Financial and location freedom for families. In 3 years or less.
Category: Money Management
We’re working towards financial freedom. How we save, invest, and spend is a big part of that. Read about what we do to save more, invest better, and spend wisely in alignment with our values (family, travel, and FI).
Does getting out of debt, saving more, or building net worth seem hopeless? Fear not. You can make lots of mistakes, start late, and still create financial independence.
Part I of this post details the beginning of Mr. ThreeYear’s and my financial story.
Basically, it was the story of how we made a ton of financial mistakes, had several big setbacks, and still managed to make fine progress on the road toward financial independence. It detailed all the mistakes we made like buying a house at the top of the market and selling at the bottom, not saving for retirement early and blowing all our money on eating out and new Apple products, and buying cars we didn’t need on credit.
In Part II, I’ll explain how we dug ourselves out of what seemed like a hopeless hole, got out of debt, and totally transformed our financial situation.
**This year is A Year of Good Habits. Each month, I’ll focus on developing or strengthening one financial habit to better automate that behavior so we can double our net worth in three years and become location independent. In January, I’m focusing on setting and sticking to a budget as the goal. To do that, I started using a new budgeting software called You Need a Budget. Below is my take on how that’s working out for us.** (By the way, if you click the link above, you’ll get a free month and I’ll get a free month. Thanks for supporting this blog!).
Here We Go
Why did I pick budgeting as a habit? Is it a habit, exactly? If we look at a habit as a behavior or set of behaviors that have become automated, then the way we channel the money that comes into our house is a habit. In the past, I’ve used the 50/50 budget method and Mvelopes software to channel our family’s finances. Some people use an anti-budget which works, too. But for me, a reformed spendthrift, I need the parameters of a budget to help me spend less. I say “I” because my husband does not have this problem to the same extent. He doesn’t spend much (I am also the family purchaser, for the most part. I buy groceries, pay insurance, etc.).
Our family’s dream is to move internationally in three years. In order to do that, we’ve set a goal of doubling our net worth by December 2019. While that amount of money won’t replace our yearly expenses using the 4% rule (yet!—we’re slowly bringing down our spending), it will give us enough financial security to leave our “safe” jobs to travel.
For us “semi-adventurous” folk, having that nest egg in the bank is important. Everyone has different levels of tolerance for financial security.
My husband grew up very, very poor, in Santiago, Chile. While his family always had enough food to eat, he spent time after school collecting wood scraps in order to heat their house. His mom worked three jobs after his dad died, when he was 13, in order to keep their family afloat. As you can probably imagine, financial security is important to him.
I have a friend who is amazing in so many ways. She is giving, has co-funded charities that help refugees, and is so excited about life she never stops participating in cool events in our area. She has family who lives internationally so she and her family travel a lot. But she is terrified of budgeting. She and I have made dates to sit down and look at her budget but she keeps cancelling—she can’t bring herself to do it. She is afraid that if she puts the numbers to paper that she will be forced to stop doing something she likes—travel, supporting charities, enjoying local entertainment.