A weekly thread to discuss financial matters - from personal all the way up to global.
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Notes -
How do you balance FIRE with not wanting to be a miserable tightwad? Most specifically interested in if anyone has thoughts on that in context of marriage + children + income gap (let's say 4 me:1 her). A particular potential (pun intended) Mrs. Lagrangian likes travel and activities more than I do and I have trouble thinking about that, especially in context of the income asymmetry.
I'm another non-miserable tightwad. Most things worth doing are worth doing for less than $5k. That includes travel and countless activities. Diminishing returns, ect.
With a romantic partner, I'd figure out if she actually likes to travel or if she likes to take Instagram selfies in infinity pools. Because flying somewhere interesting and spending two weeks at carefully chosen Airbnbs shouldn't really set back your FIRE time line all that much, at least not if you do it "only" twice a year.
Same with "activities". Even skiing can be done on many days with top tier equipment for $5k - unless she likes telling people about the awesome ski-in ski-out hotel.
There are, of course, things not worth doing for less than $5k. Check if she has aspirations only possible with access to your money. Polo, general aviation, yachting, motor sport, ...
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I've achieved FIRE with kids due to hitting startup lottery and relocating to a mid COL country. Geographic arbitrage is a huge part of making it work realistically
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I am just a non-miserable tightwad. There's very little that costs money that I want and yet do not have. Most of my big spending is A) The house, and B) Nice groceries (Which is just not that large).
For a single person, it's really not complicated. You identify what you care about, and what those things cost, and compare the cost benefit of them being part of your life vs the additional years you need to work to afford those drinks/that boat/the next step up the housing ladder.
Where it gets complicated is when your working partner comes into it. Ultimately, you really need to understand your wife here. Does she support you retiring early? If yes, does she actually, or will she get resentful about it? Will it make a difference if you're pursuing a hobby seriously or taking care of the kids rather than getting high and playing games all day? Does she expect you to support the family entirely when kids come into the picture? If so, is that gonna be just while she's on maternity leave, or is there an unspoken expectation that she'll transition to full time caregiver while you win bread? You really need a firm understanding of how she feels about your money vs our money vs her money, and how much she enjoys work, if you're even gonna consider stepping away.
I am married, semi-fired, and expecting kids in the next few years, so I've got some experience here. My wife is very much uncommonly devoted to separate finances and does not feel entitled to my money. The flip side of this, is despite being unemployed, I do still pay more than 50% of the household expenses. Additionally, we are both naturally quite frugal, so there's few 50-50 travel expenses that I'd balk at. It helps that her limiting factor on travel is available days off, while mine is money, so there's not a lot of pressure to go on more trips. On top of that, I do a lot of household labor, and expect to be primary caregiver a sizable part of the time when kids get added to the picture.
In your case, with the massive income disparity, and your wife enjoying spending more than you, I'd just add half a million to your fire number (Unless it's already so large you'd be able to afford her quitting and traveling as much as you want). It's just gonna make sense for you to do more earning for the family with your large earning capacity.
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Ideally, I imagine you and your (to be) wife have to be on the same page in terms of goals. And if you're so entirely off base from each other, it's probably not a good idea to get entangled legally with that person. If you're a hermit that wants to live in spartan conditions, while your wife longs for instagrammable lifestyle, it was never bound to work. But if you're a stingy nerd that has a wardrobe of 5 identical t shirts and doesn't like leaving the house, while your wife prefers a hike on the weekends and 2 international trips a year, it would definitely be possible to find middle ground (because her expectations are pretty reasonable and you can definitely afford it). And for the income gap, how do you plan to divide up your finances once married if that's such a concern for you? I'm not married myself, but I know some couples with disproportionate income gaps and the usual set up is that her money is her money and your money is collective money. And it makes sense when one person is making $700k and the other is making $40k. Your income gap wouldn't be as dramatic, but I imagine this informal arrangement would still hold up in some form - expect to pay more for things, even for stuff you wouldn't buy yourself if you were on your own.
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If you're getting married and it's causing you to ask this question, you can forget about FIRE dude. Sorry. There are women out there who are the kind of savers who would be amenable to that lifestyle, but it's not likely you got one.
Turns out my wife likes saving money for the things it can buy. I like saving money so the pile can eventually get big enough to earn its own money. I could say that her financial goals are short-sighted, but I think the truth is I'm a homebody who doesn't need anything but an internet connection to be content. My goals to her seem intangible and optimistic. We have to manage around those differences.
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Yeah, everyone likes travelling on someone else's dime.
