thrift store. We have the big ones out here (GoodWill, Value Village, Salvation Army) and they have a good selection of kids toys and books. My daughter is happy to hang out with me for an hour while I go through the racks, in exchange for a book or toy of her choice.

        Again, ymmv, and searching for adult clothes is much more of a pain, but depending on what stores are around you, I’ve found it takes shockingly little time to outfit my daughter.

      3. I used to be very opposed to buying clothing from thrift stores but my attitude has changed. If you’re very discerning you can buy excellent quality used clothing. I bought myself two Evan Piccone suits for $12 each. I went to Nordstroms (or Dillards) a month or so afterwards and saw the same suits for $300 each. I also bought some beautiful Gloria Vanderbilt heels–one pair looked like it had never been worn–for $3 each (if I remember right). My husband bought a never worn pair of expensive Weejuns loafers for about $8.

        Many thrift stores have discount days, like on Labor Day, where you can buy even more for less. One of the stores in our area allows you to bring in good used clothing for store credit so you get a double benefit–buying used clothing with used clothing!

        Look for signs of high quality–such as fully lined skirts and jackets–and you won’t go wrong.

      4. I completely hear you on this Audrey! I don’t shop at thrift stores because: 1) I don’t enjoy clothes shopping, so I don’t want to go to more than one store to try and find exactly what I want 2) the sheer volume of stuff in thrift stores here makes me freak out and I shut down. I’m happy to own fewer clothes that I just buy at normal prices (with coupons if possible) and it’s a much less stressful experience for me.

      5. So take them with. You might not get a ton done, but my girls love looking at the clothes. I have them wear tank tops and they try on shirts right in the aisle. They love getting an opinion on what goes into their closet and I let them buy some crazy stuff because it’s just a couple dollars.

        Depending on your kids I guess they might still be too young, but they won’t be for long.

      6. Away from your kids? Why? Bring them along as extra eyes & fingers. Teach them what quality clothes look and feel like, and, especially for clothing for growing kids, buy second hand. If they know what “good” is, they will have an extra buttress against the dictates of school “fashion” pressures.
        Ditto for summertimes with the husband. Even small kids can be useful assistants.
        Don’t keep your kids in a bubble.

  10. Thank you for honestly sharing your circumstances, I’m grateful to learn from this!

    Have you considered exploring things like time banks? Perhaps you could”barter” sewing tasks for something else your family pays for?


  11. Will the work on the exterior significantly increase the value of your home? If not then I agree with Mrs. Frugalwoods about re-evaluating having the work done. Are you being reimbursed for the mileage on your work trips every month? That’s a lot of mileage to be putting on a new car that you plan on keeping for a long time.

    1. We’re getting an appraisal next week so that will help us figure things out a little more. I am reimbursed for mileage- aside from that travel, my commute is normally 17 minutes one way (about 6 miles). It really doesn’t put that much extra on the vehicle.

      1. Hmm, having read your response above re safety for driving you could go to a smaller car and then the days that you need to do the long haul simply switch cars with hubby so you have his better car. My two cents!

        1. FWIW, I commuted 10 miles each way by bike. It took me 35 minutes + 10 minutes sponge bath. If you want to avoid sweat going there, get an electric bike. Me, I just took a sponge bath in the handicapped toilet. Why pay gym fees or run separately when you can exercise while getting to work.
          Get your company to put in lockers and showers. Then do your daily bathing when you arrive.

          1. We don’t pay gym fees- I have an elliptical, free weights, and some yoga dvds in the basement that we bought back in 2008 that I use. I can barely get a new computer for work every 5 years- I don’t know how I could ever get the pull to have them install showers and lockers.

  12. I heartily second the Frugalwoods’ recommendations. But on a bigger-picture note, it looks like you guys have a healthy income that can get you many of the things you want, but it’s not sufficient to get you *all* of the things you want — it’s very difficult to have major house renovations and two new cars and vacations and organic food and still retire in 10 years. Usually if you want to retire in a decade, you need to save something like 75% of your income for that first ten years. You guys have a good start on savings (yay!), so you wouldn’t need to go that extreme, but you’d need to do more than you are now.

    I think you have a great start here with the numbers, but I actually think you need to dig a little deeper. Instead of focusing on your current expenses, reframe the question as what is your anticipated post-retirement budget? Be realistic here – you plan to keep the cars for a long time, for ex, but they are going to need replacement at some point, and over time they will likely need more maintenance and repairs, so make sure to account for that. Or you may have most house stuff done but will still find things you want to improve or need to fix. Etc. (And don’t forget to include continued savings, as your DH will want to retire someday too!)

    Once you have that budget, make a conservative estimate of how much of that is going to be covered by your DH’s job. The delta is what your investments need to cover — if your goal is never to *have to* work again, the basic rule of thumb is you want 25x that amount in savings/investments. Once you figure out that number, you can use any number of investment calculators to tell you how much you need to put away eveyry year to get there.

    I suspect when you do the math, you will find that there is a gap — unfortunately, a 10-year horizon doesn’t give you a lot of time to use the power of compounding in your favor, so your savings rate has to be much higher than if you are looking at a 20-30 year horizon. And then the question is really for you: what gives? Are you willing to work longer in the current job? Decrease some budget categories? Change your plan to assume $X income from your own work and so not retire/quit until you have another job lined up making $X? There is no right or wrong answer here, only the one that is right or wrong *for you*.

    1. I’m definitely willing to work longer- if I put in 30 years, I’ll have about a 60% pension like my husband. It’s just figuring out if this is really how I will spend 30+ years working. I will have a plan in place before I “retire” from my current job- if you couldn’t tell, I always have a plan. The budget will decrease with day care costs for 2017- we’ll gain back $1,067/month starting in July. The $1,000/month with credit cards was more of a place holder- when things come up we tend to charge them and pay them in full when the balance is due. For example, 2 years ago our clay tile pipe sewer line collapsed. It was $8,600 to tear up our front yard and basement- we put it on a 0% card and paid it off in 12 months instead of taking it out of savings. That was $716/month so it would have been $284 in expenses and $716 on sewer line repair for the entire year.

      1. Another example I can think of is that our IP copays are $500. My oldest was hospitalized twice in 2 months so that would have been 1/2 of the $1,000 on credit cards for 2 months straight. With a family of 4, I try to plan for those type of situations by saying $1,000/month for credit cards. It’s basically the worst case scenario happening every month.

      2. Your position offers good pay and a pension, which is rare in these times. Really look at options that are generally available at companies with these benefits. I have a benefit of working halftime from home but keeping all benefits. They take the same dollar amount for my pension. By not driving an hour a day and being home I have a much better quality of life. My feet propped up, DIY show on television, washer and dyer going, home made food in the oven or crockpot. I used to leave before 5 AM and get home after 4PM a few days a week, but there were other things my employer needed that I could do, mostly from ho!me.

      3. Audrey,
        We had Clay tile pipe sewer pipe in a home we flipped it was about the same price to get it dug up and replaced.

        One of our houses we used a special paint for decking that held up to more rigid wear and tear.
        I am also wondering about the quote. I live in a fairly high cost of living and have not been quoted more that 6-7k for an entire outside paint job.

        1. It would be a full scrape and paint of the house and porch. It could have been that they didn’t want to do it, it could have been that the job was too small? The houses around here that are still wood are mostly 4,000+ sq ft- massive old homes. We don’t have a lot of painting companies around- most people have brick or replace with vinyl/build with vinyl in the suburbs. We can look into more estimates this summer.

    2. Laura you summarized my thoughts! I’m reminded of the book Your Money or Your Life. There’s always a trade off and one just cannot have it all unfortunately.

  13. Thanks for sharing your story, Audrey. I completely agree with the suggestions above. The one thing that really jumped out at me were the car payments, but I see you value the vehicles and aren’t willing to budge. I completely understand. I don’t value cars but I do value other things and am willing to spend money on them where other people would not.

    The renovation is a big killer if you’re looking to quit your job in the relatively near future. Mrs. Frugalwoods suggested a few options that I think might be worth looking into more closely. And believe me, I know all about wanting to have the best for your home. My husband and I nearly committed financial suicide a few years back by buying a huge home we couldn’t comfortably afford. Thankfully the deal fell through because of a mold problem and we have been on the path to early retirement ever since. However, now we spend on updating and improving our current home instead of looking for a new one. We just got done with a major renovation last summer. We refused to finance it so we didn’t allow ourselves to go over our limit. There were things I had to adjust and become creative with, but in the end, it turned out beautiful and we love living there. I think your reno could be in the same boat. I’d say consider repainting until you have the cash or figure out a more affordable option.

    I think you should try project what you spend per month and figure out how much you’ll need invested and in savings to cover everything if you quit. I, personally, like the idea of knocking out the mortgage, but I know that’s not a popular decision for some people because they can make more money elsewhere – assuming the market cooperates. Paying off the mortgage would greatly reduce your expenses and the amount of money you would need to live each month. Yes, it is an emotional decision but if you can make it work and have the necessary investments/income, then go for it. For some, the emotional benefit is worth the price.

    Good luck and keep us posted!

    Mrs. Mad Money Monster

    1. When we built our new house last year I bought a bunch of the things we needed from the local classified ads. A few of the things I found were a barely used $900 Kohler cast iron tub for $100; $4500 worth of Crema de Luna marble tiles for $700–enough to tile our master bathroom floor and shower and the beautiful granite tile for the front entryway, hall and bathroom for a couple of hundred dollars. No way could we have afforded to buy them retail. I also bought used oak cabinets for the garage for $200 and plan to paint them. I kept records of what we bought: $60,000 worth of items for about $17,000 which we paid for in cash (private individuals won’t accept checks). No one would ever know that our house isn’t 100% new.

      I do not recommend buying things like faucets from the ads, though. One of the faucets, although it was new, broke in the middle of the night and flooded the basement–1/2 of which was finished. The disaster company charged $9K to dry out the house which the insurance company paid for. We also got about $9K for replacements. Except for the extreme distress caused by the flood (ugh…it happened two days after falling on the sidewalk and bashing the side of my head) we made a handy profit out of the flood because the inexpensive items I’d bought were reimbursed at full retail cost by the insurance adjuster. The new, classified ad $150 bathroom vanity was valued at $750 and the $200 worth of new carpeting (not including the pad and installation) I bought through an interior design sidewalk sale (that was advertised in the classified ads) was reimbursed at about $2,000 (including pad and install). A nice profit that helped pay for our beautiful landscaping–which my husband got multiple bids for and found a company that cost $9000 less than the others.

      Look up discount online outlets for more great deals. I bought three copper bathroom sinks for about 1/2 of what they would have cost retail.

      If a person flips houses, remodeling with classified ad offerings would greatly increase the profit when the house is sold.

      (My sister’s friend’s husband, a builder of multi-million dollar homes in gated communities, did the same when he built his increasingly expensive family homes. I got the idea to buy from the classified ads from him.)

      1. B. Lyman,
        I used a lot of those techniques you meantioned when I flipped houses.

        We also, hire hourly workers PM the job myself. Also, got creative with solutions. Long bathroom mirrors were $300 at Home Depot, used a bathroom vanity mirror horizontally that I purchased at Home Goods. Also negotiated a flat fee with my realtor by staging and getting photos myself.

  14. I think it’s so great that you are thinking ahead of a separate savings for spending on the girls when they get older and ask for extras. Piano lessons, tennis gear and lessons off season, camp, school fees, events…they rack up so fast!! Keep funneling money into that fund!

  15. Hi Audrey,

    It seems like you’ve done great to save that much. The “ouch” moment for me, was when I read about your cars. In depreciation, interest, fuel, repairs and insurance they will cost you a fortune over their working lives. If you have your heart set on a newish car from a dealership, I’d always suggest an ex-showroom or, even better, ex-lease car. I work in the automotive industry with a variety of big international brands and I’d always buy private. Once you really what a swizz it all is, and how dealers very intentionally play on our fear of second hand cars, repair costs (most repairs are predictable, and far less expensive than the initial depreciation of a new hunk of metal) and safety.

    If you do achieve your dream of working part time or giving up work, becoming a one car family would be my first suggestion. Mr Money Mustache has some very enlightening (if not quite as fluffy as the lovely Mrs. FW) reading on “clown cars”. I speak as someone who has made very similar mistakes. My next car will be a second hand, 5* safety rated, small, economical car. Above all, my next job will be in cycling distance from my home.

    Good luck and all the best!

  16. I wouldnt get rid of the cars, at least the 2015. however, I got a 2014 considered used in 2015 for like $10000 cheaper than a brand new one. I never ever buy a new car. However we have a 72 month loan and I plan on not buying another car after until this falls apart. I think the spending on clothing a month needs eliminated. I either buy clearance racks when I see something, yard sales or thrift stores. plenty of name brands at consignment stores also. Plus there really is no need on spending that much on clothes a month. I would go for vinyl siding and would skip the option to pay someone to paint it every so often.paint can look dingy and with the weather in the northeast chip easily. Vinyl siding holds up very well and can always be washed nicely. Food budget is huge..I would scour Aldis if you have one, farmers markets in the summer and start using coupons (i love my coupons) to create a small stock pile then you would not have to spend so much all the time on food. just my suggestions. I am looking at saving and paying off debt too. am new to the game of such so…

  17. The exterior renovation project is not worth it in my opinion. You’re spending about 40% of the current value of your house to do something that won’t add near that amount in value to your home. If you had plenty of excess cash and didn’t plan to move, then I’d say go for it. But in this case you’d be depleting your emergency fund down to $15k, which only leaves 2 months of expenses. You’ve done a great job building it up, now leave it be!

    Also, I don’t like that the E fund is only earning 0.05%. Online banks like Ally and Capital One will pay 1% on money market accounts. That’s another $240 annually in interest you could be earning on your E fund.

    Your retirement savings are pretty good so far, but if you’re planning to quit your job early, I’d like to see more built up in after-tax investment accounts as well as cash savings. Your current earnings exceed your expenses by about $1,300. The part-time work you’re able to pick up after leaving your job will play a big factor in this. How much and how consistent it is will be big considerations. However, currently, you wouldn’t be able to survive on just a single income.

    I would recommend you do a test run and see if you can live off one income before you leave your job. You’ll need to cut expenses to do this. At the same time, you’ll be able to pump your current salary into savings during the test run to build up your reserves. Making sure you can live comfortably on one income is a must before making a big change like this.

    Good luck in the future. It looks like you’re off to a very good start financially. Keep it going!!

    1. I don’t like the e-fund either- we have it attached to our checking account with the bank, so that’s why it’s there but I will definitely start looking into a higher interest one.
      I am not leaving any time soon- the earliest would be 2024. I make about twice what my husband does but by then, he will make what I make now based on his contracts (he’s a union teacher in NY). Every year I up my 401k contribution- with day care ending, we’ll have an extra $1,067/month to use for retirement type goals starting in July if we don’t go with the HELOC. I also won’t leave until I have a clear plan in place- I have been a planner since I can remember and I won’t put my children’s well being in jeopardy because I feel that my career is not fulfilling.. I’ll keep doing my best at what I am doing and use my creative outlets to help me feel more fulfilled in that aspect of my life.

      1. I use Ally because of the 1% interest rate. I have it linked to my checking account at a traditional, brick-and-mortar bank so I can transfer money back and forth. It’s really easy.

  18. Audrey, you used the word “Snowball” so I know you’re on the right track. And your savings to date are to be congratulated. Times are good, right?

    Reading your story I had pretty strong feelings against the HELOC and have to say, that seems like a potentially regrettable mistake to me. I remember when our double income was suddenly cut in half by a layoff – and I used surviving that strategically to play it conservatively for the working years thereafter. The siding can wait, but I would absolutely go with the hardy plank and trim like you want and not Mr’s F’s yucky vinyl. 😉

    A teacher, home for the summer but tied to staying local due to your job will have some time on his hands. He could do the demolition and / or assist someone who knows how to do siding. Think about some sweat equity, as the 70k doesn’t pencil, especially when it is debt to a bank which will take your house away, even, or especially, during harder times. A person could do the back side and learn how, then do the sides and gain proficiency, and then do the front last when they were competent – think Mr. Money Mustache style – the tools and knowledge one gained using “spare time” here might be parlayed somewhere else later, like a rental. (and you can rent the scaffolding you know.)

    I had his and her Subaru’s years ago in Oregon. Neither were new – and what’s done is done, but snowballing some debt now would be so much better than adding more. Just my 2 cents, good luck!

    1. Regarding layoffs- my husband has been laid off 3 times since 2011 with his old school district. They chop off the teachers with less time and rehire them as others retire. We are no stranger to layoffs and his new school district is constantly growing and the top one in our area. I actually have a plan if I do get laid off to go into consulting- the job is waiting there if I need it.
      The siding- we feel the same way about vinyl.. my in-laws had good quality installed a few years ago and there are already cracks in some pieces. We want the hardie siding and trim- not really budging on that but right now, might not be the best time.
      So although my husband is home in the summer, he will have our 2 girls, ages 4 and 6 with him full time. Our day care is done in June and both will be home with him. He can’t be up on ladders/scaffolding (which we own!) with 2 little ones running around outside. Our goal for the summer/breaks is for him to spend time with them and enjoy time together- before we know it, they will be off to college. I am so glad he gets to do that with them and it makes me want to be a teacher too!
      The subarus were actually a better deal new- we had a 2006 outback and 2003 civic prior.. this is the first time we have ever purchased new and we’ll have them until the girls need vehicles. Our winters are bad and the civic was becoming border-line dangerous to drive with 2 little ones (it was my vehicle). I honestly don’t regret those because I know they are safer in them than the other 2 cars we had.

      1. If you are fairly certain you want to retire in the house, and can pay cash, I say go for the fancy siding, especially if you think you can leave the house to the kids. But- cash, not a HELOC.

        Sorry about the 2006 Outback- must have been a lemon. My 2008 Impreza has had some issues (tailgate rust, it’s dented, and I had to replace the AC compressor), brakes replace, but safety issues, none.

        It’s awesome to want a luxury item (new car), but I think it’s always helpful to recognize them as such.

        It sounds like ER isn’t your plan, which means you are right on track!

      2. Hi Audrey – Really interesting situation. Just wanted to say that we went with the Hardi years ago, and it is great. BUT, it was so heavy that we did have some settling, and you might want to consider whether to talk to an engineer beforehand.

        Also, I’m super debt-averse, so I’ll volunteer that there’s just no peace of mind like knowing that you own the roof over your child’s head. And a 4% return isn’t bad in this world right now.

