October 26, 2015
Popular frugal finance says: Want early retirement? Live on less.
But I don’t want to! Been there, done that, still wearing the crappy free t-shirts because holes aren’t a good reason to throw them out. Obviously we CAN live on less, and boy have I, but given the choice, and I’m giving myself the choice, I choose to spend mindfully and selectively so we can spend on good quality or pay for expensive stuff when we have to. Besides, while I know frugality-focused Early Retirement folks enjoy their wage-working-free days, my desire to retire early has a lot more to do with freeing up time and energy to do things I care about like animal rescue, helping foster kids, addressing poverty, etc. That takes money.
Why not do both?
In an alternate universe, I could, so I would! But here in this somewhat crappy version, I simply can’t and I will not sacrifice health for wealth again when it’s not for survival.
Nope. I’m a forever fan of the multi-faceted approach.
Reducing our spendable cash flow: we were saving 25% of our salaries, net. That’s untouchable unless it’s paying down debt or keeping us afloat during job loss. We’re saving another 15% to account for LB’s expenses. Until / unless it’s spent on LB, it’s also untouchable outside of catastrophe or debt paydown.
The one-income life: replacing one of our incomes and benefits, or learning to live without one of our incomes for a while, isn’t going to happen through a side gig right away, but it’s a goal. I’m starting the income replacement with our investments.
Cutting our expenses ruthlessly: I negotiate our internet bill regularly, we don’t have a phone bill, we use the heck out of our cell phones and have the lowest plans appropriate to our usage. I’ve tried to refinance the mortgage several times, to no avail, but no fear! There are other ways to kill that mortgage.
With thanks to Nicole and Maggie for pointing me in the direction of a useful amortization spreadsheet, I’ve worked the numbers:
I love the potential for savings here. It’s time for a good hard look to see how much we could comfortably throw from savings in a big ole prepayment when each dollar is worth two in this scenario! There’s a serious temptation to throw all the cash at it but I’ll refrain from overzealous stupidity, I won’t deplete our savings cushion even if it feels like our jobs are relatively secure for now.
Update: Had a chat with PiC, we’ve decided that we can pull together cash from enough sources to make a big prepayment this month so we’re going all in. It’ll be worth almost twice the value in interest we don’t pay over the life of the loan so I’m over the moon about that. And you’d better believe I’m looking at ways to relieve my cash spending so I can throw more cash at it next year.
September 7, 2015
Monday: Catching up on FSA redemptions.
Tuesday: Didn’t pay for daycare and cooked up a pantry dinner of sausage & pasta!
Wednesday: Getting the August Net Worth figured!
Thursday: Worked on figuring out how much mortgage prepayments I would have to make in order to approximate the same savings as refinancing. Got very confused by the mortgage calculator. Riddle me this, how does this make sense? Using this mortgage calculator, I kicked around some numbers.
Total interest paid over the life of the loan (no pre-payment): $322,459.53
Annual prepayments of $10,000.00 for 5 years
Total interest paid over the life of the loan (with pre-payment): $245,588.91
Your Savings: 5 years and 7 months shorter loan
Total interest saved: $76,870.62
Annual prepayments of $12,000.00 for 5 years
Total interest paid over the life of the loan (with pre-payment): $233,895.42
Your Savings: 6 years and 6 months shorter loan
Total interest saved: $88,564.11
Annual prepayments of $15,000.00 for 5 years
Total interest paid over the life of the loan (with pre-payment): $218,142.25
Your Savings: 7 years and 11 months shorter loan
Total interest saved: $104,317.28
Annual prepayments of $10,000.00 for 10 years
Total interest paid over the life of the loan (with pre-payment): $215,785.50
Your Savings: 9 years and 1 months shorter loan
Total interest saved: $106,674.04
Enough about me, let’s admire your progress!
@clareyfrey: Now that we earn more than we did when he opened it, @FreyDrew converted his traditional IRA to a Roth. #1goodmoneything
@PhoenixStorm24: #1goodmoneything I’m trying to predict how much it would cost us a month to get a newer car with insurance, when we’re ready for it.
@imawindycitygal: I spent the weekend doing free fun things like kayaking on the river and cooking/eating dinner in. #1goodmoneything
@femmefrugality: Balanced the budget. The numbers are looking good even with Q3 this month! #1goodmoneything
@femmefrugality: Got the bills paid for this half of the month. #1goodmoneything
@FunnyAboutMoney: #1GoodMoneyThing Canceled NY Times; got NY Review of Bks & Economist for less than half Times’s cost.
@imawindycitygal: Stopped at Whole Foods tonight to buy one thing, and came out spending less than $100. :-/ #1goodmoneything?
