Four Money Lessons from Four Decades

On Wednesday I turned 40. I started this blog with that birthday in the forefront of my mind. The three year experiment was an exercise in using the last three years of my 30s well, in reaching a financial and lifestyle goal before I hit the big 4-0.

To celebrate this auspicious occasion, I went with a group of friends to a Korean restaurant where we rented a private karaoke room. Several friends drove or flew in to Davidson to help me celebrate. I had that perfect, happy feeling of being well celebrated and surrounded by people I loved all night.

Time is a funny thing. The memory of my 30th birthday is so clear, and yet it happened a decade ago now. Junior ThreeYear was two then and now he’s twelve.

Celebrating Junior ThreeYear’s second birthday at our house in Atlanta. I turned 30 a few days later.

I’ve done a lot of living in those ten years. Just ten months after my 30th birthday, we moved from Atlanta to New Hampshire, and then eight years later, on to North Carolina. We had a second child. We sold two and bought two houses in that decade. I’ve run over ten half- and full-marathons. I’ve had half a dozen jobs. We lived through eight New Hampshire winters. We’ve gone on countless trips. I’ve made lifelong friends.

We’ve done a lot with our money in that time–we’ve grown our net worth substantially. We’ve paid off our apartment in Chile as well as many cars and large chunks of mortgage debt. We’ve built a college fund for the kids. We’ve gotten a month ahead with our budgeting. We’ve learned to be a bit more frugal, to spend according to our values.

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Mid-Year Goals Update

In January, I made the decision to set my goals a little differently for 2019. I decided on the top three values for our family for this year, which have changed a bit since we’ve moved, and made a list of daily behaviors I wanted to work on in order to live those values.

Now that six months of the year have passed, I thought I’d report on how I’ve done.

Our Top Values

In New Hampshire, we became very focused on our financial goals. Part of the reason for that was because we didn’t have our family or long-time friends around, so pursuing financial goals gave us something to focus on.

Now that we live in North Carolina and enjoy something like location independence, although I have a full-time location-dependent job starting next month (but not summers!), our values have, admittedly, changed.

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June Net Worth Update

The first month of summer has now passed. For the ThreeYears, it was a whirlwind of swim practices, swim meets, and a job acceptance. That’s right; as of August 1st I’ll officially be gainfully employed (although I don’t actually start teaching until the end of the month).

I also took a bit of a break from blogging. I had been blogging three times per week; that’s a lot of writing. I took a rest from getting up early in the mornings and blogged once or twice per week instead.

While the boys had a great experience in swim team, it reminded all of us that we don’t like to have lots of activities in the evenings. For the first two weeks of June, we didn’t eat dinner as a family once (and we almost always do!).

Our Progress

In June, our net worth came back up to 65.6% of our goal, having gone down by several percentage points last month. Our goal was to reach 100% of our December 2016 net worth by December 2019, that is, to have doubled our December 2016 net worth in three years. While we’re still a long way from our goal and I don’t think we’re going to get there, I’ll start getting paychecks in August, so my 403b contributions will start then. I’m looking forward to making more progress than we would have otherwise for the last five months of the year.

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I’m 21. What Do I Do with My Money?

I was at a party last year, and there were several college students there who knew about my blog. They were in the final years of college, and thinking about the next stages of life. One earnestly asked me, “What do I do with my money when I get a job?”

Do you know how to shut down a party? Ask me that question. I can talk about money all night long. Poor kids. But I tried my best to refrain from throwing up money advice all over them, and focused on giving them a few key pieces of advice they could maybe remember. Then I hightailed it out of the kitchen and found some other people to bore.

After our conversation, though, I started thinking about the implications of the question. It’s a well-known fact that we offer little to no personal finance education for high school or even college students. That’s changing, slowly, but as I think about teaching high schoolers, I want to have some actionable advice to give them.

Here’s what I told the guy in the kitchen.

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A Year of Good Money: Make Repairs

Six months into the year already! Time for another money challenge, the monthly challenges I give myself or my household to improve our spending habits or make us better stewards of the planet’s resources.

Last month, I read that the third top way to mitigate global warming is to reduce food waste.

And the fourth top way is eating a plant rich diet.

So during the month of May, I paid attention to how much food we wasted, and worked to decrease what we threw away.

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May Net Worth Update

The final countdown… yes, we have one more week of school left. The kids are remarkably sanguine. I am excited for the days where we won’t have the mad morning rush for a few blessed months.

We had another extremely full month in May. Since the weather has warmed up, there has been almost more to do than I can keep up with, leading to this post on how it’s a lot harder to be frugal when you’re busy.

We’ve also been spending a lot and not saving as much as I’d like, which has reminded me why I like having a job so much… extra income. While I’ve been on several interviews, I still don’t have anything lined up for fall. However, I have two promising meetings this coming week, and I’m continuing to apply to many different schools (and universities!).

