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.

Continue reading “What It Feels Like to Forget It’s PayDay (and How to Get There)”

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.

Continue reading “The Non-Frugal Guide to FI”

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.

Continue reading “A Year of Good Money: Decrease Food Waste”

Our Switch to an HSA: The Good, the Bad, and the Ugly

Last October, I was excited to learn that Mr. ThreeYear’s employer was offering, for the first time ever, a high deductible health care plan, coupled with a Health Savings Account (HSA).

In the past, we’d only had the option of a Flexible Savings Account (FSA). Flexible Savings Accounts offer some tax advantages, such as allowing you to deduct up to $2700 of your paycheck, tax free, to use with qualified medical expenses. But you only have one calendar year to use the funds or you lose them. $500 of the funds carry over to the next calendar year, which you have to use by March 31st.

With an HSA, however, you can deduct up to $7000 of your paycheck, tax-free, and there’s no deadline for using the funds. You can invest the money in your HSA, and take it with you if you leave your employer. Your money will grow, tax free, for as long as it’s kept in your account, and you can access the money whenever you like to pay for qualified medical expenses. If you haven’t read the MadFientist’s excellent primer on HSAs, you should. It’s one of the reasons I was so excited to get an HSA option this year.

Last Year

Last year, we opted for the company’s normal health care insurance option. Each paycheck, $280.99 was taken out of Mr. ThreeYear’s paycheck for his cost of the health insurance, and $57.75 was taken out of each paycheck to fund the FSA.

When we went to the doctor, we paid a normal copay of $20-$40 and medications cost us $10 each.

Continue reading “Our Switch to an HSA: The Good, the Bad, and the Ugly”

Your Three Year Experiment: Jennifer & Lewis

Happy Wednesday, readers! So glad to be back with another installment of the “Your Three Year Experiment” series, where we feature stories of people pursuing their unique dreams and goals over the next few years.

Today I’m delighted to introduce Jennifer, a new reader whose story is very similar to my own, except she’s a lot younger, doesn’t have kids, and has way more energy than I do, based on this interview! 🙂

You’re going to love her story! In it, you’ll learn:

  • the daily habit Jennifer and Lewis, her boyfriend, use to stay on track with their goals
  • their multi-national geoarbitrage plan
  • why paying attention to your tax rate is so important

Take it away, Jennifer!

Tell us a little bit about yourself.

Hi! My name is Jennifer and my boyfriend’s name is Lewis. We are in our mid-30’s and live in Cincinnati, OH. We’ve followed very different paths up to this point in our lives but one thing we have in common is our dissatisfaction with following the standard societal norms and the idea of working for the next 30-40 years. We have decided to chart our own path that is a unique mix of a “fully-funded lifestyle change” and eventual financial independence, with a big dash of geoarbitrage mixed in!

Our plan is to spend the next 3 years in Cincinnati saving up/investing as much money as possible so that we can then move abroad for the following decade or so. We would both continue working on-and-off in some capacity- I plan to apply for teaching positions in international universities, while Lewis completes his degree online and then launches his own translation company. Our goal is to move every 2-3 years. So far we are planning: Bogotá (Colombia), then somewhere in the Middle East (likely Dubai or Abu Dhabi) [Laurie’s note: then definitely check out my friend Andrew’s story], then either Paris or Granada (Spain) for Lewis to do his masters. From there, who knows?!?

What’s your background? Early years, education, married, kids, jobs?

I’ve spent most of my life living in Cincinnati minus a few years in Dallas. I grew up in a solidly middle-class family and was the first to attend/graduate college. My parents have always tried to instill the standard American ‘dream’ in me of getting a good job, staying there forever, and living my whole life here in Cincinnati. Sorry to disappoint them, but I’ve never fit into that mold!

Even my career path has been interesting in that I keep jumping back and forth between two fields. I went to a top design school for architecture/interior design but quickly realized that I didn’t enjoy working in the field, so I took extra classes each quarter (the maximum the university allowed!) in order to get a minor in Spanish. Good thing too, because I graduated in 2009 and couldn’t even find a design firm to VOLUNTEER at!

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The Six Streams of Income We’ll Rely on in Early Retirement

Now that our family has moved to North Carolina, our next big financial goal, ten years’ hence, is retirement. We’ve decided to wait until Little ThreeYear graduates before we retire (although we could always change our minds).  Since we’ll be retiring somewhat early, before the “official” age of 65, we’ll need to structure our retirement so that we have access to different pools of money, or streams of income, to tap into.

Though Mr. ThreeYear and I primarily invest in index funds (we have a “slow and simple-don’t get greedy” philosophy), we currently plan to have several streams of income available to us when we retire. Some will be passive, and others active. While this wasn’t necessarily a conscious plan on our part, life has worked out this way and we’ll take these streams of income we’ve developed along the way. Continue reading “The Six Streams of Income We’ll Rely on in Early Retirement”

March Net Worth Update

As we enter the fourth month of the year here in North Carolina, I’ve been thinking about the differences between our old Spring in New Hampshire and the Spring we’re experiencing now.

