Reader Case Study: Hoping To Swap an Apartment for Acreage
Rebecca and Robert are newlyweds living with their two cats in Washington, DC. Rebecca works in environmental sustainability and Robert is in donor relations at a non-profit. Their ultimate goal is to buy a home in a rural area with lots of natural beauty and the opportunity to grow their own food. They also have dreams of traveling full-time in the future–perhaps with their future young children. Right now, they’re living in a one-bedroom apartment in the city and want our help mapping out their next move.
What’s a Reader Case Study?
Case Studies address financial and life dilemmas that readers of Frugalwoods send in requesting advice. Then, we (that’d be me and YOU, dear reader) read through their situation and provide advice, encouragement, insight and feedback in the comments section.
For an example, check out the last case study. Case Studies are updated by participants (at the end of the post) several months after the Case is featured. Visit this page for links to all updated Case Studies.
Can I Be A Reader Case Study?
There are three options for folks interested in receiving a holistic Frugalwoods financial consultation:
- Apply to be an on-the-blog Case Study subject here.
- Hire me for a private financial consultation here.
- Schedule an hourlong call with me here.
To learn more about one-on-one consultations with me, check this out.
Please note that space is limited for all of the above and most especially for on-the-blog Case Studies. I do my best to accommodate everyone who applies, but there are a limited number of slots available each month.
The Goal Of Reader Case Studies
Reader Case Studies highlight a diverse range of financial situations, ages, ethnicities, locations, goals, careers, incomes, family compositions and more!
The Case Study series began in 2016 and, to date, there’ve been 91 Case Studies. I’ve featured folks with annual incomes ranging from $17k to $200k+ and net worths ranging from -$300k to $2.9M+.
I’ve featured single, married, partnered, divorced, child-filled and child-free households. I’ve featured gay, straight, queer, bisexual and polyamorous people. I’ve featured women, non-binary folks and men. I’ve featured transgender and cisgender people. I’ve had cat people and dog people. I’ve featured folks from the US, Australia, Canada, England, South Africa, Spain, Finland, the Netherlands, Germany and France. I’ve featured people with PhDs and people with high school diplomas. I’ve featured people in their early 20’s and people in their late 60’s. I’ve featured folks who live on farms and folks who live in New York City.
Reader Case Study Guidelines
I probably don’t 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 endeavor to help one another, not condemn.
There’s no room for rudeness here. The goal is to create a supportive environment where we all acknowledge we’re human, we’re flawed, but we choose to be here together, workshopping our money and our lives with positive, proactive suggestions and ideas.
And a disclaimer that I am not a trained financial professional and I encourage people not to make serious financial decisions based solely on what one person on the internet advises.
I encourage everyone to do their own research to determine the best course of action for their finances. I am not a financial advisor and I am not your financial advisor.
With that I’ll let Rebecca, today’s Case Study subject, take it from here!
Hi, Frugalwoods! My name is Rebecca, and my husband Robert and I are both 29 and live in Washington, DC with our two cats. We both currently work full-time – I work in environmental sustainability and Robert works in donor relations for a non-profit. We met on day one of college over 10 years ago (even though we grew up living close to each other, we didn’t meet until we both moved to DC!) and have been together ever since. We were married earlier this year in a beautiful setting in New England and embarked on a two-week road trip through the Pacific Northwest for our honeymoon.
The main hobby we do together is hiking. We love spending our weekend days in the woods either in DC or in nearby Maryland, Virginia, or West Virginia. Robert is an avid homebrewer and volunteers as a little league baseball coach, and I can never have too many books in my ‘to be read’ pile. I also adore swing dancing (although this has been on hiatus with the pandemic), and volunteer as a tutor during the school year. We enjoy cooking together and both come up with ideas and love to eat, although Robert does most of the cooking and I do most of the cleaning. With the extra time spent at home during COVID, we ventured into making sourdough, kombucha, pickling, and homemade sodas and jam. We also love traveling – we’ve been to 3 countries and 24 states together and have a very long travel bucket list. The main thing that prevents us from traveling more often is our lack of paid time-off.
We’re starting to think about growing our family from the two of us and our two cat children, to ideally add a few human children. Our dream is to leave the professional workforce when our future children are still young and to travel with them around the world together.
A few years ago, I was traveling with a friend in South America and we met a family with three young boys (I think they were 10, 7, and 4) who were almost done with a year-long trip around the world. Hearing about their experience and seeing their boys so happy, nearly fluent in several languages, and so well adapted to their lifestyle was incredible. Since then, we’ve been fascinated by the idea and have been following other traveling families for continued inspiration.
We’re not sure what would come after that adventure, but maybe moving to a small house in the woods and homesteading. We dream of a large vegetable garden, a small orchard, and acres of woods we can preserve. I studied abroad in Europe in college and my host family had a huge apple tree in front of their house. Once a year, they invited the entire community to join them as they pressed the apples into fresh cider. It was such a fun community experience and nothing beats homemade cider all year long. Both of us also grew up with vegetable gardens at home and I’ve recently had the opportunity to manage the community garden at work. What could be better than to eat (and drink) fresh produce every day that we’ve grown ourselves?
Another dream is buying an RV and traveling around the country to visit all the national parks. Robert also dreams of seeing a game at every Major League Baseball stadium. We started camping during the pandemic and have loved the low-cost opportunity to explore the national and state parks throughout the mid-Atlantic.
What feels most pressing right now? What brings you to submit a Case Study?
Now that we are married, we’re trying to work through what is next for us.
Because of all of our big dreams, we’d like to make sure we’re setting ourselves up for success on whichever paths we choose to pursue. We definitely want to retire early, and I think the most realistic goal for us is coastFIRE, which we understand as saving enough in our retirement accounts within the next few years to allow us to stop contributing and leave the professional workforce. We’d also like enough saved in cash to be able to take off completely and travel for a few years. When we return, we would both start working part-time jobs in fields we love – ideally at a brewery for my husband and at a science center for me. We’re both gaining experience in these chosen paths now and the goal would be to make enough money working part-time to cover our annual living expenses while being able to spend a lot of time with our children during normal day-to-day life as well as traveling.
We’re leaning towards coastFIRE because we want the flexibility of not working full-time, but we aren’t sure our dream is to stop working completely. From what we can see, a lot of the FIRE bloggers we follow continue to work in some capacity after achieving FIRE, so if coastFIRE can get us to a similar place significantly faster than full FIRE, then that is an important consideration for us!
What we’re really struggling with is our next steps–especially as it related to housing–before we achieve coastFIRE.
The way we see it, we have three options for housing:
1) Continue renting in DC:
- We’re happy in our current rent controlled, one-bedroom, month-to-month lease apartment and if nothing changed, we could see ourselves continuing to live here for the foreseeable future.
- Pros: We like our apartment and our neighborhood, know the staff in the building and haven’t had issues with management, and have enough space for the two of us and our cats to live comfortably. Renting also provides us with significant flexibility over a house.
- Cons: Lack of outdoor space, a tiny kitchen (less than 20 square feet), no dishwasher, and no space for family to stay when they visit. Plus, if we grow our family, we would consider moving into a two-bedroom apartment, which could significantly increase our rent. Although we think we might be able to manage to stay in our one-bedroom plus den apartment with one child.
2) Buy a house in the DC metro area (probably the DC suburbs as we’re likely priced out of DC itself):
- Last year we were convinced this was the right move – to the point where we put in an offer on a house in June – but we’ve been reconsidering this.
- Pros: More space to grow our family, a larger kitchen, a yard, and space for our parents and siblings to stay when they visit. This would be especially important if we have a child. We also would not need to leave our current jobs.
- Cons: Real estate costs in the area would likely mean maxing out our budget on a house that needs work or doesn’t meet all of our needs, moving away from the conveniences we enjoy in the city without the benefits of living in a rural area (lower costs, access to outdoors spaces), and knowing that we dream of traveling and living in the woods, not living in the suburbs.
3) Buy a house in the woods:
- One of our dreams is to buy a house where we can create a small homestead.
- Pros: Living closer to places we can hike and enjoy time outdoors, spending ‘home time’ outside, and growing some of our own food.
- Cons: Moving out of the DC metro area would require significant life and job changes and we have a bit of decision paralysis about the exact location we want to move. Also, if we’re considering starting a family, making two large lifestyle changes at once – and potentially moving further away from my parents – could be overwhelming.
What’s the best part of your current lifestyle/routine?
We enjoy living in DC – we love our apartment, we have good friends here, and we both enjoy our jobs. We are able to walk to a farmer’s market, we have an enormous diversity of restaurants at our fingertips, and we’re able to get to concerts, theaters, and ball games all via public transit or walking. Apart from the COVID years, we have been able to travel every year. When we’re close to home, we spend a lot of time hiking and exploring the natural spaces around us.
What’s the worst part of your current lifestyle/routine?
The uncertainty about what’s next. We’re quickly moving into a phase of life where our friends and siblings are getting married, buying houses in the suburbs, having children, and settling down. While we’ve gotten married and are considering children, the thought of settling down in DC is daunting.
Real estate is so expensive that it could mean doubling (or more) our monthly housing and commute costs. We’ve looked at a lot of houses, run the numbers with a mortgage lender, talked with a realtor and friends that own homes about their additional costs, etc. We’ve also considered significantly compromising on the areas where we want to live, but we’re not sure we’re willing to do that.
Also, in considering where we want to end up long term, we know we want to move to a rural area eventually. While we both grew up in the suburbs, we consider the suburbs to be the worst of both worlds – away from the conveniences of the city and without the benefit of being surrounded by natural spaces (no offense to those living in the suburbs 😉).
The issue is, neither of our jobs would be willing to have us be full-time remote, which means we would need to find remote jobs or jobs near wherever we choose to live. We are both fairly new in our jobs due to both of us being laid off from our previous jobs last year (thanks, pandemic budget cuts). I’ve been at my current job for just over a year and Robert at his for just under a year – and we don’t want to start over again quite yet after the stress of our unexpected job hunts last year.
That said, neither of us are in our ‘dream’ jobs. I really enjoy my job and most of the people I work with, but I do not like–and have some ideological differences with–the organization where I work. Despite the organization, though, I think the work I’m doing here is important and making a small but positive impact on the world. Robert on the other hand, works for a non-profit doing incredible work with some wonderful co-workers. However, while his role in donor relations is essential for the organization, it’s not his preferred type of work.
We also haven’t decided exactly where we want to settle down. In considering proximity to family, weather, cost of living, proximity to mountains and the ocean but also cities for conveniences like airports, etc., we have a few ideas, but none are a clear winner.
Plus, knowing that we want to travel full time at some point and that our families live elsewhere – my parents are in the mid-Atlantic and Robert’s family (and the rest of mine) are in New England – makes us extremely hesitant to put down that significant of an investment at the moment.
Where Rebecca and Robert Want To Be in Ten Years:
- We want to be happily semi-retired.
- We want to be able to work where we want, when we want, while knowing that we’ve already saved enough for retirement and only need enough money to cover our daily living expenses.
- I’d love to be either actively traveling full-time or recently returned from doing so.
- Other dreams include living on a small homestead or in an RV traveling the country.
- If we’re working, I’d love to be working part-time somewhere I can teach kids about nature and the outdoors.
- Robert would love to work part-time at a brewery.