@NotSoSerene: Did the math, and with my new job starting in October, if I really dig deep I could pay my loans off in 1 year, 10 months #1goodmoneything
@TheAsianPear: Ate my packed lunch & went for walk instead of buying take-out (although I still want a lobster roll) #1goodmoneything
August 31, 2015
We are Groot! aka: y’all are wonderful.
Monday: Worked on our mortgage refi application which didn’t work out but I shall prevail!
Tuesday: Me: How about we retire in 7 yrs? PiC: Don’t get my hopes up. #SetGoals #1GoodMoneyThing gets you there.
Wednesday: Transferring money into brokerage acct. [BTW: TradeKing is giving a $100 signup referral bonus right now! Let me know if you want one.]
Thursday: Added $6000 to savings from a matured CD.
Friday: I think my #1GoodMoneyThing today’s going to be cooking up a new batch of veggies for LB. No buying jarred food!
Accidentally took Saturday and Sunday off, but we stayed at a friend’s house instead of a hotel for an overnight trip so I’m calling that our weekend #1GoodMoneyThing!
So many people have chimed in with #1GoodMoneyThing tweets. I tried to catch them all – it was harder if it wasn’t hashtagged because I’d have to see it real time and they fly by quickly – but you’re just knocking it out of the park! You’re not just doing it, you’re sharing it with new folks.
Now, look at y’all go!
@PhoenixStorm24 #1GoodMoneyThing for today would be buying smaller bunches of fresh fruits/veggies to stretch $10.
@civilwarbore Goat Lady’s Financial Tip: save $$ and keep your peace of mind by getting a dumb fridge instead of a smart fridge.
@accordingathena Let’s see, today I only paid for parking & worked my side hustle! #win
@accordingathena: Spent a ton at the mechanics with a quote for $3,000 worth more of work but used a $35 coupon for today’s repairs at least.
@femmefrugality: Cancelled the spa membership I signed up for yesterday in post-massage euphoria.
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@evil_bat_witch: @femmefrugality @RevancheGS #1GoodMoneyThing doing the same for cable bought for hockey reasons. Can’t record, won’t pay $20/mo for a DVR.
Mom Kristen @PhoenixStorm24: #1GoodMoneyThing for today: selling the second car seat!
Athena @accordingathena: Didn’t spend any money today. #1goodmoneything
Evil B Witch @evil_bat_witch: @RevancheGS #1goodmoneything got all 4 of my scrips in 1 trip, instead of the 2 or even 3 i usually do:D
@windycitygal: I’m going to say my #1GoodMoneyThing today was only buying lunch instead of lunch + breakfast + snack. Was working in SF today.
@clareyfrey: Re-signed our lease at our apartment complex but moving down to a unit that is $200 less per month in October.
@imawindycitygal: Walked and took public transit to the office today. No driving, so no gas used. And I got more exercise! 🙂 #1goodmoneything
@NotSoSerene: About to go pay off my car loan 8 months early #1goodmoneything
@NotSoSerene: Because We need to see something encouraging out here, have one more #1goodmoneything #hardworkmakesithappen
@thenonconsumer: Stopped at Trader Joe’s on my way home & bought nothing more than toilet paper. Again, where’s my offing medal?!
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@NotSoSerene @thenonconsumer – it’s your #1goodmoneything and that’s something!!
@femmefrugality: Did street parking instead of the pricier lot. #parallelpark what’s up! #1GoodMoneyThing
@clareyfrey: @RevancheGS Now that we earn more than we did when he opened it, @FreyDrew converted his traditional IRA to a Roth. #1goodmoneything
Have you got more? Tell me more!
August 24, 2015
I’ve been a little complacent about money lately. I don’t track our expenses down the penny like I used to. I pay our bills twice a month, some of them are automated, and that’s good. This saves precious time.
But! There’s room for improvement. (There always is.) And there’s always too much to do. So rather than waiting until I have a lot of time, I’m going to do a little money thing everyday. I’ll tweet it under the hashtag #1GoodMoneyThing and I’ll also share it here.
What’s a good money thing?
Almost anything that involves your money, in a good way! Simple as that. Doesn’t have to be a great grand event, doesn’t have to take hours. Heck, I’ll even include anything that’s good for your health since money means squat if you’ve got one foot in the grave!
Saturday: I started up researching refinance options again. Our mortgage is currently financed at 4.8% and that’s pretty high, but we’ve had problems getting any bank to touch the loan because of some HOA shenanigans. Time spent: 1 hour.
Sunday: Via customer service chat, I added PiC as an authorized user on our phone plan so that if I am suddenly incapacitated or I croak, he can manage the account. Time spent: 3 minutes.
Care to join me?
It’ll be fun! I’m going to try this for a month, and then maybe weekly. We can give each other ideas. Comment here or use the hashtag so I can add your updates to future posts!