Articles with family finance

June home repairs are killing me!

So far, June has been the month of things breaking around the house. I alluded to one repair that cropped up in our May 2015 update, and I was expecting to have to get new tires soon as well, but man, it seems like every time I turn around, something else has broken. What all has gone on? Well, let me tell you.

It started a few weeks ago when we noticed one of our pipes coming out of the house was dripping water. Mrs. SSC googled it, and found out that, “Yipe! That is our AC overflow drain and it shouldn’t ever be dripping water!” We immediately googled DIY AC drain cleaning. Looked pretty simple, just find the original drain, hook up a vacuum and it “should” suck out all the built up algae and what not. Bada-Bing, Bada-boom! Clean drain! I get in the attic, as this is where our main units are located, and trace the pipe across the attic to where it drops into the wall and into the guest bathroom where it is tied into the P trap under the sink. I start monkeying with the joints, and hooray, they have glued every single joint… At this point, I don’t want to start cutting PVC, and get myself into a plumbing rabbit hole nightmare, so we call around and find out it’s only about $69 for drain cleaning. I find this price point definitely worth it, so I set up an appointment.

My crude AC drain diagram
My crude AC drain diagram

The guy gets there and cuts apart the joints, and snakes the line, and nothing. He gets in the attic, cuts apart the line somewhere else, snakes it, vacuums, and nothing. He keeps at it for 4 hrs. and kept re-iterating that there was no guarantee on this drain cleanout. After about 5 hrs., he got a bunch of gunk out of the line and it was all sealed up. However, because this wasn’t a typical drain cleaning, it was in the $450 range, and not $70, but I had signed off on this before he started, and inwardly I was a little glad it took 5 hrs., because I felt a little more justified. I also watched everything and asked lots of questions, and realized that with 5+ hrs. of my own time, I could’ve saved $450. Lesson learned for next time.

Three days later, we notice the drip is back. Yep, remember the non-guarantee about cleaning? This time I call no one, and head to Lowe’s for some PVC connectors, piping, and then start cutting up the pipe. I essentially cut the pipe near the unit, and disconnected it at the last place the plumber cut it. This was about a 10’ section of pipe, and after some finagling, I got it outside. There I turned the jet nozzle of our hose into it and even that wasn’t getting the blockage out. I poked it with a sink snake I had sprayed some more, and about a cupful of algae, scale, and God knows what finally came out. Then I go upstairs and 15 minutes later, clean drain. Yeah me! I was sorry that I didn’t try that sooner, but I’ve always had poor luck when I work on plumbing, so I didn’t feel confident enough to try it on my own the first time. Not anymore!

The second major cost was a broken garage door spring. I went to open the garage door, and heard a loud snap and banging sound. I went to investigate and I saw that the one of the mounts had ripped out of the wall. This was the mount that holds up our garage door overhead bar that the belt travels on, and keeps it attached to the wall.

Seriously?! This just happened?
Seriously?! This just happened?

The people who had installed it had just barely hit the stud with their bolts, and it had ripped out of the top of the stud, and out of the drywall, and was laying on the top of the garage door. I sighed, cursed a little, but 15 minutes later I had it repaired and sunk into a solid stud. Yeah me!

Yep, this is where it ripped out of the top of the stud.

When I hit the door button, it would only travel about 4 inches and stop. I investigated closer and saw the spring was snapped in half. Aye yi yi! I disengaged the motor and tried to manually lift the door so I could at least get the car out, and no. I could get it up about 2 feet before the other spring forced it back down. A couple of calls around and I got some rough quotes and found a place that could get out there that afternoon. This was about 2 pm, because I was home taking care of a sick little one. That repair for both springs (why wait for this to happen again) was right at $440 too.

I think home repair folks just look at some papers, shuffle them, and say, “Meh, that’ll be about $450.” And then shrug their shoulders at you with their hand out waiting for payment. It’s only June 10th, so I can’t wait to see what the rest of the month brings.

 

How about you? Have you run into any unexpected home repairs recently?

Did you have the time to DIY them, or did you call someone?

Anyone else feel like it’s at least $100 for someone to show up to your house to say “This will cost more than $100.”

May 2015 Update

May, May, May…. When we were going through this month and getting the numbers together for an update, I was thinking it was going to be a blown month for budgeting, savings, the whole sha-bang, but actually it didn’t turn out too bad. Spoiler alert – next month will be rough as I need new tires, we had some home repairs done, and are on the verge of adopting a greyhound, but as slow as they’re going, it could get kicked into July… Overall though, over the 1st 5 months of the year, we’re on track at ~$50k for our yearly spend FIRE estimator number. It’s been bouncing around $50-$52k these past months, but it looks like Mrs. SSC nailed it by estimating $56k/year. Fingers crossed it stays that way.

May highlights for the SSC family: We were on vacation for a week. That was excellent, and for the first time since we had kids, I can say I came back from this vacation NOT feeling like I needed a vacation! Awesome!! But, the vacation did show up in other places, mainly more gas spend, more toll spend, groceries stayed on track, as we just cooked in our condo, and enjoyed being somewhere different. Daycare was down because we got to not pay for the week of vacation, Woohoo! A cool perk of our daycare is that after a year of being enrolled, you get a free week, essentially, for when you go on vacation. It’s better than paying for the week when they’re not there, and always better than a poke in the eye with a sharp stick. I’ll take it!