        Personally – and I completely understand if you feel differently, no judgment – but personally, I would not do the HELOC to the point of reducing the amount you have in e-savings. Perhaps new wooden siding would be an option, if it’s less expensive? It’s in keeping with the character of your house, which is always nice.

      3. We had Hardie siding installed about a decade ago — and Colorado weather can range all over, from hot to cold extremes. Our siding looks just as nice today as it did the first year. Yes, more expensive — but I’d do it again in a flash.

  19. @Audrey and @FrugalWoods thanks so much for sharing this detailed breakdown.

    I think the FrugalWoods advice is awesome and I agree there are some places to easily save money without impacting the current lifestyle (cell phones, cable, etc). As Liz@ChiefMomOfficer suggested, I don’t get the almost brand new car thing, but you said it’s not up for debate so ok. 🙂 Definitely find something better for the CDs – like minimizing the upcoming HELOC or not getting one at all, because the goal is to get out of debt, not create more.
    I wouldn’t pad the emergency fund too much more, perhaps up to $30k. I think there’s less risk than usual because there are two incomes at the moment, so the chances of both incomes going away at the same time seems unlikely. Also, health insurance is in place already. I would just verify the deductibles and coverage amounts for something catastrophic.

    The 529s for college are nice, but I’m not a fan of them. There are few ways to get that money out without penalty. The kiddos can work while they’re in college, right? Personally, I saved money by taking as many classes as possible at a community college before transferring the credits to a normal one. The degree is the same.

    In any case, I’m sure that with your current attention to detail and interest in your finances you’ll be able to be quite comfortable in the future. Have a good day. 🙂

  20. I don’t really come by frugality naturally. My husband and I were forced into, but I am so, so thankful every day that we were! Only 6 months after buying a house and recently married, hubby was diagnosed with a softball sized brain tumor and he lost his part time income. And four months after that, he lost his job. My advice: if you can’t afford it one only the smallest income, and by afford, I mean pay 100% cash, you can’t afford it. No exceptions. With a truly frugal lifestyle, cutting out the things Mrs Frugalwoods mentioned, and a take home income of over 100,000, the house and cars will be paid off in no time. I also concur that plunking in $70,000 in renovations for a house that is worth less than $200,000 is bad plan unless you love the house and neighborhood so much you plan to retire and die there! Oh! And speaking again as someone that has weathered multiple job losses and serious surgeries and illnesses, YES pay off that house! The security and peace of mind are worth it!!

  21. I think that Mrs. Frugalwoods’ recommendations are spot on! I would not use my emergency fund at all for this renovation and an eight month emergency fund sounds even better! 🙂

  22. Hi Audrey – wow, great spreadsheet. Very detailed!

    *Car / CD*
    How much of the “CD” line item is tied up in CDs earning less than 1.49%? Any amount that you are earning less than 1.49%, you need to throw at the 2016 Subaru. You’re losing money paying 1.49% interest on the car when you have money tied up earning 1.13%. The 2015 Subaru is at a good interest rate, 0.9%, so there is some arbitrage opportunity for you to put cash where it earns more rather than costing you.

    I would try to either refinance the 2016 car – can you get a 0.9% interest rate there? – or start liquidating your CDs earning less than 1.49% to throw at paying off the 2016 car.

    Insurance – if you pay off the 2016 car, you can drop the full coverage as well. It’ll free up some cash flow.

    *CDs Generally*
    I would keep a few of the higher interest CDs, maybe 1 or 2, and start moving, as Mrs. FW suggests, to index funds. You are both young and now is a fantastic time to take advantage of the market. Your investments are too conservative for your age right now.

    *Taxes and Retirement Accounts*
    Your husband needs to stock up on his 403b. It’s a little low for his age.

    I also sense that you are leaving some money on the table with respect to taxes. It’s good you have a Daycare Savings Account, but are you maxing out your 401ks & 403b’s?

    I can’t quite tell, but it does seem that, if you maxed out your pre-tax retirement accounts, you might be able to get into the 15% federal tax bracket, at around $75k/year.

    You may be giving the federal government 10% of your money that you could be putting into retirement accounts for yourselves later.

    *Living on $75k/Year or $6,250 / Mo.*
    -Knock out the discretionary $1k fund. What memberships do you have? What entertainment? Really nail down and prioritize here.
    -$50/mo on clothing seems excessive to me. Are you giving the younger girl hand-me-downs from the older one? Prior to Christmas, I hadn’t bought or received a piece of clothing (everything from outerwear to socks or shoes) in 18 months. I work a professional job and shop from my closet, and I’m fine.
    -Target expenses. I love shopping there. It’s amazing. But, it is expensive, and the ruin of many budgets. Do you have a WalMart, CostCo, or Sam’s Club near you? You may want to visit these stores and start comparing prices per unit. You’ll be shocked at how much you’re paying at Target per unit for common household items. Don’t be afraid to buy in bulk.
    For home decor, greeting cards, and seasonal items, GO TO DOLLAR TREE. It’s practically the same at 80% of the cost.
    Break your Target addiction. I’ve been there. I love Target so much, but don’t allow myself to go there. I don’t even want to think about how much money I’ve spent at Target for things I really didn’t need, or could have gotten so much cheaper elsewhere. Notice that low-income people do not tend to shop at Target. There is a reason.
    – Fewer trips to “memberships”, “entertainment”, and, sigh, the lovely Target –> less spending on gas money, too. Frugality is a positive feedback loop!
    -Cell phones – how much data are you actually using per month, each of you? You may be able to spend less per month for a data cap. Evaluate your past bills and see what your data usage is like. You may be paying for data above a certain “cap” that you’re not in the habit of exceeding. As you start paring back your data usage to more “essentials”, you could easily shave off $100 here. Next time, buy your phones outright. You have the cash, and it’s much cheaper in the long run.
    – Cut cable. Get Netflix and a minimum Internet speed. I shaved down to a minimum Internet speed and I DO NOT notice the difference, not even in my streaming! I was paying $30 a month for “faster speeds” that I didn’t even notice!

    I revised your budget a little. Line items I changed:
    Daycare – voided this out as it will not be relevant much longer.
    Misc expenses – $300
    Vehicle #2 payment – $0 (payoff)
    Household items (NOT at Target) – $75/mo., though even this might be a little excessive.
    Gas – $120 (fewer trips to memberships, Target)
    Cells – $90
    Utilities – $150 (look into LED lighting, smarter usage, you might be able to trim this down some)
    Cable/Internet – $60 (Depends on how much the minimum Internet speed is, gave you $10 for Netflix)
    Car Insurance – $90 (Guessimtate on dropping full coverage from the 2016 Subaru)
    Clothing – $25 (though even this seems a bit much to me)
    This would get you to $4,797 / mo., enough to live on after you move into a lower tax bracket,which brings me to my last point.

    It doesn’t seem to make financial sense to do the siding project. However, if your heart is set on it, do not get the HELOC. If you are set on it, though, you’ll have enough room in your budget to put aside $1,000/mo. toward a savings fund for the siding. In 60 months, you’d be able to afford the project, which isn’t that long.

    Ya’ll are doing VERY well, and clearly you have a great hold on your finances. Congratulations for all the hard work you’ve put into it.

    1. Also – another benefit of maxing out your 401k is that you’re getting ALL the benefit from your employer that you can on the match.

      But your husband still needs to stock up on his 403b.

    2. Only $6,000 of cds are making less than 1.49%- it will be up in August. I’ve only had the car since May- I think the total interest paid will be about $850.
      My husband’s 403b is low because he gets a pension- it’ll pay over 60% of his highest year salary as a teacher. It’s super stable- people who work as teachers in our state, don’t leave or quit until they get their 30 years in.
      The $1,000/month is kind of worst case scenario. I gave a prior example that our clay tile sewer pipe collapsed and was $8,600 to get the new line. We put if on a 0% card and paid it off in 12 months, so it was about $716/month with $284 in expenses for the entire year. Our IP copays are $500- there was 2 months when one of our kids was hospitalized twice.. things like that. With a family of 4, I tend to prepare for the worst so that we aren’t surprised.
      Memberships are zoo, aquarium, children’s museum.. all are about $150 each per year but they pay for themselves very quickly with 2 active kids that are home all summer (starting this year) with dad. We don’t have Costco- I hear wonderful things though.. so maybe one day it will come to our area.
      We’re looking at the internet/cable. The other option we have ended up being $114/month after all of the fees and taxes so we’ll need to contact our current provider to see if there is something we can do (some type of new customer promotion that can apply to a current member).
      Phones are another thing to look at- I use it a lot for work, but don’t get reimbursed for that piece. It was more for peace of mind in not having to worry about overages with work and us not having a landline.

    3. The Financista, I’m curious as to your recommendation to drop full coverage on a fairly new model, paid off vehicle. Is this just for the monthly savings on the insurance or is there other reasoning behind it? I only ask because I’ve always carried full coverage on my paid off vehicle until it depreciates to the point that the insurance pay out would be negligible compared to my savings for a new vehicle. I have a separate savings account for vehicle replacement and at the moment there is enough in there that in the event of an accident and my vehicle declared a total loss, an insurance payout at the average of the KBB and NADA value plus what I have saved up would get me a couple year old vehicle. I’m just wondering if I have been looking at the situation the wrong way. Thanks!

  23. Hi Audrey, Have you looked into moving your money market/CDs into something that earns more interest? Plenty of online banks offer 1%, Ally is the one I use. Also there are other checking accounts that will offer 3% or more. One that I use is Lake Michigan Credit Union. They offer 3% up to 15k and all you have to do is use your debit card 10 times a month, statements, and login to the account a few times a month.

  24. That sewing room is gorgeous! I have a craft room, which has been coopted by our cat, so it’s not super-usable at the moment. 🙂

    Bravo for contributing so much to retirement, too! Those accounts are quite healthy. Most people your age have zero retirement savings at all.

    I agree with Mrs. FG that I’d keep the renovations to a minimum if you’re trying to pay off debt. There’s so much we could do to our home, but we stopped so we could save money for our student loan payoff.

    I think those car payments really need to go. We used to pay $750/mo for cars. We got rid of my $450 car payment by giving the car back to my dad. I walked to work for 2 months while we saved up enough cash to buy a used truck for Mr. Picky Pincher to drive.

    And yup, I’d also suggest eliminating the cable! It sucks because usually your cable and internet service are tied together. So if the cable is “free” with your internet, yeah, keep it around.

    I know Audrey says she doesn’t budget for groceries, but I think that could be really beneficial. Buying organic is much different (coughexpensivecough) than buying conventional foods, but there are better health benefits. To save money on organic food you can always try a small garden in the back yard? You know where the food came from and you won’t have to spend $4 on carrots.

    1. I wish we could have a small garden in the yard! We are in a city-like suburb (that has had a rat issue in the past) so we are not allowed to have gardens. We do have a farmer’s market this walkable from May – October so that is best that we can do.

  25. Also – I’m guessing you have a Discover card that you’re using for the Gap/Old Navy/BR purchases. (Ask me how I know…) Sign up for an Ebates account. If you watch carefully and plan your clothing purchases, you can earn cash back if you search through Ebates. I’ve done the “I paid $50 to get a $60 gift card” deal, and then searched through Ebates to get 2% cash back on that. It’s a little thing, but it adds up!

    1. Thanks- we do use ebates! My husband has to wear shirt/tie/pants/dress shoes every day and he goes through clothing (we don’t pay for dry cleaning at least!) so he needs a wardrobe refresh every few years as things wear out/get holes/fade/stain (no matter how many pins I pin for ring around the collar, there is only so much you can do before it’s time to get a new button down).

  26. I think you are doing well, Audrey. I disagree with selling a vehicle because I drive anywhere from 40 to 100 miles a day for work, depending on which county I am assigned to for that day. I drive very bad country back roads because I work in very poor rural counties, where cell service is sporadic, and through areas are not heavily populated.I need a vehicle that I know will keep me safe, not break down, and I am assuming you have similar issues. I do agree that you need to think for a while on whether you want to take a loan to fix up the house. I would not recommend it but, again, I live in the deep South, and I do not understand your weather issues, so perhaps take my advice on that issue with a grain of salt….lol. However, having said that, I would try to cash flow any repairs to the outside if possible and try to do the repairs many a little bit at a time. I commend you for your savings. I would cut back on the $1,000 credit card each month, to $100, and that, combined with the daycare coming to an end soon, should free up a significant amount of your budget without too much pain.

  27. Is this your forever home? If so, save up and pay cash for the expensive siding you want- can the porch be a separate project? If not then do viynl siding. Have you looked at eBay for clothes? We have done very well there.

    1. Yes it is- we have no plans on leaving and actually hope to stay here well into our retirement.

      I have not tried ebay- I can definitely look into that.. easy to do at 10pm after the girls are sleeping! 🙂

      1. Another idea is to sew some clothes for your girls. You’re clearly quite talented and they would probably have fun picking out fabric.

  28. I am in a very similar financial position as you are. My fiance and I combined make close to 80k which is more than enough to cover our lifestyle and savings. I would suggest reducing your expenses and focus on paying off your debt. I think there are cheaper ways to do your home renovation, but I don’t think you need to jump into a loan to do it either. Try side hustling and making some extra income to help pay for the renovation. Sell some of your excess things. I think your shopping expenses need to be drastically cut as well. Hope this helps!

  29. Gonna go along with others about “pulling a line of credit” for renovations. $70K buys A LOT of paint….Please don’t…. In addition, I understand New England weather is tough but a paint job should have lasted longer than 6 years. In this neck of the woods we …..scrape, sand , power wash then primer, caulk and putty then paint two coats of GOOD QUALITY exterior paint. Not unheard of to get 12-15 years out of a paint job done in this manner. Maybe contact the paint manufacturer about the poor results. And a side note….a bit troubling to have $1100 a month going out in car payments….no matter the interest rates….

  30. I agree that the price of the planned renovation is too high given the value of the home, and would not be reflected in the resale value. If you are truly dead-set against vinyl, perhaps investigate Rhino Shield (http://www.rhinoshield.net/) which is a ceramic paint and is promoted as a much longer-lasting solution than ordinary paint. I have no personal experience with it, but we’ve discussed exploring it for our home.

    Cell phones are another area where an unconventional choice may be the best. I’ve had both Ting and Republic Wireless at different times. The trick here is to know how much you actually use your phone (like tracking spending), for all categories – talk, text and data. The cell carriers want you to be scared of overages, or of using up your allotment, and therefor to take the easy way of getting ‘unlimited’ usage. There are a lot of things you can do, some of which involve some techy stuff, some only require that you pay some attention. Currently, I’m using Tracfone on the AT&T network. The key here is that as long as you keep your line active, you keep all of the minutes/texts/data you pay for. When we are not traveling, when I’m at home and at work I’ve got good wifi, so my data usage is rather low. When we travel, it can be higher, but even then, taking advantage of free wifi, it is easily controllable, and it is a transiient increase in the cell bill. Using Google Voice with or without a low-cost provider for talk (Republic Wireless, FreedomPop or Boom) can replace your home landline. (There are some obstacles to porting a landline number to Google Voice, but it can be done.) This is a topic where the discussion could be extensive.

  31. My husband and I bought a 225 year old house shortly after we were married in 1979 – we had NO money and it needed a LOT of work – which over 27 years we did most of it ourselves. One of the issues was the old clapboard siding. We always wanted to keep the original features of the 225 year old Colonial so we replaced the old clapboards with new ones – one side a year over many years – and we painted one side a year – over many years. We did as much of it ourselves as we could. The parts we did not feel safe doing ourselves – we hired someone that worked with us. All in all, we were able to pay for the expense over time – CASH. The key was finding someone with the skills that could guide us and work side by side with us. If your husband has summers off – the project would work perfectly over the next five or six years.

  32. Thank you for sharing your financial info. So brave! Not to beat a dead horse, but would it be possible to trade in for a used Outback? I have a 2004 that we bought for cash $9000. I absolutely love the thing and we bought it with the intention of driving around dogs (2) and kiddos (coming June 2017!). I would never advise a cheapo or otherwise unsafe car, but maybe there’s a compromise? Those car payments would really stress me out.

    1. Yep, we love our 2010 Subaru Outback station wagon, which we bought for $12K in cash last year. Hauls lumber, chainsaws, dog, and baby with ease up our quarter-mile long hilly rural driveway :). Gotta love Subarus!!

    2. Congrats on the upcoming arrival! Very exciting! The car loans actually don’t stress me out at all for some reason- I don’t know if it’s because they’re only 4 year loans or because it’s still less than what we pay for day care most months (if it’s a 5 week month, we pay almost $1300 for 1 child). We could pay off my husband’s loan tomorrow if we wanted so maybe that’s why? For us, it’s been life changing in a really good way. I don’t have to worry about if my 2003 civic will start today or if I can fit a piece of wood or drywall in the car or if my kid will smash her head for the 1,000th time on the door when she’s getting out because the space is so small… must be in the honeymoon phase with the foresters! Maybe I’ll have to get back to you in a year or so. 🙂

  33. My one piece of advice is really just encouragement. You won’t miss the stuff you sacrifice to save more and set yourself up for freedom. The things you think are nonnegotiable, well, really, truly, you won’t even miss them. You can acieve a remarkable savings rate on your current income. Setting aside most of the money you make and seeing it accumulate while laying aside old habits will change the way you see the world in a way you never imagined. You’re asking the right questions. Keep right on going. Best of luck. Cheering you on from WA state.

  34. Personally, I would look into getting the HELOC, but I would then use it as my emergency fund, as opposed to home renovations. I would then put some of the $20,000 that they have in the savings account (earning almost no interest) to work. Some could be put towards a good house painter, or it could be put into one of your various investment accounts. They both work in stable fields so layoffs should be of minimal concern, thus I like to see that cash put to productive use. Lastly, I would switch cell phone carriers, which is an easy change, I use Republic Wireless.

  35. I’m not going to comment on Audrey’s situation as far as money goes, except on spending. The cost vs. benefit of the top-of-the-line siding is what I look at. How long is it guaranteed? What do competing, less expensive brands guarantee? Is painting the house every 5-10 years until the money is saved worth the wait? How bad is the current exterior and how long can the exterior wait? How soon would they have to replace the siding if they chose a cheaper brand.

