Phase 2: ?

Phase 1 of the Master Plan was all about plotting and saving. The Husband and I thought and talked, talked and thought for months about one question: What do we want out of life? As the answer became clearer, we worked on plotting our course to that life, and financing that course.

So what was that answer? Simplicity. A life where I can spend every day with my children. A life where The Husband can do the work he loves on his own terms. A life filled with cats and books and nature. A life where our home is a refuge that calms our spirits, rather than a receptacle that holds our possessions. A life that does not revolve around money and things and busyness. A simple life.

At the outset, I was discouraged and felt it would be completely impossible to finance our way to this life. But a dream is a powerful thing, especially once you start to believe it’s attainable. We met and exceeded our financial goal, and we did so ahead of schedule. This has been a journey that has changed everything I ever thought about money.

We are about to set off for Phase 2 of our adventure. We will move to our new home in one week. The Husband will be launching his firm, Wright Law, the next day. We are so grateful for all the ways our friends and family have supported us throughout Phase 1. We look forward to sharing more as Phase 2 unfolds in the next few months.

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The Fitbit of Finance

Whenever I’m wearing my Fitbit one of two things happens. I either feel very motivated to be more active, or I just start believing my day-to-day life counts as exercise. In the first instance, I’ll start taking the stairs, taking far-off parking spots, and going on long walks with Little Guy; the Fitbit pushes me to do more and be more conscious of my fitness. However, there is a basic amount of walking required for existing and for me it’s around 3500 steps; so in the second instance, I get to the end of a lazy day and instead of feeling like the lump I was, I look at the Fitbit and think, “Wow, I got 3500 steps today without even trying! I’m basically Usain Bolt.” Getting credit for my existence tricks me into thinking I’ve exercised when I haven’t.

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Hiking with Little Guy! (not pictured: Fitbit on left wrist)

Budgeting is the Fitbit of finance. A budget can be insanely motivating. I know once we started budgeting with YNAB, my spending habits changed dramatically. It was like playing a video game and everything I didn’t spend in was like bonus points. I make a veritable sport out of spending as little as possible on groceries. I strategically plan meals based on cost of ingredients and make a detailed grocery list, then shop at the cheapest grocery store around with Todoist and a calculator. (Yes, I’m the geek who uses a calculator in the grocery store.) I often send The Husband a text to brag if I’ve had a particularly good week. “ALL OUR GROCERIES FOR $27 THIS WEEK! GO WIFE!”calculater

But just like the Fitbit, budgeting has its own dark side. Setting a budget can feel like a license to spend up to that amount. Where we really fell prey to this was when we were still eating restaurant meals regularly–we would impulsively go out to eat on the pretense that there was plenty of room in the restaurant budget. We’ve greatly improved since then, but this mentality still plagues me at times. For example, maybe I have a lot of “room” left in the grocery budget after picking up all the necessities, so why not splurge a bit in the Aldi Finds aisle? Just like patting myself on the back for 3500 steps, this defeats the purpose of the budget.

Here are a few things I recommend for avoiding this pitfall:

 

  1. Think of your budget as your 3500 steps. Meeting the budget is just existing–it’s when you come in under budget that you’re getting financially fit. Make a budget that is challenging but realistic. I could say I’ll spend $10 a month on groceries, but it’s not going to happen and my budget will be shot once I go over. But $250 a month is just the right balance of reality and challenge–I usually beat this number, but I can definitely stay in bounds. Think of those leftover dollars at the end of the month as your bonus points.
  2. Find your motivation. Budgeting was a challenge for a long time because we didn’t have a meaningful goal driving us. Sit down (with your spouse if you’ve got one) and figure out your Master Plan. For us, it was our move and The Husband’s solo practice. For you it might be buying a cabin on a lake, traveling more, or getting out of debt. Whatever it is, you’re going to need it to sustain a budget and build savings. Start thinking of every dollar you spend as a dollar you’re stealing from that goal. Take those bonus points and put them in a savings account for your goal. Watching your dream get closer as the numbers grow will be addicting.
  3. Keep up. There are lots of awesome tools out there to track your spending–Lifehacker has list of reader favorites. Find one that works for you, link up your accounts, and keep it up-to-date so you never think you have money available that you don’t.