Jan-15 Feb-15 Mar-15 Apr-15 May-15
mortgage -1911.99 -1911.99 -1911.99 -1911.99 -1911.99
house utilities -260.85 -328.43 -253.84 -249.01 -234.14
phone, tv, internet -237.81 -256.95 -239.07 -239.39 -246.79
daycare -1805.5 -1790 -2237.05 -1790 -1542.5
car note and ins -323.45 -323.45 -323.45 -1061.42 -323.45
health 0 0 -7.9 0 0
groceries -504.59 -630.82 -784 -690 -608.09
misc shopping -54 -291.73 -144.88 -598.27 -323.21
gas-toll -225.79 -516.1 -455 -233 -402.82
gifts/entertainment -80 0 0 -20 -45
pets -192.72 -341.8 0 -51.5 -216.2
maids -257.64 -257.64 -257.64 -346.26 -128.82
cash -40 -40 0 0 0
gym -87.12 -87.12 -87.12 -87.12 -87.12
travel 0 -1361.8 0 0 -866.83
Total -5981 -8138 -6702 -7278 -6937

Beyond the vacation spending and it affecting the travel related items, everything else seemed to be fairly stable. Pet cost was up due to a yearly exam for Quinn. Maids were less, as we cancelled for their scheduled day (Memorial Day), so we got to relax all day and save some coin! It all seemed to balance out looking at the monthly spend comparison to the previous 4 months though, so way to go SSC family!

Looking at these numbers and our first quarter spend, 2 things jump out that I’m impressed by, and they lead to a third thing that makes me happy. First, I’m impressed we are on track with our savings goal for the year. I thought Mrs. SSC was loopy when she suggested it, I believe it was $150k, but we’re on track to get there, and are at 52% savings rate currently. That’s amazing to me! Second, is that we’re pretty spot on with our yearly spend estimate for our FIRE number. That led to back calculating how much we would need to keep this spend up until we can access our 401k’s and getting our ER number, and subsequent date. Just a reminder, that if you’re adding up our monthly totals and thinking those add up to closer to $84k/year, not $50k – $52k, you’re right. It does. BUT, we won’t have the mortgage, or daycare which are a HUGE portion of our cost. Just look at that pie chart. Yikes! Like I said before, way to go Mrs. SSC! We got our $56k number through a quick look. Having tracked things in detail over the last 7-8 months, it is reassuring that we are pretty dang close, which implies our ER number and date are still valid. Whew!!

I can't wait to be done with daycare and a mortgage!
I can’t wait to be done with daycare and a mortgage!

The thing that makes me happy. That is this: I don’t feel like I’m having to watch every penny, and that our lifestyle is still really comfortable. I fought about the number being so low in the beginning, because I didn’t want to feel strapped, or broke, or like we have to be money nazi’s, and it isn’t like that at all. So that makes me really happy, because it makes me feel like this is a pretty sustainable budget and lifestyle for our family.

That’s our May update, hopefully yours is similar with your savings up, spending stable, and investments growing!

If I had a million dollars…

If I had a million dollars, I'd move here.
If I had a million dollars, I’d move here.

The other day I was working in the yard, and I had a song pop into my head that I hadn’t heard in forever. After singing through a few verses of it, I got to thinking, “Yeah, that’s not a lot of money anymore. Or is it?”

If you haven’t guessed the song by now, it’s Bare Naked Ladies’ “If I had a million dollars.” https://www.youtube.com/watch?v=B4L3ls_6UYg

The lyrics are funny and whimsical, and if you’re not familiar with it, it’s a song musing about everything that they would do if they had a million dollars. There are some of the usual things you’d think of such as, “I’d buy you a house… Some furniture for your house… A K-car, a nice Reliant automobile… a monkey, haven’t you always wanted a monkey?” Then there are the “extravagant things” that would be bought such as; “I’d buy you a fur coat, but not a real fur coat that’s cruel… A tree fort for your yard… an exotic pet, like a llama or an emu… and my personal favorite, we wouldn’t have to walk to the store; now, we’d take a limousine ‘cause it costs more…” That got me thinking, if they bought everything on this list, how far would their million dollars get them vs how far would it get the SSC family?

How far would a million dollars go if you spent it like the song suggest? Well, let’s see.

For simplicities sake, we’ll assume this is a post-tax million dollars. Where we would like to retire a house can range from ~$160k upward. We’re looking in the $200-$250k range. Let’s say they want a nicer house (they are millionaires now) and go with a newer $300k home. Then you add in some new furniture, because you don’t want any shabby digs in your new house. I’ll stay conservative and say maybe $20k, for furnishing a whole house. That should cover most of a house if you’re not shopping at Ethan Allen. Now if we look at the K-car, let’s say this is a modern day Hyundai/Kia equivalent, and go for $20k for the car, with tax, title, license. We’re at $340k spent, but our main cost of living things are covered right? Now for the fun things! Llama is about $400-800 with about $20-$30/month costs not including vet trips. In the grand scheme of things, not too much there. A monkey is about $4000 – $8000 though! Holy cow, that’s way more than a llama, and it sounds like they have way higher maintenance costs too. A tree fort for the yard, can cost as much as a house. Since they want to “take a limousine ‘cause it costs more” they’re probably not going to DIY the tree fort. Those costs range from a couple thousand on up. One of our co-workers is looking at a $5k playset for their 1 year old. Let’s just say $5k. Back to the limousine, when I had to take a car to the airport due to company policy and safety, it was about $70 each way. Let’s say that would be the average limo cost to go to the store, that would be an extra $75 a week added to the grocery budget, or $3744/year. They’ve already spent almost half of their million dollars and they still need to buy fur coats, John Merrick’s remains, some art (a Picasso or Garfunkel), a green dress, but not a real green dress, that’s cruel. Yipe, that’s a lot of spending!!

