We all need a little help in life. When it comes to staying on track with our goals, friends and partners can make a huge difference in your success rate.
For example, I’m currently training for a half marathon. A college friend reached out to me to see if I wanted to sign up with her. We live about 40 minutes apart, so we can’t train together, but we text each other our stats.
On Saturday, I needed to run 8 miles. I’d arranged with another neighborhood friend to run early Saturday morning. The night before, Friday night, a friend had a get-together. If I had to run those eight miles by myself, with no one to support me or keep me on track, I’m sure I would have stayed way too late at the get-together and would have found a reason not to get up the next morning.
Inspired by Tanja Hester’s post of her first year of retirement adventures, I thought I’d create a similar post of the ThreeYears’ 2018. After all, it was a big year for our family. We became location independent, we bought a new house, we went on several big trips, and the kids started new schools. As I was putting the post together, I realized that we had a lot of pictures! So I decided to break our year up into our pre- and post-location independence, which happens to fall right in the middle of the year (so handy!).
Here are the ThreeYears’ adventures from January to June of last year.
We started off 2018 in Chile, in the last week of our three-week long trip to visit Mr. ThreeYear’s family in Santiago. We also took a side trip to northern Chile, to the San Pedro de Atacama desert. That trip took place in the final days of December, so I won’t include pictures here, but read all about it in this post.
We bought lots of fresh fruits and veggies (because it was summer in Chile!) at the feria, the local market two blocks from our apartment.
I started this blog in 2017 (okay, technically it was the end of 2016) as a three-year experiment. I planned to spend 2017, 2018, and 2019 with a very focused goal in mind–to double our net worth and become location independent. In an absolutely shocking turn of events, our family became location independent last year, mid-way through the experiment.
Our location independence looks a little different than I envisioned, but it’s been a great decision for our family. We live in one place, in an idyllic small town in North Carolina just north of Charlotte. Mr. ThreeYear and I both work remotely. Our kids attend the great public schools here, and we travel as much as we can during breaks and summer. Most importantly, we are close to our family and the weather is a lot warmer.
Now that we’ve reached one goal (and it was, truly, the main goal), where does that leave us in 2019? Of course, we still have to double our net worth, and unfortunately we have almost 50% more to go, due to losing equity in our house and a market downturn at the end of last year.
But, because we know that we’ll eventually reach that goal, and it’s not quite as pressing now as it was when we thought we’d be leaving our jobs for several years, what should be our focus in 2019?
Each year of the experiment, I’ve picked a theme, a “word of the year,” before it was a thing.
In 2017, I picked one new habit each month to get better at, so we could improve our productivity with investing and earning.
In 2018, I focused on spending 20% less, each and every month, at the grocery store, so we could save more.
In 2019, I thought about a lot of behaviors we could focus on. We want better relationships, better health. But we still struggle with over-spending, too. And our spending experiments have worked pretty well to change our behavior.
So 2019 is the year for money experiments.
Each month, we’ll perform a different money experiment to see how we do.
Over the last several years, household debt across the world has been slowly increasing. That debt includes mortgages, car loans, and credit card debt. China’s household debt now stands at 49.1% of GDP, relatively low compared to many developed nations, but worrisome because of its 30 percentage point increase in the last decade. Shockingly, Switzerland leads the world with household debt at 127.5% of Gross Domestic Product. That means, for every $100,000 of GDP a household produces, they hold $127,500 in debt!
The average citizen in Switzerland, which has traditionally been an extremely wealthy country, has substantial assets (net worth) underpinning this debt, or at least four times more assets than the average American.
Even so, Switzerland, as well as nine other economies including Canada, Finland, and Australia, have debt levels that are high and rising quickly, at a pace that mirrors that of the US right before the housing bubble.
About this time every year, I get the travel itch. It’s the feeling that I need to book a trip for my family so we can go somewhere we’ve never been before, see something new, or just get out of the daily grind. Winter feels long, and the beautiful beach pictures in Instagram are calling me.
Yesterday, my friend sent me a picture of the little town in Northeastern Spain they’ll be visiting this summer. I. want. to. go.
However, our family just moved 1000 miles away to a new state last year, we bought a new house, and we have spent plenty of money on it. Plus, I’m not bringing in a steady income, since I’m taking a year off teaching to help us get settled, so it’s hard to justify setting aside thousands of our savings for a big trip (how much should you spend on travel, anyway? Answers here).
I’m not giving up so easily, however. Here are five ways I’m planning to save up for travel.
1. Save the Extra
This is about as obvious a tip as they come, but it’s not always easy to follow. This year, every single extra check, refund, tutoring payment, or gift is going straight to a fund called “Trips.”
In our Capital One Savings account, we have several subaccounts where we save for different goals. In our “Trips” fund, I’ll be saving all of the extra money we get, immediately, before I even have a chance to think otherwise.
I deposit any checks using my mobile app, then immediately transfer that amount from my bank to our Capital One subaccount.
The trick is to deposit the money immediately into an account or fund you can’t access or won’t let yourself touch.
It’s too easy to put the money in your general account, and attempt to save what’s left over at the end of the month. But in my house, that money will get spent, so I need to set it aside as quickly as possible to save for travel.
I have a problem. Yes, I’ll admit it. If you know me IRL, I’m sure you’ve heard me talk about it as it plagues me frequently. The problem is this: I occasionally panic because I think my kids aren’t doing enough activities.
I’ve suffered through the same conversation with myself for years (What? You don’t have conversations with yourself in your head?). It goes something like this:
Me: The boys aren’t signed up for any activities right now.
Myself: That’s ok, they’re doing deeply creative things at home.