Your Fitbit and your budget are excellent tools for physical and financial fitness, but they can encourage a false sense of security and accomplishment. What are your tricks for avoiding the trap?

A Peaceful December

Saving for our move has made this December a bit different for us. The Husband wrote last weekend about spending less during the holidays and how it’s reduced stress, and I whole-heartedly agree (also in his post, you’ll see an adorable pic of Little Guy with our Christmas tree). Besides the reduced stress, living frugally this holiday season has made Christmas shopping more thoughtful–and thus more enjoyable.

Our gifting budget is smaller than usual, especially for each other (I’m normally ready to spend our entire savings showering The Husband with gifts). Knowing this, we started thinking about gifts really early. We wrote down everyone we would get gifts for and started brainstorming ideas. I followed items on Amazon to await a good deal and checked out used options like Facebook resale groups and Abe Books.

I love giving gifts so I generally just get everything I think someone might enjoy and end up with a heaping heap of disposable novelties. Fun stuff, but with little lasting value. Do you know what it’s like to buy someone a million gifts and still feel it’s not enough? This year, the limited budget and advanced planning forced me to put careful thought into each gift and make sure it was just right. As a result, I feel great about every gift and am so excited to give them. 

I shopped the local baby resale for Little Guy’s gift, an activity cube which is about $60+ new. I lost out to someone quicker several times, but with patience and some haggling I snagged one for $30. It is in like new condition, and Little Guy will never know the difference! I’m bad at hiding so he’s found it several times, but at least I know he likes it! 

With all this forethought, I am actually nearly done with Christmas shopping. I know, I hate me too. Unlike past years, I got there not only early, but also without anxiety and stress. I only went out shopping  twice, and got most everything online. I do not miss my usual last minute shopping frenzy.

The frugalized Christmas shopping experience made the whole process about doing something kind for the people we love, not about consuming. Our focus has been on the people we’re giving to–what they want, what they need, what would put smiles on their faces–not on spending X-amount of dollars, and it has reignited the joy of the season.

(Oh, and another auxiliary benefit of a frugal holiday season? I’m baking ridiculous amounts of homemade cookies! They’re cheaper than holiday-themed Oreos, and baking is a fun Christmas-y activity that doesn’t require going out. Plus firing up the oven warms up the house, which is great since I now keep our thermostat at approximately Siberia° most of the time. WIN-WIN-WIN!)

The Master Plan

I’ve mentioned some “major life goals” that inspired our newfound financial outlook. One of these goals I covered in my first post–my staying home with Little Guy. Now we’re finally in a place to share our Master Plan more broadly, so here you go!

Since becoming a stay-at-home mom, I have really wanted to be closer to my family and friends in Minnesota. I’ve missed them over the years, obviously, but when I finished working I felt their absence more than ever. We didn’t want Little Guy to grow up without these people and their support, company, and general awesomeness in his everyday life.

At the same time, The Husband has always been ready to practice law on his own. He worked for himself by necessity in the past and did amazing, despite having no experience and being unsure what practice area to focus on. Since starting at his current firm, he has really discovered a great fit in elder law and estate planning. He even writes an awesome Medicaid blog that you should check out!

One day we were talking about our life, and we realized we weren’t quite satisfied with it. Where both of us wanted to be long-term was not where our current life was taking us. We wanted to live our life more deliberately, and really thought about what we wanted out of our future. We devised our Master Plan–move to the Twin Cities area (Wisconsin-side) by July of 2018. There, The Husband will start a solo practice as an estate planning and Medicaid attorney.

