If you are just starting this, I suggest you start at The Introduction – Part 0

You can’t figure out where you are going if you don’t know where you are…

My wife and I are each 32 years old. To some degree our finances are separate – we never felt the need to combine them other than opening up a join savings account. I have around $200,000 in assets. My wife has about the same. My money is mostly in a retirement accounts (things like 401Ks, IRAs) and equity in my old home (now an investment property that just about breaks even). Her money is invested in much the same way, but more in mutual funds and money markets than equity (though she does have some equity in the property she had before she met me).

Our Current Income

• My Wife’s Income – She’s a pharmacist working with the military. She gets a tax-free housing stipend, which for San Francisco is quite healthy.
• My Wife’s Extras – She is required to travel from time for work. When she does travel she gets money for meals. Rather than a reimbursement system, they simply just give her the cash. If she’s frugal with her meals that extra money adds up. She also gets the standard 58.5 cents a mile for her driving. For 20 miles, they’ll pay her $11.70. Since that’s about a gallon a gas, it’s $8.70 to cover maintenance costs. I think we make out well with this.
• My Income – I make some money from my websites. What I like about this income is that I can do it from anywhere that has an Internet connection. I can also write it at any time. For instance, by the time you read this, it’ll be at least a week since I’ve written it. In addition to this, the start-up business that me and my business partner have is making us each around $2,000 at this point. For a company that’s about 5 months old, we are quite happy with it.

Our Current Necessary Expenses

• Home – We rent our current place. It currently doesn’t pay to own in our area. Rents are proportionally cheap. We spend $2075 a month on rent, which may sound like a lot, but it’s San Francisco. For the year that’s roughly $25,000.
• Transportation – My wife and I each own our cars outright. My wife gets a free bus pass from her work. I work from home. This makes our gas expenditures extremely cheap. We still have to pay for maintenance and insurance. I would estimate that this is around $5,000 a year, and that might be on the high side.
• Food – We save a lot of money shopping at military commissaries. I wish this were an option for everyone but it simply isn’t. I think we typically spend about $125 every two weeks. That rounds up to about $3,500 a year
• Utilities – Our Internet and cable prices are pretty standard. We have intro deals with Comcast and save a little money that way. Our cell phone plans are around $40 each for almost everything Sprint has to offer. Our heat and electricity expenses are very minimal – the weather in Silicon Valley is fantastic requiring no air condition and very little heat. Our phone service is a $15 plan with Vonage. Adding all this up, it looks like it’s around $3,500 a year (again rounding up)
• Insurance – We have standard insurance – home, rental. We don’t currently pay for any extra life insurance as we don’t have any dependents. However, our insurance company, USAA wins awards each year for it’s great rates and customer services. It’s another military benefit that I wish I could share with the rest of you. The cost for this is insurance is around $2,000 or less for the year. I have to admit that I don’t have the actual numbers on this and I’m too Lazy to look it up.
• Additional Stuff – There’s always going to other costs to factor in. I’m probably forgetting more than a few things here already. I’ll build in another $6,000 for these miscellaneous things.

That’s a rough outlook. I intention didn’t want to get too bogged down in the details at this stage. It looks like we spend around $45,000 a year. Our income covers this and leaves us with enough money to build up significant savings.