Rebecca and Robert’s Finances
|Item||Gross Income||Deductions & Amount||Net Income|
|Rebecca’s income||$7,725||403b contributions: $1,716.25
Pre-tax transit: $50.00
|Robert’s income||$5,333||401k contributions: $1,653.34
Pre-tax transit: $10.00
|Item||Outstanding loan balance||Interest Rate||Monthly required payment|
|Item||Amount||Notes||Interest/type of securities held/Stock ticker||Name of bank/brokerage||Expense Ratio|
|Rebecca IRA (includes rolled over 401k and TSP from previous jobs)||$81,109||I do not touch this account||90% stock, 10% bond including VTI (83%), VXUS (7%), BND (7%), BNDX (3%)||Vanguard||VTI 0.03%, VXUS 0.07%, BND 0.03%, BNDX 0.07%|
|Rebecca Taxable Investment Account||$41,201||I add $1,000 monthly||90% stock, 10% bond including VTI (83%), VXUS (7%), BND (7%), BNDX (3%)||Vanguard||VTI 0.03%, VXUS 0.07%, BND 0.03%, BNDX 0.07%|
|Robert IRA (includes rolled over 401k from previous job)||$39,868||Robert does not touch this account||90% stock, 10% bond including VTI (83%), VXUS (7%), BND (7%), BNDX (3%)||Vanguard||VTI 0.03%, VXUS 0.07%, BND 0.03%, BNDX 0.07%|
|Robert Taxable Investment Account||$39,438||Robert adds $1,000 monthly||90% stock, 10% bond including VTI (64%), VXUS (8%), BND (5%), BNDX (3%), VOO (18%), VYM (3%)||Vanguard||VTI 0.03%, VXUS 0.07%, BND 0.03%, BNDX 0.07%, VOO 0.03%, VYM 0.06%|
|Rebecca Savings Account||$39,000||This is emergency fund and additional cash||Earns 2.25% interest right now||Capital One||NA|
|Robert Savings Account||$36,023||This is emergency fund and additional cash||Earns 2.25% interest right now||Capital One||NA|
|Rebecca Current 403b||$24,896||I max out my contributions to this account and receive a 10% match from my employer; the offerings are very limited. If/when I leave this job, I’ll move this into my IRA for the better expense ratios.||QCBMPX and QCSTPX||TIAA||QCBMPX 0.28%, QCSTPX 0.29%|
|Robert Current 401k||$10,160||Robert maxes out his contributions and receives 0% match for his first year of service, then 8% per year (starting Feb. 2023 for him), and will be vested after three years of service.||FXAIX (80.8%), FXNAX (9.75%), FTIHX (9.44%)||Fidelity||FXAIX 0.015%, FXNAX 0.025% , FTIHX 0.06%|
|Robert Taxable Investment Account 2||$3,857||Robert’s parents started this account when he was in high school and just transferred ownership to him – we need to move it to Vanguard. The balance is at a low point given the market right now – does it make sense to switch it to Vanguard now or wait until it recovers?||Pioneer Select Mid Cap Growth Fund A||Amundi||0.99%|
|Rebecca Checking Account||$1,500||This is where paychecks are deposited and bills are paid from||Earns 0.10% interest||Capital One||NA|
|Robert Checking Account||$1,140||This is where paychecks are deposited and bills are paid from||Earns 0.10% interest||Capital One||NA|
|Vehicle make, model, year||Valued at||Mileage||Paid off?|
|Subaru Impreza 2017||$18,300||41,000||No, the amount I owe is listed under section 3. Valued at number is based on KBB valuation of a standard model at $16,500-18,300, but we have a limited model so I assume it’s at the higher end.|
|Rent||$2,181||Includes annual renter’s insurance|
|Travel||$775||This is significantly higher than most years (esp. considering pandemic years) because of our wedding/honeymoon travel, traveling for other weddings (this is our busiest wedding year), and the first time we’ve ever done a significant group trip with friends (meaning we didn’t have full control over costs)|
|Groceries||$483||Includes some cleaning supplies|
|Gifts||$120||Higher than a normal year due to multiple bridal showers, bachelorette parties, and weddings this year, plus the normal small birthday and holiday gifts for family|
|Cable and internet||$119||Includes cable and internet; we need to find a way to get this down, but our building only provides access to two companies and they raise prices every year|
|Household supplies||$110||Includes toiletries, toilet paper, hardware supplies, some cleaning supplies, the occasional upgrade or organizational tool, and supplies for the occasional DIY project|
|Activities and entertainment||$80||Includes tickets (ball games, theatre, etc.) and occasional camping supplies|
|Pet||$75||Includes food, litter, and vet visits|
|Car Insurance||$60||Paid biannually, averaged monthly|
|Taxes and other life admin||$58|
|Car expenses||$39||Includes annual registration and parking permit, servicing, other parking, etc.|
|Laundry||$33||Our building charges $4 per load (we hang dry about half our clothes to help lower costs)|
|Cell phone service||$27||Rebecca recently switched to Ting (5 gigabyte plan based on observed usage). Robert is still on his family plan, but we plan to switch him to Ting too, meaning this will double.|
|Personal Items||$20||Occasional visit to a bookstore, hair cuts, etc.|
|Subscriptions||$14||New York Times and Disney+ (Rebecca’s family shares Disney+, Netflix, and Hulu, with the others paying for those plans)|
Credit Card Strategy
|Card Name||Rewards Type?||Bank/card company|
|Rebecca:Capital One SavorOne Cash Rewards (affiliate link)||Cash Back||Capital One/ Mastercard|
|Robert: Discover||Cash Back||Discover|
Rebecca’s Questions For You:
Should we buy a house or keep renting?
- If we continue to live in DC but don’t buy, will we regret not doing so if we end up staying in the area for another 5+ years?
- Other considerations: if we don’t buy now and wait until after we travel, our understanding is that it will be very difficult/impossible to get a mortgage if we don’t have a steady source of W2 income. On the other hand, if we own a house and then decide to travel for an extended time, we’ll need to consider what to do with the house when we’re gone and consider the possibility that traveling could change our priorities and we may not want to return to the house we own.
- What is the best way to save for a goal – such as traveling full-time – that might be 5-10 years away?
- We have our money in high-yield savings accounts, but should we invest that money since we expect it to be some time before we need it?
- Considering we have a lot in cash right now, should we pay off our car even though the interest rate is low?
- If the decision is to not buy a house and continue renting, another option could be to invest anything above our emergency fund in our Vanguard taxable investment accounts.
- How do we determine how much we should save when the future is uncertain?
- We’re planning significant life changes – children, buying a house/RV, traveling full-time, etc. How will we know when what we’ve saved is enough? How soon might that be (the sooner the better 😊)?
- With us being so young, how can we possibly estimate how much money we will need in retirement in order to feel comfortable leaving our full-time jobs in the professional workforce?
- Is there anyone in this community that has transitioned (with children or not) to full-time travel?
- Any guidance on how much to save and how to know when you’re ready to take the leap would be much appreciated!
- What are peoples’ experiences with coastFIRE?
- What might be some unexpected challenges we should be aware of? And is it worth putting off coastFIRE for a few more years in order to achieve full FIRE?
Liz Frugalwoods’ Recommendations
Rebecca and Robert are on the precipice of a new life and I can feel their exuberance coming through the screen. They want to embrace the whole world and do it all. I love their enthusiasm and their desire to plan. However, many of their questions don’t have a right or wrong answer as many of them are questions of discernment. I can’t tell them what to do with their lives, which path to choose or whether that path will make them happy. I can outline different financial scenarios in light of their different goals, but only they can determine what to do with their time and money. And I have every confidence they will do so beautifully! With that in mind, let’s dive in.
Rebecca’s Question #1: Should we buy a house or keep renting?
Something that jumps out at me are Rebecca’s repeated mentions that they don’t want to live in the suburbs. Yet, they’re considering buying a home in the suburbs. I wonder if this interest in home-buying stems from a sense that they should buy a house? That buying a house is the route to wealth building and proper adulthood? I encourage them to interrogate their interest in buying a home since they’ve articulated that the suburbs are not where they want to live.
Rebecca makes a salient point that it can be harder to get a mortgage if you don’t have a W2 job since banks do not seem to like or understand FIRE (and often don’t take assets into consideration–only incomes, which is ludicrous, but a fact). However, again, we’re back to the root issue: why buy a home in place you don’t want to live?
Could this be a rental property?
Of course one reason to buy a home you don’t want to live in is to turn it into a rental. I’m not super familiar with the rental landscape in the DC suburbs, but I imagine it’s probably pretty good given the proximity to the city. If Rebecca and Robert are interested in purchasing this home with the intention of turning it into a rental, that could make a ton of sense.
They’ll need to explore the viability of this idea:
- How common are rentals in the areas they’re looking at buying a home? How many units are rented versus owned?
- Would they be in a Home Owner’s Association (HOA) with rules/restrictions regarding renting out your home?
- What is the tenant population? In other words, who would be interested in renting their home?
- What is market rate rent for the area? Does this include utilities, lawn care, snow removal, etc?
- Would they manage the rental themselves or hire a property manager? If so, how much can they expect to spend?
And also evaluate these financial considerations:
Will rents keep pace with the mortgage, taxes, insurance, property manager fees, repairs and maintenance?
- What will your net return be each month?
- Do you have enough cash for a robust maintenance reserve (for when the roof needs to be replaced, the boiler dies and the stove breaks all in the same month)?
- Do you have enough cash to cover vacancies and tenant transitions?
I encourage Robert and Rebecca to dig into this research and see what they come up with. It might be that the areas they’re targeting are fabulous rental propositions and that this could be an excellent cash-flowing venture for them.
If It’s Not A Rental…
If the numbers don’t pan out for this home to be turned into a rental, the impetus to buy seems much less attractive. It’s tough to break even (let alone make money) if you sell a home soon after purchasing it, so I can’t say I’d ever recommend someone buy a home in a place they know they don’t want to live.
This Is Too Many Changes at Once (IMHO)
Stepping back a bit and looking at the holistic overview Rebecca provided us with, I think she hit the nail on the head when she said, “…if we’re considering starting a family, making two large lifestyle changes at once – and potentially moving further away from my parents – could be overwhelming.” I 100% agree.
Rebecca and Robert are considering making four different seismic changes:
- Having children
- Buying a home in the DC suburbs
- Traveling full-time
- Buying a home in a rural area
As Rebecca noted, #2-4 are in conflict with each other and #1 makes everything more complicated. Wonderful, but vastly more complicated. I know that I personally wildly underestimated how transformational having children would be to my life, my time, my money and my priorities.
Regarding Children and Travel
If it were me, I would have the children first and then see how I felt about traveling with them full-time. There are families who do it with infants, but most of them have already been full-time travelers–in other words, they didn’t start traveling when they had a baby, they were already traveling and had a baby along the way. There are so many unknowns in this recipe that I encourage Rebecca and Robert to eliminate/pare down as many variables as possible ahead of time.
Theoretical children are compliant, happy, colic-free and sleep through the night from birth! Actual children have, uh, very different ideas about what comprises a good time… “3am screaming party in my criiiiiibbbbbb! Everybody’s invited because I woke up all the neighbors after pooping myself awake! WOOHOOO!! Also I need to eat again. Please ignore the fact that we just had this party at 1am and will have it again at 5am.”
Then there’s the question of school once the kids are kindergarten age. There are plenty of road-schooling/homeschooling options, but that is yet another variable you can’t know until you have the kids. Another thing to bear in mind is that, when the kids are older (say age 5+), they’ll be able to actually appreciate the travels and won’t just nap through the entire Grand Canyon. Plus, they’ll have three months off every summer along with a number of week-long vacations throughout the school year (my kids have a full week off every December, February and April).
