The first step I like to take when starting a new goal is to separate it out into smaller, more manageable goals. My big goal is to save up enough money to not feel guilty about being a stay-at-home mom or wife. I currently have a full-time job, and my boyfriend (of 2+ years) makes good money. There’s enough of an income disparity that it would make sense for me to stay home if we had kids, unless my parents retire or his parents move closer. This is also 3-10 years in the future, I just like to plan ahead. Who knows what the future will actually bring. I would also like to start a career in public service, but surprisingly enough, that does not pay well. Whatever the future holds, having enough money to half retire would be nice.
So how much money is that? According to Mr. Money Mustache, that’s about 25 times your annual spending. That leads to a 4% safe withdrawal rate, and you should be fine. I don’t really have a way to trust these numbers, but if I ever get nervous, I can just get a job or do freelance work, or spend less.
I guess the next part is, how much do I spend in a year? Last year, I spent $15,111.42 according to Mint. In 2014, I spent $5,140.88. Having a boyfriend and a social life is expensive. In real life though, I don’t pay rent and have a company car. So I will add $10,000 for half a mortgage and utilities, which is a rounded number for the average mortgage of my dream houses in my town.
That brings my number to about $25,000 a year. Now I have to save $625,000 for my half-retirement.
That is so overwhelming. I wonder how my 401k and IRA fit into that. Now to figure out how to save 20x my income!
Time to do some math! I’ll be back with the results next week.
See you soon!