So I have this fantasy. I picture myself the embodiment of financial discipline. I pack our lunches everyday, I don’t buy clothes, I manage our household expenses with precision. I in-source, I frugalize, I scrimp. And at the end of the month I have ample extra cash to which I apply dutifully to our debt. I maintain this discipline effortlessly and without much noticeable disruption to our life and then reveal to my husband a short time later – ta da! I did it! I just tried a little harder, made extra payments that you somehow didn’t notice and guess what? WE ARE NOW DEBT FREE!
I’m going to be honest that there have been moments (years, really) where I truly thought “If I just optimize our spending a little better we can get there…”
And then I woke up.
The reality for us is cutting out lattes and cooking at home simply isn’t going to get us there. Yes being more disciplined with our budget helps, but the truth is our fixed costs are way too high compared to our income. Which is what launched us to take a good honest look at our fixed expenses in the first place and make some bigger lifestyle decisions.
Lifestyle Change #1: Housing
We live in a really expensive part of the country. Bizarrely, our rent is considered reasonable because we have stayed in the same rent controlled apartment for 3 years, but it’s still way, way high by any normal standards. Further, we will outgrow our apartment at some point if we want to expand our family. So our first change: move to my husband’s childhood home.
We are incredibly fortunate that this is even an option. My husband’s dad lives in the city (where we live and work) in a paid off home that is too big for him at this life stage. He very generously has offered to let us live there for a few years to save money. In exchange, we will rent him a smaller 1-bedroom elsewhere in the city at a cost that is lower than our current rent. There are a TON of questions yet to be answered with this plan (exactly how long will we stay? what sort of improvements will we make to his home while we’re there? how does us living in this home affect my husband’s sisters – Lady Red and Lady Gold? and so forth). But as of today, the plan is to move there next summer with the goal of saving $1k on rent a month. Boom. That’s the kind of expense slashing we need.
Lifestyle Change #2: Childcare
As a bonus to moving to my father-in-law’s home, there is a magical co-operative nursery school up the street that we would love our daughter to attend. My husband and his sisters went to this school as children and Lady Red’s children go there now. Further, because it’s a co-operative model, it is presumably more affordable than our current childcare situation. I say “presumably” because this is, yet again, a plan that is not fully formed. At face value, the preschool is much cheaper every month than the nanny share we are part of now. But the school is only a few hours a day, so we will still need childcare for the rest of the work day. I’m hoping that we can once again share childcare with another family for the non-preschool hours (although it makes me weep to think about leaving our current childcare provider – she will simply be too far away to make it logistically possible) and save money on this large fixed expense, but honestly I’m prepared for this to be cost-neutral. Ha. I guess I shouldn’t list this as an optimization quite yet, but one can hope. It will certainly be a lifestyle change.
Lifestyle Change #3: Side Hustle
Our three biggest expenses are housing, childcare and our loan payment. As I’ve detailed above, we are working to make those costs lower and of course our loan payment isn’t going anywhere. My husband works in sales and has varying commission from month to month, but in general, our fixed expenses make up about 80% of our net income each month. You don’t have to be a math wiz to know that isn’t great. So what does that mean? We need to make more money.
I’ve wondered for some time what would be a good side hustle for me. One that didn’t feel like it added stress to my life. One that wasn’t more of what I do during the day. One that didn’t feel like it took a ton of extra time away from my daughter that I already feel I don’t see enough. And that’s when Lady Red offered a perfect solution: work on some organizing projects in her home that she had previously been paying an external professional organizer to do. I loved it! Get to spend time with family and get to do something I already like to do. Further, I’m hoping working on some projects with Lady Red will give me practice so that maybe one day I can make a more formalized side hustle out of professional organizing. This is all new so we shall see – stay tuned.
So those are the lifestyle changes we’re trying to work toward in the next 12 months. It can’t happen overnight and it feels intimidating, but I know these changes can and will serve us better going forward. More deep breaths and more steps forward.