When You’re Considering a 30-Year Mortgage

Recently, long-time reader Sarah asked me about the difference between getting a 15- or a 30-year mortgage. I’ve written before about why I love our 15-year mortgage. We’ve gotten a 15-year mortgage on three properties: our house in New Hampshire, our house in North Carolina, and our apartment in Chile. A 15-year mortgage has helped us build equity, save more each year, and pay less in interest.

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But what if you live in a high cost-of-living area, and the payment on a 15-year mortgage isn’t feasible? What if you plan to stay there for awhile, and renting doesn’t make a lot of sense? Or what if, for a variety of reasons, you want to buy a house, but you can’t make a 15-year mortgage payment work?

On a back-of-the-napkin calculation, it’s clear to see why many people choose a 15-year mortgage is superior. You pay a lot less in interest. But, you also have a much higher monthly payment (for 15 years). Continue reading “When You’re Considering a 30-Year Mortgage”

50 Ways to Become More Frugal

I was not born into a frugal family, and frugality has never come naturally to me. Over the years, I have developed more frugal habits, very slowly. But if you’re not naturally frugal, then frugality, spending less, being careful with your money, or whatever you’d like to call it, IS a habit that you can acquire.

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Why is frugality so important? There are many who argue that you should keep your main focus on earning more money, because there’s only so much budget you can cut, but an unlimited amount of income you can create. True, but, the truth is, most of us waste an incredible amount of money, and focusing on becoming a little bit more frugal doesn’t just help us save $1, it helps us save an after tax dollar. Meaning, if your tax rate is 25%, when you save $1, you’re really saving $1.25.

Once you’ve adopted a frugal habit, it will stay with you for years. Get in the habit of cleaning your own house? That’s $150-$200 per month that you’ll pocket for years. You don’t have to keep hustling to make more dollars–once you’ve adopted the habit, you can keep at it ad infinitum. Continue reading “50 Ways to Become More Frugal”

October Net Worth Update

Hi! I’m back with another net worth update.

October Net Worth Update www.thethreeyearexperiment.com

October was a fun, warm, leave-changing, slow fall month for us. I say “slow fall” because in New Hampshire, the leaves started changing colors around August 1st (every year!) and then from mid-September to the first week of October, went into riotous “bloom” until a heavy rain would take them out and all the leaves would be bare. Fall was brief.

In North Carolina, fall has slowly moseyed its way in, the leaves have taken their time changing color, getting darker and darker over weeks, not days, and are also taking their time dropping to the ground, as the temperatures shift between 40s and 50s to 60s and occasionally, 70s (F).

I know I talk about the weather a lot. But when you spent the last eight years as a Southerner in exile in bleak New England, you get at least a year to geek out about the amazing warm weather in the South.

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Since we’ve achieved the latter goal, we’ll be primarily focused on the former in each of these reports going forward. Each month, I record our progress on our net worth and our spending. Last year, we increased our net worth by 32% over the year before. This year, we’re trying to increase it by more than 65% from where we started in December 2016. It’s looking more and more like we’re going to miss that by a wide margin. But since we know we don’t always reach our goals, especially our BHAGs, we’ll just keep working ’til we hit it!  Continue reading “October Net Worth Update”

It’s All Relative

Yesterday I went running with a group of women from my neighborhood. We recently moved to a large neighborhood in Davidson, North Carolina, and the neighborhood we moved into, to use terminology from The Millionaire Next Door, is “income affluent.” That means that people in this neighborhood tend to have high incomes, but also spend large amounts of money so that they have a low level of net worth.

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In other words, they’re broke.

I was proud of myself–I had gotten on Facebook and posted a message to the neighborhood women’s group we have there. I found several women who were interested in starting a runner’s group, something I sorely needed since I have about motivation to run as I do to clean the toilets (read: none). But running, unlike toilet cleaning, is good for me in myriad ways, predominantly mental health-wise, so it’s helpful to have accountability partners in the journey. Continue reading “It’s All Relative”

A Year of Good Food: Cook for the Week

Happy November! I am very proud to report on our October food spending. Due to a week away at Disney and Mr. ThreeYear being away for a week, we spent the lowest amount on groceries that we did all year.