Buying A Rural Home
This is another area ripe for research for Robert and Rebecca! She noted that they “…have a bit of decision paralysis about the exact location we want to move to.” Rural does not mean the same thing to everyone and it certainly does not look the same in every state/region. I encourage Rebecca and Robert to dig in on what rural means to them and what type of property they’d love to have. Your region matters a lot when you go rural because, unlike the largely homogeneous American suburbs, rural areas vary WILDLY. This will also be a chance to do lots of fun AirBnB weekend explorations! My husband and I had so much fun traipsing around Vermont for several years investigating different areas and visiting tons of available properties/homes. You can read my series documenting our search here: The Frugal Homestead Series.
I’ll also add that renting out a rural property is often a tough proposition. It’s unlikely you’ll be able to cash flow it, although if you’re ok with losing some money, you can likely find a caretaker-type person who will look after the place for you in exchange for nominal rent. Again, this is region dependent, but often there isn’t as much infrastructure–or tenant diversity–for managing a rental in rural areas.
However, if you buy in a desirable area–say, near a ski resort or hiking trails–you might be able to AirBnB a rural place, provided you can find someone local to manage your AirBnB. This seems to be the major sticking point for a lot of folks I know who want to AirBnB a rural place–there’s no one to clean it, turn it over and manage renter relations. That’s one of the major reasons why we decided not to pursue putting an AirBnB spot on our property–I do not want to spend my days cleaning another house!
Rebecca’s Question #2: What is the best way to save for a goal – such as traveling full-time – that might be 5-10 years away?
Early and often. I jest, but in reality, the best way to save money is to do just that: save it. The vehicle it’s in is always secondary to your ability to not spend it. And Rebecca and Robert are doing this splendidly! In general, if you anticipate needing money within a ~5 year timeframe, you want it to be in either a high-yield savings account or something short-term and guaranteed, such as a government bond. You likely don’t want to invest this money in the stock market because it’s entirely possible you could lose money in that short timeframe. Investing is a long-term proposition that does not favor pulling money in and out of the market.
Let’s take a look at Rebecca and Robert’s full asset rundown:
1) Cash: $77,662
Between their four different checking and savings accounts, they have $77,662. Since they only spend $4,854 per month (v. frugal!), this means they have almost 16 months of living expenses in cash. This makes them overbalanced on cash, which Rebecca noted. If they were targeting having only an emergency fund in cash, they’d want to reduce their cash position to somewhere between three months worth of their expenses ($14,562) to six months ($29,124).
The reason to not keep excessive cash lying around is the opportunity cost.
Cash loses value every day since it doesn’t keep up with inflation. Plus, when you’re overbalanced on cash, you’re missing out on the potential investment returns you’d enjoy if your money was invested in, for example, the stock market or a rental property. Hence, the crux of Rebecca’s question is whether or not they need to keep this much money in cash, which is something only they can answer.
→If they want to buy a house in the near-term, they will absolutely need this much cash (and likely more).
→If they want to quit their jobs and begin traveling full-time in the near term, they will absolutely need this much cash (and likely more).
→If they want to continue renting for the next ~10 years and THEN retire (fully or partially) to a home in the woods and/or to full-time travel, then it’d probably be wisest to invest this money.
Where to Keep This Money
Definitely in a high-yield savings account. Robert and Rebecca have their cash spread out over four different accounts, which is three too many accounts in my opinion. Unless there’s a compelling reason–for example if they intend to keep their finances separate permanently–I strongly suggest consolidating to ONE high-yield account. They have a Capital One account earning 2.25%, but there are accounts earning even higher percentages right now, such as the American Express Personal Savings account, which–as of this writing–earns 3.30% (affiliate link). That means that in one year, their $77,662 would earn $2,563 in interest!! Woohoo!
2) Retirement: $156,033
Let’s see how they’re doing according to Fidelity’s Retirement Rule of Thumb:
Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.
Since Robert and Rebecca are almost 30, they should have 1x their combined gross incomes, which is ($7,725 + $5,333 = 13 058) x 12 = $156,696. In light of that, they’re right on track for traditional retirement.
3) Taxable (non-retirement) Investments: $84,496
Very well done! Since Robert and Rebecca have completed the first three steps of financial management:
- No high-interest debt
- A fully-funded emergency fund
- Maxing out their retirement accounts every year (which in 2023 is $22,500/year per person)
They wisely opened taxable investment accounts! And as Rebecca herself pointed out, “If the decision is to not buy a house and continue renting, another option could be to invest anything above our emergency fund in our Vanguard taxable investment accounts.” I couldn’t have said it better myself.
Rebecca and Robert get an A+ on selecting investment funds with low expense ratios. Expense ratios are the percentage you pay to a brokerage for investing your money and, as they’re fees, you want them to be as low as possible.
As Forbes explains:
“An expense ratio is an annual fee charged to investors who own mutual funds and exchange-traded funds (ETFs). High expense ratios can drastically reduce your potential returns over the long term, making it imperative for long-term investors to select mutual funds and ETFs with reasonable expense ratios.”
In light of their importance to one’s overall long-term financial health, I encourage everyone to locate the expense ratios for all of your retirement and taxable investments and ensure that they are low! Here’s how to find an expense ratio:
- Google the stock ticker (for example: “VTSAX”)
- Go to the fund overview page
- Look at the expense ratio.
Screenshot below for reference:
And done! Woohoo! To give you a sense of whether or not your investments have reasonable expense ratios, the following three funds are considered to have low expense ratios:
- Fidelity’s Total Market Index Fund (FSKAX) has an expense ratio of 0.015%
- Charles Schwab’s Total Market Index Fund (SWTSX) has an expense ratio of 0.03%
- Vanguard’s Total Market Index Fund (VTSAX) has an expense ratio of 0.04%
You can also use this calculator from Bank Rate to determine what you will pay in fees over the lifetime of your investments, based on their expense ratios. If you find that your investments have high expense ratios, it will be well worth your time to investigate whether or not you can move them to lower-fee funds. This is not always possible with employer-sponsored 401ks/403bs as you’re beholden to whatever funds your employer offers. But, it’s always worth looking through all available funds to select the ones with the lowest expense ratios.
This brings me to another tidbit Rebecca asked about:
“Robert’s parents started this [investment] account when he was in high school and just transferred ownership to him – we need to move it to Vanguard. The balance is at a low point given the market right now – does it make sense to switch it to Vanguard now or wait until it recovers?”
The key consideration here is the “cost basis” for this stock. That’s what you originally paid to buy the stock. If the stock is worth MORE than the cost basis, this is considered a capital gain and selling it will be a taxable event. Conversely, if the stock is worth LESS than the cost basis, it’s considered a loss. So, if Rebecca and Robert want to transfer these stocks over to another brokerage (through what’s called an ACATS), they’ll want to first determine the cost basis and whether they’ll be posting a capital gain or loss, which will determine the amount they’ll need to pay in taxes. For more on this, check out this article from Charles Schwab: Save on Taxes: Know Your Cost Basis.
Rebecca’s Question #3: Considering we have a lot in cash right now, should we pay off our car even though the interest rate is low?
I mean, the interest rate on the car loan is really low (2.99%), but the balance remaining ($10,572) is also really low in light of their cash position. This decision hinges on whether or not they’re going to buy a house in the near term. If Rebecca told me, “We are definitely buying a house in the next ~5 years,” then I’d say not to pay off the car loan because they need the cash for a downpayment. My advice would be exactly the opposite if they’re not buying a home in the near term. 2.99% is low, but it’s still money being lost every month to service this debt.
Rebecca’s Question #4: How do we determine how much we should save when the future is uncertain?
“We’re planning significant life changes – children, buying a house/RV, traveling full-time, etc. How will we know when what we’ve saved is enough? How soon might that be (the sooner the better 😊)?”
As I noted above, these are four discrete goals that contradict each other somewhat and have very different price tags. Again, I suggest Robert and Rebecca spend the next few years isolating the variables:
- Have kids (assuming you definitely want kids).
- You’ll know A LOT more about your family and your goals once the babies are born.
- Buy a house in the DC suburbs or don’t.
- Determine if it can be purchased now and transitioned into a cash-flowing rental later.
- Research locations for your rural homestead.
- Determine purchase prices and local or remote job opportunities.
- Travel or don’t.
- Determine if the house(s) can be rented while you travel.
- If they can’t be rented, this becomes a tough proposition of paying for a home you’re not living in. That math only works if you’re a multi-multi-multi-multi millionaire.
In terms of how much money is needed to fully FIRE, there’s debate about this, but the most commonly sited rule of thumb is the 4% rule. What this means is that you need to have enough in investments to be able to withdraw 4% of those investments annually to cover your living expenses. Here’s how that math would work for Robert and Rebecca:
Their expenses = $58,248 annually
It always comes back to what we spend, doesn’t it? That’s why I harp about the need to track your spending. It’s impossible to know how much money you need for retirement (or anything else) if you don’t know how much you spend. I use and recommend the free expense tracker from Personal Capital because I like to automate everything I possibly can (affiliate link).
If Robert and Rebecca want to continue spending $58,248 annually (assuming increases for inflation), they’d need an investment portfolio of ~$1,470,000 as 4% of $1,470,000 = $58,800. This is pretty basic, back-of-the-envelope math, but it provides a rough sense of their FIRE (financial independence, retire early) number.
Their current assets = $318,191
They’d need to save and invest another $1,151,809 to reach their FIRE number of $1.47M. Of course, the less you spend each year, the lower that number. However, I always caution against cutting it too close. Better to have more than you anticipate needing than less! Rebecca asked how long this will take to reach and the answer is based on how much they can save and invest each year. If they attack it from both sides of the equation–earn more and spend less–they’ll get there faster.
Another Option: CoastFIRE
Rebecca said they might be more interested in reaching CoastFIRE as opposed to full FIRE, which she correctly identified as earning enough each year to cover all of your expenses, but not enough to contribute anything more to your retirement and taxable investments. The idea being you can quit your full-time job and transition to something with way fewer hours (and lower pay). Then, you let your investments “coast” and continue to grow in the market until you want to fully retire at a more traditional retirement age.
Rebecca said that neither of their jobs allow for fully remote work and so, I wonder if they’ve considered finding jobs that do? Most white-collar jobs these days do allow for (or even require) primarily remote work, which would be wonderful for either full-time travel or living somewhere rural.
Spend the next few years isolating your variables and refining your goals:
- Have kids (assuming you definitely want kids).
- You’ll know A LOT more about your family and your goals once the babies are born.
- Buy a house in the DC suburbs or don’t.
- Determine if it can be purchased now and transitioned into a cash-flowing rental later.
- Research locations for your rural homestead.
- Determine purchase prices and job opportunities.
- Travel or don’t.
- Determine if the house(s) can be rented while you travel.
- If they can’t be rented, this becomes a tough proposition of paying for a home you’re not living in. That math only works if you’re a multi-multi-multi-multi millionaire.
- Have kids (assuming you definitely want kids).
- A lot of your questions can’t be answered until you know the answers to these four questions.
- Don’t fret–you’re doing all the right things to enable your goals. Continue:
- Living below your means
- Maxing out your retirement accounts
- Investing in your taxable investment accounts
- Consider consolidating all of your cash into one high-yield savings account
- Commit to researching all of the avenues we discussed today and enjoy the process!
- You’re at an exciting juncture and I can’t wait to see what you decide to do next!
