Great post… my only observation is that your expenses will skyrocket over the next several years (you are a brave soul… 3-4 children).

Step 3 needs to be very specific about how you can make more money otherwise you will be like many other young adults on the financial treadmill of life. Your expenses will increase at a faster pace than your income. Most people only can count on so much from pay raises, etc. You need a plan to earn passive income and focus on basic accounting… I wrote about it yesterday incase you want to take a look:

http://sittingprettyfinancially.blogspot.com/2005/10/clip-file.html

Good luck with your plan!

One thing to consider about your eventual need for more space (with 3-4 kids) is that you have an opportunity to buy a smaller place first that is located where you want to stay put...and has potential for an addition or an extra floor. Basically if you buy for it outright, you can save money by adding space onto a current home instead of buying a whole new bigger house. Just a thought.

Good advice, Nina. We're already preparing for that by living well below our means now. We currently use about half of our combined net income for living expenses, while saving and investing the other half. If it were necessary, we could manage on about a third, which is the sort of lifestyle we're planning on once kids are in the picture.

Caitlin, thanks for the tip! I hadn't been thinking along those lines, but an addition is clearly an option that I should keep in mind, and it will likely influence our house search.

One other thing to remember is that this plan will change over time, as our circumstances change. We might have two kids, or eight! I might have to work longer and retire later. Who knows? I just have to remember to evaluate and adjust these goals over time to reflect our current reality.

I think you may need to add a Step 6 - review the plan at a set interval and make changes as required. Things change and your plan needs to be able to reflect that. The review period can be whatever you want - 1 month, 1 quarter, 1 year. This is a 'living' document that needs to change with you.

The only thing is that you have to be content with what you get. It is a shame to achieve your dreams to find out that you have aimed too low. Apply this to philanthropy as well.

Very brave, and an excellent start.

I would suggest under the short-term goals (and recurring) to make sure you have adequate insurance and proper estate planning. You probably already have, but I didn't want to assume.

We waited too late to increase my wife's insurance once we started planning on having children. No one would write a policy for her while she was pregnant, so we had to wait until after the baby was born to get an additional policy.

You're identifying your goals, which is more than most individuals have done.

Two comments here

1) "support one full-time parent with no income" - I'd suggest changing that to one full-time parent WITH income. The primary focus is being a full time parent, but that doesn't have to mean no income. More important, once the children start schooling, there'll be a lot of time on the SAHP's hands, and it's difficult to start afresh all over again. Much better to plan on shifting from a job to some other earning activity out of the home, even if it's low key / low time initially.

2) Add a step between 3 and 4 - Spell out the relevant short term goals and what you need to achieve those. You've to some extent done it with the plan to buy a house within 2 years, but it helps to breakout the long term into several concurrent short term goals and see how they all add up together. For instance, house within 2 years + 6 months emergency money + enough to buy a used car - you don't want to end up having to sacrifice one to achieve another.

Best wishes

I second Caitlin's advice... buy a house that can be added onto or has space that can be converted. We bought our house with that in mind. We have a porch that can be converted to a three-season, and a huge attic that we hope to one day turn into a master suite, bringing the house up to four bedrooms and 2.5 bathrooms.

My husband's parents added a huge addition to their ranch that is fabulous, and was much less disruption than trying to move with four small children.

Always enjoy reading the blog and haven't seen any new posts recently...hope all is okay and it's only a temporary leave of absence.