Let’s see how the SSC family would use this. Our number for FIRE is essentially a million dollars. HOWEVER, this is a million dollars NOT including our 401k’s. Oh, tricky, tricky right? Well you see, because we have been building and growing our 401k’s for a while now, we see that as money that left to grow on its own should be able to afford us the lifestyle we have now. Pushing that aside, our ER/FFLC number is roughly 1 million dollars. Maybe this is still a lot of money, even 23 years after this song was first recorded.

This should cover a mortgage outright first of all. Yes, we have equity in our house and based on the growth around our current area, we are assuming we will at least be able to sell it at a break even for what we paid for it, fees included even though we will most likely get more for it. We like to play it conservative assume break even and not count on any home sale profit. We are now down to ~$800k left over from our “million dollars” for us to live off of until we get to age 60/62 and can start drawing off of our 401k’s. I am aware of the Roth ladder and other options to draw on them earlier, but again, I’d rather plan so we didn’t have to count on that. Looking at our budgeting we have been spending roughly $56k per year. This is with about $8500 per year assumed in health costs, and $1500 per year assumed in dental. These are just ball-parked based on what we could glean from the Government health care website market options.

Breaking our budget down and having a floating yearly spend based on how well the market is doing, the cFiresim calculators show a 98% chance of success with our plan and investments as they are now. That’s not too bad really. This is assuming a 4% Standard Withdrawal Rate (SWR), and 7% growth, along with 4% inflation. We’ve accounted for higher inflation in healthcare at the urging of Mrs. SSC’s parents. Having survived a bout with cancer, their costs have increased dramatically. We also have a 5% cushion built in, and will most likely have a year of cash as a safety net. Yes, yes, there are better ways we could probably have that cash as a liquid asset but for now, we’re thinking cash. This is all NOT taking into account any side income, part-time or full-time jobs we may pick up. Also, not accounting for any pensions or even social security, which seems to be probably another $1-$2k per month each. Also, we account for $12k/year for our personal fun money/allowance/sanity fund, whatever you want to call it. So if things got tough, we can automatically “cut” $12k of expenses just by not using allowance type money for our hobbies and stuff. Then our yearly spend would be ~$44k assuming nothing else changed.

There are times I review these numbers and think, “Why the hell are we still working?!” Then I remember, “Oh yeah, we still have a ways to go!” We currently can just buy a house…. Then we’d have no jobs, no security money, and we would be watching the clock like a hawk to tap into our 401k’s then wake up broke and sad at 75… Booo…. So, we stick to the plan. Remember though, most of our investments will get the glorious benefit of compound interest, so it isn’t as if we will be setting aside a full $1,000,000.00. No way, man! Let that grow and earn, and grow and earn, and grow. Please for the love of God, grow!

The point I’m trying to drive home, is that you could spend a million dollars like the Bare Naked Ladies suggest, and you’d be back to broke pretty quickly.

I’m fortunate that we are in a situation to be able to plan, save, and get towards our FIRE goal but it comes through diligence with spending and saving and staying on track. We could derail it at any point by getting back into the consumer mindset, but we stay the course. Why, you ask? Well, even though I love my job and get satisfaction out of it, I have other things I’d rather be doing with my life that would fulfill me more. Who reading this now doesn’t have at least 2 other things they would rather be doing than sitting in their office at work? Who would rather have free time to fully pursue their passions and not try to cram them in with a “Go, go, go, Lifestyle?” You’ll see one raised hand at this keyboard – if you could look through the screen that is. Although then that would be a little creepy… Hopefully, you get the point.

How would you spend a million dollars?

Would you spend it or just live of the interest or dividends it brought you each month?

Our allowances cover what?!

Whatever you call it, it’s nice to have a little extra!

Even though we have found our FIRE number and our FFLC date worked out, and we track our spending fairly closely, we still allow ourselves some freedom with money. Some call it “mad money”, “rainy day fund”, “allowance”, or whatever the term; it’s essentially money we can spend and don’t have to be accountable to the other person for.

In the SSC household, we use the allowance system. Each month we each get a set amount and can use it however we want. This was originally meant to be for purchases that would only benefit one of us, or for extravagant things that the other may not agree with. Using our allowance funds circumvents those “why did you buy this?” arguments, and makes it easier to stay on budget for FIRE, since the allowances are a category that is already built into our FIRE budget. It also allows us a buffer with our FIRE calculations, since it is a cost we can immediately cut out if needed. It wasn’t always like this though, as our allowances and what they cover have evolved quite dramatically over the past 7 years.

