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?
This is the end, my only friend… (cue The Doors music). We have reached the last few days of the year. You know why I love this time of year? Let me be honest:
presents. I love getting them, and I love giving them.
year-end bonus. Mr. ThreeYear gets his bonus in December so we have this whole chunk of extra money burning a hole in our pockets (okay, not really-it usually goes to worthy financial goals. But we still splurge a little with it).
Christmas music. It’s cozy and it reminds me of happy Christmases of yore (another totally holiday-appropriate word, yore is).
Family. I get to hang out with my extended family during the holidays.
New beginnings! The end of the year is the time when I’ve accomplished a lot of my goals, which gives me a happy, productive feeling, and then I have the excitement of creating a new goal sheet for the coming year.
While I gave you an update midyear , let’s see how I ended the year with these goals.
Last year, I published a guide for setting great goals in 2018. I thought it was worth revising for 2019. I’m excitedly setting goals for the coming year, and I have some great ideas brewing. This is the first year I’m goal setting for the blog, too! Enjoy your weekend, and if the mood strikes, put some goals to paper for 2019.
One thing is clear to me as we ride out the end of this year: if you set great goals for 2019, it will make a huge difference in what you’re able to accomplish next year. The world we live in today is practically designed to distract us from keeping our eyes on our most important goals and work (for example, as I’m typing this, I’m trying to ignore the loud cartoon my kids are watching across the room). So focus is key. And great goals help you keep your focus, all year long.
But how do you figure out the best goals to set for the upcoming year? Maybe you have fifteen burning desires that you’d love to achieve, but you don’t know how to prioritize them. Or maybe life is motoring along just fine, and you know you’d probably like to improve something, but you’re not sure what.
I found myself asking those exact same questions several years ago, and here’s what I’ve figured out really works when it’s time to goal set for the upcoming year.
1. Get Crystal Clear on your Values
It’s hard to prioritize your goals if you haven’t defined your values. What are your values, though? Values are what you judge to be the most important things in your life–the things that deep down, you care about the most. Given that definition, it seems like it would be easy to figure out your values. But it’s not always.
Sometimes, you want to value something that you actually don’t care about that much. For example, when I was in my 20s, I lived in Santiago, and Mr. ThreeYear and I were figuring out where we should go next. I was offered the opportunity to become part of an MBA program where I’d complete half in Chile and half at a great school in Texas. But I declined, ostensibly because I wanted to get into a top-10 MBA school, like Wharton. In the end, though, we moved back to the US and I didn’t go to an MBA school at all. To the shock of almost everyone in my family, I became a stay-at-home mom for seven-and-a-half years. It turns out that what I thought were my values–getting an MBA and climbing the corporate ladder–weren’t really my values at all. I really valued family, which was the real reason I didn’t stay in Chile to start an MBA, because I missed my family back in the US and wanted to go home. And I really valued motherhood, and making sure my children had a secure start in life.
One of the best ways I’ve found to figure out your real values is the “What do I want?” exercise. It’s fairly simple. You take out a sheet of paper, and at the top, write, “What do I want?” Now, all you do is list the things you want. They can be as small and insignificant, or as large and pie-in-the-sky as you want. Anything that comes to mind goes on the list.
When you start this exercise, your first few wants will probably be fairly trivial and perhaps materialistic.
I moved from New Hampshire to North Carolina to get away from massive snowfall. And I did, honestly. My old town in New Hampshire suffered through a record three snow days in November, way before the snow normally starts. While things were chilly in Charlotte, the ground was brown, not white.
But, irony of ironies, Winter Storm Diego hit us a couple of weeks ago and not only did we have two snow days of our own, we got a solid week before the white stuff melted.
Honestly, I was kinda digging it. While I can’t make it through seven long months of white ground, seven days is manageable.
There’s something so cozy about winter. I find that in wintertime, December excluded, we tend to bunk down at home and spend more time together but less money. Probably because for the last few years, we’ve embraced the concept of hygge and home.
Hygge is, of course, the famous Danish concept of coziness. It’s the idea of making your home a warm and welcoming cave by lighting tea candles, building a great big fire (or turning up those gas logs), playing soothing music, and basically leaning in to the short, cold days of winter. Winter isn’t to be endured, according to the Danish, it’s to be embraced!