Ok Frugalwoods nation, what advice do you have for Rebecca? We’ll both reply to comments, so please feel free to ask questions!
Would you like your own Case Study to appear here on Frugalwoods? Apply to be an on-the-blog Case Study subject here. Hire me for a private financial consultation here. Schedule an hourlong call with me here, refer a friend to me here, or email me with questions (firstname.lastname@example.org).
Never Miss A Story
Sign up to get new Frugalwoods stories in your email inbox.
The advice to have kids first is a good one. I would also not underestimate the importance of being near family & established community in the first few years. Also not knowing what the Fertility journey could look like- some get pregnant on the first try, others have a longer road, others spend thousands trying to conceive. So I wouldn’t assume that step 1 of their plan will be easy or complication free.
Not to be discouraging but just offering some realism.
If it were me, I would look into buying an RV or camper that can facilitate travel, sray in that STEAL of an apartment and start working on getting pregnant. You can enjoy the travel in the meantime, and then you can try some shorter excursions and work up to longer ones eventually.
But you have a lot of amazing things going on right now that many people would desire….I wouldn’t trade the good life you have, the opportunities you’ve created, for a dream of something that looks idyllic from the outside but is actually quite challenging to achieve.
Some goals don’t have as rigid a timeframe as getting pregnant can. As you put it you can manage in the apartment you have with a baby when you start to get your sea legs and come out of that first foggy year you will probably know better what you want to do next. And it’s wonderful to have family close by during that time.
Totally agree! As a mom with two young kids, being near family who can offer support with childcare and just general helpful, loving company is EXTREMELY valuable. From an emotional and a financial stand point.
Even without children, being near family is lovely. It makes spending time with them easy, and you don’t have to eat up vacation time from work in order to do it.
I agree with the having kids first. They have done lots of travel without kids already and seem ready to begin their family.
It occurs to me that it would actually be easier living with a baby in a 1-bed apartment than it would be backpacking around the world with a baby. So if you have a baby and can’t handle being in a one he’d apartment with baby, you probably won’t enjoy being stuck in a camper van or on planes trains and automobiles with baby either.
I wonder how the whole “world traveling with kids” works regarding sleeping arrangements. When my dh and i look for hotels now we don’t feel confident letting our kids sleep in a hotel room on their own so we have to look specifically for large hotel rooms which can be hard to find.
Our parents started taking my brother and me on international vacations when we were 9 and 5. They would always book apartment rentals and we’d have a “home base” from which to take day trips. I’m not sure how they set this up back in the 90s, but nowadays there’s Airbnb and VRBO which are perfect for families. I agree that it would be challenging with very young children, though.
There is a YouTube channel called GoWithLess, they also have a Facebook group which is more active. It is all people who have FIRE’d and travel full time. They have some great information on spending and the cost of travel along with travel hacks.
Thanks for the suggestion! We’ll have to check that out!
Congrats on your choices so far. A few thoughts: 1) it seems really significant to me that you all have a rent controlled apartment; that seems to tip the balance to not buying given your future desire to move away 2) I totally agree on the wait and see approach post kids. I traveled throughout Latin America pre-kids and saw ex pat families with babies, assuming I’d want the same post-kids. My need for security and support post kids led me on a different path. So, just a note that things can change. 3) Lastly, I live in the close-in DC suburbs (right over the MD line). There are some not soul crushing suburbs that are less expensive than DC. My area is walkable, close to transit, lots of access to nature,etc. I wouldn’t say it’s “affordable” and I don’t know anything about rentals, but just a note that if you do decide to buy, “suburbs” aren’t a monilith. Good luck with all your decisions ahead!
The rent controlled apartment has been a huge help – before moving into it, we were in a non-rent controlled unit and they tried to increase our rent 12% that year. We quickly decided that any future apartments would be rent controlled. That said, rent still goes up every year based on the CPI (landlords are allowed to raise it CPI%+2% with a max of 10%), so over time, it can climb significantly.
Good point on the suburbs – not all are as soul crushing as the ones we’re most familiar with! Since the DC metro extends far into MD and VA, we could definitely take another look at some walkable communities that aren’t in DC proper. Thanks for your insight!
Just want to wish Rebecca and Robert well with their future plans. They seem to be in a great place financially and have a lot of interesting ideas. Twenty years ago, my wife and I didn’t want to put down roots in a car-centric suburb either so gave DC a try. We’ve managed to raise three kids in a relatively small house and have friends who have stayed in apartments with their families. I’ve really enjoyed living in a walkable neighborhood. If you do decide to buy, perhaps you could take a look at Baltimore. It’s much more affordable than DC these days and many commute by train into Washington a couple of days a week for their in-office days at work.
Agreed, there are some very lovely family-friendly neighborhoods in Baltimore (Locust Point, Riverside come to mind) that are a fraction of the cost of DC and situate you very close to BWI (and frankly, Dulles has become more accessible via metro now, along with DCA, PHL, and EWR, or heck, take the train up to NYC and fly out of JFK or Laguardia!)
Right now interest rates are at such a high that buying a house will cost a lot compared to few years ago. It will probably make more sense to wait until your family grows and you need the space – by then you may have a different idea of what you want to do and where you want to live.
What you want to do with your life is wonderful; however it’s worth noting that in order to get there you will have to make sacrifices now for at least the next 5-10 years as you can’t travel extensively (or full-time), and at the same time save enough money to have invested for the future and also travel extensively (in the future, with several kids!).
Something to keep in mind for the future, when you do travel, you can rent your home to a visiting professor/researcher, but you have to play the landlord. We did that in Boston when we traveled overseas with our teenage kids for 9 months a year.
But you can’t have it all now as you also have to save aggressively for your future lifestyle (check Mr. Frugalwoods’ book – very inspiring!). Good luck on your amazing journey!
I agree having kids first is a good idea. Then you can gauge how much you value being close to family, and how comfortable you are with the idea of travelling full-time with little kids. My husband and I had our first baby while living in a one bedroom (without a den) apartment in DC — which was not a good living situation for us post-baby. We moved to the VA “suburbs” when he was 6 months old. I think Rebecca and Robert are probably familiar with the DC area suburbs since it seems like they grew up there, but if they haven’t spent much time there recently I’d encourage them to go explore some neighborhoods. We rented half of a duplex (3 bedrooms, two baths) for $2250 (so not a lot more than they are paying in DC right now) in Alexandria, VA for three years. We had a cute little backyard, enough space for family to stay when they visited, and were able to walk to lots of places. We’ve recently relocated for work and to be closer to family, and are now in more of a traditional suburb that is nearly as walkable. I can’t tell you how much I miss being able to walk to a bunch of parks, the grocery store, a few restaurants, and being a short (free!) bus ride from Old Town Alexandria (which I would honestly not even call a suburb given how much is on offer there). It’s also much easier to get to know your neighbors with higher population density and when people are walking around more imo. I think the rental market in that area is quite good too, though current mortgage rates may make it a little difficult to turn a place you buy now into a profitable rental.
Totally agree, Kari! I’m from the DC suburbs (Virginia side) and there are definitely walkable communities that have a very “city” feel. Alexandria, Clarendon, Vienna, Falls Church/Tysons. These were all legit towns before they became suburbs, so it’s pretty different from the stereotype of McMansions on cul-de-sacs. (Though we have those too!)
If Rebecca and Robert are thinking of buying in the DC area, they should check out the PBS show “if you lived here.” Each episode takes on a different neighborhood in and around DC. And you get a good sense of the housing market too!
I just wanted to say that having a baby in a one bedroom apartment is totally doable. We lived in a one bedroom until our son was almost 2. He slept in a crib in the corner of our bedroom. Like Mrs. Frugalwoods said, having a baby is a huge transition. If you decide to have a baby sooner rather than later, it sounds like staying in your apartment for the time being would make your life easier.
I came to say the same thing. It wasn’t my personal experience, but my sister and her family had their first baby in a 1 BR. they turned the walk in closet into the baby’s “room” and just moved most of their clothes out of the closet and into their dressers. They moved to a 2 BR when they were expecting their second child and their first was about 2 years old. It’s doable for many families, even if you wish you had more room.
At least there’s no need to rush a move before the baby is even on the way.
Agree. We haven’t even used the nursery yet at 12 months. AAP recommends room sharing at least 6 months ideally a year, and since my baby still gets up at night we don’t plan to move her out yet. Totally doable in a one bedroom!!
I kind of wonder if they should consider a short term leave of absence from their current roles and try full time traveling for three months. There is job risk for doing such a thing, so they’ll need to weigh the pros/cons, but it would be a nice way to figure out that variable.
Agree with this 100% I found at 30 that four months was long enough to travel and after that I wanted home comforts.
I often dream of full time travel with my kids, but I think the reality would be very difficult. My 7 year old likes stability and I’d feel guilty taking him away from school and his home. We moved countries when he was 4 (England to Ireland) and it took him a year to get over the upheaval. Everytime he got tired and emotional, he said he wanted to go back home. I’d love to get an RV to travel in the holidays though.
I love hearing all of your lovely ideas for the life you want to live, it’s making me very nostalgic for that “precipice” time in my own life. 🙂 It also reminds me of what I think of as the Sylvia Plath FOMO Fig Tree quote: https://www.goodreads.com/quotes/7511-i-saw-my-life-branching-out-before-me-like-the
Not to induce disappointment at the impossibility of pursuing every wonderful idea you have, but hopefully to offer comfort that it’s part of the human condition to want to pursue every path and wonder what might happen differently if you make different choices.
Great quote. On one hand, it encourages a very practical approach to decision-making. On the other, it kind of squashes dreams and forces the reader to recognize that time, energy and resources are finite… and that ‘doing it all’ may very well be impossible or come at a cost. But doing nothing is worse!
I say: don’t stop dreaming (and trying new things), but definitely question your motives! Society likes to fool us into think we want something that we don’t actually want.
To the frugalwoods: this was the first case study that resonated with me because they want to do a lot of things I want to do and they are asking themselves the same questions I am asking myself. It was an interesting read! Thanks for posting.
What a perfect quote, Abby! It definitely resonates with our situation – I very much feel like we’re stuck trying to figure out what to do right now. It’s difficult to know where to start, but I’m hoping we might be able to grab a few of the figs/dreams, even if we adjust them as we go 🙂
I will come for the defense of the suburbs. Much like rural areas, there are many many suburbs. My small New England town is 1 hour to Boston and Providence (ideal for commuting and high paid work) but contains many types of neighborhoods. We have tiny 1/3 acre lots and cookie cutter colonial neighborhoods while I live on 2 acres with 1 visible neighbor and 3 sides abutting permanent conservation forests. I can drive 5 minutes to Target and 4 minutes to my parents but I can also hike for an hour or two out my front door. I can’t truly homestead (though I could have chickens and a large garden if I wanted) and we’re considering some fruit trees. There are a lot of kids activities and we escape to the woods camping/to our cabin when we want more space. Just something to consider that all suburbs aren’t equal!!
The rent controlled apartment in DC leapt off the page when I read it. You love it, the location etc. It sounds like your life would be pretty great especially with room enough for a new baby. Love the RV idea as a practical way of satisfying your travel goals. You’re a young couple with the world at your feet and time to decide as your lives change. Change is the one thing you cant count on. Congratulations!