I donno man, I was gonna regurgitate my life story because it's late and I'm a few in, but instead I'll leave at this. If you plan on having kids with this woman, you can basically forget everything. And honestly, kids are way better than FIRE.
I had aspirations to FIRE once. Now I can't imagine a more lonely and desolate existence if it costs me my kids who absolutely make that impossible.
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My plan is to aim for 85% of my income. In an "expensive" year, I usually spend about 50%, so it seems like a decent aim. If I don't use it all, I'll leave it to my partner.
wdym aim for 85%? Live on 85% of your income? and for that matter "leave it to my partner"?
I'll probably retire when I can manage a consistent inflation-adjusted constant annual withdrawal rate that's equal to 85% of my income.
As for leave it to my partner - she's probably going to outlive me, so I'm trying to make sure I have enough for her to be taken care of if something happens.
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We didn't have an income gap but that would have been irrelevant because it was all our money.
We were mostly on the same page with child costs. I am the cheap one but I wasn't going to deny my kid art or music lessons when she wanted them even though my husband could have covered the art and I could have covered the music. My husband would have let her redo her wardrobe at every whim through teenage years but was fine when I said no, she needed to make do and augment. Or get a job.
We were not on the same page with saving until we had several years of marriage under our belts. My husband would joke when we got married we both thought we were broke. Me because I only had a few thousand in savings (had sped run through paying off student loans) and him because he couldn't get the last few cents from his bank acct through the ATM (anything he could get out he spent on Magic cards or computer games). So for every "frivolous" thing he wanted we would save an equal amount. Did that until he realized saving was beneficial, and there was enough stashed to feel like "real money" to him. It helped that we held off on kids for the first decade of marriage, so even though I am a tightwad the dink life is pretty sweet.
Why are you thinking about income asymmetry? Do you keep separate finances?
These seem in contradiction to me. How can you consider separately whether to cover things if it's all "your" [combined] money?
It's hard not to at a FAANG vs good-for-not-being-FAANG ratio. Less glibly, because when I consider the tradeoff of being single, or at least not married, vs a marriage in which I have less control over spending, and much more to spend it on (square footage, children, travel), it is a hard sell. I feel a strong need to be in as much control as possible of how much/why the FIRE timeline slips. More control, easier sell. Five years easily, more likely ten, especially if the goal is to be so FI as to remain that way in the event of divorce.
Largely a hypothetical consideration. There's a candidate in mind, but it's early. I'd certainly want to, and a strong prenup to boot.
I meant in terms of skills. We didn't need to pay for classes. We already had the knowledge in-house.
This says to me there are other things going on.
In terms of money, most of our retirement and investments are from "my" money/efforts. (I say this because we could have had a lot more money if he hadn't spent as much as he did.) Yet, it was his retirement we were planning. If I had been planning for a divorce no way could we (I) have made these choices. I don't think I would have been willing to pay for the retirement of someone I might divorce. But I would happily do it for someone I loved.
I'd be concerned about the travel example. What are your plans for when you retire? If you're planning to travel then, why not front load some of those costs rather than saving enough money to do it all later? If you're not planning to travel, marrying someone who wants to might be a sticking point.
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You are supposed to pick a standard of living and develop your long-term budget accordingly. The subreddit's standard terms are "leanFIRE" for being a "miserable tightwad" and "fatFIRE" or "chubbyFIRE" for living large.
chubbyFIRE then I suppose, maybe flirting with FAT. HCOL. I think 3M would maintain my current life, 5M with kids, 7M with kids + buffer to pay for a divorce.
This still doesn't answer how to navigate the "how chubby" question with a partner. It's not like we haven't talked about it, it's just hard to really get more than vibes, hypotheticals, rough spreadsheet budgets.
Don't just think, run the numbers. Trying to plan on vibes would make me itchy. Forecasting out your current budget and adding health insurance costs and your other known early retirement expenses would give you good numbers to work with. Talking about exactly how many years of work are needed to pay for exactly what kind of lifestyle is really helpful.
Your partner may agree that 10 more years of work to pay for a country club membership every year isn't a good trade off. You may agree that 5 more years of work for a yearly trip to do a walking tour in Ireland is a good trade off.
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In the US, the Bureau of Labor Statistics conducts the Consumer Expenditure Survey, which can be used as the framework for a very detailed budget. For example, the table "Cross-tabulated—Size of consumer unit by income before taxes—Two people—2023–2024" provides the following numbers, broken down into dozens of categories and subcategories.
Additionally, the IRS and the DOJ collaborate on estimating the cost of housing and utilities across the country on a county-by-county basis.
Interesting, but not super useful for me specifically. HCOL + want excellent schools + FAANG puts me well outside those buckets.
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