What The Husband wants, and what I want for him, is a solo practice of his own. We love the personal and professional freedom this will give him, and the opportunity is ripe right now. Little Guy is a very little guy, so we’re not taking him away from friends or switching schools; our expenses and space needs aren’t much right now, and will only grow as time goes on. The risks are smaller now than they will be at any time in the future, and the payoff for those risks is the life we want.

Because we’ll be plunging into the unknown (and unsalaried), we set a major savings goal: three months’ expenses, moving expenses, and Minnesota bar exam fees in the bank in one year or less. Through constant efforts at frugalizing our lifestyle and getting less stupid about money, we are well on our way to that goal after just three months.

We’re very excited about this (somewhat crazy) dream of ours. And I’m excited to share with all of you the strange and sundry ways we’re making it happen.

Frugal Reading: Before the Hunt

I am a little bit obsessed with books – my house is literally overflowing with them. I have a way of just accruing books without really trying (see #5 below!), and lots of strategies for getting books cheap or free. I love owning, but there are lots of other ways I consume books on the cheap as well.

I thought it would be fun to write on my favorite frugal reading hacks (I’m a blogger now, so that means I get to call my strategies “hacks”). Before getting into the where, I will go over the how. Here are some basic rules to live by that will make you a better bargain book hunter.

  1. Keep a list of your to-reads, and have it with you always. I like to use Goodreads to keep track because all the info is right there from author to ISBN. I can accessit  from my phone anywhere to review my to-reads or add a book. I take advantage of custom shelves and have a “to buy” shelf for books I’m most eager to acquire.  In the past I’ve used Google Keep or a Moleskine that fit nicely in my purse. Whatever works for you, but if you’re writing down your list don’t forget to include the author. That was always my mistake.
  2. Embrace used. Personally, I prefer a used book to a new one. There is just something about giving that book another chance to be read, imagining who read it in it’s past, and taking in that old book smell. Every used book has a story that you could be a part of. When I was choosing a book to read on my trip to Paris last year, I picked up a used copy of Emma I’d purchased years ago and flipped through the pages. You know what I found? A train ticket from the Gare de Lyon in Paris for a bookmark. This book had already been to Paris! A new book could never be that cool.

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    This book has been to Paris twice!
  3. It helps to be into the classics. Great, cheap copies of classics are everywhere, even brand new. Most are in the public domain, meaning there are plentiful free ways to consume these books, some of which are excellent.
  4. Constant vigilance! Once you train yourself to be on the lookout, you’ll find there are used books everywhere.
  5. Don’t hide your bibliophilia. People give me books all the time, both on special occasions and completely spontaneously. When I was pregnant, I had a separate shower from each side of the family and they both came up with the exact same theme–baby books–and sent practically identical invitations. That’s because everyone knows I’m crazy about books. I had a coworker who gave me her books when she was done reading them even though they weren’t books I would like because she thought I could sell them at Half Price Books and get something I would like. When people ask what I want for Christmas, you can bet I have a slew of books on my wish list. And besides gifts, friends always send me tips if they discover a used book sale, or a clearance sale at CPH.org. If your love of books is well-known, they basically fall out of the sky.

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    A bookish birthday gift!
  6. Budget for books. Let’s face it, I’m going to buy books whether I’ve budgeted for them or not. Planning for a bit of book spending means you won’t have to starve just because you found a book you simply couldn’t leave behind. And setting some limits helps you be discerning about what you bring home. I always get very excited in bookstores and pick up a billion books, but I pare it down to keep my spending reasonable. This also helps me bring home only quality books I’d actually read.
  7. That leads nicely into my last point–just because a book is cheap (or even free!) doesn’t mean it’s a good value. I may find a book I’ve been looking for at a garage sale for a quarter but, on inspection, find it has obnoxiously narrow margins, tiny font, dog-eared pages, and the like. I would rather hold out for quality. Do you hate holding large hardcover books? Do you hate to be seen with a (GASP) movie cover paperback? Do you hate it when a books has writing and underlines all over? Then you might not want to bring books like that home, because you are unlikely to enjoy reading them–or read them at all. I used to bring books like this home all the time because it was free or cost ten cents, but they just became clutter in my home. I often bought a second copy of the same book because I found it more aesthetically pleasing. Know what you like in a book and don’t settle for just anything with pages.