    In my own case, we had an older house which needed a roof after a major storm. As it was our first house, we were filled with trust that things were done as stated in the owner’s disclosure statement. They were not, but as we had been in the house past legal time to sue for fraud, we were stuck. That said, we needed a roof and had had damage because of rain. I looked at labor costs and materials cost. In the end, 3 layers of roofing were removed, layers of which had been feathered in by the previous owner(s). I could get a 25-year warrantied roof, a 30, or a 40. After comparing bids and materials, I bought the 40-year shingle so I wouldn’t have a headache (and I thought I was going to spend the rest of my days in that house) and the labor of a single man who was a professional roofer in the summer, having done that as a kid and student and as a teacher. Total cost: $2800.00. More expensive that the cheapest shingle, but worth my peace of mind. I have been rained out of many substandard places as a poor student, to the point of having a ceiling fall down on me, but I did not want that to happen to me as a home owner.

  36. Wow thanks for sharing! It’s brave to put it all out there. Based on your replies Audrey, it seems like you are set on the siding you want. If it is your forever home, and this is your priority – then do it! As Mrs Frugalwoods says – frugality gives you options. If you want this costly siding, and it truly is your priority, then I think the best way is to cut spending in as many areas as you can, and put that money towards the reno. With your healthy incomes and by embracing extreme frugality, saving 60g may not take as long as you think. Patience will pay off! Good luck to you and your family 🙂

  37. Your renovation photos are lovely! Such character and classic design. I love all the advice given so far and from the outside looking in, I would take most of it, if it were me. Hearing advice is hard, kudos for you for putting yourself out there. In life one usually makes the best decision we can based on our values and priorities. You have thought out why you spend on certain items and based on your comments you feel comfortable keeping your spending at its current level in almost all areas. Being at peace with your choices is important, since it is your life. With that being said, I can’t find any advice that will fit, since there seems to be few areas that are negotiable. This means you will have peace of mind and confidence, since you are following your gut and your priorities. It also means that some long term goals may take longer to reach. If that is okay then you all are on the perfect track for what matters most to you.

    If I were to give any advice it is this – Change is often uncomfortable and takes sacrifice and thinking of things in a different light than we may want to. It never hurts to try out a few ideas. The yard sale idea for clothes doesn’t appeal to you at first glance, however 1 hour on a Saturday, for a few weekends a month in the summer, while the kids hang out with dad…well you might be very surprised at what it can yield. It can be fun, thrill of the hunt, and tremendously rewarding. So I would encourage you to try a few ideas, even if they don’t sound like a good fit. Now you very well may have tried some of the ideas proposed in the comments and that is why you are confident they will not work for your family. If that is the case, then again it sounds like you are where you need to be based on the changes that can be embraced. Your family life sounds lovely and you are living in a charming home and area that brings you joy.

  38. I drive a 2010 Forester and I have a huge reservations on the 2013-2016. My brother has had one engine replaced on his 2013 and needs another one because it is still burning/leaking oil. There is a recall but they don’t seem like they’re going to last as long as a 2011 or earlier. A 2006 Outback doesn’t seem like it would be on its last last legs but I understand the need for safety. I don’t want to rain on your parade but check the oil on those puppies. There is a huge recall on them but it’s a huge hassle.

    I think it’s good that you value your time (shopping online for deals vs. thrifting) so perhaps a clothing ban for yourself and a stricter budget for the kids? It’s also worth it to see what your priorities are – do you value the time now or retiring early? It’s not a total all or nothing but you need to pick one or the other once you look at the income vs. expenses.

    I also love my vinyl siding on our house. No painting and minimum upkeep, especially in New England.

  39. Ages 4-6 are wonderful times! What can your family do for mostly-free to spend time together? Can you cut back vacations and more expensive treats for a few years if the house is the priority? Small children don’t necessarily understand the difference between the county fair and a major amusement park, and more expensive vacations might be more memorable for them when they are a bit older. You can teach them a lot about construction if they could somehow chronicle the house re-creation as the work is done.

    1. They are a lot of fun! We do a lot of free things too- the first pic in the post is of our waterfront, we take them to the playground a lot, I taught my oldest how to sew, they love drawing, we set them up with a really nice art space in the basement- all free and fun. The memberships- zoo, aquarium, children’s museum are not too pricey and they take a full day. It’s a good local treat during breaks/vacation.
      This was the first vacation we took in 6 years and as much as the girls wanted to go to Disney, Mom and Dad wanted a warm place to hang out for 5 days in the dead of February. It was surprisingly relaxing- we had a great time. I’m looking forward to taking them to DC when they’re a bit older- hoping to plan some sort of trip yearly with them as they get older.
      They have lived through the upstairs bathroom reno- DIYing most of that ourselves took almost 6 months with all of the tile and time. We are always working on something with the house and we were hoping that this exterior project could wrap up about 90% of what we have left. It’s still up in the air- we’ll see what happens once we get the appraisal. I appreciate your feedback.

      1. I don’t know what your relationship is like with your extended family, but if you are close and exchange gifts for holidays, have you considered asking for memberships for birthday and/or Christmas gifts? The next time our families ask what we want for birthdays or for Christmas, I am going to ask for a zoo or museum membership. It would solve two problems at once: loved ones know they will get your family a gift everyone would enjoy (perhaps more affordably than purchasing each person a separate gift), and you don’t have to pay for that particular item.

        1. We did get the zoo membership this year for Christmas! It has been a struggle to get people to realize we value these memberships as much as a bunch of toys that my girls don’t really play with. We return as much as we can and donate the rest that we can’t return- they are very happy with art supplies (and of course there are a few toys that they really care about) so we always encourage that.

  40. So here is my take on things. If their house is truly only worth $176,500 and the appraisal confirms this, they will be borrowing more than the 80% of the equity of their home by $4,025. Have they asked their banker if they are being charged an additional rate to cover the extra they are borrowing over 80%. If yes, they are most likely paying a higher interest rate. If it’s a Home Equity line of credit, most likely their rate isn’t fixed, meaning it can go up as interest rates rise, which they most likely will at some point. Also, if an emergency happens and you need to borrow money from the bank, your debt to income ratio will most likely be too high after the new loan to do so.

    I’d definitely ditch the car loans. Totally agree with Mrs. Frugalwoods on this one. We also do not make repairs to our home unless they are paid in cash.

    1. Really get harped on about the car loans!

      I agree on the cash for improvements- all of our other home repairs (roof, gutters, kitchen gut, bathroom gut, bathroom remodel, sewer line, side entrance door, and the list goes on and on…) were paid in cash or with a 0% 12 month credit card. This is the last big hurdle- was hoping for a “one and done” situation so it’ll be something we’ll have to figure out. The bank allows up to 85% for a HELOC (we are allowed to lock in at 4.5%) and we were going to pay about $1,350/month to get it paid off by the end of 2021.

      1. Re: car loans. Taking a look at the numbers and what happens to our money when we agree to purchase anything on monthly payments shows the future value of today’s spending.. It’s not that you cannot have reliable, comfortable, useful automobiles. The question is – is this particular expense the only way to service those specific transportation needs.

        Accurately seeing the long term consequences of the spending we do today requires looking at things through a very long term lens. a 10 year window is a great way to look at things. What does this car cost me over 10 years? If I bought a less expensive car, that still gave me all the same attributes, what could my money do for me if I invested it instead? How much could I accumulate by eliminating this car payment?

        To calculate the value of a monthly expense over a 10-year period, compared to investing that money conservatively instead, multiply the monthly expense by 173. When you plug your monthly car payments of $1,075 into this calculation it yields $185,975.

        Mr. Money Mustache has a great post about this here – http://www.mrmoneymustache.com/2011/04/15/getting-started-3-eliminate-short-termitis-the-bankruptcy-disease/

        And there are many online calculators that can help you analyze the future cost of today’s spending. One is here http://www.calculatorsoup.com/calculators/financial/future-value-calculator.php

      2. I wouldn’t worry as much about the car loans. I bought a 2013 Subaru Impreza new. I had a 1.9% financing that I paid off in 3 years. I paid very little interest, and honestly, by taking out a loan I made more money on the cash I had invested over that 3 year period. I looked into getting a used 2011 Subaru, and it wasn’t going to save that much! They really hold their value (at least here in WA). I didn’t feel comfortable getting a much older car because I don’t know a lot about cars, nor do I want to deal with repairs/maintenance. I have a very long warranty thanks to my negotiating, and anytime a light comes on, I take my Subaru to the dealer without fretting one bit. As they say, peace of mind is worth a lot!! I VOTE KEEP THE CARS. 🙂

  41. The beautiful thing about math is it doesn’t judge and it doesn’t condemn. At it’s heart, this is a math exercise that with emotion removed provides the answer that these goals will not be achieved on the current trajectory. I think Mrs. FW’s recommendations are spot on, and even implanting ALL of them wouldn’t guarantee the desired outcome in this case. I would suggest that if she’s not already using it, to plug all of her finances into Personal Capital and use the Retirement Planner under advisor tools. I believe all of the variables could be captured and that many thousands of possible scenarios could be reduced to a chance of attainment. From there you can play with these variables to improve your percentages. The short math on retirement income is that it takes $2.5m to “safely” withdraw $100k a year. Living on $50k and relying on $50k in investment income to supplement would require $1.25m. I’d love to hear the results from Audrey if she would go through this relatively pain free process. Along the way a lot of other things would probably become clear, including the investment strategy etc…

  42. Totally unrelated but what is the paint color on the bathroom wall? I have very similar tile in our bathroom and will want to paint in the upcoming years so would love to know. Sorry disrupting the actual conversation!

      1. Oooo that is a good-looking color! Seems like it’s more grey than blue? I’m slowly thinking about re-painting some of our walls…

  43. don’t think we are trying to harp- whatever you think is best for your family is of course best, and no one is knocking discretionary spending if it means a lot to you. I think it’s hard, though, for folks to hear this is all because of “safety” when others have made different, cheaper, choices when safety is equally important to them and for their families.

  44. I would look at cutting the easy expenses first like cable, focus on earning higher interest, so you can save more cash for the renovation.
    It’s great you are asking people about your finances. Best of luck!

  45. I agree with many of the earlier posters that paying 70,000 for external renovations on a house that is worth 176,500 is not a wise use of money. I live just outside of Boston and my three neighbors all have houses that were built in the early 1800’s (1820s and 1830s) – the wood siding has lasted 200+ years and with the correct maintenance !

  46. We just bought and renovated a 90+ YO foreclosed and neglected home. We made a lot of decisions toward maintaining the character of it which had less costly alternatives that would have been OK, so I get your desire to maintain the historic integrity of your home. But I would think long and hard on it before going into significant debt to do so. Have the neighbors invested similarly? What is the chance you will want or need to move before the house’s appreciation can make up for the investment you’d be making? Is there an in-between siding solution that will not be offensive to your tastes but not cost top $$?

    Definitely ask a number of contractors, and ask open ended questions. Some may have alternatives and ideas that they might not suggest if you start the conversation with, “I want an estimate to completely remove the old siding and replace it with X. ” And make them work for it a little. If for example they bid $70K, come back and ask them how they might approach the job if there was a hard budget limit of only $50K to work with. Sometimes a little prodding and they might be wiling to do the same job a little cheaper, or might figure a way to honestly save them and you a few bucks with just ingenuity. When the money is that big, there is always wiggle room and it requires some negotiation. Splitting the work up into phases may help. Or looking to economize in some areas by DIYing even minimal portions of it.

    Mid way through our aforementioned renovation project, I was laid off. So we had the house we lived in, the half done house we were renovating to move to, a loan for the renovation work, taxes on both, no job, and the real possibility that finding a new job might mean a move. Talk about financially being caught with one’s pants down! Thankfully we did have decent sized emergency fund, and I found a new local job pretty quickly, but the moral of the story is sometimes really unpleasant surprises happen at the absolute worst times. If you do go for the HELOC, definitely shop around. I found a locally owned bank that gave us one with a 2% first year rate, no origination fees, and no early payment penalty while other larger banks had fees and higher rates. We paid it off in that first year and all was well.

    Best of luck!

  47. I think taking a strategic approach to the renovations and really looking into your options there will yield some gains. As others have pointed out, sinking ~50% of the value into the house is very unlikely to yield a price increase, and it is a significant amount of money to be debt financing.
    My parents finished a house that they purchased as a log home shell when I was a kid (~4). My Mom says it was instrumental in giving my brother and I the confidence to be comfortable around tools and know that we can take on DIY projects. They had a GC but my parents did a ton of the work themselves. All of this is a long setup to: “How much does a babysitter cost?”
    I suspect that hiring a babysitter on occasion to free up your spouse to do *some* of the work, while still having the kids at home, could substantially chop off some of those costs. Also, would you be able to call in favours from friends and family to do some of the demo with you? Many hands make light work and all that jazz.
    You’ve mentioned that there are many pieces to the reno; break it down into several smaller projects, then detail out the exact cost. Also research materials. For example, find out how many square feet of siding you need, then scour the internet/call places to see if you can find it liquidated somewhere. If you’re looking at a 5 figure materials bill, saving 5% is equivalent to a lot of after-tax days at work. At 70k, your materials costs will be ballpark $35k, so 5% would be $1750 . That’s a solid chunk of change to have to earn and save up. Even pouring cement can come for many different prices.
    A note about hardie board… it’s not the miracle that it seems to be. My condo building is made out of it and water contact makes the paint bubble off all the freaking time. There’s the spots where the rain always blows onto the wall and it dribbles down, where air conditioners vent, where an icicle melts and drips, gutters that overflowed, etc. If it sits in water, like say there’s a small dip in the sidewalk in one spot, it crumbles. There are repairs done to ours every year and the building is only 9 years old.

  48. I’m going to specifically address her home equity line of credit and the exterior siding project because this is my field of expertise – I worked in architecture for 10 years and have a professional degree in architecture, plus I own three houses (one of them 80 years old like hers). I absolutely would not spend $70,000 on hardieplank siding for a house that’s worth $176,000. Period!

    If the wood is not in good shape have it sanded, filled, and repainted. We had our old house with cedar siding painted for $4k. Most of the wood from this era is thicker than what we would use today anyhow so it usually can be sanded down. Or look into putting vinyl siding over the existing – it shouldn’t cost more than $15,000 $20,000. From the pictures on the blog, it looks as though painting it came out very nice the last time. There’s no reason why you can’t do that again.

    Look online at real estate. Calculate the $$ you have invested in your home, (purchase price, plus the work you’ve already done, plus the $70k you’re thinking of spending). I’d be willing to bet that for that amount you could get a much larger, newer house! You’d be better off investing the money in a newer, bigger home which will be worth more when you’re ready to retire than investing in expensive renovations on an older house. It may be time to trade up!

    I’m going to ditto Mrs FW’s comments – Subaru car payments are too high, cellphone plan is pricey, and entertainment can be reduced.

    I’m also not a fan of Disney vacations. . $400/day for rides and lines! Ugh! I’d rather see the Pacific Ocean, the Rocky Mountains, or a national park during a 2 week trip. We get discounted tix to a local amusement park for less than $30. Same thrill without the cartoon endorsements.

    You are doing a good job saving though! Best to you!

  49. One thing that does not seem to have been suggested is getting someone else to watch your kids for the summer, so your husband can do useful tasks – like the boarding. Do you have friends or family member who would do this for free? Even if they’re not nearby, could they take the kids for a week or more? Would the cost of a holiday club/ camp/ or extra day care in the summer be less than the cost you have been quoted for the renovation? My husband is a teacher and they get more holidays than most people, he can use all his holidays not just the summer to get a handle on the DIY. Even if you can’t or won’t get care for the kids for whatever reason, then he should use the early light mornings and long summer evenings, once you are home to tackle the project and would certainly get a similar number of hours in. Whenever you update a house, you must, must consider the value of the property / location and how long you plan to stay there. Getting valuations is a really sensible idea.

    I wholeheartedly agree with everyone who is saying don’t buy things on credit – you will ALWAYS, ALWAYS end up paying WAY MORE than if you had saved up to pay cash – it’s just craziness. No-one needs to buy cars on credit, they are a depreciating ‘asset’ – sell the cars or give them back/ trade them in -whatever you do in that situation and buy good quality, used vehicles. If you’re so concerned about safety, then choose the same brand/model that you have now but buy an older model. There are rare exceptions to this – the 2 times I have bought new were 1) when the government was running a scheme to scrap old vehicles and gave me £2000 for my old banger that wasn’t even running. That bought the price of a new car down to crazily low levels, even cheaper than buying new and was an offer that could not be refused, since also the new vehicle gave better performance, lower emissions and therefore lower tax. 2) If you can find a dealer offering an insane deal on a showroom model or an old-plate. We picked up one of these (ex-demonstrator) models essentially new with v low mileage, that had been pre-registered by the dealer. It was an old shape and old number plate model that the dealer needed to get shot of pronto. We paid less for it than we would have paid for a 2-3 year old version of the same car, with much higher mileage. Also we got free road tax the first year and much lower tax and running costs overall. In those 2 situations, buying new was a no-brainer decision but also we paid CASH.

    I’ll second the idea of getting a side income, there are sites such as Swagbucks, InstaGC and Clixsense where you could quickly and easily earn free gift cards for all sorts of shops in the evenings and at weekends. You’d never need to pay cash again. There are plenty of other ways to boost your income online and it should not be dismissed. I have effectively given myself a 25% pay rise by maxing out all these opportunities, alongside selling stuff we do not need.

    Again, as others have said practicing extreme frugality is the way to reach your goals fastest. Whilst all these memberships and TV, mobile phones etc may be nice, they are certainly discretionary spending and can be significantly reduced or axed altogether. There are plenty of free places to take children, including museums, parks and so on. Check to see if your local council/ government or voluntary groups- like churches- are running free activities. Children do not need paid activities, they just need time. Why not bake together at home? Children can also learn a great deal by getting involved in household activities, including gardening, cooking and renovations.

  50. Hi Audrey! I can’t weigh in with the depth of many others here, but one thing I noticed was that you said your emergency fund is in a “money-market account with 0.05% interest.” Is 0.05% the annual rate? I keep my emergency fund at Ally Bank in a savings account, and they pay about 1% per year. I have it set up so I can do online transfers with our checking accounts if I ever do need to access the funds, and transfers clear within 1-3 business days. So, that might be a way to earn a little bit more interest on your funds!

  51. One other thought… you can do 1% or better on savings with online banks for vacation and emergency funds. I’ve used Ally Bank for 4 years now and am very pleased with them.

  52. Hi, Audrey. First, I think you are doing an excellent job, and if you changed nothing you’d still be in great shape financially.