While it did snow yesterday (very strange for North Carolina in April), in general we’ve enjoyed warmer temperatures and sunshine. New Hampshire still has snow on the ground, so the flowers and Spring weather are a welcome change.

Spring has always been my favorite time of year here, and this year is no different. The new blooms and warmth make me smile. And things are in full bloom right now. Our cherry trees have exploded in tiny white blossoms that look like snow as they fall off the trees. We’re sneezing like crazy with all the pollen in the air, and everywhere you turn, creeping phlox, tulips, daffodils, and other early Spring emergents are bursting out of the ground in an explosion of color.

Our Progress

March was a pretty boring month, net worth wise. Nothing much changed and we saved a normal amount towards retirement, our HSA, home equity, and the like. Our total net worth increased just over 1%.

Continue reading “March Net Worth Update”

The Golden Rule of Building Wealth

Everyone wants the magic formula, the hat trick, the secret, to becoming wealthy. And no, it’s not “you attract to you what you think about.”

The golden rule of building wealth is simple. It’s so simple, it’s been repeated ad infinitum by the personal finance community, financial planners, and people who actually have wealth.

It’s been systematically attacked, hacked, subjugated, by practically every other entity in our society.

Ready? Here it is: spend less than you earn.

Oh, and we can’t forget the corollary: invest the difference.

Boom. We’re done.

Oh, if only, dear reader. If only it were that simple. If only I hadn’t felt dread course up and down my body yesterday as I calculated how much we’ve gone over budget in March. If only Payday Loan Centers didn’t sprout like fire ants across the small rural communities of this country.

If only we didn’t have the hear the siren call of advertisements fill our every waking moment, to peruse the endless streams of social media promising you’ll be better, faster, and stronger, if you click here and buy it now.

Spending less than you earn, as simple as it sounds, is one of the hardest things to do as a human being living in our modern (especially first world) society. It involves saying “no” one hundred, one thousand, ten thousand times per day to what can feel like everyone and everything around you. It involves staying true to a distant goal for a distant self, living like you’re in a different economic class, developing copious amounts of will power over time, and not letting it all fall apart if your life becomes unglued, through death, divorce, or some other tragedy.

It sometimes feels like an impossible task. And yet, people accumulate wealth every day. People save; people retire; they pay off their mortgages.

In my experience, as a reformed spend-a-holic, we’ve been able to slowly accumulate wealth in the face of all these temptations because of a couple of behaviors that have allowed us to practice “The Golden Rule of Building Wealth” while still existing in a consumerist society.

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How We Paid Off Our Debt, Twice: Guest Post on Financial Pilgrimage

When I saw a note on a forum about a new series featuring young families getting out of debt, I smiled. Our family has definitely achieved the former, but I don’t think we qualify for the latter at this point. After all, I’m almost 40, Mr. ThreeYear is a ripe old 45, and our kids are no longer so young. At 11 and 8, they definitely qualify for the middle-elementary category.

However, I think our story has a lot to teach young families with debt to pay off. After all, we started our debt payoff in a typical fashion, by following Dave Ramsey’s baby steps. But we took more debt on, after we’d paid off our original debt, learned how to pay off debt twice, and have somehow still managed to save a large net worth and reach our goals of location independence.

Financial Pilgrimage is a blog about a young family who is also in the process of paying off their debt, including their mortgage. They focus on advice for young families, those who are just getting started, have young kids, or both.

Here’s our Debt Payoff Story (times two):

1) Start by telling us about yourself. Please include any details you feel comfortable sharing about your family, job situation, income level, and amount of debt paid.

I’m Laurie and I’ll start by saying that my family is probably a few years past the “young” stage. I’m 39, my husband is 45, and our boys are now 11 and 8. When we started our debt repayment journey, though, we only had one son who was about 18 months old.

Don’t worry, it didn’t take us ten years to pay off all our debt! But we had to learn some lessons twice, so I thought our story would be a great case study for young families.

When we started our debt repayment journey, my husband worked for a Fortune 50 company in marketing, I had just become a stay-at-home mom, and we were adjusting to life as new parents.

It was July 4th, 2008, and my husband had been laid off six months before. It was the middle of the housing crisis, and his company had been hit hard. They laid off thousands of employees.

At first, we were frantic—he’d received a 3-month severance, but what would we do after that? After all, I was no longer working, we had a mortgage, and we now had a young son to support.

Continue reading “How We Paid Off Our Debt, Twice: Guest Post on Financial Pilgrimage”

Hate Your Job? Don’t Worry; You’re Not Wasting Your Time

Yesterday Paula Pant posted a quote on Instagram:

Okay, let’s analyze this one for a minute.

I know that this could have easily been a throwaway quote designed to inspire people to find their dream jobs.

But this quote bothered me in a real and visceral way.

Here’s why.

Let’s say you’re currently in a job you hate. According to this little pearl of wisdom, your life right now has no value. You are doing absolutely nothing of worth. There is nothing that you can glean from this job to help you with the rest of your life.

I call bull on that.

Continue reading “Hate Your Job? Don’t Worry; You’re Not Wasting Your Time”