If I were you (I’m a mom of young kids), I would 1) STAY in that rental. Kids do NOT need a lot of space, especially babies. You don’t need all the gadgets. Minimize your stuff if you have to. Especially if you want to travel, I would not buy right now. 2) Pay of the car. Just do it. That’s a monthly payment you can reallocate back to savings. 3) As Liz said, have the dang kids! They may or may not change everything. We started camping after kids and it’s a sloooow adjustment. You need to figure out what you need when traveling/camping with kids, and it’s certainly a journey. 4) Once you start traveling (or not), THEN consider buying a house. You’ll know where you want to be because the kids will have a big impact on how you feel about that decision. Best of luck! I wish we would have been into the “frugal” lifestyle before kids.
I second the suggestion to pay off the car immediately!
I’d definitely try to stay where you are. Why buy in the suburbs if you don’t like them? If there really isn’t any scope to buy even a small place where you want to be, then just continue renting!
Even if you got pregant tomorrow, you’d have minimum 18 months before a child was walking so you don’t need a garden yet. Cross the bridge when you come to it!
There hasn’t been any mention of possible daycare costs, which is high in this area. When my kids were little, the childcare cost was as much or more than our mortgage. Another item to consider is commuting times if you move to the suburbs and where that childcare will be – near your house or your work.. I live in the DC suburbs in Virginia and honestly, I love it. Within a 15 minute drive I can get to any type of restaurant you can imagine, there is a farmers market on the weekend, and we have parks galore. I can walk to the library and elementary school. I even have a small garden in my townhouse backyard. But before I worked remotely, my commute was awful and I didn’t have great work/life balance. Getting to the city on the weekend is a breeze, but not during rush hour. If you did choose to buy them rent later, it probably won’t be hard to rent out a home. In my neighborhood several people rent their townhouses. We have a lot of government/military folks that want to rent for 2 or 3 years and then move. I think in reading your case study it may be best to stay put (avoiding a commute) and keep saving until you do have a child. Priorities and finances can shift a lot after children!
We had our first two kids inside the Beltway and I still tell everyone that it is the BEST place to have Littles. Free Museums? Check. Public Transportation? Check. More playgrounds and splash pads than you can ever visit? Check, check. Did one of our kids sleep in a closet for a bit? Yes. Did my husband and I give up the bedroom and sleep in the dining room at one point? Also, yes. But when they are little, it’s totally doable and I think, worth it. (For the longest time, our oldest thought the Hirshhorn was a craft store because of their storytime crafts. I loved that!)
That said, we did eventually move out of the area because they don’t fit in closets forever and there’s no way we could purchase a house and we had no interest in moving out and having a 2+ hour round trip commute. So I feel ya on that one. (Also, sign up for daycare and preschool about a year out. Ask me how I know! Ugh!)
There are so many fun decisions to make here and I wish Robert and Rebecca all the best. It is an exciting season in life and there is no rush. Since they sound close to their families, one (very future) idea I want to throw out there is considering some sort of co-living arrangement with family members or grandparents. I’ve found that retirees (at least the ones in my family! 🙂 desire similar kinds of freedom and flexibility and this might be mutually beneficially down the road. We are considering it with some of our family members now and I’m a little sad I didn’t think of it sooner! Good luck!
I traveled full time for 2 years before I was married. I got married and had a kid who is now 10. I always kept thinking it would great to travel as a family, but to be honest, it wouldn’t have been best for my daughter. We do take regular trip and “post pandemic” have begun traveling more with her, but her need for good friends and a consistent education and a hometown really outweighed the desire to travel. It is on deck for non school weeks though! Child care is a HUGE expense. Huge. It’s not that you can’t afford it, but it will change some of your financial calculations for the future depending on when in your journey you have babies. Lastly, I have a condo in a rural ski town in NH (which we also unexpectedly moved to from the suburbs in 2020 and aren’t leaving!) and although we do rent it out on Airbnb sometimes, we do as many seasonal and monthly rentals as we can. It’s very common to have a 6 month rental in ski towns that are easily accessible to larger cities. And I have 2 1 month rentals lined up for other parts of the year. You don’t HAVE to have turnover every few days. Also note – you could live in that rural condo and upgrade later to something else, keeping it for rental or selling it when you upgrade. Also, kudos for planning ahead!! As a nearly 50 year old, the only regret most of my friends have is not doing more and taking chances when they were younger. That will NOT be you!! The biggest regret you can have is never making a decision – you are both so thoughtful in your planning that even if you look back and think you COULD have done something slightly differently, you will not have regrets about your decisions. Enjoy and pat your self on the back!!
My experience lines up almost exactly with Alison. We have one daughter, and she also has a “need for good friends and a consistent education and a hometown”. So much so that we bought an RV with dreams of spending Summer 2023 on the road traveling America and then realized that our 12 year old might actually die if she can’t see her tween friends 😉 So we’ve compromised with a 2 week trip at the beginning of summer vacation, a month back for summer camp and hanging out with friends, the last month of summer vacation is one long trip.
Rebecca, you and your husband are terrific savers and you will do well. If you do choose to travel with children I recommend at younger ages. Before the school years you’re not beholden to the school calendar. But they can’t walk as far, so there are always pros and cons. Best Wishes!
I agree! As someone who is just a few years older than Rebecca and Robert and who has had/still has similar life goals, I wouldn’t make any of them without first having children (if that is the #1 priority in all the scenarios – sounds like it is). It will radically reshape any of the other priorities, even if you still hold them as life goals. I’m from Portland, OR (nice pic of multnomah falls! did you check out oneonta?), and currently live in Richmond, VA with my husband and kindergartener. While many of my goals in life have stayed even after baby (although many of them have disappeared as I’m sure any parent will tell you), the way to get there couldn’t be foreseen pre-baby AND the ways I thought I might get there and timelines it would take pre-baby, radically shifted post-baby anyways. Moral of the story: ALL OF IT WILL CHANGE!!!! And I (personally) wouldn’t recommend making any major decisions until after this one (assuming it will happen in the next couple years – if not, maybe feel free to make another big decision in it’s place?)
Another thing to mention: having a baby is expensive, even if it is done the cheapest way possible (pregnant on the first try, zero complications, etc). Depending on your insurance, I would have at least 10k in reserves per child (even more if your insurance isn’t great) if you plan on having a baby or two in the next couple of years. I had my son with great insurance, mild complications and got pregnant after my husband looked at me, and it was ~$7k almost 6 years ago. I have a friend who just gave birth a couple months ago and it was ~$13k for them to have their 2nd (with decent insurance). Maybe ask around to different people you know who might be comfortable sharing how much it cost them to have a child? Could be a good data point to include in your calculations.
Best of luck and I would be happy to share more in person, or over the phone if you’re interested. We’re frequently up in DC (check out King Spa speaking of suburbs) and sounds like we have similar goals, hobbies, etc : ). Best of luck and look forward to reading the update in a year +
Thanks for input and for mentioning the costs of actually having kids! We know its a cost to expect (and have seen the example estimates that insurance companies provide with their plan options), but it’s always helpful to have actual numbers.
Multnomah was beautiful! We hiked the loop behind Multnomah and over to Wahkeena, but only spent that one day in the gorge before heading to Mt. Hood. We’d love to go back and spend much more time in that area – and all of Oregon – if we can!
As far as D.C. suburbs, check out Riverdale Park, specifically the neighborhood between LaFayette and 51st on the north side of East-West highway. Economic development is BOOMING and you can walk and ride a bike everywhere: Hyattsville Arts District, playgrounds, parks, brew pubs … the purple line is coming through, the green line is walkable, the MARC train is right there, lots of tech jobs, the university is nearby so you could easily rent out when you are done. There are so many trails nearby, for walking and biking … We lived there for several years and loved it. You still get all of the urban vibes without the small-apartment city life. Riverdale Park has its own police department and they do have some rules around renting, which is honestly great because it keeps the neighborhood nice.
Thanks for the tip! We’re not too familiar with that area, so we’ll have to check it out!
I’m sensing a great deal of exuberance about “getting on with life” and making some foundational changes, but not really any specific passion for one destination vs. another. I can definitely sympathize with feeling So Ready for change! However, until there’s a clear winner for what changes to make, I’m voting for a mental deep dive while standing still in the sunny spot you currently occupy.
With creativity and effort, you can have nearly anything you want! But you probably can’t have everything, at least not all at once. Kids are a total game changer. I’m not sure I’d advocate for kids first unless you’re 100% sure parenthood is your path and you’d be willing to adjust (or possibly curtail or give up) your other desires to fit around it.
This – 100%.
You’re on point there – now that we’re married and nearing the 10-year mark in our careers, we are ready for what’s next, but stuck figuring out what that is! I’m not always the most patient person, lol, but from reading all these comments, it’s clear that a pause and a deep dive is what’s needed. Thank you for weighing in!
One thing not yet mentioned that jumped out at me is that in your response to the question of where you want to be in ten years, you did not mention children. There is certainly nothing wrong with opting not to have them (that’s the path I took, myself). But it is a massive life decision to make, and I’m wondering whether you are ambivalent. I’d suggest making that decision first, and then map out the next few years once you’ve decided whether or not children are part of the equation. Best of luck to you — I love your positivity and the great life you’ve created for yourselves so far!
I wouldn’t buy if I were you. It sounds like you don’t actually want to buy, you are just considering it because of fear that you might not be able to buy in the future. Fear is not a good basis for decisions.
That travel dream would be closer if you moved to a cheaper apartment. A little further out and that $2100/month rent could be 1500 (or less if you stick with one bedroom). I know you think you don’t like the suburbs, but there’s more nature out in Maryland and Virginia than you might think.
Keep in mind that when you each work part-time, you may not be able to get insurance as a benefit, and it is expensive !
My advice is to do nothing major in the next 3 years. Keep working, lower your cost and save, a lot. Put those monies in a short term easy access. While doing that, build on skills you need to improve your options. Learn how to brew, get the skills you needs for whatever the future bring. You are now full of hope and wishes, don’t act on impulse. Wait a bit , try some stuff until you feel more certain of the road you want to travel.
In considering proximity to family, weather, cost of living, proximity to mountains and the ocean but also cities for conveniences like airports, etc., we have a few ideas, but none are a clear winner.
This sentence sounds almost identical what my partner and I have been considering when looking at places to live long term and in retirement – three other factors that are high on our list but not mentioned here are access to medical care, a strong local food/agriculture scene and some cultural offerings. We currently live in Western MA which ticks many of this boxes, but are thinking our long term locale will be south western NH. It ticks almost every box except weather, but as lifelong New Englanders we’re willing to suck that part up. Southwest NH gives us easy access to I-91, lots of local outdoor activities to enjoy in the immediate area as well as the mountains and beach within day trip distance, low COL via no state income taxes (including on pensions and social security), it is close to our family who are primarily in Massachusetts. Keene and Brattleboro both provide some nearby cultural amenities and we particularly enjoy Keene for its bookstore, cute shops, local restaurants and international market, for airports we’d be easily accessible to Bradley/Hartford via 91 or to Boston (or even NY if really needed) for larger flights, and there are decent regional hospitals as well as all the facilities in Boston should anyone have a major health issue. We do like that there are lots of college towns, as we find they often bring cultural amenities to an otherwise “small town area” and get you that hybrid of some city amenites and small town living without feeling like an overpopulated suburb.