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Not that it was easy. There were complaints (from the Big Guy). So many complaints! Apparently if the fridge doesn’t look like the produce aisle then something’s wrong.

But I held fast and we survived, and we clocked in our month way under budget.

The Reason for This Experiment

This year, our family is challenging ourselves to spend less on food so we can save and travel more. Last year, I adopted one habit a month that would translate into better money moves for our family. You can read all about our A Year of Good Habits here.

That experiment worked so well that we tried a new one this year. In 2018, we are challenging ourselves to do better at our food spending. Last year our family spent over $12,000 in groceries, or $966 per month.

This year, our goal is to spend 20% less on groceries. That may not sound like a lot, but it’s almost $200 per month in food savings. The extra $200 per month is going into a travel savings fund, so we can see the results of our hard work in spending less on food.

We could have adopted a radical goal to keep our spending under $500 or something like that. But we know better. We thought it made much more sense to consistently hit our modest target, month after month, for an entire year, to show ourselves we could do it, than to maybe hit the $500 goal once or twice and then face plant with more $1000+ grocery bills.

And if we consistently hit sub-$772 spending, then perhaps we’ll challenge ourselves next year to shave off more.

Each month, we’re trying out a new way to save money at the grocery store. Last month, I just kept doing what we’ve been doing that has worked: shopping at Aldi, keeping side trips to a minimum, making a list, making a meal plan, and taking inventory before I go to the store.

October

October dawned warm and ended cool. It’s so nice to experience fall in North Carolina, because it’s very slow to arrive, and then gets blessedly cool at night and in the mornings, but warms up during the day.

The leaves are actually just starting to turn here, at the beginning of November. When we went camping in the mountains, two and a half hours Northwest of here in Pisgah National Park, we experienced much cooler temps, but here in the city it’s not as cold.

camping
Checking out the Davidson River while camping

Continue reading “A Year of Good Food: Cook for the Week”

A Frugal Reputation Pays

When we lived in New Hampshire, it was pretty standard to be frugal. New England is a region of the country that was settled by English Puritans. A group of Puritans settled the area around Boston back in 1640 in order to escape increasing religious persecution in England.

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Putting aside the theological, Puritans believed in living Godly lives both as individuals and as a community. They believed that hard work was the epitome of such a life, and eschewed owning servants or slaves for that reason. They stripped their daily lives of “worldly distractions” such as entertainment and ornate adornments or decorations in the house.

Fast forward four hundred years, and the descendants of that group continue to value some of those core beliefs, like dressing simply and practically (trust me when I tell you that makeup and highlights aren’t big in New England), using their resources wisely (ie being frugal!), and simple entertaining (people don’t have big parties and it isn’t very common to be invited over to your neighbors’ house for dinner).

Our family moved to New Hampshire from Atlanta. Atlanta is a… little bit different than that. We were used to showy Atlanta, where there were McMansions on every corner, people drive fancy, pricey cars, and showed off their latest designer purses, nails, and haircuts.

Needless to say, I loved the frugal aspects of life in New England (except the no-entertaining part. That really stunk).

I embraced the way people wore the same jeans from 1990 with absolutely no compunction (I was just checking to make sure you were paying attention. I did NOT wear mom jeans while I lived there! Much). When I’d get together with other moms for playdates with their kids, we’d go to a no-cost park or the library and would bring our lunches.

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Me and my running friends, eschewing makeup and fancy clothes.

Continue reading “A Frugal Reputation Pays”

8 Cheap Purchases that Have Lasted Years

There’s something to be said for well-made items, items you can depend on to last you for years. Many times, we expect these products to cost an arm and a leg. But this post is a homage to ten items that were cheap, and have lasted me years and years.

8 Cheap Purchases that Have Lasted Years

On Friday, I wrote about ten items that I’ve spent a lot of money on that I absolutely love. These days, I’m working to conscientiously buy products that are well-made and will last, so that I won’t have to repeat buy these products again.