    I agree with Mrs. Frugalwoods on everything except the CDs. I saw them as the second half of your emergency fund want to know where you have them, because that’s exactly what I would like to have. I have emergency saving in an Ally online savings account with a 1% interest rate, and I highly recommend it. I do wish you’d bought those cars 2 years used, but it’s too late to recoup those first minute depreciation costs. You have a lot of room for increased savings with some more frugal choices if you want that.

    I would vote against the remodel for all the reasons posted. We bought a fixer upper in 1997 and did a lot of work to it, and with HELOC money did more, and almost doubled the property value in 10 years. When the market tanked I went from 30% equity to 30% underwater. Your plan is so similar to where I was, and I would never do it again with what I know now. Cash only. I suggest pay to have the painting done ($18,000) out of the emergency fund, then save the amount of the HELOC payment, plus the child care (and more) until you have the cash to pay for the re-siding. It’ll only take you about 3 years to save the $70k. Then if anything unforseen happens, you’ll have the option to do something else, rather than a loan you have to pay back. That’s really what this is all about – freedom to make choices.

    One other suggestion, I think you could make resale shopping fun with your daughters. I’d start with the 6 year old now, maybe once a month, hit a store for an hour. Teach her how to look for quality clothes and make it an activity you do together. You’ll teach her a valuable life skill. And bargain hunting is fun! Pack a lunch and have a picnic at a park.. Your husband can do something 1-on-1 with the younger girl, until she old enough to join you (or add another day with her and keep it 1-on-1).

    Thanks for sharing!

  53. Hi Audrey, thanks for being a case study and sharing your finances with us!

    I definitely agree with most of the suggestions the other comments and Frugalwoods suggested.

    The things that I would try to cut out would be the cable bill (keep the internet though as I would like to read future updates), the phone bill (that’s a really high one!), and try to reduce spending on groceries and the miscellaneous expenses.

    Overall, you’re doing pretty great for where you are already. And with some more adjustments, you’ll likely achieve your goals in 10 years or even before then!

    Keep on going, Audrey!

  54. Hey Audrey,
    I just wanted to give you a little love on the car issue…. I’m a driver. I love to drive. And I love to drive cars that are performance cars. I grew up with my father driving a sports car and a “beater”. I learned to drive on a manual transmission and my current car is only my second automatic (my company car right out of law school was my first). I had a Mini Cooper S Convertible that was a DREAM to drive. I literally still dream about driving that car….. downshifting on the highway and speeding past a slow poke in the passing lane…. aaahhh…
    Anyway…. I think you’re incredibly brave for putting yourself out there. And I think you want to make some changes if you asked this community for help. I think there’s a lot of low hanging fruit that can but utilized to create savings first before you cut into the cars.
    To me, there is low hanging fruit with clothing, food (I know you don’t wan to “frugalize” but I think that minor tweaks could yield savings without feeling it), home supplies, and even memberships? (Library in town have memberships for example?) Make those changes, obviously. I have no opinion on the home improvements because I’m an idiot when it comes to things like that.
    I think you’ll be surprised how little you’ll notice changes if you take them slowly. Implement one or two changes a month and then it won’t feel like an insurmountable task. You’ll forget why you ever ordered from Gap.com in a year from now!!
    Stay as long as you can in corporate America and then plan for something more fulfilling once you’ve vested in pension. That’s wise and can still allow you to do what you believe matters in the world.
    I’m not frugal because I want to save up a bunch of money and stop working. I’m frugal because I made the decision to be the change I want to see in the world and that doesn’t pay well (in money at least). So I don’t buy lunch out and I shop at Savers for my work clothes and I run outside rather than getting a gym membership and I keep adding to my DIY skills every month (this month: sourdough bread baking…. so far…. its going).

    But seriously. Don’t touch the car.

    1. Thanks- it’s been tough with regards to the cars considering if I had labeled them Student loans, no one would have said anything about them (We both have bachelor’s/master’s degrees- I had $0 SL debt and my husband had about $37K.. we paid that off back in 2012). Oh well…
      I know there are things we can cut for sure- we’re getting better now that the girls aren’t babies and we have more time to meal plan, don’t have to worry about nap schedules, diapers, things like that. It takes time and we’re trying our best. The house is our home and we plan on staying here for 30+ years.. it would be nice to have this all done so we can enjoy it and not have to spend summer after summer scraping/painting/replacing wood clapboard/trim/porch flooring/columns/etc. It might just not be the right time yet- we’ll figure that out after the appraisal. I appreciate your feedback.

      1. Yeah. People harp on cars a lot. It’s not personal. Though the difference with a student loan is you can’t throw your education back and buy a cheaper one with cash. It’s an action you can take and a lot of people do.

        I think another commenter said it best: you can do anything but not everything. Does the 10 year retirement, the cars, or the reno matter most to you? They aren’t equivalent, but what would be the first to go if you had to choose?

      2. It’s not for me or anyone else to judge Audrey and her family, but I find myself wondering what they want out of this exercise. It seems that, for this family, most things are nonnegotiable (car loans, girls must stay home with the father in the summer, cable), so I wonder, why ask? In many ways the responses are judgey (am I not safe because I ride my bike to work and have an older car? Do I care about my loved ones less? If someone’s children go to summer camp, does it mean their father is not sufficiently involved) If she’s comfortable with debt and decisions, then fabulous, but why ask?

        As to the loans- many people would be just as disturbed by student loans. But equating them with car loans is false on so many levels. Student loans can’t be traded in for a cheaper model, and education done correctly is not a depreciating asset.

        If the house really needs that much work for siding, it’s a financial albatross. This doesn’t mean don’t keep the cars and don’t do the house, but these should be recognized as luxuries, not needs.

        The answers may seem like tough love, but this is the Frugalwoods site, not the how-to-maximize-enjoyment-with-debt-site. It seems like Audrey is comfortable with her decisions, which is great.

        One thing I might add- don’t count on a state or city pension. They’ve been strafed all over the country and are frequently mismanaged. They may be there, but for many (hello Rhode Island), they have been severely curtailed.

        1. Exactly my sentiments. They are doing well for a family with less ambitious plans (no 10 year plan, less expected expenses on the home front) but it is a little difficult to advise on how best to reach their goals when so many things are non-negotiable.

  55. Audrey and family are in amazing financial shape for their ages. Regarding the house, I am a Realtor and I agree with Mrs. Frugalwoods’ opinion of NOT putting $70,000 of money into a home that is worth $176,000. There will never be a return on investment. It will most likely be over-improvement for the neighborhood. Please don’t go there. Look at the alternatives Mrs. Frugalwoods’ has recommended….or look around and move to a more modern home in the same price range. Sometimes you can get great deals on homes that have already been upgraded.

    1. Not interested in a different house- this is our home and we like the neighborhood. We don’t need anything bigger and I don’t want to have to clean anything bigger. We’ll figure out what is best for our family.

      1. Just wanted to throw out a little perspective here. I grew up in WNY, and in many towns, property values are extremely suppressed because of insane property taxes. My parents are still in my childhood home (a beautiful, large old home in a great location), which they long paid off but now are essentially renting from Erie County since their property taxes are nearly 10k per year. They’d be lucky to sell it for $250k. All that is to say that the improvements and repairs Audrey is planning may very much be in line with what is normal and expected in at that price range , and therefore be more attractive to buyers if they wanted to sell. Not saying they would recoup the total cost, just something to consider.

        I’m also someone who is 100% against car loans and having too much car in general, but I TOTALLY get why your cars are a big priority in WNY. Commuting in the winters is NO JOKE and if I were in your position I’d probably do the same thing.

        The one thing that really stood out to me is your cell phone bill- my husband and I have two smartphones on Verizon for $100/month with 6GB of data, and we’re shopping around because I think we could go even lower! Verizon does offer a teacher discount that we take advantage of (husband is a teacher)- maybe your carrier does as well!!

  56. I like to keep things simple. When summer is here take the 30k and pay off 1 car and working on paying off the other ASAP. Stop the other savings. Then keep these cars for at least 10 years.

    I also WOULD NOT take out a HELOC for an aesthetic change. If you keep borrowing money and then you will continue to fight the battle of savings with chains on your feet while walking uphill in the snow.

    Once you stop borrowing money for stuff you will realize what you really can and cant afford.

    This strategy has worked wonder for our finances. We have more cash flow then ever but we have to wait for the things we want. Sometimes the wait kills the lust.

    Good luck and thank you for sharing your story,

  57. Audrey, thank you so much for participating. I don’t think I would have the guts since my DH and I have made every financial mistake there is. I think I am the only person here who thinks you are doing very well. When you stated you did not budget groceries, I was prepared to see some huge number…..$716 all organic? I think that is doing darn good!

    The cars…..I get it. I worked full time with a 30+ mile round trip commute 5 days a week in a very rural area of Northern Coastal California (Humboldt) and having a safe car was mandatory for us. Since the youngest turned 18 (10+ years ago) and married a Marine who was 19, I have only purchased two used Camrys. My first Camry is still running and my middle daughter (35) uses it as a dog car (she has a stepdaughter, but they drive a different car the three days a week they have her).

    Clothes-Someone thought $25 a month is enough….for a family of 4? That is $300 a year. I think that is completely unrealistic. Like I said I live in Humboldt and thrifting here for clothes…..don’t bother. But when I go to SoCa where my youngest lives……I go there and have gotten a few good items, but really the time it takes……not willing to do that when I worked full-time with 3 very busy daughters.

    Cable-I can’t say too much since ours is $150 for Direct TV, but again rural area we literally have 5 channels without cable/satellite.

    Auto Ins-We pay $167 for 4 vehicles so around $100 for full coverage seems fairly reasonable. Our 38+ year insurance agent just retired so we are going to shop around, but I’m not holding my breath.

    Life Ins-Again very reasonable.

    In fact, I’ll cut to the chase…..the only thing I have to suggest, since I think you have budgeted pretty darn well, is to really plan. It takes time and organization to save money. Also after working 4 years as an executive director of a 100 bed assisted living facility and being responsible for the entire budget, I started looking at our home in the same way. I had to plan and budget for expenditures such as new carpeting, new outdoor furniture, can we get through another year with the current clothes dryer, etc……

    So for the past 2 years we have done our budget for the year including what are we going to do as far as maintenance on our home. Our home is 52 years old and a ranch style. In 2016 we replaced carpet and living room furniture. In 2015 we got a new lawnmower and garage door (and opener) and I got an Accuquilt Go Electric Cutter! I know I had to say that so you would be jealous. One of my purchases I doubt I will ever regret! In 2013 We bought a new King Size dual remote control adjustable memory foam bed (from Costco on line). In 2012 We remodeled our master bathroom and painted the cabinets in our kitchen (to get another 5 or so years out of the original ugly pine cabinets). Another tip: I keep a list of all major type things we have bought like washer and dryer 2009, stainless steel frig 2010, new patio April 2011, December 2011 Babylock Evolution serger (my husband surprised me for Christmas). Even better is keeping the receipt with the instruction book in page protectors in a binder…but that’s a whole other thing……

    Even though we made huge mistakes, the one thing I feel that I did right was put my older girls on a budget with a substantial allowance at 11 and 13. With the allowance they had to cover ALL their expenses including clothes, gifts, movies, magazines, etc. The only clothing I purchased was socks, underwear and outerwear. They went from not paying attention and making fun of me for going straight to the sale rack, to doing exactly the same thing. I supplemented before school each year a few hundred each otherwise that was it! They both are pretty dang responsible with their money. Don’t ask about the baby, everything I did right with the older girls I did wrong with our surprise baby, which incidentally I got pregnant with her when the older girls were 5&7 so be careful!! haha.

    The retire and earn money sewing…..I am a quilter and I think I have seen your sewing room on Pinterest, seriously, and I love to sew, but I think it would become a job if I charged for the quilts I make. So many people tell me I should sell them on Etsy, but the main reason I don’t is I think it would take the fun and relaxation out of it. I have blessed many a child with a quilt and my hope is to someday make some for donation to Project Linus or similar. I do, however, plan to make as many gifts as I can next Christmas and vow to start in July!

    Spending some time each week planning, not just menus, but what can you do to make your life easier in the coming week? Before retiring (unexpectedly 7/8/16) I did several things on Sunday to make the coming week easier. I picked out all my outfits down to jewelry. I washed, spun dry and packaged salads since along with packaging up my breakfast each evening so I could grab and go in the morning. I would make steel cut oats on Sundays or a quiche for instance. I would order anything from Amazon I could that we needed like my Clinique cosmetic stuff (I have rosacea) or a new water filter for the refrigerator, etc.

    Okay the remodel. as I stated above, I had to retire due to chronic pain 9 years before we planned. I do not think I would do the remodel as stated. We have instituted a plan for paint of our redwood siding (I live in the Redwoods) that we learned from our neighbor. She would paint one side of her house every year. So we have instituted the same. We paid for a good paint job about 4 years ago and have started the paint side rotation. My husband did the south side while I was visiting our granddaughters in fall of 2016. This summer we will do the north side. I would take care of some of the smaller things, I believe you said the porch, and save like crazy to do the new siding. My husband who built houses for many years, refuses to consider vinyl siding and about flipped his lid when he came home and realized the Direct TV guy had drilled a hole in our siding to set it up several years ago. I did like the person above who suggested taking out the Heloc, but using it as the emergency fund and use your cash, but with two car payments, I would want to get those paid off first.

    My son-in-law who planned to be a lifer in the Marine Corps was medically retired after 9 years and 3 deployments he became legally blind and they had to retire him. My daughter, son-in-law and two granddaughters are moving in with us for 2 years to save money to buy a home in SoCa. They realized after a year they jumped the gun on the move and are coming back. We had an honest discussion about money/help around the house/etc as they lived with us when he was first retired in 2014 and our youngest granddaughter was a month old. His disease progressed much more quickly than they expected. My second SIL lost his job 8 months after he and my oldest were married. He thought he had job security as a radiology physician assistant. His group lost their contract with the hospital and they disbanded. He now works for a radiology equipment company training physicians on the use of the equipment.

    My point is that you are planning for the best and sometimes the best is not what happens. So maybe just rethink a few things, make a few adjustments, but really hats off to you for the good job you have done so far.

  58. I agree with Mrs. Frugalwood about the renovation project. I’m against the HELOC. I’ve done that in the past and came to regret it once I sold my home. Also, when you are ready to pay cash for the project, find an alternative for the Hardie board. I also agree with the advise about the cars. I would encourage you to sell them and replace with used Subaru’s. A friend had an accident that totaled the car. When they replaced said car with a Subaru, their yearly insurance dropped $200. That’s a nice savings. Good luck to you and your family.

  59. On the car topic… definitely a very personal decision. Everyone has a different idea about what is safe or not for them and their family. I personally like middle-aged cars… new enough with low enough miles to be reliable and have modern safety features, but not brand new. Others get peace of mind from knowing they bought new, and the value of that peace of mind cannot be ignored. There’s no right answer.

    Also it is easy to advise that you should sell your newer cars and buy older, but you already are on the hook for their loans so you’d need to fetch a good price for your almost new cars to make that plan worthwhile. And you’d need money for their used replacements from somewhere and loans for used cars are rarely at as agreeable rates as new. I’d vote for sticking to your original plan on them. You bought them, now keep them, maintain them well, and milk them for 15 years or 200K miles each. They’ll be good for it!

    Same with clothes in my opinion. I do shop thrift stores sometimes, but it is not for everyone. I think the biggest bang for the buck in terms of frugality is scrutinizing and only buying what you truly need, be it new or used, and then being sure to get every ounce of utility out of what you bought before you pass it on, sell it on ebay, or re-purpose it as rags.

    1. Thanks about the cars- my last one was 13 years old and needed more work than it was worth (tires/brakes/timing belt/other stuff I can’t even remember). I would have driven mine longer, but it was a civic and with the winters and the room, it was getting tight with 2 growing girls that are in 5-point harness britax booster seats. We plan on giving these foresters to the girls when they are ready for college- so we’re talking 12-13 years minimum before we even think of getting a new/newer/new to you car.
      Clothes- we can try. I reuse all of my oldest’s clothing (including all winter gear) for my youngest and we donate the remaining items that my youngest haven’t completely destroyed with stains/holes/etc. We don’t reuse sneakers with them- by the time my oldest has outgrown them (about every 9 months) they have holes in them and the soles are so worn.

  60. I wade in here with some trepidation. First off, I admire Audrey for sharing her information -brave! Second, I agree the family looks like great savers, so kudos to that as well. However the family also seems more comfortable with debt than many posters here.- myself included. For example, I would never carry a car loan.

    I will not answer with the financial acumen of others. I will only share a bit of my experience. We renovated our home extensively a few years back to make it wheelchair accessible for our son. It was absolute necessary and we saved for years, and lived for years with a house that really was inadequate for our needs, just to avoid taking on debt. In short the renovations weren’t a want but a need, but yet we waited for years until we had the cash. My son lived with bed baths because we couldn’t afford a wheelchair accessible shower. Like others I would suggest you avoid taking on such a significant loan for something you don’t need to do and that won’t really increase the value of your home. Since you are committed to this home have a plan to make something work in the interim and save the cash.

    Like the previous poster suggested you are planning your financial future using best-case scenarios. And I genuinely hope that your life continues to be wonderful with no challenges. However if I have learned anything parenting a medically complex child I have learned that life can throw you curve balls – sometimes pretty big and scary ones. For the most part you won’t see them coming and you won’t be able to prepare for them. I cannot tell you how much less stressful life has been because we lived frugally and live(d) without debt – no car loans, no students loans, no credit card debt, mortgage resolved in 10 years – and so on. I could walk away from my (professional) job the moment my child got ill because we were debt free and lived below our means. It is a huge gift, and for me it is, and has been, worth far more than high-end cars, new clothes, and so on.

    You can offer all sorts of reasons why you need two new cars, organic food, nice vacations, new clothes, and why you would take out a $70,000 loan for siding. If these things are important to you then you should do them. But by doing these things you are actively choosing not to do things such as retire early, or work part time. You may also leave yourself vulnerable to the volatility of life.

    1. Wisest comment on this board! Thank you for sharing, and best wishes to you and your family. I hope your son is doing well and enjoying the new renovations.

      Not to judge and Audrey and all of us have different comfort levels, but rereading the spending it’s a luxury life to be sure. I earn at least triple what they do, with many fewer mouths to feed, and I would never take out a car loan (nor give a teen a car for college).

      Thank you again for your wisdom and insight, and most of all for sharing your story.

  61. What a great article! I appreciate reading about your family and your goals.

    This is just me but I’m wondering about your girls’ college funds. Having a degree is extremely important but perhaps you should put the money towards your emergency and retirement funds first. If you can’t afford your own retirement and your daughters have to help support you and your husband in your old age or your family has a major emergency that severely impacts your daughters’ standard of living the money in their college funds won’t mean much.