Since we only have to embrace a few months of cold weather (and it’s currently 55), I’m more than happy to enjoy what little truly cold weather we have, and transform our new house into a cozy nook.
About nine years ago, when Mr. ThreeYear and I began to wise up about our finances, we visited a financial planner and filled out a detailed survey. We didn’t have many assets to speak of, at the time, since we’d just gotten out of debt, but if the dude had been wise, he would have nurtured the relationship with us because he could have had very good future clients. He was not and we now manage our own investments, a scenario I am more than happy with.
Even so, it was interesting to hear his predictions that we’d need about 80% of our income at retirement. Where did that number come from? In the years that followed, as I filled out online retirement calculators, I heard the figure repeated.
Then, I began to learn more about the 4% rule, the oft-cited retirement rule-of-thumb (based on the Trinity Study) that cites evidence that if you withdraw 4% of your portfolio per year in retirement, adjusted annually for inflation, then your portfolio should easily last you 30 years (or more). Another way to look at the rule, popularized by the incontrovertible Mr. Money Mustache, is that you’ll need 25 times your annual spending invested in order to retire. This rule assumes that you’ll keep your spending relatively level in retirement, that is, you’ll spend a similar amount in retirement as you do now.
This season of my life, that is, the last six months, has brought a mountain of consumption. It started when our family moved from New Hampshire to North Carolina. We began spending gobs of money to move our belongings and settle into our home (just look at this spending report if you don’t believe me).
We bought a new dog and subsequently bought the related accoutrement: water bowls, food, shots, kennel visits, Kong toys, cages, leashes, chew sticks, and rawhide bones, amongst other necessary pet purchases.
We bought a trip to Disney and had a fabulous time, but in addition to the many dollars we spent, we stuffed our faces with food and drink for a week.
Since we’ve begun to work at home, Mr. ThreeYear and I have increased our food consumption. We have the weight gain to show for it.
It’s Not *That* Type of Consumption
There’s a different type of consumption going on, as well. I have been mindlessly consuming every printed piece of garbage I can pour into my brain. Romance novels (a particular vice) and crime thrillers–I average about one trashy book every two days (I read fast). Instagram feeds. Twitter. Facebook, which I occasionally stalk. Personal finance posts. My phone is in hand for multiple hours a day, according to my tracker (I read on it through the Kindle app, too).
In Monday’s post, I shared the things Mr. ThreeYear and I have done that I consider our best money moves. They were the habits or disciplines we adopted that have served us the best over our fifteen years of marriage. BUT, we’ve also made our share of bone-headed money moves, and today, you get to hear all about our very worst money moves of the past fifteen years.
Buying Expensive Cars to Repair
When I was pregnant with Junior ThreeYear, we had two cars–a Jeep Cherokee Mr. ThreeYear bought after we moved to the States (used, because with two exceptions, we’ve only bought used cars) and an Acura Integra. This was the car my parents gave me, brand new, because I got a scholarship to college. It was a two-door coupe, standard, leather seats and CD player (rare at the time). It was such a good car. But we thought that because I was pregnant, we needed to get rid of the Acura and get a bigger car for the baby. So we went car shopping, and found a used BMW X5. I remember being transfixed because it had built-in shades that you could pull down in the back.
Our neighbor, who had just traded in his Audi, warned us that foreign luxury cars were expensive to repair, but we brushed him off.
Instead of trading cars with Mr. ThreeYear, I sold the paid-for, gas-sipping Acura and bought this BMW for about $16,000 (financed). For the first few years, the car needed a few repairs, but nothing too terrible. BUT, three years in, just when we moved to New Hampshire, it started to fall apart.
Junior ThreeYear and I were on the interstate when all of a sudden, the car just slowed down. It wouldn’t respond to the gas. I managed to pull over on the side of the road before it completely died. We had it towed, and luckily, it wasn’t the engine, but it was something else that cost $1,000. Meanwhile it had stranded a pregnant me and my not-yet-three-year-old son on the side of the interstate!
We only had two mechanics in town, and the honest one didn’t work on BMWs, so we had to take it to the shady one (who was later incarcerated for dealing meth. Lovely guy). Long story short, the BMW cost us around $7,000 to repair that year before we wised up and traded it in.