In the beginning our allowances were less, and were intended to cover things that would only benefit one of us. For instance, beer brewing supplies, video games, and fishing stuff for Mr. SSC. And then for Mrs. SSC, well, she would let hers grow and then invest it… Seriously. Then Mrs. SSC started shopping for work clothes, and shoes, and purses more often, and more often. It got to the point that she started feeling bad about the amount that was coming out of the household budget that she decided we should put clothes into the “allowance” category. I rarely bought new clothes, but if it was a little more $$ to spend each month, then sure, I’ll vote for that! Add one more thing to the allowance list.

After a year or so, Mrs. SSC decided we were going out to eat for lunch too often. Specifically, I was going out to eat too often. Usually, we would bring our lunches and eat out at the pavilion at our work campus, but with my new team and assignment, I had started going out once a week, sometimes twice a week! Gah!!! We were also eating out at restaurants at night a bit more during this time period, so after some back and forth discussion, restaurants were put into the “allowance” category. I of course argued for more money, because, well I always argued for more money if another item was put onto the allowance list.
Although looking back I realized I could have had double the allowance and would have still spent it all because my spending habits were pretty poor. Another item that got put into the “allowance” category was gifts. Birthday presents, and Christmas especially. I resisted this one pretty hard, but lost. Mostly, it’s because Mrs. SSC has a birthday close to Christmas so for most years initially, I was in debt to the SSC bank come January, and sometimes thru February. I told you, my spending habits suck.

I kept arguing that the allowances were getting out of hand because we were having to buy “everything” from our allowances. Not really, but it felt like that to me. Plus, just using the term “allowance” made me feel like a little kid whose Mommy watches over his money for him and doles out what she thinks is “appropriate”. That attitude didn’t help my thoughts that our allowances were a good idea. When I would mention them to people, the reactions were one of two: 1. That’s a great idea, we should do that in our relationship! 2. You get what?! An allowance?! What are you, 12?

Yeah, that did wonders to reinforce my negative attitude towards allowances. However, I’ve come to realize though that they are great on many levels.

First: Even though we track everything, I don’t feel hamstrung by our “frugality” and I feel like I have the freedom to buy frivolous things if I want. I can also go out to eat if I want, or take Mrs. SSC out to lunch/dinner. It works great, and avoids those arguments where one party tries to justify buying something ridiculous. Imagine yourself trying to justifying to your significant other, why a $2000 banjo is a good purchase for “the household”. That took a LOT of saving, but zero arguing.

 

Second: It now makes me question a lot of purchases prior to buying them. Instead of buying something just because I’m “bored”, I want some kind of return on my money. For instance, I just replaced my bike. Prior to doing that, I researched bikes online, went to a couple of stores for test rides and thought about it for a few weeks before I decided on which bike to get. I love my new bike and since we go on bike rides 3-5 times a week, it’s worth it to me to have a comfy, nice bike. I haven’t even looked at banjo’s lately or other music instruments because I just don’t feel the return on investment will be there, and I won’t get a new banjo before selling one.

 

Third: We have an extra buffer in our FIRE budget calculations. Sure, maybe this is a stretch, but when we quit working if things go south and our dividends aren’t doing well, or stocks have dropped, this is a “bill” that we can immediately eliminate. I mean, it’s more of a book-keeping thing, but it’s money accounted in our budget that is available for us to use, so it would be easy to cut out if it needed to go to something else for a bit.

 

For us, they work well and have for about 6 years now. It’s also something that we plan on keeping into our “post-work” life. Even though the “allowance” seems to have become a nebulous “everything comes from allowances” budgeting category, it is still easy to build up a surplus. That being said, due to some unforeseen purchases that came up, I admit, I think I’m currently at $0 or maybe even negative. Ooops…

In general though, I’m a fan of some sort of system like this. I’ve seen other bloggers that have this system, The Maroon’s for instance, use a similar allowance type of fund. I think it’s a nice way to not feel so tied down to always being frugal or feeling like you can’t spend money. I can spend it, I just have to save. That makes me buy less, scrutinize my purchases more, and ultimately be more frugal than if we didn’t have this system in place.

 

What about your family? Do you have a similar discretionary funds system?

Would referring to it as “allowance” make you feel like a kid again too?

We’re headed to the track!

Best new investment strategy around!
Best new investment strategy around!

A while back I noticed a lot of bloggers talking about what you should do with your tax return, as opposed to what most people would actually do with their tax returns. As a kid, this was always a nice time of year because we generally got a fairly healthy tax refund. It was like a financial Christmas, and presents would be bought, we’d get treated to some dinners out, and usually within a month or less, it would all be gone. Nothing invested, maybe some immediately pressing bills caught up, but generally, it was frittered away here and there. As an adult, I’ve tried to be more fiscally responsible, which is why we invest our tax refund. This year instead of putting it into our usual investment hidey holes, I convinced Mrs. SSC to go a different route and diversify our investments. Being from Kentucky, where we’re most famous for horses and bourbon, I decided investing in bourbon wasn’t up my alley, but how could you go wrong with horses?! It’s like they say, “How do you make a small pile of cash off horse racing? Start with a big pile of cash.” So that’s what I plan to do!