    You can encourage your daughters to study hard in school, get good grades and engage in extracurricular activities (such as volunteering at a soup kitchen, for example) to pad out their college applications thereby getting scholarships and/or grants. They should also be expected to have after school (if they can keep up their grades) and summer jobs as soon as they can legally work. An alternative to expensive 4 year degrees might be to avail other less expensive educational pathways that will lead to well-paying careers. They can also take college level online courses while they’re still in high school to accumulate inexpensive credits towards their degrees.

    I can understand, though, why your daughters’ college accounts are a priority. Maybe my point of view is the way it is because my sisters and I had to work our ways through college because my father was unable to help much (plus he was unwilling to co-sign any student loans) . I’m of the philosophy that being given something for free–in your daughters’ case free college–without any expectations of personal contribution makes the achievement less valuable. If your daughters have to work to afford college they will, in the long wrong, turn into more frugal adults. They will also feel pride in their independence.

    1. Re the college accounts: my husband and I have bachelor’s and master’s degrees from our local state school. I came out with $0 in SL debt thanks to a scholarship, my mom, and work paying from my grad degree. I worked 30+ hours waiting tables in undergrad, moved out of the house at 21, and bought at condo at 22. Without my mom’s help, I would not have been able to do that. My husband came out with about $37K in loan debt. When we got married, that was our debt and it wasn’t great, but it’s gone now and it was well worth it given his current salary and what he will make in 5, 10, 15, 20 years from now.
      My husband has a pension that will pay out at 60% of his highest salary, my current pension will pay out 30% (peaking at 60% with 30 years of service), we also have the 401k, 403b, and Roth IRA accounts. We increase our contributions every yaer by 1% when we get our raises.
      College is important to us and is expected- I’m going to help them as much as I can because I was given such a wonderful gift and our goal as parents is to ensure that they are better off than we were.

      1. It sounds like you’ve done a great job getting your degrees in a responsible manner. I agree college is very important.

        I think it just shows that each of us commenters have our own philosophy on how to achieve things and what’s best for us is probably what’s not best for you.

  62. I actually disagree that you should get rid of your current cars and buy used ones. You’ve already experienced the largest depreciation just after buying them. If you were to sell them now you would simply lock in the loss and give up the remainder of the inexpensive maintenance and repairs time with a new car. You wouldn’t come out ahead. My advice would be to make sure you drive those new cars to at least 200k miles and start saving for their replacements once they are paid off so that you can pay cash the next time. I am really not convinced that the standard frugal advice to only buy used cars is actually the best advice unless you have mechanical skills that will allow you to do repairs without paying for labor. You might pay around 40% of the original purchase price for a car with 100k miles on it, but you also only have the car for half of its useful life, and it’s the half when things start breaking and needing repairs. As long as you actually drive them for 200k+ miles, I don’t think there’s anything wrong with buying good, reliable cars new.

    1. with used cars, you look at the price per mile. If you say a car would last 200,000 miles, then a brand new car for $25,000 is $0.125 cents a mile (not including maintenance). If you can get a 3-4 year old version of that same car at a cost of $15,000, then the cost comes down to $0.094 cents a mile, a savings of 3.1 cents per mile. So yes, the used car still comes out ahead in price.

      If you’re buying a used car with 100K miles on it, you’re getting it even cheaper, probably more like $7,000, at which case you’re paying $0.07 cents a mile.

      Just because a car is used doesn’t mean it’s going to have MORE maintenance. You would still have that same maintenance if you bought it new, you’d just experience the maintenance later. So as long as you’re buying a used vehicle from a reputable car dealer or private seller, the car should be fine.

      I’ve bought both of our used cars at Ford dealers (one was a Ford and certified pre-owned, one was not a Ford). In both instances, the car has been fine for the age and mileage thus far. I’m sure the same can be said for other major vehicle used dealers. Just watch out for small dealers, especially those that target people with poor credit and use ignition lock devices. I wouldn’t trust cars sold from places like those.

  63. When your kids are older and/or grown-up, they will not remember that your house had shabby siding. What they will remember is the summer their dad was home with them every day and the different things they did and adventures they had during that summer. I am a believer in DIY, but if dad is going to spend the summer working on the house rather than spending time with the kids, is it worth it? Not everything is measured in dollars and cents.

    1. That was our feeling lately- we spent so much time on the bathroom, Saturdays, Sundays, nights.. it took a lot of time and we saved a lot of money, which is great ($8,900 vs $15,000 minimum from 2 contractors) . My husband is very hands on with them and already it feels like they are growing up so fast. I don’t want him to have the burden of this outside work every day when he’s just trying to take them on walks, playground, library, swimming at my in-laws, etc. I was just trying to have a nice home for us that we plan on staying at for 30+ years and to have more time to be together- that was our goal in this entire exterior renovation project.

  64. Hi Audrey-
    Thanks for your super honest and open writing. I have a thought on the exterior reno because we are facing a similar issue with a home we just purchased. Our exterior is currently stucco and does need to be replaced due to moisture concerns, etc. as it is a 1904 home in a harsh Minneapolis, MN climate. Although our home value would still be in line with comps if we chose to do the 60Kplus worth of work, we are uncomfortable with the debt load. A couple of contractors have recommended doing one elevation at a time (one side), starting with the most needy area. Maybe you could check into that and pay cash along the way if the reno is important to you and your quality of life (less maintenance). Best to you and your family on your journey. 🙂

  65. Audrey-
    🙂 One more thing…I don’t think that 50/m to clothe 4 people with two of them growing, and two in professional environments in a four season harsh climate is a lot. We use ebay to buy expensive items like Obermeyer snow gear, shop deals and thrift a lot and still spend close to that for three people. People don’t always take into consideration the time/value that thrifting “costs”, especially if you are both working full time.

    1. Agree, that’s only $600 per year. Wait until they’re teenagers: opinionated, self conscious, and shaped funny. 🙂

      Pennies vs Pounds here

  66. You’re doing a great job and your finances are fine, now it’s really up to you about lifestyle choices vs early retirement. I would not put vinyl siding on your house. I think with research you might be able to find an alternative to hardie wood but putting vinyl on your house is like putting ketchup in a $100 steak. I’d keep painting until you come up with another solution. Not sure about a HELOC though, it turned into a flood gate for us when we opened ours it just kept adding up and I think that amount you need is very very high.

    The biggest costs for most people are housing, cars, food. You seem happy with your choices here. I would take a page out of Mrs. FW’s book for saving money with other things. Do something with sewing. Start a little 4 week Saturday class or 1 day workshops or whatever works for you. Girls will go crazy for it, it’s a big trend where I live. You make stuff like stuffed unicorns or mermaid blankets or whatever and get paid for it plus bond with your daughters if they want to be in the class too. This is a way to do your hobby for free or get paid or see if you can make it into a feasible business which I am pretty sure you can! You can also teach to adults or think about whatever it is that excites you about sewing and do that! Next item you can improve on is clothes – if you choose to order on line as before, join a local facebook group and sell them once your youngest has outgrown them. The groups are often called things like Thrifty Moms of Yourtown or Junk in da Trunk yourtown or Mommies Selling in Yourtown or something like that. Sometimes these groups post brand new items for places like The Gap or Old Navy or J Crew that they received as gifts or bought end of season for the next season and doesn’t fit so there is the opportunity to buy and or sell. You can also sell items you no longer need after renovating. Last thing is look into some minor travel hacking with credit card bonuses and your meticulous record keeping you could get some free flights and hotels – check out the Mommy Tips blog. She has two young daughters too.

  67. Hi Audrey,

    First, congrats to you and your husband on putting yourselves on such solid financial footing.

    I have a few thoughts, thought not sure they have not been discussed already.

    Frankly, while a big line item is your car payments, I’m not sure it is smart to try to resolve that by selling those cars. You will take a hit on whatever equity/depreciation you have already realized. for the future, and for others reading here, what we do in my family is try to stagger new (or newer used car) purchases so that we have no overlap of car payments, and then no car payments, but save money proactively for the next vehicle so we 1) can have no car payment for awhile, and 2) are not pressured into needing to make a purchase. The greatest power as a car consumer is the ability to walk away from a deal. In any event, I would not worry too much about the criticism of the cars. The important thing is that you derive pleasure/value from them. While Ms. Frugalwoods agrees that your grocery budget is not an issue, others may feel that there are saving that can be had there. Clearly you feel the opportunity cost of making those care payments over-rides the availability of the money for other things. Mr. MM would say having a car at all is indulgent. Unfortunately, the reality is that we all make choices, and while we all strive for the “optimal” choice, you make a choice that makes the most sense for you and your husband. You are mature adults, and understand that, so please don’t sweat the criticism….

    Good Luck!

    With regard to your home renovation. I agree that it doesn’t seem that putting ~$70K into an exterior renovation (for a house valued at perhaps 2X that) doesn’t make any sense. I also get that HardiPlank is super-awesome. We did that as part of a renovation of our (circa 1965) home ~8 years ago, and besides washing off some algae growth occasionally, it looks as good now as it did when installed. But, that investment just seems that it will never have a + ROI. (In our area, any new home is sides with Hardi, and any other siding has a negative impact on home value).

    One thing I have not seen, if you insist on doing the renovation, is doing a cash out refinance, and going to a longer term loan. This will give you more flexibility in making payments, and would likely not substantially increase your monthly out of pocket, while allowing you to enjoy the renovation. I know this crowd would likely not feel this is prudent, but given the relatively cheap cost of borrowing, in addition to the mortgage interest deduction, and the fact that having one loan makes things simplified compared to 2 notes, it might be acceptable.

    I also agree that you should consider the CD ladder part of your emergency fund, and focus new investments in low expense index funds.

  68. Audrey, it sounds like you guys are doing very well. I think you are getting some well-intentioned ‘flak’ for higher spending on things like cars and clothes because a lot of folks here are focussed on early retirement and can’t imagine prioritizing those things over their retirement. However, it sounds like you are both happy to continue working and those things are important to you. If you both wanted to retire in 10 years AND wanted to keep the cars, etc, then I would tell you that a compromise needs to be made. But since that is not the case, it seems your current path is fine!

    Just a word on the cars – I am a mechanic, I drive an older civic and I recommend them to almost everyone who is looking for a vehicle. They are safe and reliable. However, it’s clear that you’ve thought this out and that is not what you want – and that’s OK! Older cars can get expensive if you are not up to doing repairs on them yourself. I would HIGHLY RECOMMEND to you (and anyone else) though, that if you want to pass these cars on to your kids that you do all the regular maintenance AND make sure you wash under the cars (with a hose or going through a car wash) a few times a year. I work on salt trucks and it is astounding what a difference washing the salt off regularly makes. Then hopefully these cars will last you and your kids a long time ☺

  69. Organize a work party!! We have resided two homes. Given your renovation skill/experience (btw…nice work!), I think you could tackle this project with some help. I also think it would allow you to use Hardie Board and be satisfied with the finished project. The first house we resided belonged to our in-laws (1980’s house – vinyl). The second was our first home that we turned into a rental (1920’s house – Hardie Board). Both times we organized a work party which also happened to revolve around lots of food. The rental took us three weekends between taking down the old wood and applying a vapor/weather barrier, installing Hardie Board siding, and painting/calking/trim work. You really need at least two people to side a house. A 3rd or 4th person would be useful for measuring and making the cuts. Allow one day to go slow and figure things out. Once you get a rhythm, it all goes fast. If you can, designate the less critical items on your list to the following summer.

    1. The work party is a good idea. I would offer a couple caveats.
      1. Will all your “helpers” have the necessary level of expertise to complete the project in an acceptable fashion? Sometimes there is a reason we hire professionals.
      2. I would guess your buddies will want more reward than just food, probably repayment-in-kind. Which means that if you have 4 buddies helping you to do a project that takes 4 weekends, will each of them expect you to assist in one of their projects for an equal amount of time, which would mean you will spend 16 weekends helping others?
      Just things to think about. . . .
      (Been there, done that with both these items. . . .)

      1. Everyone we know has kids younger than ours, work full time, have their own lives. We barely get together for a pay date at the park for an hour. My parents are getting older- I’m not going to burden them with helping like they did almost 7 years ago. It sounds like a good idea but I just don’t feel comfortable asking others for help of that magnitude. We’ll probably just wait a few years and do the improvements in chunks.

  70. Thanks for being open about your finances and letting Mrs. Frugalwoods and us readers provide some tips for you. I do not want to go deep into your situation but want to suggest a few items. Shouldn’t your auto transfers to your Roth IRA and 529 accounts reflect on your retirement and children’s savings respectively instead of expenses? Also, try to increase your emergency account to at least 50K. 25K may be a bit too small as Mrs. Frugalwoods suggested. so try to cut back on your expenses like car insurance, cell phone, no tv cable. And with your daycare expenses ending soon, it will also help increase your emergency account. Other than that I think you are doing a job on your finances. Good luck and keep us updated .

    1. Thanks- the girls are flying through clothes. Their sneakers, underwear, and socks- can’t believe how many get holes and they outgrow. Feels like it’s every 6 months. Luckily my husband and I aren’t growing (height wise or width wise!)

  71. This was a fascinating read to me because we have a similar income and similar expenses. We have slightly more in retirement savings, but you have more in cash-savings, we both have pensions, a Forester, and I like to quilt too. (Is that the Thimble Blossoms “Swoon” pattern I spy?) Oh, and we have the exact same bathroom fixtures!

    Reading between the lines, I get the impression that you value quality over getting the lowest price (or doing something the cheapest way), and I feel the same way. In fact, we used to almost always choose low price over quality, and I’ve regretted some of those choices. So, I understand completely why you have your heart set on the high-quality siding, and I don’t think it’s unreasonable. t *is* worth the investment, in my opinion, but I’d see what you can do with moving some money around so that you don’t need to finance $60K or $70K. That might mean waiting a couple of years and just making do until then. Every time I’ve been impatient to get something done, we’ve made a sub-optimal financial decision, and I think that financing $60K would be an example of that. (So would our decision to finance all new floors. I’ve been there, done that!)

    Other than that, I think you’re in pretty good shape! Considering your expenses, your husbands’ layoffs, and the astronomical cost of daycare, I think you’ve done quite well.

  72. You have done well. I think that huge exterior investment on a property valued under 180k should be reconsidered. You have done exceptional DIY projects. You may have maximized the ROI on that property. That money would better serve you elsewhere. You have such talent sewing, i would take a fraction of that money and perhaps start something part time that could transition into your next full-time job, or be your part time endeavor. Go where you find joy. Invest in one of those quilting machines for a quarter of that money and it can have huge gains and it is something you enjoy! I am certain you will flourish and thrive. All the best!

  73. Mrs FW & I are mostly on the same page. I do not like CD’s, so I would get out of that el pronto. If you want an “emergency fund”, then I would think having a checking account tied to your 401K is a better answer. No-it isn’t your everyday checking account. It is fed with profits from your stocks. It will happily just sit there until you need it. I did that right away when I retired, and it is a blessing to have. CD’s will punish you with early withdrawals, extra fees, etc. Hardie Plank is, hands down, simply the best to rewrap a house with. It is also VERY expensive. I’d go with the vinyl siding which has been vastly improved in looks, structure, and longevity. You are a Young couple, and who knows why or how, you might need to sell that house in a hurray? Life has a way of running the fences when we least expect it. Your house might now be appraised at $176K+ but you might find yourself in a position to take the first $150K that walks in. I’m curious: if you can sew, why is so much being spent on clothing? Home sewing has the benefit of allowing you to take $2 worth of material, an old pattern, and making a dress. Home sewing also lets you buy thrift clothes and remodel them. Unless it’s underwear, your clothing bill should be $50 a year. I know that you feel your food budget is non-negotiable, but have you thought of adding a garden? It’s good for children to learn, it is something that the family can do together, and not only do you have the benefit of fresh vegetables but excess can be canned or frozen for future use. I’d suggest Costco or Sam’s Club over Target. Both have designated credit cards that offer rebates on purchase amounts, & Costco Executive also refunds money based on your yearly purchases. Free shipping still doesn’t equate to bulk savings. And Amazon Prime is also a great choice. Good luck to you. You seem to be heading the right direction.

    1. I’m not trying out for Project Runway. It takes me 4-5 hours to make dresses for my girls. I usually make them a few per year but I’m not experienced with knits so they are usually summer cotton dresses. I don’t know how to tailor clothing for my husband or myself for work. I also don’t know how to make underwear or bras. I quilt, embroider, hand sew stuffed animals- it’s very different.

  74. I had one idea on the Target expenditures. If you buy mostly household items there, see if maybe these items (TP, toiletries, dog food etc) are available on Amazon subscribe and save. Saves a trip to the store and saves seeing all the other things at Target that aren’t on the list!

  75. I completely agree with the recommendations in the article, especially the exterior renovation. Spending $70,000 on a $180,000 house seems crazy. I suspect it would be more prudent to move to a house with nicer siding than spending that kind of money fixing up the old house.

    1. We have to also consider schools for our girls. A public school system that is equivalent to our current will cost us about $250,000 for a house built in the 1980’s that will need a roof, furnace, etc with taxes $7-$8K per year. For a new build, it’ll be at least $300,000 with taxes probably $10-$12K per year. We are not moving out of state either- our jobs are good and our family is close by.

  76. Hi there,
    I admit it, I’m super curious! Considering your current monthly expenses and the other hefty financial burdens you’ve had to incur over the years (85,000 daycare, 30,000 student loan, numerous renovations etc), I just can’t quite fathom how you’ve managed to save such a sizable nest egg! I’m wondering if your lifestyle has just incrementally crept up or whether you went through a super frugal period? I ask because it might be worth considering what’s changed and then considering if you may want to scale back on some of your lifestyle upgrades?
    I did do a bit of math (I’m no accountant) using a lot of rough estimates to try to glean some insight into your financial dilemma. It seems as though you’ve managed to save about 269,000 in Roth IRAs, college funds, emergency funds, CDs etc. I’m guessing that you and your husband have been in the workforce approximately 12 years. Your salaries have probably increased over the years but, for the sake of this exercise, let’s just say you made an average of 100,000 a year. So….after taxes you probably took home about 75,000 a year.
    If I look at your savings (269,000) I’m thinking it has appreciated some over the years. So…let’s just say you actually socked away 200,000. 200,000 divided by 12 (the number of years you’ve been working) is, roughly, 17,000 a year put away. So, if you had 75,000 a year to live on after taxes, and you saved 17000 that means you lived off of 58000 a year or 4833/month. But… right now you’re currently spending 6,218 dollars a month (after subtracting money put into savings). So, it seems that at some time in the past you must have been saving significantly more than you are now (and spending much less). I point this out because I know that it’s easy for lifestyle to just kinda inch it’s way up and sometimes it’s good to step back and get some perspective.