Me: But X’s kids are on swim team. My kids should be on the swim team! They’ll learn discipline there, and focus, by being a part of something difficult that will stretch them. And both of them love swimming!
Myself: You’re doing it again.
Me: I KNOW! But Y’s kids play in tennis championships. The boys should join our tennis academy. It’s a family sport that they can play forever! I want them to be good at something, to have a skill. What kind of parent am I if I haven’t helped them develop a sport they love to play?
Myself: There’s still time.
Me: They’re getting older. I didn’t really play a sport when I was young. But I started running with my dad when I was 9! I haven’t run with the boys at all. They’re inside too much. They play too many electronics!
Myself: Junior ThreeYear has climbing.
Me: I know! But that’s only once per week. And is he really learning anything there? It’s a very basic group. Can I help him get better? Should he be going more? Now what do I do? More climbing, swimming, tennis? Which one to pick? They’re all so expensive. And they take up a lot of time. Maybe I’ll start with tennis lessons? Maybe karate would be a better choice…
A year ago, I made a decision to try again: I’d been working to decrease our grocery bill for 10 years. I’d never been consistently successful at it, and as our family grew and our boys ate more, the grocery bill steadily ticked upward. In 2017, we spent almost $1000 per month on groceries alone. So I set a modest goal for 2018–to shave about 20% off our grocery bill each and every month. I set a budget of $772 per month, or $9264 in total yearly spending.
Did we do it? Well, despite going over budget in 4 of the last 12 months, we had an average monthly spend of $746.55 and a total yearly spend of $8958.60! We did it!!!
We did not halve our grocery bill. We did not keep it under $500. Or $400. Or $350. But we did hit and surpass our goal, keeping grocery spending to under $750 on average for the entire year.
I am proud. I am pleased. I have $1600 in the bank that I wouldn’t have had if I’d spent it on groceries, many of which we might have thrown away. I would have had $2400 if I’d saved $200 for each and every month of the year like I planned, but for four months in there, the months when we were getting our house ready to sell, I didn’t save the $200.
So what lessons can I extrapolate from this year-long experiment so that I can continue to spend less on our groceries?
Little ThreeYear and I spent a little time counting our blessings yesterday as we talked about his New Year’s Resolution, to work on his anger issues. Sweet thing, he hardly has any anger issues. He has major anxiety and sometimes that causes him to freak out a little. But he’s gotten so much better this year! So we talked about that and about all he’s good at, and all we’ve got to be thankful for. And I spent time counting my blessings after reading Mr. Money Mustache’s really honest and thoughtful post on his divorce.
Mr. ThreeYear and I have a best friend who’s a divorced, single-parent dad. For years, we watched many things happen with his former spouse and have seen the good, the bad, and the ugly that came from his divorce.
It takes such strength of character to be able to write about such a wrenching and difficult subject, with all its associated social baggage and judgment, in a way that’s designed to help others get better with money and life, and I admire MMM for writing about such a hard topic. I’ve read plenty of posts lately about people getting divorced, but not as many about staying married, and so here I humbly offer my own situation and lessons for better or for worse (no pun intended, of course).
The most helpful part of Pete’s post for me was where he gave tips on how to stay married. Staying married is really important to me. I remember in middle school, telling a classmate that I was never getting a divorce. She, with much more maturity and insight than I had at the time, reminded me that it wasn’t always within your control. I told her I’d do everything I could not to get divorced. I feel the same way twenty-eight years later.
My dad’s parents, my grandparents, got divorced after 34 years of marriage, and it kind of wrecked the family. It really messed up my aunt and uncle, who were born much younger than my dad. They were little kids at the time and got shuffled between two homes, one of which contained their mother who was losing her mind to grief and booze, and the other of which had their self-absorbed father who was more involved with his new wife than worried about his kids.
A year passes quickly, no? Especially when you move almost 1000 miles South during that year and upend your quiet life drastically. I’ve been fairly faithfully sharing our net worth and spending progress in 2018, so this final post of the year probably won’t be much of a surprise. Still, it’s fun to have a reminder of the good, bad, and ugly of this past year, and our final stopping place, net-worth wise.
Mr. ThreeYear receives his annual bonus in December. This year’s was a good one, which was helpful in offsetting some of the losses we experienced in the stock market. He used part of it to buy a new car, which you can read more about here, and is saving the rest. The deal this year was that he got to use the entire bonus however he wanted. As much as I’d love to take what’s left and throw it into our taxable account, I also love the fact that we’re at a place financially where the bonus truly is a bonus. For nine years, Mr. ThreeYear has dutifully turned over the bonus to me to put towards our financial goals. We’ve used it to save up for a downpayment on a house, increase our emergency fund, finance our trip to Chile, pay off our cars and Chile apartment, and many other things.
This year, he gets to enjoy the money and think up ways to spend it (he hates spending money, so I know him–he won’t actually spend it, he’ll just imagine dozens of ways to spend it.
So how much did we increase our net worth this year? Well…
This year, my #1 goal has been to lower my family’s grocery expenses from almost $1000 to no more than $772 each month.
For a lot of people, that number might seem huge. How do four people eat so much? For some people, that might seem like a ridiculously small amount. “How can they possibly subsist on so little?”
For me, grocery shopping is the thankless, difficult, necessary task that I do each and every week, going back again and again to the basics: meal planning, making lists, inventorying, not wasting food.
I love shopping at Aldi, the low-cost grocery store, but it’s 25 minutes away from my house, so getting there, buying groceries, and getting back to put them away can be a pain.
Enter: Instacart. A few weeks ago I saw a sign in Aldi that advertised grocery delivery with Instacart. For Aldi groceries! I was intrigued, and decided to spend the month of December testing the service out (because, with all of the running around and craziness in December, what better month to have groceries delivered straight to your door?