Y’all are in such an awesome position, way to go! We are on a very similar trajectory but maybe a couple of years ahead. We are mid-thirties with a three year old planning to get to coast FIRE when she’s 6 and then rent out our home in Austin for extended RV travel. Our travel style has changed a lot since becoming parents and we made the decision to travel less internationally while she is young and plan for full time round the world trips closer to age 8-10. Right now we’re testing and scaling (just bought a tiny fiberglass rv), investing a lot and enjoying the stability and help of having grandparents nearby. I don’t think you can underestimate the benefits of a walkable neighborhood with a baby, hello stroller walks! really think y’all can have it all and you’re poised for a fabulous decade (and more) ahead. I recommend moneyflamingo.com for coast fire with kids perspective.
Congrats on being so close to coast FIRE! It does sound like you’re on a very similar trajectory so it’s reassuring to hear that you’re finding a way to make several dreams become a reality! A walkable neighborhood is definitely a priority – we started going on several walks a day during the pandemic to make sure we were getting out of the house and some fresh air, and now its a very ingrained part of our routine. I can only imagine it’d be important to continue with a baby!
Thanks for sharing and for the recommendation, we’ll have to check moneyflamingo out.
I can’t relate exactly to your specific goals, Rebecca (except the distaste for the suburbs lol) but I do feel like I’m in a similar time of life. For context, I’m 30 with a toddler, I also live in an apartment in very high COL area.
1. There is a hidden cultural message that when you have a child, you should have a house, and the only people who raise children in apartments are people who have no other choice. This is ridiculous. Many millions of happy children are raised in apartments. You do not need a house to have a child. Don’t live somewhere that you don’t want to be unless you have a VERY good reason and an exit plan. I would 1000% rather be close to my support system than be far away in a house. Living in a small apartment in a dense urban environment does have downsides but being isolated with a baby is worse. Practically speaking, you can easily have one child in a 1+1 apartment but two children in that space is tight unless your den (or primary bedroom) is really big.
2. You have a lot of dreams. That’s great! Many of your dreams cannot happen simultaneously (and I know that you know that.) It might be helpful to reflect on what dreams you want to accomplish first. Maybe in your 30s the goal is to have a child and accomplish coastFIRE. Maybe in your early 40s you’ll take a year to travel the world when your child is about 8 or 9, then buy a rural property and an RV. Not everything has to be done now, and most of your dreams (owning property, traveling, owning an RV, seeing baseball games) can be accomplished by spending money, so as long as you HAVE money when you’re that age, you pretty well can do what you want. You don’t have to do everything when you’re young.
Reading this blog as a European, the cultural difference when it comes to housing definitely stands out. Many functional and happy kids are raised in apartments here 🙂 my bf even shared a room with his sister and they turned out just fine
We were in a similar (half the investments as we were new immigrants but just purchased an apartment in downtown area with a plan to eventually turn it into a rental) situation before we had our daughter when I was 29 (4.5 years ago). Honestly, if I could go back, I would delay having kids. It adds a layer with childcare costs, less time, money and energy. We’ve been able to keep up with saving but not at the same rate. Also, as we were at the beginning of our careers, we have not been able to advance as quickly as we would have when we didn’t have a kid. We stayed in our apartment (2 BR) for 3 years with our daughter but ended up buying a house as we just needed extra space (COVID definitely played a role in this), backyard and all the appealing amenities in downtown weren’t as important anymore.
I think if you are able to delay it even for 5 years you would be in a more comfortable place and have more options available for your family. Then you can also do more research into homesteading, travelling full time, etc as with kids it’s harder to find the time and brainspace to do this.
Just something to consider with all the good advice Mrs. Frugalwoods has already given you!
My suggestion would be to make sure to travel together as a couple before any baby comes to get that out of your system. As many others have stated, you don’t know how parenthood is going to change you nor do you know the baby you get. So travel and try out some of that before. Maybe take a sabbatical and do the RV thing? Then, have the baby and check in with yourselves what you feel is the next step. 🙂
I would like to respectfully disagree with Liz and say travel FIRST then have kids! You are both still so young, sounds like you really want to keep exploring–I’d say take a mega-trip and then re-evaluate and see if you still want to have kids! Seems to me it is way too early for you to have kids. That being said it is just my opinion from interpreting your tone, do what feels best to you obviously. It appears travel is pulling strongly on ya though. 🙂 As a fellow travel bug I encourage you to go do that!
Second this. Prioritize whatever is most important, but consider that could be traveling for right now.
What’s the parental leave like with your jobs? If you can both get paid parental leave while you’re in your current jobs, what a great thing before you go part-time somewhere.
I love the exuberance and the sense of possibility, and I also read some romanticizing in your descriptions–you’re visualizing the apple orchard and the community gathering and traveling with happy kids, but maybe not the labor involved in those lifestyles.
As someone who was in your position a few years back and now has the baby and the house in the suburbs, I hope you can savor this sweet and temporary inflection point in life. Enjoy your urban lifestyle and affordable rental! Travel and cook and hike as much as you can! Continue saving, and don’t introduce unnecessary complexity in your life (e.g., by buying a house in a place you don’t want to live) until you have to. The path will reveal itself, especially after you have kids.
Good luck! You have an exciting future ahead of you.
A comment on the kids/house issue: We were very disciplined savers like you but opted for one parent to take a hiatus from paying work and stay home with the baby for the first two years, and again when the second baby arrived. If we had committed to a mortgage, this might not have been an option due to the uncertainties of house upkeep costs. Long story short, we ended up raising our daughters in a 940 square foot apartment while saving every penny we could toward the future. People all over the world raise families in less space than this. Until you hold that baby for the first time, you might not know how much you’ll want to enjoy their early years full-time.
I’m not sure how old you two are. If it were me, and I was in my 20s, I’d travel more and wait a bit to have kids. Also save as much as possible. Kids tend to cost money AND time. Good luck.
As someone struggling with secondary infertility (one kid is great, though! I feel lucky to have her.), have kids as soon as possible. Money and life will figure themselves out. Have kids. If you want a bunch, have them now.
Also, having kids will change your perspective on EVERYTHING. It will change your goals, your dreams, your priorities, your career… Just be open to changing your minds on things once you become a parent.
As always, Mrs. Frugalwoods knocks it out of the park! “Living below your means” is the first and best option with any person. It allows you to save, and make rational decisions. Nothing worse than being mostly broke and in a hard place (ask me how I know!). This couple seems to be doing very well on a living/saving balance. Why don’t they try some part time jobs out now? They seem to have vague ideas of what would be fun, but until you do it, you don’t know. I had a friend who got her dream job of working in a bakery. Yes, she enjoyed the decorations on cakes and muffins, loved mixing up the batter, etc.; however, she forgot the part about time commitments, clients changing their minds 7 times halfway through a bake, and family arguements in the lobby area. So, try out a part time job in a children’s museum or a boutique brewery. See if it fits. That will help with a lot of other decisions. Best of luck!
I hope you keep us updated with what you and your husband decide Rebecca 🙂.
I cannot stress enough Liz’s point to have the children first. You just don’t know what their personalities might be. I could travel the globe quite happily with my oldest child as she’s easy-going, and eats just about anything. My youngest child is very different, especially as feeding him in other countries would be a challenge as he has issues in this area. We plan to take them around Europe in two years time, and I’m hoping he’s improved a bit by then.! Both my children are very outgoing and enjoy travel, but I have friends who children struggle with it.
Anyway, not trying to rain on your parade, I hope you do go on some grand adventures.
We have traveled all over Europe with our very picky eater since she was less than 2 years old. While it was extremely stressful for me when she was little, we always found something she would eat. She never realized the stress of it and just had fun. Last Summer, at 15 years old, she did a one month camp in Germany where the food was horrible. She finally understood my stress but was able to work it out by buying snacks and good food on her outings. The nutrition is not what I would have preferred but she ate! Traveling with kids can be a challenge but exposing them to the world has a lasting benefit that is very rewarding in the end. So, if you want kids, that doesn’t necessarily to limit the travel. We also lived very frugally while I took a 12 year career break. I homeschool and have rented apartments in Europe for a month at a time with my daughter or RVd in Alaska. I wouldn’t trade it for anything. Now that she is in highscool and I am back to work, I miss the frugal, traveling life even if it was very stressful at times. If you want a child, go for it and take them with you when you travel.
I’ll be the odd (wo)man out in this one – find where you want to live, find jobs that can support yourselves in the area where you want to live then have the kid. Our first mortgage was at 13% interest – we could have gotten a slightly lower rate but our 3 acres was zoned AG and the lender with the best *refused* to finance properties zoned AG (like we were farmers, go figure. Our loan officer was bummed out but his hands were tied). It was a one bedroom house, nothing to brag about at time of purchase but with an addition and rehab (not remodel – better half totally transformed the house). The house was 20 minutes away from both sets of grandparents. Having family nearby, whether both work or not, should be taken into consideration.
Two kids total and we lived there 21 years, *dirt cheap*, in an excellent school district.
You guys are in an amazing position thanks to your hard work and shared vision. We have lived/are living several of the dreams she is aspiring to…
For starters i am old as dirt at 51. Our now 11 year old was born in San Francisco where child free life for my wife and I was very different than delightful suburban life in Kansas City. We loved urban life equally. Life is full of chapters and trying to jam everything into each is a classic mistake i have made many times.
We returned to midwest be near family and slower suburban life and welcomed our son. We own our own business so that is the gift that keeps giving. We traveled 8-12 weeks a year with babies (then toddlers, then kids…). as my wife is from south america and we traveled for pleasure around South America, north america and Europe. We had an RV for 5 years for domestic travel. This was all while building our coast FI base with kids in public school in USA.
Since before our kids were born we dreamed of living abroad with them. Having an international base to travel from on another continent. We are 9 months into a 2-3 year chapter living on the mediterranean in Spain. This sabbatical took a mountain of planning and kids are in public school here. While we do not plan to get ahead while here we don’t want to move backwards either. we still debate whether it is easier to travel from a base in US while running our business locally vs remotely managing it (and all the headaches that go with it) while immersing in another culture with easy access to all of Europe. we are so glad for our kids to have this immersive experience at ages 11-14 for our daughter and 9-12 for our son as they are old enough to remember and absorb culture but not in high school where we have to remove them from social life.
I don’t say all this to pat myself on the back as stresses and struggles were part of each chapter as everyone experiences. I am famously impatient in my family and wanted everything all the time as well much like you do.
If i were you i would…
Take your excess cash and build on it for 2-3 years to travel first without children for 1-2 years. Your fertility is is unlikely to change if you start trying at 35 rather than 32. You can always travel again with kids BUT you will never have another chapter to travel without them.
Don’t buy a house you don’t really want. You are crushing it financially without building equity in real estate. While it is possible to keep it as rental while you travel you would do better to work hard and continue to save rather than become a compromised novice real estate investor. (my business has been 20+ years in real estate and owning properties) Enjoy your freedom and simplicity of life. You can own a house from age 35-100.
Keep your body healthy and plan to farmstead in your late 30’s to early 40’s with kids. See frugalwoods entire story for inspiration.
IMHO, People in FIRE movement go to such unreal heroic efforts to never have to work again vs investing in things they love and growing into doing meaningful work for the balance of life. Work is not a cliff we have to jump off of never to return. Brewing, outdoor education, homesteading, and all your passions can work during coast FI. invest in your passions and loves and a life of significant work lies ahead. Surely enough to cover your modest expenses.
An amazing life lies ahead for you. Enjoy it slowly.