 

That’s right, I’m putting it all into horses. I’m sure you’re thinking, “Wait a second, most horses are privately owned and you can’t really buy shares of them, can you? Are you planning on investing in a horse training facility, or farm?” You’re right, I can’t diversify our portfolio with “shares of a horse” so I’m heading to the tracks baby! I usually do pretty well on Kentucky Derby day investments, and over the last few years I’ve managed to clean up. I did some calculations and my investments at the track have yielded over 200% return year to year. I did have a down year here and there, but modeling the amount invested against the returns, makes the stock market look paltry in comparison. I mean really 7% is supposed to be a “good” number? I’m talking averaging 200% returns. If you put that into my other modeling spreadsheets, I can have us to our FI/FFLC goal 2 years earlier!! 2 years!

 

Now that I’ve piqued your curiosity, you’re probably wondering, “How can you do this though, because The Kentucky Derby is a month away, PLUS it is only once a year. You won’t be able to make that much on one race, right?” You’re right again, I knew we had some smart readers! Plus, like I’ve found on all the FI blogs I read, you don’t want all your eggs in one basket, so I’ll be diversifying and spreading my investments over MANY races. I have taken our tax refund and parlayed it into a side hustle of betting on horses! We’re midway through the racing season, so I only have a half a season left, but I’m confident that I can more than double our refund. Already, I’ve been able to get a 30% return on my “investment choices”. 30%!! Our portfolio hasn’t done that yet! It makes me want to show our portfolio my winning stubs investments and say, “Get with the program, portfolio! What have you done for me lately?! Slow and steady, more like, Slow and Slower… sheesh!” I digress…

 

This weekend, I plan to get the investment action in full swing though. I’ve been researching the upcoming races around the country, track conditions, racing surfaces, horses, and put them all into a spreadsheet. Then I run a few Monte Carlo scenarios and pick the new members of the SSC Investment Portfolio. It has worked well so far with predicting which “investments” I should be making, so I will continue to follow it. I diverged from this method last weekend and I found that picking a horse with a funny name isn’t the best investment strategy, so I’ll keep science-ing it up. Not sure why I thought “Pajama Pancake” and “Tweedling Peanut” would pull out a win, when my spreadsheet said otherwise, but I know better now. Seriously though, I don’t know why people haven’t thought about this before, it’s pretty dang easy once you get all the variables accounted for.

 

I’m excited about keeping this train to FI rolling and get us retired a few years earlier than we’ve planned using traditional methods, and now I get why more people aren’t doing this whole FIRE thing. They’re sticking to slow methods with even slower investment return times. No wonder everyone works until they’re 60 or older, it takes that long for the stock market to work! Ain’t nobody got time for that! Certainly not this household. While the stock market keeps trying to make me some coin, I’ll be laughing all the way to the bank with my new diversification strategy!

 

Do you have a unique side hustle that outperforms the market?

Do you want a copy of my Horse Racing spreadsheet, so you too can be more diversified?

Have you realized today’s April 1st yet?

 
image from hdwallpapersnew.net

Decisions, decisions…

Which would you chose?
Which would you chose?

This past weekend, I was at the grocery and had an interesting moment arguing with myself over a dollar fifty… Yep, a dollar fifty… It started like this.

I was in the potato chip aisle looking at which options to get for my lunch the upcoming weeks. I usually tend to get the mix bags of 20 or so bags to keep up variety. I’ve tried buying a big bag of the same chip and parsing it out, but it never tends to last as long, because I overfill and then I get bored of the same chips all week long. Anyway, as I’m contemplating the different flavor combos for the next 3 weeks, I notice the price difference in store brand versus name brand. I’ve noticed this before, but rarely pay too much attention to it. As I stared back and forth, I was thinking, “Hmmm, $4.98 vs $3.48. The bags are the same size, flavors are mostly the same. I’ve tried these before and they’re ok, I mean it’s hard to screw up chips.   Hmmm, no Cheetos in the store brand, or equivalent… Hmmm, $3.48 or $4.98? It is $1.50…. We could save that just by choosing different chips…” At this point Mrs. SSC had moved on to the dairy section while I stood locked in debate with myself over which brand to choose.

Suddenly, I felt this sharp stinging sensation like I’d been slapped. Startled, I was like “WTF?! Where did that come from?” Then I realized it came from me. Not my logical side, but my more practical side which just entered the debate. Apparently, this whole chip debate had only included the frugal side and the logical side and they were both about to agree on store brand when the practical side jumped in and literally knocked some sense into me. It went like this, “Slap! Seriously? $1.50?! You idiot just wasted 3 minutes standing here debating about chips over $1.50?! Look dummy, you’ll have the rest of your life on a budget when you can eat store brand chips. Right now, you can spend a $1.50 and get the name brand chips. And QUIT standing in the chip aisle looking slack-jawed at the chips. This isn’t a groundbreaking Supreme Court decision, it’s chips!”