Mr. ThreeYear and I will have been married for fifteen years this May. During that time we have done a lot with our money, good and bad. Today, I’ve detailed our best money moves in our decade and a half together, and on Wednesday, I’ll share our worst money moves.
Contributing to Retirement from the Beginning
Even though Mr. ThreeYear and I didn’t max out our retirement accounts from the beginning, we did contribute to them.
While I don’t remember the exact percentage that we contributed in the early days of our first jobs in the US (in Chile, I contributed a certain portion of my income to retirement because there it’s mandated by law), I believe it was enough to get the full company match (for him) and a few hundred dollars a month (for me).
We continued contributing to the accounts in 2008, until we adopted Dave Ramsey’s method of paying off debt. We stopped contributing to retirement for 18 months while we paid off our $38,000 in debt. Once we paid our debt off in late 2009, we began to again contribute to retirement accounts again. When we moved to New Hampshire, we again took a short break while we saved up a house downpayment, since we sold our Atlanta home at a loss in 2010. Finally, when we moved into our New Hampshire house in 2012, we started maxing out Mr. ThreeYear’s 401k (because I wasn’t working), and then started contributing heavily to my 401k once I started working.
Maxing out our 401ks is the single best financial move we’ve made, in my opinion. We’ve lowered our taxes, increased our yearly investments, and decreased our spending (because that money is no longer available to spend), all in one fell swoop. I tell friends and family members who don’t know where to “start” on their personal finance journey to start there. In my opinion, for someone who has spending issues, it’s even more important than paying off debt, because of the effects of compound interest and time (plus it forces them to spend less).
It’s still hard to believe that almost another entire year has passed. As I was looking through my posts, I saw one I’d written last year about this time, and I thought it would be great to share again.
The funny thing is, our money moves this year are almost exactly the same as last year’s. We’re creatures of habit, for sure!
The biggest difference between this year’s end-of-the-year money moves and last year’s is that last December, we paid off all non-mortgage debt so this year, we have nothing to pay off. It feels amazing, and has felt amazing since we did it last December. We feel so much more in control of our finances this year, in large part because we keep more of our money and are able to save and invest more.
I’d love to hear your end-of-the-year money moves! Let me know in the comments!
While we’re still over a month-and-a-half from the end of the year, we know that soon, December 31st will be upon us, so the ThreeYears are currently working on end-of-the-year money moves to make sure our finances are in good shape.
Here’s what we’re doing to close this year out:
1. Contribute as much as possible to my i401k
Since I’m self-employed, I have an i401k (if you’re interested in the particulars of opening one, read this post). I am playing catch-up with my contributions since we had so many cash goals that we funded with my income this year. So, in the final quarter of the year, and in the first quarter of next year (or at least until we file our taxes), I’ll be contributing a lot to my 401K. Even though the market is high now, I don’t want to miss the tax contributions of these contributions. I estimate we’ll save several thousand dollars on our taxes if I reach my contribution goal for the year.
2. Fulfill our outstanding financial obligations
We’ve got a few outstanding financial obligations, including completing our yearly pledge with our church. We usually wait and pay the majority of our pledge in the fourth quarter of the year, when our cash flow’s better (as a teacher, I don’t get paid in the summer and it takes a month or so after school starts to begin getting paid, so our income rises in October, November, and December).
I also have to pay my fourth quarter taxes for income earned from September through December. I have until January 16th, 2018, to file the taxes, but I’ll probably go ahead and pay what I estimate I’ll owe before the end of the year. I set aside 20% of my income as it comes in, in my business account, so that money is ready to send in anytime I decide to pay the bill. Continue reading “5 Money Moves We’re Making Before the End of the Year”
When Mr. ThreeYear, our boys and I moved to North Carolina this June, we realized a dream at least a year and a half in the making.
So how does location independence feel six months in? How have our decisions turned out? I thought I’d give you an update on how we’re feeling about our move now that we’ve had some time to settle in.
First of all, just as a review, our family publicly announced on this blog, just over two years ago, that by the time I turned 40 (in July 2019), we wanted to sell our house and move abroad. I put it like this: