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)”

How We Stacked Financial Wins to Grow Our Net Worth

Ten years ago, in 2009, we had just started getting paying off our $38,000 in debt and had very little savings to speak of. We had a 30-year home mortgage on our house in Atlanta, and because we’d only put 5% down and the market tanked so bad, we had negative equity in it.

I thought we’d never get our debt paid off, but we finally did, in December of 2009. For awhile, we were only focused on building up an emergency fund, and didn’t think about our net worth at all.

But once we found the FIRE community and began to learn more about personal finance, we wanted to grow our net worth and become financially free.

Here’s what we did to stack our financial wins and grow our net worth to the level it is now.

Continue reading “How We Stacked Financial Wins to Grow Our Net Worth”

The Power of Waiting

There are few things in life I hate as much as waiting. I remember my grandmother reciting the lines to one of her favorite poems when I was little, as I jumped from one foot to the other, hurrying her along in my mind.

“If a string is in a knot,
Patience will untie it.
Patience can do many things—
Did you ever try it?

If it was sold at any shop
I should like to buy it.
But you and I must find our own—
No other can supply it.”

My grandmother is a fairly patient woman. More importantly, she understands the power of patience. She is one half of the frugal dynamo comprising my maternal grandparents.

Leon

A little background, if you will. My mom’s parents were born at the end of the 1920s and beginning of the 1930s and were Depression Babies. My grandfather Leon, especially, grew up in the middle of the tobacco fields and sharecroppers of central North Carolina. When he was a little boy, about Little ThreeYear’s age, his dad left, leaving my grandmother alone with two small children. My grandfather had to work in those same sharecropping fields, picking cotton and beans to make money so his mama and sister could eat. They’d trap rabbits for the occasional meat to add to their meals. They were so poor that food was a constant concern. Continue reading “The Power of Waiting”

Budgeting a Month Ahead

I know there are many people who don’t budget, but for me, it’s been a lifesaver. I am a natural spender, not a saver, so putting artificial boundaries around my money is important. Over the years, I’ve trained myself not to touch some of it, to keep it off limits, and giving myself artificial boundaries around eating out and entertainment has helped us spend less over time.

One thing I’ve never been able to do (and I say “I” because Mr. ThreeYear has pretty bad money anxiety and doesn’t look at the budget) is get a month ahead in our budgeting.

We’ve been budgeting for ten years this month, and it’s the first month I’ve gotten a month ahead in the budget. Previously, I’d budget one paycheck at a time, so I wouldn’t fully find my budget categories at the beginning of the month (I have a habit of throwing any extra money we get into investment accounts). It worked, but I was never budgeting all at once. With budgeting one month ahead, you use this month’s income to fund next month. So you need to have a full month’s income saved, in addition to what you need to pay your bills for the current month.

Part of the reason I never got one month ahead was that I didn’t see the benefit. As long as our budget was working, why fix it? Sure, it was a little awkward to fund our essential expenses and then later fund our nonessential expenses (using our 50/50 budget) but it had worked for years, and we always had investing, saving, or debt payoff goals that seemed more important than getting a month ahead with our budget. Continue reading “Budgeting a Month Ahead”

The Average Joe’s Ultimate Guide to Getting Out of Debt

What would your life look like with no more payments? No more car payments. No more credit card payments. No more student loan payments. How much extra money would that give you? Imagine the freedom to travel, to build your dream house, to finally retire. It’s a new year. And a chance to finally, once and for all, get out of debt. But what if you’ve tried before, and nothing’s worked? Or you’ve gotten out of debt only to get back into debt?

If you’re reading this, you may have an overwhelming amount of debt to tackle. Or you may be a personal finance guru, and need this advice like you need an extra helping of pasta with dinner.

Never fear! This guide is designed to help you get out of debt, but much of this advice will also work for other large, looming goals you’ve set for the year.

But why, you may be asking yourself, should I listen to this random voice on the internet? What does she know about how to get out of debt or how to accomplish my goals?

Our Story

I have written every detail of how Mr. ThreeYear and I managed to get out of debt in this post and this follow up post, but in case you’re new, here’s a recap.

When Mr. ThreeYear and I got married, we were both debt free. This is something of a miracle when most college graduates finish college with debt. According to Tica, The Insitute for College Access and Success, 76% of graduates from New Hampshire, where we live, have college debt upon graduating as undergraduates, and the average debt burden is $33,410. That’s for undergraduate education!

I was fortunate to have scholarships to college and parents who paid the rest. Mr. ThreeYear was fortunate to live in a country where undergraduate education is more reasonably priced: Chile. When we met (in said country), neither of us had any debt. We spent a few years living like the DINKS we were, but Mr. ThreeYear’s way: we bought everything in cash. If we couldn’t afford to buy it with cash, we couldn’t afford it. I scoffed at Mr. ThreeYear as he saved up to buy a car, in cash. “Why don’t you just take out a car loan?” He looked at me like I was crazy. “I don’t want to take out a car loan! I’ll just wait and buy it when I have enough money.”

Two years later, we moved to the States. We moved to the fast and furious city of Atlanta, where Mr. ThreeYear, and then I, found jobs, and slowly, every-so-slowly, we began to adopt the Atlanta way of life. First, we bought a house. We had been renting a very nice, 1100-square-foot apartment that was 15 minutes away from Mr. ThreeYear’s job (it was literally two miles away from us, but you know, Atlanta traffic). It had tennis courts and a pool, and a low rent (we paid around $850 a month for a two-bedroom in the heart of the city), but we decided we should buy a house, instead. Continue reading “The Average Joe’s Ultimate Guide to Getting Out of Debt”

Our Simple Financial Management Plan

Einstein said there are five ascending levels of intellect:

  • Smart
  • Intelligent
  • Brilliant
  • genius
  • and simple.

So many times, we think that complicated strategies are inherently better. But have you seen Einstein’s theory of general relativity? The one where he challenges all conventional notions of matter moving in space and time? That puppy is simple. Continue reading “Our Simple Financial Management Plan”