    1. Day care is $1,067/month for our youngest. Back in 2014, we paid $19,979 for day care for 2 children full time. We got the few thousand dollar break over the summer because my husband had them home for 3 days/week and we sent them 2 days/week so we didn’t lose their spot. When I hear people telling me to get child care over the summer, I cringe just because we’ve spent so much on it already. I just don’t want to see another day care bill after June ever again! 😕
      That $6,218 includes the $1,067 for day care, it includes life insurance (we didn’t have that until we had kids), higher health care contributions (pre-tax: used to cost nothing when I first started working and for 2017, contributions are up 77% for families), and our food budget has doubled since they started eating solids (They eat almost as much as I do and they’re still only 40th percentile on the weight charts).
      Currently we put away for retirement almost $30,000/year between 401k/403b/Roth IRA accounts. We’ll keep increasing at a minimum of 1% per account (not Roth IRA because we max those out) per year as we get our yearly raises. My husband is on steps as a union teacher so we see his increases ahead of time when the new contracts are signed.
      There definitely has been some creep though- we didn’t get smart phones until 2015 but the cell phone bill basically doubled when we did get them. We refinanced back in 2010 from a 30 year to a 15- that upped our mortgage payment a little bit and our taxes go up a few hundred each year. Small things clearly add up.
      The $1,000 to credit cards is more of a place holder. This month is was $742 and our target bill was $97. We just need to be more aware of small bills- I mentioned that I got the cell phone bill down $15/month and the internet bill down$10/month yesterday. Took me almost 90 minutes but it eventually came down. We’ll look at other plan options for the phones and internet next weekend, but after ice skating with the girls. I appreciate your feedback on everything.

  77. I’m reading this on a phone, so this might be a repeat, but has your husband ever considered earning money by providing some kind of daycare / tutoring service in the summers? Just an idea, no clue as to the feasibility of this.

  78. Sorry, everyone if these have been said:

    1. That emergency fund in a money market account making only 0.05% interest? Move it to Ally or CapOne online where you get a rate closer to 1% (or on CapOne at least 0.75%). It’s still VERY safe, VERY accessible (within a day or two), and you might as well get a bit more interest there.

    2. I just replaced siding on a rental home in Florida. I, too, thought about getting a top of the line siding that would last forever….if you’re going to stay in your current home forever, MAYBE it makes sense. But consult your realtor — have them tell you whether getting that type of siding is “outkicking the coverage” of your neighborhood. In my case, spending a ton of money on nice vinyl siding (to replace wood) was not needed and way too pricey given the neighborhood and my home’s value (as my realtor was able to tell me). I ended up replacing some wood siding pieces that had some rot, and repainting, and it all cost me probably 25% of what vinyl siding would have cost.

    3. I’d just keep the CDs, but consider them part of your emergency fund (to get you up to 6 months expenses).

    Good luck!

  79. Hi, Audrey:

    Thank you so much for posting and also thank you to everyone for these comments and suggestions. It is so nice to see a conversation on the internet where people are graceful and kind!

    One thing that is emerging for me here is that we all have different priorities and we make different choices. My partner and I have a historic crAftsman in one of the country’s most expensive cities. What we pay in taxes and have paid in home repairs would make most frugal folks’ toes curl. But we are very blessed to have professions we love and are well compensated for, and we cut in other areas, like clothing and eating out. And we truly love where we live.

    I think the point might be to think about those choices as choices, and to embrace them if they are important to you. Don’t worry about what folks think about the cars or clothes–you don’t have to justify it and you are doing a good job. But if it is more important to retire from your job in 10 years, then something might have to give.

  80. In reading over the comments a bit, I was struck by what I’ve learned through the first 13 days of Uber Frugal Month: most of what I think I *must* have are actually luxuries and I need to be honest with myself about what those are costing me (and which ones I really, truly, can’t live without). Second, I can’t have it both ways: I can’t say “I must have everything and there’s no wiggle room and I don’t know what to do.” There is always a way to make it work but it might not be the one where everything is the exact way I want it. I have to decide what I really want and perhaps the children will get some HFCS in their food once in a while and the veggies won’t be organic and they’ll end up watching more TV for 6 months while I get myself together. In my case, in the long run what is important is that we own a house we can be in together–I am going to have to let a lot of little things go in the service of that larger goal. For me, I’ve had a real calibration of my wants versus needs and a newfound awareness of how much I do have. Good luck Audrey, and I hope that some of the suggestions people have made will percolate with your family for a while until you decide what you need to do to get where you want to be.

  81. That was so interesting and thought provoking! Audrey you must have felt like screaming at times as it was clear many posters hadn’t read the preceding replies by you. I’ve made plenty of financial mistakes and probably still making them but I think you are doing really well. Understanding the time value of money is so importan when you’re young ( I failed miserably at that!). I am totally amazed at house prices in the US. In Australia the average house is about $500 000 and more in the big cities. Our emergency fund is woeful at the moment but we do have a lot of equity in our home and bought it before the market recovered from the GFC. An option for us on retirement is downsizing to have no debt and more to invest. Most Australian mortgages offer ‘offset’ facilities which means you can have money sitting against the loan that reduces interest. Say you have a 200k loan, you might have 50k sitting in an offset account. That means you are only paying interest on 150k but you can access that 50k or part of at anytime without fees. The only thing I see, like many others is spending that much on your home renovation. I live in another country but my understanding of property economics is that land appreciates in value, houses depreciate. I thought our first home would be our forever home but we sold it after 5 years. We spent a fair bit on house 2 but made nothing. I like FW’s idea about the painting too. It will reduce the risk of your home deteriorating, look great and give you more time to save or weigh up the hardieplank. Our house is brick and old by Australian standards (1988) and the fashion is to have them rendered now (expense) but I figure we live inside it!

  82. You, and others, have mentioned breaking the renovation into smaller chunks and that sounds like it might be worth investigating. That way, you can get the most important parts done first, without taking on excess burden of debt if the projects run long or over budget.

    It’s tidier, mentally, to consider one big project and have it all finished. It might seem that it saves money since the workmen can complete multiple areas at once… I haven’t actually had it work out that way for us in the past, and our larger renovations just meant that more of our life was disrupted at once! The smaller projects gave us more control over the details, helped us stay on budget, and gave us breathing room when something unexpected was inevitably discovered.

    Whatever you do, I’m sure it will be beautiful!

  83. Everyone already said everything. I just want to pay you attention to the girls savings for them to be grown ups, I think you should pick a high risk stocks or plan, as these savings are for a long-term and a risk also brings profit for the long term, and just few years before the time change it to low risk so you don’t lose the earnings. Because you’re so aware of all your assets I think you shouldn’t have a problem to follow this. I can’t really recommend anything specific as i leave in Israel and all our plans and laws are different from the US. I just understand that that’s what one should do.
    Good luck

  84. Hi Audrey
    Sounds like you have things well sorted to me! Beautiful home and family and you know what’s important to you. My thoughts are not about rearranging your finances or spending habits but from a DIY veteran aged 60 in New Zealand. I would urge against any more borrowing if you want to shorten your working life. My plan if I was in your situation would be to think ‘what am I prepared to forgo to get the house exterior finished?’. It is clear you love the house and also have high standards! ( love your bathroom!) Firstly I would ditch the idea of any spendy holidays until the house was done. Then I would try to negotiate getting some time off work at the same time as my husband so it could be a DIY holiday. You would be the support person (and looking after the children – make the most of the zoo etc). Make a very detailed project plan (with a detailed timeline) to restore the exterior cladding (as we call it here). My husband and I did this on a house built in 1880. It looked so rough but the transformation was miraculous. The timber used when it was originally built was the best, and we figured if had lasted so well, it deserved to stay! It was a great sense of achievement and wonderful to come home every day to that sense of achievement and not look at it and think ‘ yikes $70k’. Thanks for sharing and look forward to the project completion photos!

  85. I agree 100% on the siding project. Your characterized their plan far diplomatically than I might have. Here’s a cool, related story: When my sister and her DH wanted to use Hardie Board to re-clad the disaster of a house they bought in foreclosure, they knew they’d have to be creative to afford it. They scoured CL and bought up odd lots whenever they saw them at the right price. Suddenly, they found a builder who was cleaning out all his excess materials at the end of a project. They bought as much as they needed without regard for color, because they knew they were going to paint it a non-Hardie stock color anyway. They put it up themselves over the course of one summer. When they finished, the house was a crazy patchwork of colors. Then it sat that way a while while my sister debated color choices. When they finally painted it, they were surprised how many people told them they liked the crazy quilt effect. (They live on five acres in the country, fwiw.)
    Of course, their awesome savings would not have been possible if they hadn’t had cash to buy the heavily discounted materials.

  86. The $1000 mis expenses category needs reduction. This added to your savings in day care expenses will increase your savings by about $1500 whilst still allowing for medical expenses and the $50 clothing budget. I don’t think that the home renovation using a HELOC makes financial sense as you will never recoup the cost of the renovation should you need to sell in the future. I agree that you should save cash for this renovation if you feel you must have it. The 2016 car monthly payment is quite steep but if you save the cash for the home improvement project, you can still afford the car payment for the new vehicle!

  87. Nice one Audrey. It’s good that you acknowledges all these financial challenges and you are ready to have a good budgeting and to manage money well. What I’d like to say is that enjoy this phase and I wish you good luck!

  88. We had to take out a HELOC for 20000 to replace a retaining wall that was collapsing. There was no way that we would have been able to save up fast enough to pay cash for the project. I can completely understand where you are coming from with wanting the siding done. I am not a DIYer when it comes to my home renovations. We talked about doing our retaining wall ourselves. It took the contractors half a month and 50 loads of dirt and then 50 loads of rock! Sometimes saving a buck is not worth the headache and the time away from other pursuits. You said the porch is collapsing, but as long as the siding is good enough to keep your interior safe I would try to save more specifically for the renovation. You are way ahead of us when it comes to saving, but I would move some of the money you are saving in other areas to the renovation. I would stop putting money into the girls’ discretionary fund and cut back on Target shopping. I think you and I are similar in that we want financial security and yet also believe life is for the living. I want to enjoy time with my kids when they are young, not hustle for every dollar. It’s a fine line to walk and I think you are doing a great job of planning for the future while also trying to enjoy the moment. I say wait another year or two on the siding project, save as much as you can, and then reevaluate.

  89. We have an older home too, (over 100 years old) and we do a lot of work ourselves. I agree with trying to make things as maintenance free as possible so when you are older you don’t have to worry about it. Can you do Hardie board on the front of the home and a good quality vinyl siding on the sides and back? The newer vinyl looks so much better than the older kind. We have board and batten, and did vinyl vertical siding on the side. It’s very hard to tell the difference.

    1. Our former home was built in 1891 and about 10 years ago we had top-of-the-line vinyl siding put on. It was hard to tell that it was not painted boards. It looked so good that two other homes within a one block radius had the same siding put on and in the same color(!) Pacific Blue with white trim. Unfortunately our home burned down 2 years ago (had nothing to do with the siding). Our new home on the same site also has vinyl siding, but, again, it looks “real” and expensive.

  90. I have an older home that I adore as well. We’ve found that no one will ever do the work as well or as thoughtfully as you will. I would recommend breaking it up into manageable chunks that you can do yourselves debt free. We re-sided our home with hardi, reinsulating as we went – doing one side of the home at a time – taking a week of PTO each year. You could consider taking PTO so you can watch the kids while your husband works or better yet, getting a babysitter so you can both work. You would still be on-site to supervise and handle meal times, so maybe a younger (or much older) friend/relative would work out.

  91. Cell phones: If you live in an area with decent Sprint network coverage, I would recommend the Sprint reseller ringplus.net. I’ve been using them for my family for the past 2 years and have paid $0/month for moderate usage! That’s right, they have free plans that really are free. The names are weird (I’m currently on “Mad Avatar”) but for $0/month I get 775 min (500 VoIP and 275 regular), 275 SMS, 275 MMS, and 750 MB data. Overages are expensive, so you may prefer one of their paid plans (unlimited voice & SMS + 1.75 GB data = $18/month). Their customer service is not great — email only — but I’ve not really need it.
    Also, I recommend buying used smartphones on swappa.com. The phone sales are more regulated than on eBay and I’ve never had a problem. I just bought used iPhone 5s phones for my family for about $140 apiece, and used Android phones are even cheaper (but be careful as operating system security upgrades are often not available for Android phones after the initial release).
    Good luck! Matt

    1. We actually have sprint now so that should be easy to look into and we did knock the cell phone bill down by $15/month as of yesterday. It took about an hour on the phone but it’s done. We also got our cable bill down $10/month yesterday too- which only took about 20 minutes on the phone. We’ll circle back with both of those in the next few weeks to see what else we can do. Our target bill this month was $96 and that included a $50 gift card as a gift so we’re making some improvements. I’m also traveling 2 times this month which will yield $140 from reimbursement- that’ll easily cover gas for our 2 cars. We’ve been spending less than $180 now that my husband doesn’t have to pick up both girls after work from 2 different locations. We’ll keep plugging away- little things add up. Thanks for your feedback!

  92. Hi Audrey, this is so impressive, really! I only have a few thoughts, but since this is the place for sharing I guess I’ll do that!

    First, I wouldn’t mess with the cars except maybe to pay down faster the one with the higher interest? I see from your responses that this is important to you and I totally support that. I have a hard time considering used cars myself (so I’m driving my current paid-off cars into the ground!), and you need to feel safe with two kids in the car on snowy roads.

    Second, you have such a great plan for most everything in the budget….except I don’t see a line item for the sewing hobby. Since that’s important to you, perhaps add one line for “hobbies” (and include everyone in the family) and take some money for it from some other place – like cable, that Target line (replace with auto-orders of household items from an online source — that surely shouldn’t take up an entire $200/month for toilet paper and soap? and then you’d save time from shopping as well – more time outside of stores with your girls [side note – I realized that I was spending most of my non-work time with my little girl shopping for “household necessities” and that she was starting to equate shopping with fun/mommy time and that I need to STOP that trend; I now save money and time with my girl doing things more enjoyable]). Just like $50/month isn’t really excessive (IMO) as a budget for clothes, I bet you need about that much as a hobbies line item (and for the girls, that could include the memberships, toys, etc).

    I also wouldn’t mess with the vacations or the memberships to museums and zoos–those are important for little kids, and they do remember those fun times! So it sounds like the big thing in the way here is that siding project and the loan you’d need to take for it — could it wait a few years until you’ve saved up the cash? But if you are committed to doing some home renovations and starting right away, perhaps one idea could be to DIY over a longer time frame (over several summers, for instance) by utilizing those memberships! What I mean is, perhaps each summer the girls do one or two weeks of day camp at those zoos or museums (there are usually member discounts for those daycamps) – freeing your husband up to do work on the house for a shorter time period each summer so that the work gets done by him but not all at once. My girl has LOVED her one or two weeks each summer at the natural history museum/kids science center/zoo day camps and they aren’t really very expensive (about $200/week — cheap in terms of the labor your husband could do on the house!). No, that wouldn’t allow you to re-side the whole house all at once, but you could save a bunch on the overall costs if he’s doing parts of it. Just a thought. Good luck with your choices!

  93. So after I had my kid, I could barely get anything done in a day. I felt super guilty about this and there was this constant niggling voice in my head chastising me with comments like, “Other people raise five kids and manage just fine. Why can’t you do better?” But at the end of the day, because of who I was, the values I had, my ideals for raising a child etc., I just couldn’t/didn’t do that much other than look after babe for those first few months. Still, those “you should be able tos” dogged me during this period. I finally had to come to the realization (I needed to beat it into my head) that my choices were just fine. Baby and I were doing well and I really didn’t need to be able to accomplish a sizable checklist each day.
    Reading your post and your responses to some of the comments, I feel like, at some level, you may be experiencing that some sort of dilemma, just with finances. Perhaps you wonder how other families can make it, quite happily, on half your income. Maybe you even presented your case study to the Frugalwoods forum looking to justify your life choices or rationalize your spending or have other people do this for you. If that’s the case, let me just reassure you, YOU DON”T HAVE TO. You and your family are doing just fine. Is it possible to live on much less than you do? Of course. It’s also possible to raise five kids and work full time (I have a coworker who does this), you betcha. But for me, that’s just never gonna happen. Still, I chose to only have one kid and live really frugally so I don’t need to work full time or have the stamina of the energizer bunny. Likewise, you and your husband make really good money and you don’t mind staying in the work force longer, so there’s no real need to tighten the belt strap. You don’t have to justify or rationalize your choices to yourself or anyone else.
    Still, I do tend to think it’s a good thing to take an honest inventory of one’s life. Admitting that your lifestyle/spending choices are a privilege, and not a necessity, doesn’t have to negate that lifestyle. As I mentioned, you can comfortably maintain your current standard of living because of your work ethic, education level, family size, prior savings etc., so there’s really no need to change. Accepting that this is where you’re at right now and what your comfortable with is a good place to be and may be what this whole case study has done for you.

  94. I posted the above during a fit of West Coast insomnia and before I had read the comments. After some good sleep, I have now read all the comments and have a few more thoughts which I hope will be helpful. I’m a lousy typist. I triple proofread everything, and still mistakes slip by, as I see happened above. To compound matters, I’m using a pad with a small screen, so I can only proof a few lines at a time. It also has a hair-trigger auto fill/correct, which drives me nuts. With no edit feature available, I will just apologize in advance for my mistakes. All this to say that I really want to offer concrete, actionable help to you, Audrey. I have Been There, Done That, and am willing to share the lessons learned to help make your path to FI easier and shorter. Still with me? Settle in, I suspect this is going to be a long post.

    Audrey, other than “Clothing – I will try”, I see a lot of resistance in your replies. To put your mind at ease, I will open with my opinion that you should keep the cars. Just ignore them for now. Well don’t ignore them in real life, take excellent care of them so your kids will learn to drive in them, but eliminate them from this discussion.

    First, I sense you are not using the term CD ladder correctly. The point of a ladder is to stagger due dates to avoid penalties if one needs to tap emergency cash. If yours are not set up that way, take another look.