Our Progress

This month our net worth dropped, because the stock market dropped. So, sadly, we ‘re one step back. We usually have less net worth progress in the summer months, so I’m prepared for several months of disappointing net worth reports.

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Which College Major is the Best Return on Investment?

What do you want to be when you grow up? I’m guilty of asking this question to my kids. But the truth is, it’s hard to figure out what you want to be as a kid. As an eighteen-year-old entering college, it’s still pretty difficult. We share words of wisdom with freshmen in college like “follow your passion” but that is terrible advice, according to Cal Newport, author of How to Be a High School Superstar.

First of all, how many of us have passions? If we do, it’s obvious what we’ll major in. If we don’t, how are we supposed to develop said passions?

When we send our kids to college, we’re often making a huge financial investment in their futures, or asking them to take on massive amounts of debt. Yet we do so with very little forethought or planning into what, specifically, they’ll get out of the process.

Sure, we know that four years at a liberal arts university will teach the next generation higher thinking skills, give them writing skills, and generally expose them to thinking that will help them in the workplace (and maybe help them learn to hold their own at parties), but do we give enough thought and planning to how they’ll produce a return, in the form of a salary, on the investment of college?

The Chilean model

When I lived in Chile, where I moved shortly after I finished my own university education, I was surprised by how pragmatic Chileans were about their educations.

With average student debt rates climbing ever higher, it's time to pay attention to our return on the college investment. #highered #college #university #careers #collegemajor
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What It Feels Like to Forget It’s PayDay (and How to Get There)

I realized, recently, after I saw the Pinterest quote above (credit: CleverGirlFinance), that I no longer notice when payday is.

Sure, I eventually notice when paychecks land in our bank account (which I keep track of through our budgeting software YNAB), and I put them into our “To Be Budgeted” envelope to save for the following month, but I don’t remember if it’s this Thursday or next Thursday that paychecks will hit.

I will often let a few days or even a week go by before I do anything with that money, because I forget it’s there.

I don’t worry about when our paychecks will hit because we no longer need this week’s paycheck to pay our bills.

Believe me, I worried about when we got paid plenty before this past year. Even though we were debt free and on our way to FI, I still had to make sure we had enough cash in our accounts to pay the bills.

It’s only after getting a month ahead in our budgeting that I no longer worry or think about when we get paid, because we use last month’s income to pay this month’s bills.

And it’s as awesome as it sounds.

We should have made it a financial priority years ago to get a month ahead in our budgeting. It means we have so much less worry and anxiety around paying the bills. I never have to madly check my bank balance right before the 18th of the month (when our credit card bill is automatically paid) because I know we’ll have the money available to pay the bill.

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The Non-Frugal Guide to FI

As many long-time readers of this blog know, I am a spender. I am not particularly frugal, or even somewhat frugal.

That’s hard to admit when you’re a personal finance blogger. So why am I a personal finance blogger? How have I managed to accumulate any assets as a spendthrift?

I believe that part of this blog’s purpose is to encourage people who aren’t particularly frugal that they, too, can create financial freedom in their lives.

I’m going to be honest: you will not create massive assets or be able to retire early without some sacrifice. You just cannot spend everything you have and save nothing and become financially independent. Not gonna happen.

HOWEVER, it is very possible to train yourself to stop going in to debt for the things you want to buy and trick yourself into saving. I know because I’ve done it. It’s not instantaneous and it takes persistence to develop some of the habits you’ll need, but it is very possible. Trust me because I’ve been there. Maybe it’ll take you a little longer to get to FI. But you can get there.

It’s Your Life and Your Spending, Yo

Here’s the thing: as cool as frugality is, and as useful as it is to rein in your spending and save more, it’s not for everybody. It’s YOUR life, and if you want to spend it regularly eating out and buying lattes at Starbucks, you can!

This philosophy is called values-based spending, and it’s the one I personally employ. Basically, you figure out what your values are, and you spend on them. Then, you save in areas that don’t mean as much to you.

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A Year of Good Money: Decrease Food Waste

Another month is here, and with it, another opportunity to get better at money stuff! (No, it really never ends–I’m always trying to work on spending a little more wisely, despite how long I’ve been paying attention to our spending!).

Last month I took on the huge challenge of a digital fast. There were so many takeaways that I’m dedicating a whole post to it.

For this month, I’ve been reading a lot about global warming, in honor of Earth Day, and I actually read some really useful information about how we, as a family, could do a better job of reversing global warming.

I read that the third top way to mitigate global warming, according to Project Drawdown, is to reduce food waste (if you’re interested, refrigerant/AC coolant management and creating more onshore wind power are #1 and #2).

As a huge composter, I was shocked to hear that reducing food waste was much more impactful to the planet than composting (composting is still a good method–coming in at #60 of 100).

Want to know what #4 is? A plant rich diet.

Okay, as someone who pays a moderate amount of attention to helping Mother Earth, the fact that there are two relatively easy ways for me and my household to impact climate change is kind of amazing.

Reduce the amount of food we waste.

Eat more plants and less meat.

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