A Post About Money

(oh man, this post is so long!)

It's important to understand something.  The main reason I ever even thought about applying for a job in the first place was because of money.  It's also, I'd say, my number one reason for accepting that job too.

What really (really) bothers me in this whole job-weighing process was how my Dad reacted to that idea - essentially telling me that I was just making excuses, that we only would need to "choose what really mattered" and we'd be fine.  Frank arithmetic didn't seem to make any difference at all to him and, to be honest, those hard-line conversations I've had with him, trying to just get him to give me a little support (anything!  anything at all!) have just shattered me.  And really, it drove me up a wall to try and explain how our city's housing market would essentially mean we'd be paying, minimum, about 50% of Paul's take home pay just to have a place to live....to a person who hasn't had to pay rent, a mortgage, utilities, or health insurance since he was 24.    I mean... I'm sorry but, let's think about that a little bit.

All of that backstory, I think, is why I really wanted to focus on "Wealth" this month, too.  I knew the facts, but I couldn't help but have a niggling little voice saying, "What if you're just imagining things?  What if you really don't have to work?  Could you make it happen?  Could you?"  And this was the first month so far that we'd have some kind of slightly more stable income and spending to try and get a real snapshot with.  With one week left to go, here's what I've been able to, as objectively as I can be, figure out:

We have some absolutely necessary costs that are as low as we have been able to humanly control:

Rent/Mortgage

To rent a small, two-bedroom apartment on the outskirts of town, the cheapest one we found has cost us $1030/mo.  Starting in November, the price will be raised to $1270/mo.

For our mortgage, I have done everything possible to get it as low as we could.  We compromised a lot of our must-haves in our house search to get the price down into the 180's, I shopped the crap out of homeowner's insurance policies, we obsessively hovered over the mortgage rate market to lock in as low as we could possibly go (ended up at 3.875%), we saved around 45% out of our combined Danish salaries last year to be able to put down 20% and not have to pay an additional PMI (as well as put the rest into a make-up-for-lost-years-of-retirement-saving fund).  My goal, from the start, was to get that mortgage as close to or below $1000 as I could.  I think we'll end up somewhere around $1100/mo for a 3-bedroom house in a market where comparable houses in the same neighborhood rent for around $1400-1500/mo.

So, let's put housing cost at $1100 for now - and that's a huge victory.

Utilities

In our little, two-bedroom apartment our electricity bill during the summer was $150/mo.  Last month it was $90.  Obviously, it's all because of the A/C.  To try and keep costs down, we kept our thermostat religiously at 78-80 degrees during the day and 75-76 at night during the summer.  It was hard and hot and uncomfortable.  And for that...it cost us $150/mo.  Insane.

Water here has also been more than I expected at around $70-80/mo.

Internet, again, is more expensive than we were guessing it would be (in Europe, it was about $30/mo), coming in at $60/mo for the discounted package we get through living in this apartment complex.  We don't have TV or a landline.

Our cell phones have no data and the lowest number of minutes allowable, are the free non-smart variety, and cost us around $75/mo.

The range then (seasonal), I'd say will be about $275-365/mo.  What is tricky is that we don't know what the difference will be in a house vs. this apartment.  All bets are that it's going to be more because there will be more space to have to cool/heat and we won't get an internet discount.

Insurance

We have one 8-year-old car right now, paid off.  It costs us $75/mo to insure.  (And let's just throw in that, right now, we gas up at minimum about once a week at the cost of around $20.  So, conservatively, $80/mo for gas.)

Health insurance is rough.  Right now, we're on the cheapest possible plan we could find which costs us, as a family. about $200/mo in premiums.  From experience, this means that we pay around $90 minimum for every basic doctor's office visit we make, out of pocket.  We had to get medicine for Hadrian one time for an ear infection and eczema that cost about $30.  I honestly don't know how to project costs for this than except to say that it's definitely $200/mo if we're lucky and, if not, could go up to $350 or more pretty easily in a bad month.  Deductible is $3000 and after that we'd have to pay 20% of all costs.   The plan comes with a health savings account and we can put in $75/mo pre-tax and have that matched by the university.  So, that's another cost/future-savings(?) to add. Health insurance is complicated and awful in America.

If we chose the next best plan available to us, it would cost $540/mo in premiums and we'd only really have $30-$500 (depending) co-pays.  But, on one income, we simply can't afford $540/mo, as you will see, as so have had to kind of gamble that we'll all stay relatively healthy and have no emergencies.

So, for health insurance, let's be super optimistic and say that it could range from $275-$475/mo, staying on the "cheaper" (gambling) plan, barring any crazy medical emergency.

Retirement

Paul's university automatically takes out 6% of his salary for retirement and matches another 10%.  Let's just assume that is the only retirement savings we do.  That ends up being $232.50/mo pre-tax.