I love this comment…but I just have to pipe in that fertility does, in fact, change even in a few years from 32 to 35. We were lucky and IVF worked for us, but it was a long, expensive journey (we started trying for kids at 33). If the writers want to have kids, I would caution putting it off for too long. A few years *can* statistically make a big difference. Not for everyone, obviously, but for a lot of people. That’s another reason I would not give up your apartment you enjoy, because even if you started trying today, it’s possible it could be years until you actually have a baby.
The easiest thing to do if you are worried about it at all is to get your AMH and a sperm analysis done now. Those are very simple tests and will give you a better idea of how much time you have to put off kids if it is something you really want to do but would rather focus on getting some of the travel bug out of your system first. (From another IVF long hauler :)).
I second this comment about fertility.
And I also don’t agree that this is your only time to travel without kids- one perk of having kids younger is that you are younger when they move out! My parents became empty nesters at age 52 and have traveled extensively (more than half they year) for the past decade. They are both healthy and loving life. So it’s not now or never 🙂
Since it sounds like traveling is a high priority for you, you may want to consider writing a list of places you really want to visit and simply go over the next year or two. Keep everything else in your lives the same (rent control and acceptable jobs) and travel as much as you can before growing a family. As many have already shared, and I concur from first-hand experience, many ideals and dreams grow and change after having babies. Make those beautiful, adventuresome memories now.
You are both on a solid path. Offering another slightly different perspective. If you think there is a possibility you will want to be closer to parents post kids I’d buy a place in the suburbs with the rental plan. It is completely possible to live able in a small space with a baby and toddler, but moving with one is an entirety different ballgame. My husband and I lived in a 380 sq ft jr one bedroom in SF when we had our baby. After about 2 months we needed more space and we didn’t have the same amount of baby gear as a typical family. We moved to a one bedroom in the suburbs by family when our baby was 3 months and the little extra space was life changing. Your place sounds larger with the den and could totally work for a few years. We stayed for three years when I was transferred out of state. Unpacking was so hard with an infant. It took a full year to get organized. If you can that part done prior to having the baby you can focus more time on enjoying your baby. And even though we were less than 20 miles to family living in the city, being 10 min away was so helpful. My in-laws were even full time childcare eliminating daycare expense. Now if you don’t think you’ll want to move after kids then stay. It does sound like you have plenty of space. My child is still in the same room as is and it work. I had a coworker with two kids in a one bedroom. She turned the bedroom into the kids room and the parents bought a convertible sofa for the living room. Second what everyone says about cost. With insurance we paid $7k out of pocket. Plan on spending your deductible. These first four years haven’t been too bad raising a child. Just had our first emergency room visit and stitches $1,400. Unplanned expenses will pop up with kids and I made sure I had a properly funded emergency fund before having them. And you do too! Good luck!!!
My husband and I were big travelers before kids, and while we haven’t done full-time travel with kids in precisely the way you’re hoping to do, we’ve taken four extended (4-8 weeks) trips abroad with them, beginning when they were 2 and 5. One of the (many) things that have made this kind of travel possible for us is home exchanges, where we swap our house for a home base elsewhere. I can’t say enough about how this makes travel with kids easier (I say “house” swap, but we typically also swap vehicles, car seats, bikes, toys, pet care, etc). Not only does this cut down on what we need to haul with us, it’s great having a long term home base as we explore. We live in location that many people want to visit for vacation and work, which means it’s easy for us to find exchanges. It’s something you might consider as you think about where/if to buy your own home.
Also, to echo what many have said, your thoughts on travel with kids may change once you meet yours. When people ask about our experiences, my typical reply is that it *is* worthwhile, but it’s not always fun!
I’d love to know how you arrange for these home swaps! My kids are 3 and 5 and I love this idea. We live in Victoria, BC, which attracts a good amount of tourists.
We use a website: homeexchange.com. It costs $150/year and works a bit like a dating site, where you list your home and places/dates you’d like to travel, and then others do the same. If you find a “match” you work out the details between yourselves, although the site does offer a few resources to help with that.
Congratulations Rebecca on putting yourselves in such a strong place financially at such a young age! With regards to your question on people’s experience with COAST FIRE, I’ve been coastFIRE’d for a couple of years and all I can say is it was life changing! Once I had enough money in my retirement accounts to allow them to compound and not touch them until a traditional retirement age, I was able to leave a corporate, management type job where I was unhappy and took a 6 month mini-retirement to recover and figure out what I wanted to do next. Spent that time getting certified as a yoga teacher, training for a marathon, triathlons, and volunteered as a running coach for a girls team. By the end of the 6 months I was happy, healthy, and no longer burned out on working and was excited to job hunt once more. Ended up taking a fully remote job with far better work-life balance, able to focus my energies on travel and adventures and time with family. Without Coast FIRE I don’t know if I would have had the courage to step away from the corporate treadmill. Did a rough calculation of the retirement accounts listed above and assuming you all want 1.5 million at the traditional retirement age of 60 years old, you are about 1 year away from Coast FIRE (200K x 30 years x 7% annual returns. Currently 156K in your retirement accounts, contributing 40K annually) So now the exciting part starts, what’s next for you both?! Enjoy the freedom you all have earned for yourselves!
I wanted to add one thing. If you aren’t sure about kids, resolve that first. But if you know you want them, it’s worth noting that if you plan to conceive them yourselves, it can get lot harder the closer you are to 40. It’s just a medical fact. It added years and tears and $$ to my journey…all more than worth it! But I guess what I’m saying is Paris or a house in the country will always be there if you put those plans further back in line.
I will not add too much wisdom here LOL, but I wanted to commend how well this couple is doing financially. When I saw the total of assets the amount looked familiar to me so I checked my files. I started tracking our NW in 2017 and we had $315k at the time, but I was 32 and my DH was 38 at the time. We also had a car loan with 0.9% interest just because the savings were paying 1.9% interest and it was paid off in 3 years. In the hindsight we were lucky to have bought a house and were paying off our mortgage on the ‘speedy plan’ (15-year loan with 4.75% paid off in 5.5 years just before 2009 and then steered that payment to the stock market in a taxable account).
Yep, we also chose traveling over kids for the first 4 years and had our children when I was 30 and 33. In the hindsight, I kind of wish we started earlier just because it’s quite an energy-draining activity to raise teenagers lol, but it shall pass, but we loved traveling so it’s fine either way. I would say not to delay children especially if you think you might have a hard time getting pregnant.
I wish you good luck. You’re both on a great track. I won’t comment on daycare expenses. It’s a HUGE difference what we paid in a city in NC vs. what the prices are now. I feel lucky now. At the time we used to say we were having a car loan payment, but today after just 10 years it seems parents have a mortgage payment instead. Daycare inflation is crazy, but the sad part is that inflation didn’t go to the care givers, but to the bottom line of corporate day-centers.
Such a wonderful case study! My husband and I traveled quite a bit pre-children, and kept the streak up with our two little ones. Just a few months ago, we did a 2.5 week Europe trip with a 2 year old and 6 month old. All I can say is: travel with littles is not for the faint of heart. Having a 3rd adult (such as a grandparent) is a huge asset as you get comfortable traveling… but long drives, airplane rides, adjusting to a new sleep space or change in routines— ie, all the inevitabilities of travel— are extra taxing on a child’s patience & their understanding of the world. & Especially in foreign countries (even ones you think are similar to the US!) you will spend a seemingly ridiculous amount of time looking for everything from diapers to infant cold medicine. Would LOVE to hear from more people who travel frequently with kids as that is something we plan to keep doing… but you won’t know what that looks like for your future family until you are in the thick of it and get a better sense of your kiddo’s temperament.
I wanted to weigh in on the idea of traveling in an RV full-time. We’ve been doing it for a year now after selling our house when prices were high, leaving us with a good nest egg. We have always been savers too and had enough resources to retire fully, so we decided to just do it in 2021. We bought a used 35′ RV that was only 1 year old and in great shape plus a used truck to pull it with. We’re in our 50’s and done with having kids so our situation is very different from yours. We’re super happy traveling all over the US and are trying to explore every state before we settle down into a house again. Like you, we want someplace fairly rural with forest land. Regarding expenses, I’d say now we spend about 4-5K per month, depending on how much we want to splurge. We eat out a lot and spend money on activities and entertainment plus the cost of RV parks themselves and the ridiculous gas prices in the past year and RV maintenance… Many people buy the big RV’s that look like buses and are super expensive. My point being that living in an RV can be less expensive or super expensive. For us, we spend about the same as what we spent living in our house, but we could definitely pare that down. If you want to go this route at some point, you need to do your research on exactly how you would want to live in an RV and what you want to spend. About 25% of the families we meet have kids but most have older kids, and take shorter trips due to school issues. But some people do have younger kids. Would I bring a baby? I don’t know how I’d feel about this for myself but people do it, even with multiple kids, and homeschool. Lots of RV-ers have remote jobs. Most of the people we meet who make it a lifestyle are usually retirees like us or people who live in their RV’s while they are based somewhere temporarily, like military folks. Lastly, we also want to homestead in our next place and have thought that living in the RV could be a good way to start out if the property we buy needs work, assuming we could deal with water, electric and sewer needs for the RV. This idea for us is just an idea for now as there are a lot of things to figure out first. You have some fantastic ideas! I wish we’d done some of the things you talked about. Although I like my life now, I spent a lot of years giving all of my energy to work. When I was working, I did travel to over 20 countries and loved it. There is so much to see and experience and learn about! I hope you get to achieve many or most of your goals. I think you have the right idea of grabbing and taking what will make you happy as soon as you can.
Congrats on your journey so far and your zest for life! We are in early 40s and discovered the FIRE movement late but had similar dreams pre-kids (without any practical notion how to get there).
I would: calculate a rough coastFI number and find a scenarios you would love to live to get there, delay kids until a few more travel items are ticked off and /or you are on the preferred coast fi number, delay house buying unless it’s something that can be profitably rented out, not move to acearage & buy an RV until after kids – but do lots of fun acearage and close to family living research
Finding your coast fire path: One other person mentioned money flamingo and I can highly recommend her site. She has a FI calculator that tells you when you will/have reached the different stages of FI. Obviously your spending will change over time but it’s a good first indicator and you can probably find average COL for different sized families and then adjust your cost by a % based on the dream size of your family plan. Once you know roughy want your barista/coast FI number is I would estimate how long it will take you to reach it with kids in next years budget vs kids a bit later. After having kids it took me ~10 years for the next promotion even though I was up for that promotion later in the year of giving birth
obviously cost are higher with kids. And at least one you is likely to earn less with kids if they go part time etc. Also the earning trajectory usually stays much flatter. If you only had 2-3 more years to reach coastFI, it might be worth going a bit extra hard towards that goal so you can have the acreage part time dream life when/shortly after welcoming kids into your life
Kids and travel – everyone with kids attested to that change you can’t plan for: your kids personality and your parent mindset
We didn’t have problems conceiving naturally (took ~1 year), so my view is probably biased, but I would get some of your must do travel bucket list done before having them – with the caveat of doing it within your coast FI trajectory. We are multi lingual and immigrated to Australia with most family in Europe. Just for staying close to family our kids have to travel. But our first born doesn’t cope well with the disruption at all. Until about 2 she would not sleep the first 2-3 nights in new surroundings. E.g. wake up about every hour. We still took her on camping road trips but had to book hotels in between because I was too shattered and needed some sound proof walls to get a sleeping rhythm going again. On another road trip we hardly saw any of the places because we were too tired after getting to each destination 🙂 when Bub 2 came along we finally learned and took it slower, e.g. no more road trips and camping. But we have a school that’s really generous with taking the kids out. After extended holidays we have now learned another lesson that they are really bad for our eldest mental health. She is 9 and fine on the trip. But after the last trip we went to a psychiatrist because her independence had regressed so much…
Being from Australia I don’t know how hard it is to get a mortgage in the US with a part time salary nor the cost of switching properties. Here it’s really expensive to switch due to government taxes. Having to sell a property to buy a different one in a flat market here would be pretty disastrous for net worth. And you can always do another round of (near) full time work once you know what you want to buy where.