But you don’t always need to buy such expensive products to find items that will last. Sometimes, you stumble upon jewels that are inexpensive and will last for years. Here is a list of my favorites:

Rain jacket

In 2008, when Junior Three Year was just one, my grandmother took our entire family on an Alaskan cruise. It was amazing. Mr. ThreeYear and I were newly married, battling layoffs, and adjusting to one income, so we had very little extra money for the trip. We needed to get a rain jacket for the inevitable sprinkles of the Alaskan climate, so I headed to Walmart to see what they had. I found a jacket that cost about $16, and brought it with me. It was made by a brand I’d never heard of, Stearns. Continue reading “8 Cheap Purchases that Have Lasted Years”

10 Expensive Purchases that Were Worth Every Cent

I love a deal as much as the next person, but as I’ve embraced minimalism over the years, I’ve begun to make an effort to buy fewer, better things.

10 Expensive Purchases that Were Worth Every Cent www.thethreeyearexperiment.com

Mrs. Frugalwoods writes a great post about why “Buy It for Life” isn’t necessarily a foolproof frugal plan, and I agree with her on many of her points. In fact, I have a “8 Cheap Buys that Have Lasted Years” post highlighting the things I’ve bought for cheap that have lasted.

But this post is not about those purchases. This post is about the things that I have consciously spent more money on, in order to get a quality product that:

a. I love and

b. will last.

I think that the common denominator of these items is that I love them, that they “spark joy” every time I touch them, use them, or look at them. Because I’ve ended up using these items so often and sometimes, for so many years, the cost per use of each item is incredibly low. They have, indeed, been worth every cent.

Here is a caveat: I only bought about half of these products full-price. The frugal side of me always looks for a way to get quality goods for less. I bought in outlet stores, at company sales, and at discount stores. Once you’ve identified the product you want, it pays to shop around and shop strategically.

But in the end, I recommend buying the exact size, style, and color you want. Don’t compromise just because something’s on sale. You won’t be as happy if you do.

I’ve also linked to where you can get your own if you so desire. These aren’t affiliate links; I just want to share great products with people who’ll appreciate them if you’re in the market for any of these items.

If you are interested in finding quality items that last, or that come with a lifetime warranty, I recommend the excellent site Buy Me Once. They have a selection of well-curated, well-made products that will last you a long time. Continue reading “10 Expensive Purchases that Were Worth Every Cent”

Why a Prepaid Disney Vacation is the Best Vacation

Have you ever taken a prepaid vacation? Maybe you went to an all-inclusive resort, a cruise, or a tour vacation. By prepaying before you go on the trip, you cover the cost of lodging, food, transportation, and oftentimes gratuities and incidentals like phone calls. We just got back from a prepaid Disney vacation, and I am convinced it’s the best way to enjoy Disney World.

Why a Prepaid Disney Vacation is the Best Vacation www.thethreeyearexperiment.com

Our family got back from our epic week-long Disney trip two weeks ago. It was the very first trip Mr. ThreeYear, Junior Three Year, and Little Three Year had ever taken to Disney World. I’ve been several times throughout my life, but we were never interested in making a trip with the boys until now.

First of all, my brother-in-law is a big Disney fan. He and my sister have gone multiple times since they’ve been married six years ago, and they invited us to go with them about a year ago when they started planning the trip. Second, they agreed to plan 100% of the trip for us. If you’ve ever been to Disney, you know that to get the best experience requires some major planning. And my brother-in-law was more than up to the task.

He read Disney blogs, researched the ways to get the best deals on places to stay, reserved our fast passes exactly sixty days before we left so we could get the best ones, and even filled out our online Disney Destinations profiles for us. All we had to do was pay for the trip and show up.

Disney World is very expensive, unfortunately, especially when it comes to food, so we made the decision to go all-out on this trip, which will be our one and only Disney trip while the boys are young.

Here’s how we did it. Continue reading “Why a Prepaid Disney Vacation is the Best Vacation”