Alright, so then there are other necessary costs that are a tiny bit flexible and hard to pin down, like:

Groceries

Yep, kind of need to eat.

Our habit with food has, from the start of our marriage, been to plan meals for one week and go to the store one time on the weekend.  Planning meals generally means we line out between 5-6 homemade, from-scratch dinners and buy some oatmeal for breakfast.  Lunches, for Paul, mean a loaf of bread (that he sometimes will bake himself on Sunday) and some deli meat and cheese and an apple; for me, they're dinner leftovers.  Even though Hadrian, in general, eats the things we eat for dinner as finger-food practice, we supplement it with a little bit of pureed vegetables and get him some pureed fruit and multi-grain cereal for the mornings.

I remember, in Oregon, our grocery bill was consistently between $50-75 a week.  Here, for the life of me, I have never been able to get it below $95.  Usually it's closer to $110.  Sure, some of that is because we're still buying things like spices, which we don't have anymore because of our move and they're expensive.  And sometimes it's a $20 box of diapers that puts us over.  But still, it seems so expensive to me!

So, let's just say...let's be realistic here... $500/mo minimum for all groceries and baby/household goods like paper towels, detergent, diapers, all that kind of thing.


Clothes? Furniture? Basic Household Repairs/items? Literally anything else other than food?

I have always considered anything outside of housing, utilities, insurance, and food to pretty much be a luxury cost.  I've never ever budgeted a certain amount each month for clothing.  In Germany, I had 100 euro lined out for anything I deemed "superfluous" - this included items like socks.  So, for the sake of fun, let's not even make a budget line for this.

Let's do it like we always have done it and say, "We'll save whatever we can and when we need to buy a shirt, we'll take it out of that chunk."

So, for our purposes here - $0

Savings

Pretty much see the category above.


SO, right there, and I hope that I've made it clear that we're being incredibly conservative here, that comes to about

$2382.50/mo - $2657.50/mo (maybe more after we move into the larger house).   Just to live and eat and never buy anything else at all 


Now, for income, considering that health insurance premiums, the health savings account amount, and retirement are taken out before taxes, here's what the monthly income currently is for us, after taxes, if we only had one income to work with:

$3206/mo


SO, doing the math here, that leaves us with around $500-800/mo leftover.

Sounds okay, right?

Welp.  Sure.  Until I throw in the real kicker that there's only going to be a salary coming in for 10 out of 12 months of the year.  So, to make sure that we have $3000/mo to live on in the summer, we'll need to save about $600/mo all the other months of the year.

Are you following me here?  That means that we'll have, just doing a conservative estimate, from $-100 to $300 a month (yes, I'm saying there's a good chance we'd actually be going in the red just to have a house and food) to use for...

* Any savings at all for anything
* Any home or car repairs
* Anything to buy other than food
* Any furniture or appliances (which, we need all of pretty much)
* I was going to say "any entertainment" but, you know, that's just silly to even think about at this point.

Thank every banking god that we have no student loans!

...

I feel like I can't be more clear?  I very openly welcome any possible way to come to a different conclusion here.  These are just the facts.

Now, there's some help available here - but it comes at a cost (hah...).  For instance, Paul has the option to teach overtime, which gives him $550 extra per month - enough to save to cover the summer.  Also, it's apparently really grueling, but he could also volunteer to teach during the summer (lecturing 5 hrs/day) and earn a couple thousand there too.  However, if he did that, it would completely take out any research time he'd have during the field season, which is necessary to use (unpaid, I'll say) to be able to write the articles necessary to get tenure.  So it's a really hard decision to make.  Either way, teaching overtime means that he takes on 10-12 hour days (maybe more in the summer).

I...just...I can't let that happen.  All to just bump us up enough to save a couple hundred dollars a year and buy a pair of shoes now and then.

If I could do anything to save his time...to find a way to get him home before 7pm, to have time to be a Dad every day.  I'll do it.  And if doing that also means that we can actually save money and buy a couch and afford a better health insurance plan and occasionally get our teeth cleaned and maybe even someday build a garden or go on a family vacation?  All the better.

I'm tired of feeling ashamed (deep down somewhere in my soul, I internalized it) that I can get a good job that helps my family.  And I'm way more tired of trying to convince the world (which, honestly, probably doesn't care) and myself and my Dad, dag nabbit, that what I'm doing isn't selfish.  That there really isn't virtue in pointlessly suffering or endangering yourself and your family.

Aaaaaand we're veering off into emotional territory here.  Welp, that's okay because chances are that absolutely no one but me will ever everrrr read this, especially this far into such a boring personal finance novel!

But, it was a project to figure this out this month - to help me make a decision.  In five years, when Paul get's tenure and a raise, we can reassess.  But for now, this is what it is.

And, I'll say it again, but man I wish I could read this kind of thing about, like, everyone else.  It'd be so helpful and illuminating!