For an audio version of this post, please click on the speaker icon (top left).
Welcome to this episode of The Doctor’s Bill (Can You Afford It?).
Wonder if you should buy that big ticket item or not?
Well here’s your chance to have a wealth management expert, Johanna Fox Turner, of Fox & Company Wealth Management analyze your overall finances and make a final verdict on whether or not you can indeed swing for the fences and splurge on yourself or whether you should just walk away.
[Johanna and I have no current financial relationship]
Disclaimer: This is not meant to be a substitute for paid professional advice but only meant to serve as a suggestion/guideline.
The following are the details from our submission form:
How do you plan on paying for this item/experience?
On A Happiness Scale of 1-10 (10 Being Happiest), rate what this item/experience will do for you A) Short Term and B) Long Term:
A) 5 B) 8
Recent birth of son.
How Many Years Till Planned Retirement?
What is your total household income?
$450k at new job
What is your % Annual Savings Rate? (savings/gross income)
35% while currently renting (probably 25% after buy home with mortgage)
Market Value of Primary Home [For Renter =$ 0]
Additional Real Estate Holdings Equity (Market Value-Debt):
Current Liquid Asset Value (Savings, Checking, Etc.):
$60k ($30k emergency fund, $10k for annual bills, rest for possible down payment)
Retirement Assets (401k/IRA/HSA):
Brokerage Account (Taxable):
Miscellaneous Asset Value (Please elaborate):
Student Loan Balance:
Unfunded Future College Costs & Years Left Till Needed:
Will likely do 5k/ year for about 5 years max (we only want a small fund to help cover part of a public school only, not planning to finance all education and not planning to fund private school unless we have lots of excess.)
Other Unfunded Goals and Years Remaining (Today’s Dollars):
Any other pertinent information not addressed?
I am about to start an academic-associated job and will be employed with no “partnership track.”
Our timeline for buying a home will be around June and starting work in July.
I also negotiated out all weekends, so I will be working Mon-Fri with no call, weekends, holidays or nights.
We will be back to a large city in the Midwest that is very near both our home towns, within an hour to each grandparent, and in the same city as most of our friends.
My wife will be going back to work part time once back to the area at her previous job, and will be putting money directly into a pre-tax retirement account with the goal to make 19k a year.
She is a nurse and has not gone back to working where we are living now since we just had a child.
Grandma will be spending 2-3 days with us every other week so she will probably work a few shifts just to get out of the new house.
I would doubt that she makes much more than maxing out a retirement account yearly based on quality of life/family goals.
This is also a city we both have lived before: 3 years for me during training and 5 years for my wife until we got married.
We are therefore very familiar with the area, the schools, and looking in neighborhoods we already have established friends.
I have been pretty aggressive about saving, am 2.5 years out of training and had 270k of med school debt, 50k of wife undergrad debt so a net work of -320k to start.
We are now about +320k net worth, and also cash flowed a wedding on the beach and dream honeymoon for 30k along the way.
In cash have 30k in emergency fund (about 5-6 months of current expenses).
I do the “pay yourself first” to multiple savings accounts rather than budget.
What is left over goes to investment:
- about 6k is set aside for vacations
- 3k is set aside for bills that come up (yearly bills that I “pay” for each month)
- the rest is a small amount starting to build up a possible home down payment.
Based on our current financial situation, I think we will have about 100k available cash by time closing comes.
I am researching loans and getting quotes now, so have not decided how much if any we are going to put down.
May split the difference and do 50k down and 50k to retirement since rates are very similar.
While we certainly are not Mr. Money Mustache frugal, we live a very balanced life and each pay raise has seen a larger % go to investments, and all bonuses go directly to investments.
Will this early career attending find happiness being a local in a LCOL area?
Or will the ivory tower of academia crumble under siege from the simultaneous financial stress of a new baby, new job, and new home?
Click on the Doctor’s Bill Image and find out the verdict:
After you see the verdict please come back to this page and comment whether you agree or not with the decision (and no cheating by looking at comments first!)
If you would like to submit your own Doctor’s Bill request please fill out the submission form.
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Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
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