    Second, in case of true emergency, one uses ninja skills to stretch their EF dollars, making a 4 month EF last for 6 or more, so your EF is more robust than you think. And yes, those CD’s are your EF, if they are structured correctly.

    I LOL’d at your thoughts about DH’s ability to complete projects during the summer. When we were kids, it was our job to help my dad with whatever the project at hand was or stay the heck out of his way. Daddy’s primary job is to entertain us during the summers? Not on your life! An economical choice is to hire a late middle schooler as a mother’s helper.

    Stop reading this and go order a copy of Amy Dacyczyn’s “The Complete Tightwad Gazette”, the big one with the blue cover. I’ll wait. Buy it new if you need to………….. It’s the one book I recommend buying over getting from the library……….. This book is old and laughably dated in parts, but the advice is timeless and her situation is remarkably like yours in many ways. I believe it will resonate with you. I am rich beyond my wildest dreams now, thanks in large measure to what I learned from Amy D, aka The Frugal Zealot way back before PF blogs existed. I still re-read it every year for renewed inspiration. It WILL lead you exactly where you want to go, with money and time to spare.

    Oh, you’re back? Okay, let’s continue.

    I wonder how gardens can be “not allowed”? I have some pretty restrictive CC&R’s on some of my rentals, but never have I seen a No Gardens rule that was enforceable. You could at least plant an indoor herb garden to defray a few costs. Hmmm, no human rules are going to eliminate rats, nor are well tended gardens going to foster explosions of rodent colonies. Seriously, question this.

    In addition to ThredUp for her chicas, Kristen at The Frugal Girl really likes Schoola for high quality, used kid’s clothes.

    Lots of other good tips have been offered, so I’m going straight for the elephant now. I think i’ll switch to bullet points, because there is so much ground to cover.

    ▪ Self-impose a moratorium on all DIY shows. They are designed to make you want more, just like a Target Red Card (hint, hint). Just stop watching (buying).

    ▪ Stop thinking that your house will ever be done. You could do all the work on your wish list,(Which is what it is, btw. Your family needs shelter. You, Audrey, want it to be beautiful. I call this the HGTV Effect. Pinterest is also culpable.) Where was I? Oh yes, you could do everything on the list and stuff would still pop up that needs to be done. Big, expensive stuff. With a house, there is no “Done.” Ever.

    ▪Take that list of things you want to do for 70k. Grab a sheet of paper and divide the list between Wants and Needs. Be honest. Be brutally honest. I can make a case for cheaply financing needs, but wants must be paid in cash up front, no exceptions. Then address every single need and find the most cost-effective way to achieve it, one at a time, just the way Mrs. FW manages her spending. It’s going to be a much smaller number. Then challenge yourself to make it even smaller.

    ▪ Related thought: just because you got two bids for about the same amount does not mean that’s the “right” price.

    ▪I despise vinyl siding, so you can go set that idea over there by selling the cars…

    ▪Hardie board may be the best of the new stuff that’s available, but here’s a newsflash: most of the new building materials can’t hold a candle to the old stuff. Unless your siding is riddled with rot or insect damage, it’s probably better than any new product, even Hardie. Sanding, scraping and even planing work miracles.

    ▪Even if you do have some damage, consider a three sides solution. Original siding on the front and sides and a very closely matching replacement siding on the back. (BTW – Aside to the person who needs their house re-stuccoed: Don’t do this, the sides will never match. It will actually take away value as buyers will wonder what the heck was wrong with the house. Trowelling stucco is an artistic skill and no two jobs are exactly alike, not even by the same person on different days.)

    ▪On to the heloc. You understand what you’re considering is like buying three more brand new cars all at once, but with variable interest rates that are likely to go up? Next time you consider that heloc, visualize yourself trying to balance three more cars on top of your head.

    ▪Tough Love Alert – IMO, you are putting way too much stock in this upcoming appraisal. If it comes in high, you are going to have a mighty hard time resisting the urge to continue your improvement spree. An appraisal is only an educated guess, it is not a guarantee of market value. I recently did a re-fi on a rental property to lower the interest rate. I was biting my nails a bit, because I’m actively buying in the same market and I know intricately what things are selling for. I schooled the appraiser, pointing out all the upgrades and added features the home had. I was shocked at how high the appraisal came in. Her comps were good, but I can tell she was very selective in the ones she pulled. Different but still legitimate comps and the number would have been much lower. If I actually wanted to sell this house, I would have to list it for $50k to $60k lower than the appraisal. Repeat after me: an appraisal is only an opinion, not a sworn affidavit of guaranteed resale value.

    ▪ If you’re still determined to do the improvements in a big chunk, forget the heloc. A safer bet, for thou$and$ of reasons, is a new 30 year fixed mortgage. Yep, start the home loan clock all over again. It will be far cheaper in the long run and will help you sleep better at night by avoiding variable rate heloc risk. If you don’t have enough equity, there are home improvement loans that let you borrow more than the home is worth. They’re more expensive (I think) and I am not advising them, but it’s cheaper and safer than what you’re considering. Puh-lease don’t cry that you want to pay your primary mortgage off early, because your home improvement wish list makes doing both rather um, not possible, and not the smartest way to deploy your resources even if you could.

    ▪ If you won’t/don’t refinance, see if your city has any low-cost home improvement loans programs. Such programs tend to favor teachers.

    This is getting long, just as I feared. I want to wrap this up with one more thought, er, gift.

    -x-x-x-x-x-x-x- “Home improvement is socially sanctioned self-indulgence.” -x-x-x-x-x-x-x-x-

    Visualize this statement as a cross-stitch sampler. Repeat it like a mantra until it becomes ingrained. Write it down, put it on a note on your bathroom mirror, put another one in your car and in your wallet in front of your credit cards. Repeat every time you cross the threshold to a big box store or enter any shopping portal or surf the internet. Seeing home improvements for the wants they mostly are will save you a fortune, allowing you to achieve your life goals sooner and with much greater ease. I’m getting off my soapbox now, but I’ll be here all week if you have questions.

    Best of luck to you and your family, Audrey.

    1. Thanks for the feedback. I know some dads aren’t that involved with their kids, but my husband is. The picture of the waterfront with my girls is from him sending it to me while I’m at work. I have hundreds from last summer when they were all together and I can’t wait for more from this summer. He is the one that takes them to the zoo, the aquarium, the pool, the playground- and he loves it! He was going to become a SAHD if he wasn’t hired back after our 2nd was born. His relationship with them is unbelievably important to me (that’s a whole other story) so I just want him to have the time with them before it’s all gone. I come home after working all day and I see our house and it’s what I have always hoped for- I just want it to shine. Someday hopefully it will and this all probably sounds really stupid and snotty and selfish… ugh.

      1. Audrey,
        It is wonderful that your husband is so involved with your girls. I hope you both remember that kids just need time spent with them, and they do not always have to be entertained. As they get older, your husband could use some of his time to teach them skills. My kids built planter boxes for my garden last summer with my husband and I am going to teach them how to paint cabinets and walls next summer. These are skills that they can use when they own their own homes. Will the paint be perfect? No. Were the planter boxes exactly perfect? No. Although I must say that they looked good enough that a neighbor asked if they would build them for her too. Teaching children to help with what they can and back up and entertain themselves for a bit when they can not help is a tremendous asset for the family. You can save a ton of money too when you do not have to hire it out.

        1. I definitely agree. The girls “painted” the bathroom walls in those pictures and my oldest was all decked out in demo gear the first day. I have pictures of her with a crowbar and she got all of the wood trim out of the bathroom. They help all the time- unload the dishwasher, fold their laundry, dust, help us grocery shop, make lists for us, pay bills with us, wait for our oil changes to be finished, and the list goes on and on. But when the weather is awesome (we get about 3 months of summer like weather) and they want to go to the playground, my in-law’s pool, or the zoo, I have a tough time saying no to that. 😊

        2. I forgot setting the table- our youngest loves getting out our cloth napkins, silverware and setting the table for our meals together. It’s so cute and she’s so careful about it- will make a good waitress when she’s in college. 👍🏻

        3. I forgot again! My oldest lost a button on her shirt and she sewed it back on herself today. I taught her how to sew back in November. She asked for a needle and picked out some thread and got to work. They played up in their room today for 2 hours while I vacuumed and cleaned the bathrooms- they entertain themsleves all of the time. I just love spending time with them too when we’re all together!

    2. There is so much wisdom and insight (not to mention kindness) in this post. I hope the Case Study is able to take it in.

    3. Yes, I love your reply, Diane. I like your advice on the cars and on the heloc. I laughed out loud at your “Home improvement is socially sanctioned self-indulgence.” I would add, that I had to put a new roof on my house or face rather unpleasant water falls in my home. I would say Audrey probably does need to at least paint the outside, considering the harsh winters where she live ro do a cheaper board than Hardie board..

  95. Audrey, you all have done an absolutely beautiful job on your renos, stunning really. You are also very brave to open yourself up in this way, must be exhausting to read through all of this. I agree with the rest of the crew in regards to the exterior work. A very brief google search resulted in some horror stories about Hardie as well as a class action lawsuit http://www.mnd.uscourts.gov/MDL-HardiePlank/Orders/2013/Hardiplank-Amended-Complaint.pdf

    I am also an owner of an old home which we have spent a lot of money to renovate. The purist in me says that wood is a known and safe product, while Hardie Board is relatively new. Why not have a pro replace the rotted bits of siding and paint with high-quality paint? For $76,000 you could pay to have this done intermittently for the rest of your life and not have to take out the HELOC. The problem with borrowing against your home is that should anything go wrong, your place to live is in jeopardy. Especially risky is borrowing money for something with no ROI. What if the Hardie board doesn’t deliver on its promises and you go upside down in your mortgage cause of it and have to spend more money to resolve the situation? Wood will do its job with proper care and is safe to use.

    I buy my son’s clothes in lots on Craigslist for super cheap. Beautiful Gap, Gymboree, Old Navy by the bagful, talk about a timesaver. Search in affluent communities from people that have good taste, you’ll be surprised. I hate sifting through thrift stores too.

    Good luck to you, I’m sure you’ll do great and your old house will thank you for your beautiful work!

  96. Audrey, you and your family are doing so well. Congratulations! Also love your bathroom renovation – it’s gorgeous. Here are my two cents: I know you mentioned that your cars are non-negotiable, but I hope you and your husband are open to reconsider – for financial and environmental reasons. Two used Toyota Prius’ can do the job (reliable, safe and environmental). We live in Montreal, Quebec and know something about snow, ice, cold and awful roads. Our Prius handles everything beautifully. I also believe that not everything in life is about ROI, and I understand your desire to put durable and high quality siding on your home. I second other commentors that are suggesting that you hold this off until you have the cash to pay for it in full, or alternatively, to do it as several projects. Both you husband and you are doing such a wonderful job and I really support your decision to focus on your children and experiences such as vacations. Thank you for being so open about your finances.

  97. Audrey,

    You have posted a few times about how much your husband does with your kids for his time off. I don’t understand why doing work on the house means he can’t do any of it. Summer is long. Embrace the power of AND. Split the time. As others have said: break the project down into tasks. Preferably ones that take a few days at most.

    You made a comment earlier about him watching the girls from scaffolding. Why is that not an option? He’ll be standing at the side of the house. There might be some blind corners, but is there no safe place to play where he can keep an eye on them? They’re not toddlers whom you might have to scoop up at a moment. Then work on the house in the morning and go to the zoo after lunch. Or work Monday and play Tuesday. Or maybe he plays all week with them, then you play with them on weekends while he works on the house. Or maybe for a large task he works for a week then they take the next week for pure fun.

    But the most important thing I can share, as a homeowner trying to diy with young kids, is this: your kids are going to grow fast. I don’t mean that in the nostalgic “enjoy them while you can” way, but in the “soon they can be trusted out of your sight and might actually even be helpful occasionally” way. I will grant that being the responsible adult for a 6 and 4 year old isn’t conducive to getting much done. However I don’t really see an argument that it can’t wait a year or two. Next year they will be a ton more mature and the year after will be yet more self sufficient. Do what you have to to keep away major damage to the siding for 2 or 3 years and you will be amazed what you can take on after that.

    I understand the appeal of just having it done. But the big glaring elephant in your spending plan is that reno. You simply need to figure out another way to make it happen. Ask any project manager, you get one or two of three: quality, cost, or schedule. You aren’t willing to sacrifice quality so you need to decide between the other two.

  98. Hi Audrey, I only have a couple suggestions. One would be to cash out the CDs this summer and pay off both the vehicles. I’m debt averse and even though the interest rates are low on the loans, you have the cash to pay them off and eliminate that monthly payment. I think that your plan is great in a “best case scenario” situation but I would advise you to also plan for “worst case scenario” in case things don’t work out as planned. I’ve been subjected to illness, accident, and natural disasters that have threatened my livelihood and I am also so grateful that my monthly spending is so low that I’ve been able to weather them. Part of this peace of mind was not having a monthly car payment to worry about.

    I would try to look at ways to decrease your monthly spending. I think that it will only go up as your girls get older but if you can reduce it now then it will help long term. I understand the need to replace clothes for growing children but maybe examine your spending and challenge yourself to only replace items instead of supplementing them? Kids clothes are so cute and when they’re on sale it is easy to keep buying. I had to finally put a stop to buying my toddler clothes all the time. Now, I just replace things as he grows out of them.

    Also, are you shopping organic at your local grocery store or a Whole Foods type store? I buy 80% organic and find that my local grocery store has a great selection of store brand organic products at a great price.

    Lastly, and you might already know this, but see if your appraiser can give you an “as is” and “as complete” valuation on your home. This will help you determine if the project is worth it right now. I work at a bank and so many times we have clients who do extension renovations to their homes thinking that it is going to increase the value and it doesn’t. We had a client recently who did about $100,000 worth of renovations on their house and the value only went up about $10,000. If it is possible to do the project in stages and cash flow it, I would advise that instead, especially since you are using your “emergency fund” for a non emergency related improvement.

    Thanks for sharing your story and good luck! It’s amazing that you are so young but already have so many years with your current job!

    1. Thanks! We actually shop at Wegmans- it’s a local store here that is expanding to other states. We don’t have Whole Foods or Costco and the small grocery stores tend to be more expensive. We have a co-op that we go to once in a while and also use the farmers market that’s in our village (we can walk to it) during the summer months.
      Kids’ clothes are definitely cute- we were more strageic the last time we had to get my oldest school clothes. 3 pairs of jeans, 4 pairs of leggings, 3-4 dresses, 5-6 shirts, pack of undershirts/underwear and 6 pairs of socks. So far it’s worked out well and we’ll do that again when summer comes and she needs some shorts/short sleeve tees. We reuse all of her clothes for the youngest as long as they don’t have holes/stains and my youngest gets her own underwear!
      That’s a great idea about the appraiser- my husband was going to take him through the house (He is off for MLK day) so I will mention that to him.
      Thanks about the job- it was my first “grown up” one and I’ve had so many different roles/bosses that it has felt that I’ve had 3-4 jobs (just never had to leave)! 😉

  99. Hi Audrey! I love that you are so in tune with your spending. I think you need to consider what is absolutely most important to you. Do you truly want to semi-retire in 10 years? or, is it more important to you to do the renovations on the house, have new cars, etc, etc. (fill in the blanks) I think you have received a lot of good advice here and now need to be really honest with yourselves (you and hubby) about what your goals are. The point is to get spending way down if you truly want financial freedom to do what you like with your time, or to continue working so you can have the things that you want. It is the mind set that makes the difference. There is nothing wrong with either way, it is your life and you need to do what is right for you and your family. However, if you truly want financial independence, some things have to go. It is great that day care costs are winding down, but more needs to be cut from your budget if you intend to semi-retire in 10 years.
    Unexpected things can and do occur in life. One of the bread winners loses a job, takes a pay cut, or has an unexpected illness and can no longer work. When something happens, you want to have at least six months of expenses in savings. You also have to consider that given your high rate of spending per month, you need to have a lot saved to support it.
    I understand where you are coming from. I have 4 children and live in one of the most expensive areas in the country. My husband and I are working toward retirement in about 10 years. Our current spending averages between $5,000-$5,500 per month. We are looking closely at our spending to try to lower it.. It is tough to make the choices we are making, but for us, we are motivated to retire before my youngest is through college.
    I definitely would recommend that you put off the exterior reno, get many estimates, and do it in stages as you can pay cash for it. This would keep your expenses consistent for now.
    Next, you can scrutinize your spending and decide what you are willing to give up. For instance, my two oldest kids, husband, and I all have trac phones from the home shopping network. This works for our needs as we are not on our phones excessively. Our cost is $30.11 per month for four phones. Our reception is much better too than when we were paying over $100.00 per month for two phones. When my husband first suggested the switch, I thought he was out of his mind. I reluctantly agreed to try it and can not believe that I do not miss the old phone at all. Giving things up is difficult at first, but once it is done to work toward your goals, it can be freeing! I wish you the best of luck in whatever you decide is important to you!

  100. Audrey, as someone who loves thrift shops, they do take time. Your clothing budget is more than reasonable and not something to stress over. Sewing will not save you that much money when you figure in the cost of fabric. And you don’t have the time. Your children are only young for a short while. I think you’re doing an incredible job of having them work alongside you and your husband and spending tons of time with them. Don’t sacrifice that time.
    Organic groceries are expensive but I understand that is a priority for you. If you have an Aldis near you, check out their organic selection. It’s gotten quite extensive.
    To cut down on gifts that the girls receive from family, could you suggest cute socks in their Easter baskets? Cute pajamas as a Christmas gift, etc? As a great aunt, I love getting the kids cute things to wear that also make their parents’ dollars stretch. Also, if you mention how much the girls love books or that they’re learning to sew, it may encourage gifts that would be more appreciated.
    I just want to encourage you as it’s obvious you’re trying to cover every area.
    Time with those precious little ones is the most important thing. And it’s clear you know that.