So I grabbed the name brand and wandered on with our grocery shopping. That got me thinking. I’m at least becoming aware of being frugal, and have worked it into my life in many other ways. Recall the tolls and money saved by using the next on-ramp? Now, I skip the morning tolls altogether due to finding an even better route. But back to the point of this post. I have no problem eating store brand on a lot of things. Our local grocery makes awesome store brand foods, and they’re almost always better quality and price than name brand. I also don’t like the feeling that I’m shorting myself just to save a buck. It  makes my skin crawl and reminds me of the times growing up when we had to short ourselves because there were no bucks to save, much less spend on things other than rice, beans, other staples, and utilities. So I find it’s worth the $1.50 to “treat” myself to something that yes, I could buy cheaper. If everything is save here, pinch there, cut this out, cut that out, I tune out and lose interest in any savings because there’s nothing that bring a little joy.

What are the little things you still get even though you know they could be cut out? Do you have any things like “my chips” that give you a little smile when you enjoy them?

Let me know, I’d love to hear about them!

How do you define retirement?

“Retirement isn’t the right word anymore”, is the phrase used by an article that I was reading recently. It was describing how people used to see retirement as, You hit 65, quit work, and sit around and get a pension, living out your golden years, or even more generally, you stop working and life slows down.

Anyone that is reading this blog has probably come across Mr. Money Moustache, and other blogs and heard them referencing the “retirement police”. These are the trolls or just misguided folks who seem to prefer the, “If you are working, then you’re not really retired” type of definition of retired. I say ballyhoo to all that, and I prefer to describe our upcoming change in life as a pre-tirement, stay at home parent type of thing. Real specific huh? I will likely work at some point, but chances are it will because I want to, not because I have to – so bring it on retirement police!!!

The biggest difference I see in those that define retirement as “You don’t work” is that they see work as a financial obligation and not a choice. Simply put, I will see it as a choice I can make and decide whether to participate or not. If it gets to be no fun, I can quit and not stress about bills, getting another job, and how this short stint may affect my resume, or even next job application. I have no doubt that I will work once I quit my corporate job and transition to stay at home dad. I’ll bet even more on the fact Mrs. SSC will also work in some capacity. We’re hoping to move to a place with a small college, so that either one or both of us may be able to teach. Also, we will be in a place with outdoor activities, which means there should be some outdoor stores, possibly even flyshops and I wouldn’t mind spending a few hours a week getting to talk shop about good trails, nice hikes, good fishing spots, what’s biting, what flies are working, etc… Yeah, they’ll come with mundane times of inventory, restocking, setting up displays, yada yada yada, but I’m too social to start sitting around in my recliner watching golf and holing up at the house for weeks on end. 1) I can’t stand watching golf, even for background napping noise; 2) I need a better recliner; and 3) why the hell wouldn’t I spend more time outdoors now that I don’t have a job chaining me to a desk?!?!

Actually just this weekend, I was double checking with Mrs. SSC that our current dream retirement town has a ski resort/big hill with lifts that take me up, so that I can snowboard down. I don’t need anything huge like Vail, or Breckenridge, I prefer the smaller places like Loveland Pass (usually empty and a LOT of fun runs). The point is we were talking about being able to get the kids to school and hit the slopes for a bit when there’s fresh snow on a Monday, or maybe Wednesday, or whenever there’s fresh snow. So working at an outdoor outfitters  and being able to relay that info to tourists looking for nice runs on the slopes, sounds like a fun time for me. If you couldn’t tell from my posts, I can be quite a Chatty Cathy if you catch me on a topic I like. Topics that I’m not knowledgeable about, or don’t find very interesting though, can be a lot harder to discuss. For me, financial management is one of those. I can discuss it very thoroughly, but what I can’t do is explain “good financial management”. Actually, I can regurgitate what everyone else says you should do with your money, but I would have a hard time showing how to apply it in your life. I’m not financially minded, and except for the means to an end aspect of it, I could do well with not ever reading any more finance articles in my life. It just doesn’t do anything for me, so I can assure you, in my retirement, I will NOT be doing any financial advising, seminars, or anything related to that. Come to think of it, it does sound like an easy way to make some coin, “Come to my seminar and find out how you too can retire before 45!! For only $200, I will reveal my “secrets” to early retirement and you too can tell your job to shove it! (individual results may vary: especially if you don’t marry well, invest well, or marry someone that does both, oh and nice incomes to fund the retirement nest egg are also strategic and advised).  Sounds like every other seminar I see ads for on tv, but rest assured, you won’t see Mr. SSC on your television shilling for your hard earned dollar.

Fishing shouldn't only be done on vacations!
Fishing shouldn’t only be done on vacations!

So back to the point of this post, what do you see as “retirement” and why is it that we have retirement defined in our head as “no work, receiving pension, take up gardening/golf/fishing/knitting? My Grandad was scared to death of retirement. In his family, people quit working and then died. I mean literally died within a few months or less of “retiring”. He finally retired at 72, and fortunately made it another eight years, but he could have retired way earlier as he was at FI way before most people. He fit more of the traditional model, doing more gardening, volunteering, and staying active, but not anything that earned money, just satisfaction.