Because I could tell my post was going to get ridiculously long if I went into detail on all my favorite frugal book sources, I will be splitting it up into a series and periodically highlighting one at a time.

 

Surrendering a Salary, in Perspective

It was easy to make the decision to stay home with Little Guy from an emotional standpoint–it’s what I always wanted, and I knew it would make me happy–but the math had me second guessing. Looking at my salary, it felt like giving up so much–but it wasn’t as big a financial blow as it seemed at first glance. Though we definitely come away with less, the lifestyle changes create savings that soften the blow. Here are just a few of my biggest savings from staying home.

Taxes

I’ll get this obvious one out of the way. Taxes cut significantly into take-home pay. There is a certain sticker shock of giving up your salary, but factoring in taxes keeps things in perspective.

Childcare

Without doubt our biggest savings. One-third of my monthly pay would have gone directly into childcare–and my childcare was particularly cheap! There was a cooperative daycare basically on campus where I worked–monthly service hours required of parents kept costs low. Were this not the case, it might have been up to half.

Commuting

My workplace was about twenty-five minutes from home. That adds up at the pump. We also had to have two cars. Now my husband’s job is walking distance from home, and I work at home. We sold our second car for a little extra cash and thus save monthly on car insurance. Plus, having just one car and driving it mostly around town keeps maintenance costs to a minimum.

Convenience

This is a big one that seems like a small one. We have drastically reduced our convenience spending. I am not a morning person at all, and I am exceedingly forgetful. That means I often didn’t have time in the morning to make lunch, and even when I did think ahead and pack leftovers, I would forget them…a lot. I worked directly above a cafeteria, so I always had convenient, overpriced food to rescue me on these days. Then I would get home hungry and tired, and I didn’t always feel like cooking–so we went out to eat, or picked up Little Caesar’s (so temptingly close to us). These days, my husband watches Little Guy after work while I cook dinner. They get some quality time together, I get some alone time to decompress, and all three of us get delicious, healthy home-cooked meals. (Bonus: We are both home at lunchtime, so we can’t forget lunches anymore!)

Groceries

I could probably write 2000 words on grocery savings alone, but I’ll keep it short for now. When I was working, my husband did all the grocery shopping, but I did all the cooking. I rarely made time to plan meals and write him a list beforehand, meaning a lot of guesswork on his part. Often, we had to change plans because I didn’t have everything I needed, or food would go to waste because I didn’t know we had it or didn’t have a plan for it. Also, as stated in #4, I often came home too tired to cook and we would go out, and the planned-for meal would sometimes go bad before we got to it. Now that I’m doing both the shopping and the cooking, we never get more than we need–I have a plan for everything I buy, and I don’t scrap planned meals to go out to eat. I have time to shop mindfully, and even go to different stores to get the best prices.

Laundry

Our apartment, to my great chagrin, has no washer/dryer. Our favorite laundromat offers half-off washes on weekdays, but we didn’t have time or energy to take advantage of this deal. And we hated using our precious nights and weekends doing something so time-consuming and lame as laundry, so we put it off as long as humanly possible every time. Sometimes we bought new clothes (ahem, underwear) just to put off doing laundry, or at least under the reasoning that having more clothes would make it easier to put off laundry at some future date. We both had too much clothing, and spent too much on clothing. Now I always take the laundry on a half-off day, and get away spending a mere $2.50. My schedule makes it easy to make it out once a week, so no more wardrobe padding. (I have culled my wardrobe down to a small capsule wardrobe, which I’m crazy about–but that is another subject for another day!)