  101. I am enjoying hearing your story, Audrey, and reading everyone’s suggestions. You are doing so well and have obviously done a lot of research and are very stable financially. The car deal is rather a done deal…I bet you received very low interest rates from the dealers; if so, it is very similar to paying cash…Yes, you paid more for brand new than many Frugals would but it’s a done deal…to undo it at this point would be useless. Excellent for paying off the childcare: ours was only $250 each child but once the elder one was a latch key, that $250 a month was able to pay for the mortgage of a lake vacation rental which we enjoyed for nine years and whose profit helped pay for three years of college expenses…lol. You have a few choices for that $1047 additional money each month, paying off a car is one of them unless the interest rate is super low. Would not recommend paying off the house: I assume you have a super low interest rate and file Schedule A. I HIGHLY recommend that you put a stop to any more renovations for the near future. Number One rule in fixing up your house is not to Over Fix It Up for the neighborhood and for its sales value. It is an investment…every future upgrade should be run by a real estate agent (not a HELOC appraiser) first to determine what it does to the sales/equity value of your home. I bet a $70,000 siding upgrade will eat up all your equity in your house and NOT increase the sales value. Location, location, location. We had an 80 year old Craftsman Bungalow for 25 years. While some repairs were mandatory (roof, new fridge, new stove), others were choices (new carpet, redo hardwood floors, add a family room) that we did sparingly OVER a 25 year span. We NEVER remodeled our kitchens or bathrooms, did our own painting. We watched our equity grow by NOT over fixing up our house, watched our neighbors do extensive remodels and ended up underwater in their mortgages, some losing their homes. As we grew older and the kids left for college, we realized we wanted to live more in the country and sold the OLD HOUSE on an AS IS basis with $30,000 of dry rot needing to be fixed, including the two story front porch. Our $300,000 in equity (in a down market, too) paid for our one story, newish retirement home in full. The trick was to stop fixing it up, just like stop shopping at expensive stores. Just stop until you have cash and even then, pay off bills like cars first. Just because you can get a HELOC or a new car or have the cash to do an upgrade doesn’t mean you should. As you are already doing, keep your eye on the big picture and realize that one more real estate downturn could blow away all your equity, or your job, or your health insurance, etc. It IS possible that you may want to move in the next five years, move up, move down, move away, etc. You need that equity in your home even if you stay. Make sure your porch is safe from below and slap some paint on it (kids can paint, sort of…lol) and live with it for 25 years if you can…we realized, for instance, that a $30,000 investment could buy us a new porch (which we already had so no more space or usage or enjoyment) or a beautiful, spacious family room with closets and storage and space for our growing family and friends. Our realtor agreed re the investment choice. I suspect fixing up bathrooms and kitchen was your hobby (I understand hobbies) but perhaps a cheaper one is in order…the kids are of an age where a $500 week at a lake cottage is a fabulous vacation. We were a lot like you in many ways…I started out in business, became a teacher later, partly to spend more time with my kids and aging parents…made more money in business consulting than teaching but LOVED teaching. Pensions are great and should be carefully calculated as well as Social Security. Always work ten years out, calculating cost of braces, high school, travel, etc. Keep an eye on the parents’ health, many take Family Leave to care for them…although Trump may repeal that as well. I would not (and did not) invest heavily for the kids’ college: there are a lot of ways to pay for college, including working as an RA which my daughter did for two years…invest more for your retirement, inside and outside of tax-advantaged plans. As the Frugalwoods and I did, leaving fulltime work early for the benefit of more time for oneself, one’s parents, one’s kids, is sometimes even more important than a luxury retirement. These last ten 20 years of part=time (and yet lucrative work) have been wonderful for the whole family. Good luck, Audrey, you are doing so many things well and I applaud so many of your choices. We all have to choose as individuals what is most important and what can’t be cut back…I have picked up many clothing and furniture items at thrift stores…shop frugally in many ways…and found the $500 week lakeside vacations to be what our family remembers most…:)

  102. 1) A 70K renovation on a house valued at 170K is not fiscally sound. What happens when the furnace fails? Or you need a new roof? I’m skeptical that investing 70K in the exterior would net a 100% return in the open market. Remember the housing bubble of 2008?
    2) Hardie plank is not everything its supposed to be. My house is 10-years old. We did the 30-yr stain hardie plank, which promptly faded within 10 years. Though supposed to last 30, apparently, the warranty on fading is only for white?!? Re-painting our house last year (2 story, 3500 above ground square feet) cost 8K (we live in a metro area in MN).
    3) Your kids are young. I naively thought after daycare expenses were gone the kids would be less expensive. WRONG. Kids activities -namely sports such as swimming lessons, gymnastics, soccer – but also other things like music lessons etc – can be very expensive.
    4) do you really need *two* new-ish cars? We have one larger SUV that we use exclusively with the kids and family activities whereas our 2nd car (with 180K miles) is mainly used for adult stuff only. Unfortunately purchasing two new cars at the same time puts you on a cycle where both cars need replacing at similar times. It is kind of nice if you can try to stagger large purchases in the future.

  103. Excellent advice Ms.Frugalwoods. I loved each and every one of them. You are fabulous in living and thinking frugally. For Aubrey I completely agree with “get old car instead of new one” 100%. As per kids, they are young and kids that age are quite resourceful in their play time. They wont need or notice expensive things unless mentioned. So stick with hand me downs and spend more quality time with them. They will grow up fine, and feeling loved.

  104. Hello, I think everyone has given input on the cars. My husband and I bought new Subaru’s in 2006 and 2009 and are still very happy with our decision to buy new cars.
    One thing I would like to mention, you are maxing out your Roth IRA Contributions, but not your 401K contributions. I would reverse that in order to get the tax deduction, and build back up the IRA contributions just as you were planning to do on the 401K.

  105. Kudos to Audrey for being brave! I like reading these to think about ways to be more effective in our budgeting at home.

    My concern is the reliance on the pension fund for retirement. Unfortunately, pension plans are a huge target in bankruptcy. Just ask municipal workers in existing city governments that declared bankruptcy at how their pensions looks know (see Central Falls, Rhode Island in 2011, Stockton, CA in 2012, Detroit, Michigan in 2013). Cuts to pension benefits in Central Falls, Rhode Island were reported to be more than 50%. So I’d consider it pension a possible “bonus” and plan for the worse case scenario by socking as much $ in the 403b as possible. Great tax haven as well. Moreover, does the pension have survivor benefits if your husband dies first? Something to consider for planning purposes.

  106. I will try not to repeat anything anyone else has already said on here but just had a few additional comments that I don’t think have been mentioned.

    1. Does your work (or your husband’s work) offer a high deductible health plan? If so, you may want to consider switching to that plan. These plans come with a health savings account attached that allows you to sock away thousands of dollars pre-tax (voluntarily, of course), plus as long as you use the money for eligible medical expenses (which is almost anything except a mental health spa day), withdrawals are tax free. You usually save money on your premiums as well. The high deductible can take some getting used to, but as you have probably noticed, $500 copays can really add up too. There are some more benefits to HSAs that I won’t get into here, but they are well worth taking a look at, especially for a couple in your tax bracket.

    2. As far as the siding goes, it sounds like you and your husband view this more from a personal then an investment perspective. I get the very strong impression that you are planning on living there for the long haul (which is awesome, as I have moved an average of every four years my whole life. It gets tiring). This is good because you have a lot of flexibility, but also have a lot of factors to weigh. Have you done a lot of research (or heard any reliable gossip) on housing values in your area? It sounds like you have pretty awesome schools in the area, which is always good. If your area has been growing in the last 10-15 years, and is likely to continue to grow, your house may appreciate above average over the next decade or two, making the Hardie a pretty good investment choice. If your area is just generally pretty stable (housing values, general growth both relatively flat), or if housing values are declining, this would definitely make the expensive materials a want, not a need. There is absolutely nothing wrong with that, as long as you guys are fully okay that you may never see any monetary advantage to putting it in, and are ok with opportunity cost.

    Also, I’m not sure if the $70000 includes an allowance for problems that may be uncovered when the siding is put in. If it is not, that is something else to consider. Most articles/books I have read, and also personal experience, say to add at least 10% to your budget to deal with unexpected problems, up to 20%. My personal experience (not having sided a house but my parents recently had siding and an addition added to their house) is that if you are DIY’ing it, add 10% for sure. Since it sounds like your house is fairly old and you are taking it down to the framing, I’d say conservatively add 20%. 15% would split the difference. That means you are talking potentially an extra $7000-$14000 dollars in possible repair work that is needed. However, you should definitely check your estimates and talk to your contractors to see what they say (not trying to scare you here, but I have not spent less than I thought I would on any of my house renovations so far just because there is always some leak/tool/repair/extra material that is needed).

    My final point on the siding would be, if it desperately needs replacing, then I would vinyl it up, and then pay for Hardie 10-20 years down the line when you can pay cash for it, since you have long term plans for this house, and it seems unlikely (though not impossible) that you would be forced to move.

    3. Another commenter mentioned this, but I thought I would expand on it. You are saving for your children’s college using a state savings plan, and have quite a healthy balance in there. I would consider stopping or greatly reducing your contributions to this plan, and putting any additional savings into a more flexible savings tool (such as an investment account). A lot can change in the years before your children go to school, and I wouldn’t want to deal with the tax/penalty headache of trying to use that money for something non school related. Either of your children could decide to join the military (and perhaps get a full ride), or get scholarships, or end up working for an employer right out of high school who may cover some or all of their later educational expenses. I’m not saying stop saving for college at all (because it is also very possible they may go to a traditional 4 year, very pricey school), but you may want to be able to use that money in different ways for your children. Plus, your current savings will still continue to grow tax free in that plan (from my understanding of how these plans work). Roth IRA’s have some interesting, and potentially beneficial, rules about withdrawing contributions without penalty (not earnings).

    4. When it comes to your emergency savings, I do consider both your CDs and your money market accounts to be emergency (in my mind) due to the extremely conservative nature of the two. First, I would check your paperwork on the penalties for withdrawing your money early. If they are anything like the ones I have seen, they are probably extremely light. Plus, you have your money market account to draw on first. You most definitely have a health emergency balance (I give you A++++). However, the first thing to think about is, what is an emergency? If you are budgeting for typical expenses (medical, food, clothing, gifts) and repairs/maintenance appropriately (which I think you are-you just lump most of them under credit card, which is fine because you are BUDGETING for them), true emergencies would be: job loss, death/illness/disability, natural disaster. I may be leaving one or two out but I feel like those are the biggies. [Side note: A car breaking down is not an emergency expense because you know at some point in the life of your car, it will need a repair. And so on for most medical expenses, etc.] It sounds like you and your husband have extremely stable jobs, and you work in a high-demand field that would make it easy for you to find a different job with similar income, so it is unlikely you will experience prolonged job loss anytime soon. A sudden death/illness/disability is much harder to predict, but that is why they have insurance (which you have). As long as you are maintaining appropriate coverage, you should be ok there. Natural disasters are also hard to predict, but it sounds like you need to worry more about snow than hurricanes, and that is also what home insurance is for. Therefore, for you, I would say you have more than enough emergency money just in your money market account. If you need cash immediately (to buy a plane ticket to visit an ill family member or something), you have plenty to cover it. If you have a long term emergency, such as your home is demolished by an earthquake, and you have to rebuild or something like that, you will have plenty of time to liquidate stocks/bonds etc. to start covering expenses and also adjust your lifestyle. I’m not suggesting you reduce your money market savings, as you own a house/have children/car payments to cover expenses for and I think having a healthy reserve of liquid cash is a good thing and gives good peace of mind. My point would be that you have plenty of wiggle room for deciding what you want to do with your CD’s. You could use that towards your short term debt (cars), beef up retirement/college savings, put it towards house renovations, or at the very least invest it in a decent index fund while you decide what you want to do with it. You have a lot of options, and I wouldn’t make a hasty decision but its something to think about.

    5. My final point is once your cars are paid off (in about 3 years), your cash flow will improve even more (don’t think you are in trouble here). That is something to think about as well. Have you run calculations on how much you think you could contribute to your early retirement goal using the money from those payments? That could influence your current decisions as well.

    I agree with Mrs. Frugalwoods that I think you guys are in pretty good shape overall financially, and it sounds like you will have plenty of flexibility when it finally comes down to when you will actually retire, depending on what your life looks like in 10 years or so. Hope I have you some helpful ideas!

  107. I would also recommend doing another painting job to hold the exterior of the house for a few more years while you save up more for cash financing of this upgrading project.
    1) Since you are going to strip down the siding to the studs, yes add more insulation, as well as looking into upgrading all windows to high insulation triple pane windows. While the siding is off, the contractors can replace the windows, without having to cut off the insulating 6″-8″ barriers on all sides. This really makes a difference in cutting out all drafts in the new windows.
    2) Since you don’t know what you will find in terms of structural damage or rot, once the siding is stripped off to the studs,
    I would also budget another 20% or so for nasty surprises in your construction plans.
    Our condo association was too cheap in its painting maintenance, to add a 2nd coat of exterior paint, after the primer & overcoat, here in the rainy Pacific NW. So the wood weathered long before repainting time…
    Eventually they tore off all the old wood siding & replaced it with Hardiplank… & found so much rot in the structural walls & decks that they had to refinance the “replacement loans” for an extra 5 years!! (The projects involved 72 condo buildings for 288 families, a clubhouse & 2 pool houses). My neighbors & I also got the workers to predrill some holes for awning hooks at the time of the rebuild, with their professional tools, so we have extra rainy shelters that the other buildings don’t…
    Good luck!!

  108. I would advise against the renovation. Hardy Board still requires upkeep, I looked at a place here in NC (standalone Condos) that had Hardy board exterior and they said they allowed for repainting in the cost of the dues every 7-10 years. In the NE you might have to do it more frequently, so I would seriously consider vinyl – you need to at least look at the different vinyl available today – there are a lot of varities available and they look nice.
    I would also cut your cable cost and go with high-speed internet and streaming – lots more channels and cheaper, we have Hulu for $7.99 a month.
    And your Cell Phone could be cheaper, look to see if you really need unlimited data, I cut mine from unlimited to 2G a month and saved $100 (we have 3 phones on it, my husband’s, mine & one for my mother). We get notified if we go over 75% of our 2G and know to watch it or up it that month. And using Wifi on the phone does not count as data usage.
    Also would advise to work for the 30 years if you can get 60% of your income that way, it will make a big diffeence in how much money you need in your retirement. One thing to consider (but hard to predict cost of) is medical insurance once you retire and until you qualify for Medicare – it’s expensive (even with ACA which will change).
    Good Luck

  109. I know I am late to the comments, but I check web at work so just a word of caution. My husband (55) and I (50) thought we had it all together. We had a mortgage with only two years’ left, paying only $900 including taxes, our kids were all grown up and out of college. I had taken out parent plus loans to help them. We were both working full-time good jobs with my husband having the insurance. However, last year in March, he finally had his fifth heart attack and quadruple bypass. No more working for him…..no disability yet either because we are waiting for a hearing on same. No hubby income. and don’t get me wrong, there is no way I want him to go back to work with stress and everything but now I am working two jobs (7 days a week) so we can try to make ends meet. We didn’t have any savings and have taken out a home equity loan which brought my house right back up again to owing $80,000. Just be careful everyone out there. Anything can happen. Try to plan for it. I actually took my 401K for bills, which I know is very very bad but I guess what I am trying to say is you never know. We had everything going for us as far as the income and bills, and then wham!

  110. Audrey, you mentioned that homes nearer to work would cost in the $250,000 range, so I want to point out that the value of your current home plus the projected cost of your home renovations put you right about to $250,000 anyway. My family made the decision to move close to my husband’s office in the city last fall, and we couldn’t be happier. He is able to walk to work in 15-20 minutes, which has eliminated our need for a second car and given him an extra hour each day with the kids! We did have to jump way up in home price, but we are seeing so many financial benefits that offset this, as well as the benefits to our family and well-being. Your kids are much younger than mine, and I bet at their ages they would see a move as an adventure!

  111. After reading your issue, I find its always easier to solve problems of others while I had similar issues of my own. Simply put, cash is king. I took out a loan from Home Depot for a generator and three rooms of carpet. I make monthly payments of $250.00 overpaying it so it will be paid well before the expiration of the loan. While making these payments I feel like it takes away from other things I really want to do. However it’s a catch 22; if something gets worse you’ll kick yourself and if you wait other things may take presedence over the saved cash. Always remember secured debt (your house) can be taken away from you HELOC is a fancy way of saying that. Unsecured debt is just that, if you can’t pay for some reason you won’t lose your house but, your credit will suffer for 7 years and a life lesson later. Best of luck and go with your gut!

  112. I don’t have time to read all the comments so sorry if these ideas have already been recommended.

    1. It sounds like the exterior replacement is a requirement and not an elective change. Yes Hardie is expensive but they will never have to address this again as long as they live. Going with it being required, I would use the HELOC as my emergency fund and use the savings and liquidated CD’s to pay for the exterior work.
    2. Unless things change drastically, never buy a CD again. You are basically giving the bank a free loan. I guarantee you the stock market will out perform the CD 9 out of 10 years if you are diversified.
    3. The car loans represent over 14% of their monthly expenses. That is very high. I would get out of at least one of those cars and try to get something a lot cheaper. If you are upside down then at least you should have two cars that will last you a very long time which will prevent you from having to buy a new car for another 10 to 15 years.
    4. It looks like you are paying your credit cards off every month. That is great and don’t let that ever change.

    1. Hi Lance:
      1. We’re going to use the HELOC to pay for the exterior work- it’ll be paid off in 3 years and we can claim the interest on our taxes. Our mortgage will be done in 2025 (15 year fixed).
      2. We plan on cashing out the CDs (interest ranges from 1.3%-2.3% for the 5 CDs) as they come due- we have $12.5k this summer that will fully fund our Roth IRA accounts (index funds) this year with the balance being moved to a savings account (currently gets 1.3%). We are also maxing out employer retirement ($36k between 401k and 403b) with our current retirement total at $214k. If we work for 30 years at both jobs, our pensions will be about $11k/month (can collect at ages 55/57), and social security later on (whatever that amount may be).
      3. The cars are still with us- we plan on keeping them for 12+ years (our vehicles were 10 and 13 years old when we bought these). The total balance for both is $31k (interest is 0.9% and 1.49%) and we have a plan to pay those off in 24 months with day care wrapping up next month ($1,067/month for 1 child). Once we just have the mortgage left (in 3 years), we’ll be able to send about $4k/month to an index fund account separate from retirement that can help when we need different vehicles. We’ll also keep $20-$25k in a savings account as an emergency fund.
      4. We have never carried a credit card balance and never will. We were able to get several expenses down- clothing (from $50 to $24), target (from $183 to $100), internet (from $102 to $85), gas (from $180 to $120- will also decrease in the summer when my husband doesn’t have to drive to his school), misc expenses to credit card ($1,000 to $525). We continue to contribute to 529 plans ($350/month). Our income also increased in April (raise, bonus, mileage $ for me) and will again in September (yearly contracted raise for my husband).

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