For me, I’m scared to death of 80. Except for the senile and decrepit few in my family that made it to their 90’s, most people in my family die by 80, if not well before. No wonder I need to retire early, I’ve got a clock ticking down people! Actually, we all do but I just don’t want to be one of those people that I see emails about in my office. At my last job and this one, I have gotten emails about so-and-so was diagnosed with “blah” and is terminal and going to spend his last days with family. Then a few weeks later, you hear so-and-so passed away and will be missed, and I read, hit delete and get back to work thinking, “Lord, I have got to retire soon and get out of this office.”  A good friend of mine back in LA worked his whole career, finally got to retirement, had all of these plans made, and got a virus and died 2 weeks into his retirement. 2 weeks, and 1.5 of those weeks he was sick. What a pisser. Retired or not, I still see myself working to some degree, whether it’s at a job with a paycheck, making wooden stuff at home and selling it on Etsy or some other e-commerce platform, or maybe just playing bluegrass and getting the occasional gig. Who knows? But, I know that I’ll have some internet police giving me the business when I mention “work” and retirement in the same post. Until then, I’m still working and counting down the days until I can define my schedule, job, and what retirement will be like for me.

How do you see your retirement taking shape? Will it be more of a traditional model, or more of a FI approach where you can choose where and how you want to work if you choose to work at all?

Free money cost me HOW much?!

money graph
Free money cost me HOW much?!

While Mrs. SSC was paying the bills, she noticed that Discover had a cash-back reward offer for her personal Discover credit card that she uses for her ‘allowance’.  Anyway, Mrs. SSC noticed that there was an offer of “spend $2k/month for the next 3 months and get $300 FREE!” Mrs. SSC thought this was awesome, since we have a second Discover card account that we use as our primary household credit card for bill paying/grocery/gas/etc… type of card that gets paid off every month. So, she went to see if she could sign up for this awesome deal with our household Discover card, and any guesses on whether it was offered on that account or not? Hmmm? Anyone?

No, is the correct answer.

So, for the card we typically have a fairly consistent amount spent on each month, there is bubkus in regards to additional offers. On the more meager monthly spend card (Mrs. SSC allowance spending) there was this nice reward offer. So then, would it be worth it to use that card for groceries and gas and get an extra $300 in a few months? Sure.  But, really Discover just wants her to boost her spending to match that of our other account with them… As my 3 yr old would say in a sing-songy voice “Ooohhh, Discover….”

So, Hooray Us! for getting an offer to get cash back above and beyond their typical rewards, but it strikes me as devious or scheming in how it was presented.

Although, thinking about it now, I guess it’s just plain business. They see someone not spending much on their card each month, so why not try and lure that person to spend 3-4 times the amount they normally spend. Especially with the holidays, if you give a consumer a target of say ~$2k to hit and get “rewarded” with a free $300 to spend at Amazon among other places, well, it would seem that it should be a no brainer to spend that amount and get your “free money”. Then maybe they are over their usual budget and can’t pay it all off at once and then interest accrues. Who wins there? Discover.

But think about this in the case of most consumers.

Hell, let’s use me as an example of said consumer, from just a mere 7 years ago. I carried revolving debt and was constantly paying towards it, because my spend was way over my pay-down each month. Yes, yes, I know, Bad Mr. SSC, and you can read about that more here. But I would’ve been delighted at that offer. Spend $2000/month and get $300? Hell yeah, free money! But is it really? Let’s say I had just 16% interest (I paid late occasionally, so it was probably closer to 18% – cringe!!) over the course of one month, that interest would be $320. Someone check my math, I could be way off…. They’ve already gotten their “free money” back plus $20 if I don’t pay it down for just 1 month. 1 month! That’s it.

So for all those analysts sitting inside the machine that is called Discover, they’ve just earned their bonuses. Think about it. If they get just 10,000 people to accept this offer and not pay their additional $2k spend down for just one month, they made Discover an extra $200,000!! That’s just from the $20 extra per person that doesn’t pay it all down. And that’s not compounding that with the fact it will probably take more than 1 month to pay it down, so just by this one little offer, they will most likely make more than they put out there to give away as free money. Genius Discover, pure genius!

For those not in a situation to pay that balance off, it’s lose, lose. But I wouldn’t have known that or thought about it back in the day, and they would’ve made way more than the $300 they “gave” me. I would have never realized I just stole from myself because it was worded as spend blah amount and get Blah amount FREE!

Have you ever gotten taken by something that seemed great but you realized later, “This free money cost me SO much more than it was worth?”

I’d love to hear that younger Mr. SSC wasn’t the only one that wouldn’t see past that “free offer” and get taken for much, much, more.

To buy, or not to buy…. Wait, what was the question?

I’ve come to realize that being aware of our budget and savings is a double edged sword. On the one hand, it’s amazing how much we’re able to save and be able to achieve FIRE in 5-7 years, on the other hand, I now am becoming unconsciously miserly and questioning every big purchase. That’s assuming the big purchase ideas weren’t killed automatically, before they could even take root and grow into an outlay of cash. For instance, boat, truck to pull the boat, riding lawnmower, exercise equipment, newer bigger T.V., etc.. Even big purchases I support, I wrestle with “Is this the right time for that purchase, and do we really need this?”

Recently, we’ve decided to purchase a dining room table and chairs. It’s a huge investment, and one we won’t be making again in our lifetimes, barring coming across an excellent deal at a yard sale in 30 years…. Ever since we married, we have used Mrs. SSC’s kitchen table and chairs. They work fine, and are perfectly functional. “So why are you replacing these things and not investing that new table money,” most of you are probably asking yourselves right now? Well, it comes down to simple aesthetics. I hate that kitchen table. I just can’t stand it. Evidently, I can stand it, because I’ve lived with it for 6 years now, but it just makes me throw up in my mouth a little every time I see it. Okay, it’s not that bad, but I really don’t like it. Let me paint a picture for you, and see if you can get on board with me.

