The Cost of My Marriage

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any.  Dave is from Ontario and is working towards his CGA certification.

My wife and I had an interesting conversation recently – she understands that I am a somewhat “quirky” (how I like to think about it) person and she was wondering what my life would be like if I were single.  I described a very tongue–in-cheek fantasy world initially, which, although amusing (to me) was probably not all that realistic.

In reality, I would probably turn somewhat hermit-like.  My goal would move from a more conventional lifestyle which is currently dictated in order to keep my marriage together, to an extremely independent way of life that is very non-conventional.

Rather than my current stream of paying off a significant mortgage, and investing for retirement after that, I probably wouldn’t have taken on a mortgage in the first place.  Living by myself, I think I could tolerate significantly less enjoyable conditions than would be tolerated by my spouse (I once rented a room in Toronto in a house with about a dozen other people which turned out to be very roach infested, and overall very disgusting) in order to save enough to pay cash for a place of my own.

Instead of a house in town, I would prefer to be somewhere where I could grow a portion of my own food for part of the year, which isn’t possible right now with my 10’ x 10’ backyard area.  I would build a tiny house and find a reasonably priced plot of land to live on, which would reduce my normal housing costs as well as a purchase cost significantly over what I currently pay.

I think I could support this lifestyle on very little (less than $10,000 per year) so I would be able to quit full-time work several years sooner than I currently am planning (at 45).  For leisure, I’m not sure what I’d do – I might decide to work a few months of the year to be able to afford to go South to golf or travel or learn new skills (or whatever I felt like doing).

Is this an ideal life?  Not really – I love my wife, which is why I’ve compromised these very non-conventional plans to a point where both of us are happy with the way we’re living (I hope).  It would be ideal if I were single at this point.  I figure I have to work full-time an extra 5-7 years to retire with a more conventional retirement (although much earlier).  To me, this trade off is worth it – I’m generally surprised my wife tolerates what could be perceived as weirdness to the extent she does, but as I write this we’ve been married for 800 days.

Have you made any significant compromises in your marriage around spending and retirement?  How would your life be different if you were single (or in the case of single people, married)?


Unexpected Dentistry

This is a guest post by Robert, who lives in Calgary and works as a financial adviser. He is married, has three kids and plans to retire at age 35.  Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.

I have an irrational fear of dentists. I told someone at work about it, and she almost gagged at the mere thought of a dentist, so I’m not alone. A few weeks ago, one of my teeth started bothering me. But because of my desire to avoid dentist offices, I ignored it. After a few days, the gum started swelling and then the side of my jaw became swollen. I couldn’t postpone it any longer.

The good news is that I found a nice (but expensive) dentist who fixed me up temporarily. The bad news was: root canal. Ugh. I took a course of anti-biotics and scheduled in the root canal for a few weeks later. The whole thing went fine, but the bill was almost $1500. This is why I’m very glad to still have some benefits through work. I was fortunate to have been offered a $1500 health spending account (for my entire family), which will all be used up paying for this root canal.

But what happens when I’m no longer working? In fact, I found out after the root canal was done that this isn’t the end of it. Now I need a crown to protect what’s left of the tooth. That’s going to set me back at least $1000 and I no longer have benefits to draw on. Not only that, but $1000 is a significant departure from my regular monthly budget of around $3500. When I’m retired and living on a fixed income, I will no longer be able to dip into excess earnings to cover unexpected expenses.

There are two possibilities to deal with unexpected expenses like this. One is to have an emergency reserve. Hopefully I won’t have a root canal each year, but last year it was a repair to my car and the year before it was repairs to my fridge. It didn’t bother me at the time, but it seems that I can always count on $1000 – $2000  worth of “unexpected” expenses. Having at least this much cash accumulating over the year in a savings account would be the best solution. Alternatively, having a line of credit available that could be paid back from monthly savings, as long as it was used for nothing but emergency would also be acceptable. If neither of these are in place, it would mean selling investments which, depending on the economic environment, is likely to permanently reduce my ability to produce monthly income.

Where do you find unexpected expenses come from? How much do you normally need in a year to cover them? Where does the money come from?

The 20 Month Dash

As it currently stands I’m about 2 years from paying off my mortgage.  Yet because that date is so close to the end of 2012, I looked into the difference to finish it off at the end of 2012 instead of early 2013.  Total cost was about $5500.  Now given that is about 20 months from now I think I can manage to find that extra money in that time frame.

So that is what I’m going to do and try and have my mortgage completely paid off by Dec 31, 2012.  Yes, I’m going to try and pay off a $68,000 debt in just 20 months.  It isn’t impossible, but I know it will have some challenges as I’m cutting into my usual margin of error.  So to get that extra $5500 paid off I’m going to have to either divert money from other items or just earn more.  Yet the amount is still reasonable since it works out to an extra $275/month.

To get that done, I took a recent minor raise and dumped that into my mortgage payment for about $75/month (or $1500 in total).   Then I am taking some extra cash from our investing accounts and moving it over as well for another $750.  So without too much effort I’m already 40% towards that extra $5500 being paid off.

The rest of the extra money will now have to come from either my wife or my businesses earning more or savings on other items.  While not impossible, it will provide some motivation for the next year and a half to get creative on what we do.

Now an obvious question on this plan would be: why bother?  I’m going to be done in a few more months, why bother pushing it.  The reason in this case is simple: I like a challenge.  Saving for a long period of time is well, boring as hell, so you have to get creative on making the journey interesting at times.  So this is why I think we get these odd experiments like the 100 mile diet, owning just 100 things or paying off large amounts of debt in short time frames.  You won’t know what you can do unless you push yourself.

So what is your thought on the 20 month dash? Pointless or interesting?  Would you ever do something similar and push yourself further than you think you can go?