Hey there I haven’t read through all the comments but here are my thoughts. StAy in your current rental as it’s meeting so many of your needs but buy at least a five acre property you can reasonably drive to within two hours. This can be a project property you can work on while you are starting your family and will allow you to connect with that community while your still earning a good income. Put in fruit trees and sort out a water supply. When it comes to building hopefully you would have talked to enough locals to have good recommendations on how to go about it. You can also holiday there with your families if you put in some comforts such as a toilet / shower and picnic facilities. Since you have such good access to produce right now I wouldn’t worry about putting in a massive vege patch just yet but if you need it to save money can you rent a small plot of land near your apartment in a community garden ? As for having a family – every couples journey is unique and it may be worth just being patient with yourselves and focus on each pregnancy at a time. I think age 5 is a good age for international travel for your youngest. We’ve taken our kids all over the world. All the best !
Job well done with your finances! You are in a great position to have options, it is exciting. I agree with not buying a house to live in if you do not love the area. Unless you love it or you plan to buy it as a rental, I would wait. Would your jobs allow hybrid telework? I wonder if you could rent a place with acreage further out of the city, but along the Amtrak or VRE so you could commute a few days? It would give you a chance to test run a more rural lifestyle. I agree with advice about kids. I’m a mom and kids will change your life decisions in many ways big and small. If you stay where you are – which sounds lovely – I would not worry about staring a family in a small place, lots of people do. Kids need less space and things than you think.
I’m going to disagree here and say take a leave and do a ton of traveling together for awhile prior to having kids. You think you will travel after you have kids but your child just might not have the personality for it and you may not have the bandwidth for traveling with child(ren).
I actually think that doing some proper travelling now, while they are unencumbered actually makes the most sense. If they somehow – I realise this is hardly the work of a moment- take some meaningful time away from their careers, now, while they are young and want to explore and have the wherewithal to do so, they will be far better-placed to decide what kind of travelling would work when children arrive.
Don’t buy a house because you think you ”should”. Figure out where your best chance of good employment is weighed up against being close to family and friends, and where you could feasibly carve out the quieter, more rural life you want, and after your first stint of serious travelling, go there. Once babies arrive, things get busy, very busy and quite exhausting. It’s a huge, wonderful thing, but do as much of the other stuff as possible first, or at least have it properly in the works BEFORE adding your first home-made new human to the mix!
There were a lot of comments. I didn’t read them all. Check out TheMomtrotter on Instagram and blog. She has lots of write-ups about buying an RV, moving into an RV as the home, homeschooling their kid and his cousins, and also traveling around the world. She will probably a lot of answers for the questions above.
Check out the Del Ray section of Alexandria. Totally walkable suburb with easy transportation into DC. It’s a great compromise between the city and the suburbs.
Amazing! Twenty- nine and thinking about near retirement in ten years, thinking about children and years of travel. It’s good to dream before the real world comes a knocking. I agree with others. If you are serious, have a child or two and then reassess your goals to a realistic level.
I love your exuberance and all the possibilities available to you. Since your direction is kind of fuzzy, I’d recommend taking a deep dive into frugality for the next year, ala Frugalwoods. More money will provide you with more options once your direction comes into focus. There simply isn’t an easier time to do radical savings than when you’re young, double income, and in a rent controlled apartment (wow!!!). You’ve got a ton of free stuff to do in DC. Not to mention, there’s got to be a lot of “treasure hunting” at local thrift stores. After a year, take stock and enjoy your next step!
Late to the party, but I would absolutely NOT buy a house right now given the uncertainty of your future. No reason to pay today’s high interest rates if you don’t know where you’re going to be in 5 years.
Instead, I would sock away as much as possible into savings and maybe when the time is right, you’ll have enough cash to buy a home in the country and not even need to bother with a mortgage. 🙂
Loved reading about all the exciting things you two are doing in your lives. Best wishes for whatever comes next!
I’m a few years ahead of where you are (35, had my first at 30, then 34, and now pregnant) and remember this cross road. We opted not to buy and invested most of our down payment instead. I’m glad because it gave us a lot of flexibility AND allowed us to focus on our careers and child rearing instead of home maintenance. This is especially true for you since you’re not sure where you want to be long term. Also, when you live further from family, a lot of your vacation time and travel budget can be exhausted to travel “home”. My corporate America PTO suddenly looked much more generous when I was able to use it only for bucket list trips instead of visiting relatives.
Hi Rebecca! We are the same age but sort of living different lives but with many of the same goals so.. I’m just going to toss in my 2 cents. My husband and I have 3 kids ages 6, 2,5, and 5 months (we started young which is very counter cultural especially in the frugal world) and I just want to say it was the best thing in the whole world. I’ve watched so many friends wait to have kids and struggle with fertility and age out of being able to have the family they want and it’s really sad. I think if having a family is a priority, do it now. There are so many ways to still be frugal and still attain many of your goals while having kids. It changes your life, as many have noted, and I’ve found it helped sharpen my focus on what I really wanted and cared about. I personally wanted to be a young, energetic parent and down the line, a young, energetic grandparent. Which if I had kids late and then my kids did the same I may be too old to truly enjoy my grandkids. Morbid. But. Also something to think about in the way future. I guess what I’m trying to say is it sounds like you really want to have kids but are maybe afraid to acknowledge it because it’s not “frugal”. So if that’s the case, start your family. Nothing in life is a bigger blessing than family IMO. Not money. Not travel. Not early retirement. Hope everyone’s comments have nuggets you can use to help shape whatever decisions you make going forward. Best of luck!
On the travel with kids front, my parents traveled for 15 months with my sister and I when I was 9 and she was 13 in 1996. We also lived abroad when I was 5. We were homeschooled on the longer trip and went to local schools on the earlier trip. My husband and I plan to do something similar once we have kids, but are planning to hold off until our kids are at least 8 or 9. While the time l spent living abroad when I was 5 was probably formative, I barely remember it. At 9 I can remember a lot of the longer trip we went on. One thing to consider with your house if you are planning a longer trip is that you can trade houses with people. On our 15-month trip, we spent each month in a different country and traded houses with a local family for each.
I would also strongly recommend having the planned children first (this is often easier said than done, not every couple gets pregnant when they want to) and then see how life goes with the child. Every child is different – is it an easy birth, a healthy child, is everything going great, or are there perhaps completely unexpected costs? Does the child need special help or treatments that are more readily available near a big city than in a rural setting? How does the child react to a change of location – not every child likes to travel. Some need a familiar environment in the early years and don’t adjust well to change until later.
There is no greater adventure with more unpredictability than having a baby. It’s often thought of as a plan – but that plan usually dissolves into thin air very quickly.
What an exciting time of life to be in! Have you and your partner done any longer trips yet? Two or three weeks? My partner and I just got back from a three week trip to Thailand. It’s the first trip over 12 days we have done. We saved up PTO vacation days. By three weeks we were ready to come home! I always envisioned long term travel in my life but the trip to Thailand was a really great experience to learn that 2-3 weeks of travel at a time can fit into a full time career lifestyle, provide a ton of adventure and not require you to throw a more traditional life, local community, career goals out the window. Plus, it can be done during kids summer breaks.
also, I will cast another vote for close in suburbs. I always considered myself a city girl until I met my now fiancé. When we met he already owned a home in a suburb of Portland or, about 15 mins from the city. I have lived there now for 2 years and honestly love it. It’s so easy to drive into the city or take the train and our suburb is very walkable with a ton of cool restaurants, parks and things to do. I actually drive less now than I did when I was living in Portland.
The one downside is that there isn’t as a cool of a scene in the burbs. No hole in the wall music venues or trendy cocktail spots but at 34 and getting ready to start a family… I’m not really looking for cool anymore. Ha!
Tldr; consider the gray areas around all your plans. Nothing is black and white, either/or. You’ll find the perfect combo of what works best for you!
Don’t buy right now. Can’t see why you would, and this is from a woman who owns shares in more than a dozen properties! But I knew where I wanted to live and I love houses and gardens, not travel.
If you want kids, don’t wait too long. One of my nephews and his wife had trouble getting pregnant in their early thirties. She doesn’t want to try for a second child after turning 35 so if they get pregnant this year they have two kids, otherwise only one. One of my nieces has a wonderful, but challenging, energetic, first child. She is also heading toward 35 years of age, but can’t imagine having a second child until the first one gets into school full time. Yet she knows she’d like to have at least two kids. If you are thinking about having kids plural, it’s wise to start by age 30.
And as someone else pointed out, starting younger means having an empty nest while you are relatively young. My twin sister had her first child at age 23, and her second at age 28. By her late forties her kids had flown the nest! This also means that she is a young grandma at 57 to a four year old grandson. And she is having a lot of fun traveling now!
You’ve both been at your jobs for a short time so I agree with your desire to stay put for a few years, especially if your jobs have good parenting leave policies (if not, perhaps you could gently start to job search?).
You are doing a great job, and congratulations!
If you want to have multiple kids, I’d say, start now! I got married at 32, and thought I’d have my first kid at 33 and then second 35 and be all set!
In reality…it took me 2 years to get pregnant with the first which I had at 35, then 1.5 years to get pregnant with the second. I’ll be having my second kid at 38 if all goes well, and…now I want a third but it may be harder at 40. So much can happen and you can quickly find yourself way off the timeline you thought you’d have. Just what I would tell my younger self! Best of luck!!
I am always dismayed how future taxes and health insurance are ignored when calculating how much retired-self needs. Those are built into W-2 income, but will come out of your pocket after retirement.
I went through a similar decision process when I moved out of DC to the suburbs with my husband and 2 young kids. My husband wanted a rural area so we compromised and got a house on a cul-de-sac on .6 acres that backs into a 15-mile hiking trail. The neighborhood is full of nature but still under 10 minutes from everything we need. Also, some homes have basement rental units that you could try out before buying, or rent out for additional income if you buy a place like that. Look in the Rockville/North Potomac/Gaithersburg area. There are a lot of homes with a rural feel that are not remote.
One additional note on DC vs the suburbs- DC has free pre-k, so if you move to the suburbs you’ll add another $20k-$25k in childcare costs per kid for ages 3-5. It’s one big reason I had planned to move after preschool.
Regarding the commute- it is doable for me because I have a hybrid work schedule and go in 2 days per week. School pickup is tough if you’re coming from the city in rush hour traffic every day.
Hej Rebecca and Robert!
You seem like a lovely couple with lots of dreams and good things going on!
I have some advice regarding traveling, and that is, if you have some specific more adventurous trips you would like to take, do them now before having a baby. In some cases having a child really takes a toll on the female body. I am really happy that I fulfilled many of my travel dreams for example white water rafting in Iceland and sightseeing by the Victoria Falls in Zambia before having a baby, since we had a rough road to fertility and a number of miscarriages, and now 4 years later after having our baby boy finally, my body does not have the energy and stamina it once did, and I am not sure if it will recover either. For a number of my girl friends it is the same, you might not regain the health and fitness level you once had, so do take the opportunity to have your dream trips when you can.