The year was 1968, someone somewhere just pressed a nice oval tabletop out of particle board and sawdust, and thought to themselves, “You know, this would look great covered with a top of the line wood grain laminate. Unfortunately, we’ve just got this plastic wood grain laminate, but hey, it would still really “fancy” this table up!” To really sell this beauty though, they decided to add some of the world’s most uncomfortable chairs and, Voila! Our table was born. I have no idea where it started its life, or how it came to be in Mrs. SSC’s household but she grew up with this table and has some fond memories of eating at it, doing some arts and crafts at it, and who knows what. It’s like she tells me, “This is a perfect table for the kids to do crafts on, it’s impossible to mess up.” That’s the beauty of plastic laminate, you can do everything short of burning it, and it still looks like crappy laminate. To be fair, it’s in really good shape for a 50 year old table, and it would make an excellent craft sort of table the kids can spill paint on, carve pumpkins on, decorate Easter eggs, etc… I just think it should be relegated to that duty, and not sitting in a spot where I have to look at it every day.

It’s only taken 6 years, but I’ve finally worn down Mrs. SSC into getting a new table! Actually, I’ve come very close in recent times, only to have one little thing ruin the whole deal. There was this past Christmas season for instance, I had her decided on a table, finish, chairs, even use support from family in town for the holidays to help win her over, and we were set. Except the place we wanted to get the table from didn’t have the chairs she wanted, and she is very particular about chairs, so we never ordered it. Even though they had a very liberal, no-cost return/replacement policy, as in, we could order the chairs and if we didn’t like them, we could swap them out for different chairs at almost no cost to us (actual cost $150). But we wouldn’t be paying shipping for 6 chairs back to the store and 6 new chairs back to us (total cost ~$400). Anyway, that fell through due to stocking errors on the companies part. Then there was a few years back, and I was in a similar boat, but didn’t strike quickly enough, and that deal also fell through.

This time, I knew would be different. This time Mrs. SSC started the “Let’s go look at tables” conversation, and she hates looking at tables and chairs. We went to a store and they had about 30 chairs to try out. Even lining them up side by side so you could sit in one, and then scoot over to the other for a comparison. I didn’t get it, but they claimed it was “the best way” to try out chairs. Whatever… So we both actually found chairs that we both agreed on the style and that were actually comfortable. We also even found a table style that we both liked, and even a stain, it was all coming together so nicely. However, the cost was laughable, and while we weren’t out shopping to purchase that day, I realized I’d found my biggest hurdle, the cost. Fortunately, when we got home I researched everything online and found the exact same everything for 30% less, plus an additional 5% off due to the cost structure and order amount, and even an additional 3% off if we didn’t use a credit card, and didn’t make them (or us rather) pay the credit card service fee. This was the deal maker there, I mean almost 40% in savings, and we get the exact everything we wanted. And then Mrs. SSC went back into stall mode…

Mrs. SSC, “Well, this style is also nice, I like it too. You know, we could probably have my Dad make us a table just like this one. You know, you could make a table for us when we retire in another 5 years. Are we sure we really need a table, we don’t use this one much now anyway.” Mr. SSC “eye-roll, and slapping my palm to my forehead.”

After a few weeks of back and forth with different style choices, I had given up on it as this purchase seemed to be “tabled” again.

Then this happened out of the blue:

Mrs. SSC: “Have you ordered that table yet? I would’ve thought after all this time, you wouldn’t be waiting so long to order.”

Surprised Mr. SSC playing it cool: “Oh? I thought we were still deciding on the final style.”

Mrs. SSC: “Well, put together the choices again to review and we can decide.”

Mr. SSC: “Here is style A, B, and C…”

Mrs. SSC: “I like style B. Let’s get it!”

No less than 5 minutes later the order was sent in, and the check has been sent off. The table is ordered and soon we should be getting our new dining room set. Although to be fair, we don’t have a formal dining room setup, it’s just wasteful in our opinion, so this will be going into the kitchen area. This endeavor, while mostly complete made me think how many man-hours it took into getting this purchase approved and complete (~5 whole years). Mrs. SSC has some valid arguments, such as, “The old table is still functional, it’s a lot of money to replace something not broken, we can invest it and make more money with that money, it’s a perfectly fine table…” You could probably come up with some of your own arguments as to why we didn’t need to purchase a table. I would agree that we may not have needed to purchase the table, except for my heavily weighted dislike for this table. My thoughts are this, “Why wait until we get to FIRE and then look for a new table/chairs and start making big purchases? Why not do it now when we have incomes and can do this and not feel the hit?” I’m excited for our new table and chairs and unlike past purchases, I will be even more excited when it gets here and I can move that other table out of sight.

This is why allowances are an excellent idea. This type of debate gets avoided with most “want based” purchases by using allowance money and not general funds. This is our first long running debate over a big purchase though, and I hope will be our last. I don’t know if I have it in me for another 5 year sales job.

 

What are some big purchases you’ve made and have had to use years of convincing to get your partner to pull the trigger?