Pumping and formula

I haven’t had the best luck with pumping. I worked for a short time after my maternity leave, and it was a nightmare. I was constantly frustrated at not getting enough. I’m almost certain that I would have had to supplement with formula, which is very expensive. There also would have been pumping costs like replacing valves, getting flanges that are actually the right size, and extra bottles and/or disposable pumping bags.

Pick-me-ups

I was never really happy in the nine-to-five life. At work, I always felt that my time would be better spent with my husband, my baby, my cats, my books, my guitar, my kitchen, my you-get-the-idea. I was fine with the job itself and never felt that finding the “right” career would fix the problem. I never dreamed of being a “this” when I grew up. I dreamed of other things–the friends, family, husband, children, hobbies, travel. I always knew that there was more to life than work and that is what I dreamed of. I needed regular pick-me-ups to deal with my my less-than-fulfilling lifestyle. Hard day at work? Let’s go for drinks. Forgot my book for my precious lunch-time reading? Pick up a new one at the campus bookstore. Late getting home because I had to risk my life driving through a snowstorm to get to and from work, which I didn’t even want to go to in the first place, but didn’t want to waste a vacation day because then I couldn’t take my summer camping trips? Order pizza, the good stuffed-crust kind. Because I deserve it. I bought too much nice clothes, so I could feel good about my looks at work. I bought lots of expensive tea, so I could enjoy a luxury at my desk. I bought lots of expensive gifts for my husband for special occasions because I lacked the energy and time to do things on a daily basis that would mean much more to him than gifts (his primary love language is acts of service). An unfulfilling lifestyle leads to unnecessary expenses and lifestyle inflation. It just does.

It’s not easy to give up a salary, but the loss is never as big as it seems. There is value–monetary value–in having a stay-at-home parent in a household.

PANIC! 

So, for a blog partially about finances, I’m probably about to alienate most people interested in reading on that subject. Here goes! I reject the debt emergency mindset, at least for student loans. (I might think differently about 18% interest credit card debt.)

When I first started to face the cold reality of our student debt, I started to panic. For help figuring things out and calming the heck down, I turned to the debt gurus of the world wide web, your Dave Ramseys and the like. And you know what their sage advice was? PANIC!

So I spent the next few days doing just that. I stared at our debt summary for hours whilst crying and panicking. It is one of the least productive things I’ve ever done. It left me insanely frustrated because no matter how hard I tried, I could not think of a way to move forward (other than me going back to work, which is frankly not on the table for us).

Taking a step back, I realized we are already moving forward. We are on track with our payments, and making strategic extra payments when possible. We have frugalized our lifestyle a lot and are constantly brainstorming more ideas for saving. We are avoiding credit card debt like the plague. And we have plans to sell our car and buy a cheaper one to eliminate our car loan.

Our plan for paying off debt is about nine years. It’s a long-term plan no matter what. Even if I were working, it would probably shave off a couple years at best. I worked in higher education, so it’s not like I’d be flush with cash. Working would certainly help, but with daycare for one kid now and a second in a year or so, the extra would not be much. We cannot panic for six to ten years. It helps nothing.

Dave Ramsey would tell us we are gazelles about to be killed by a lion. But that’s kind of bullshit. There is an end to our debt, we are planning for it, and it is definitely not going to kill us. We acknowledge our debt, we manage it responsibly, we pour our energy into eliminating it. Essentially, the same things we would do in emergency mode, but without the completely unproductive panic. It’s a marathon, not crisis.

We want to get out of debt because we want our life to be about more than money, so why would we make our life all about money for the next several years to make it happen? We can’t get those years back, and we can’t short-cut through them either. What we can do is live our life accepting that debt will have a place in that life for a while (because it will whether we go into crisis mode or not). We plan for our debt, we take it seriously, and we are going to beat it. We don’t panic.