Our blog was nominated for the Sunshine Blogger award by the bloggers over at Ditching the Daily Grind! Thanks for the nomination guys, I’ve been enjoying reading your blog! It’s nice reading about other families out there on the same path, and how their kids have/have not affected their FIRE goals. We really appreciate getting nominated for that award! Now, let’s get to the fun stuff!
The Rules:
Thank the person that nominated you
Answer the questions from the person that nominated you
Nominate some other bloggers for this award
Write the same amount of questions for the bloggers you have nominated
Notify the bloggers you have nominated.
The Responses to our set of questions:
When you were a kid, what did you want to be when you grew up?
These are really different answers from Mrs. SSC and I. Our familydynamics and priorities were pretty different growing up, as reflected in SO many ways in our lives. This is just one of those instances.
Mrs. SSC: She wanted to be a scientist or professor when she grew up. She’s done pretty well meeting those goals too, between being an actual rocket scientist for a bit, teaching some in grad school, and science-ing it up at her current career in the oil industry.
Mr. SSC: I wanted to be a long haul trucker. Yep, the guys on the road in the big-rigs hauling the 54’ trailers. I thought it would be fun, I’d get to travel a lot, see the country, and have a lot of freedom. Plus, you get to drive the biggest trucks out there! Woohoo! I’m a geologist instead and those dreams are in the rear-view mirror of life, and thankfully not the rear view mirror of my big rig.
What is the coolest/most memorable place you’ve visited
Aaahhh…..
Mrs. SSC: Yosemite National Park. It was breathtaking and also one of the first times I ever went camping and hiking by myself. It was one of the first times I was able to take everything at my own pace, observe nature around me, and just get to be introspective and not have to deal with anyone else’s time table or schedule. It was awesome!
I really took this. It’s so beautiful even at night.
Mr. SSC: Le Mont Saint Michel in Normandy, France. It’s an island commune and monastery that is just offshore, like ~600 meters. Besides being stunningly beautiful, an amazing thing is the tidal range of that part of the coast. When the tide goes out, it goes out 15 miles from the shore and drops nearly 40’!! When it comes in again, bam! The monastery is again an island surrounded by water. We got to take a 7 mile hike across the tidal flat at low tide, and it was awesome as a geologist, getting to see all those tidal features first hand. If you’ve never seen it, google it and check out the images, amazing! My picture doesn’t do it justice.
If money was not an issue and you could indulge in one thing, what would it be?
Mrs. SSC: My one thing would be land. I would want to buy an amazing plot of land with great views, mountains, fruit trees and more, and build a small but luxurious house. That and a Disney Cruise for the kids. Our friends say “it’s great!” and “the kids would love it!”, just like a 50’s tv ad, but it just seems SO expensive, so probably that too.
Mr. SSC:I’d go to the moon and spend a few hours bouncing around in my astronaut suit and riding one of those moon buggies around.That just seems like it would be a LOAD offun, and it was literally the first thing that popped out of my mouth when I read this question. I mean, who could afford that nowadays? Not even NASA right, and you did say money was no issue. That would be my indulgence for sure.
What is the best compliment you’ve ever gotten?
Mrs. SSC: I don’t respond well to compliments, so I avoid them, and can’t think of a best compliment I’ve ever gotten. Sorry…
Mr. SSC: My best compliment was um, well, yeah I don’t know either really. I’ve been scouring my brain, but nothing jumps out. Sorry…
What legacy would you like to leave?
Mrs. SSC: I feel that if I can get the kids to grow up and be true to themselves, that would be good for me. I want them to be who they want to be, and not try to be someone that they think they should be because someone else wants them to be that way.
Mr. SSC: My legacy – with visions of being a trucker, I can’t say I’ve thought too much about a legacy that I would like to leave. When I was hiking the Appalachian Trail, I decided that I wanted to do something that would help the environment and not just take, take, take. Ironically, I ended up switching from Environmental Science to Geology and ultimately landed in the oil industry. Since I’ve had kids, I’d like for them to be adults that aren’t self-centered and self-serving and are empathetic to helping those who need it. Like Louis C.K. put it, “You should never look into your neighbors to bowl to see if they have more than you, but rather to see if they have enough.” If I can raise my kids tohave that mindset, I’d feel good about that.
What do you prefer: beach or mountains?
Mt. Hood. We need to get back out there soon.
Both: Mountains for sure! Our relocation spot for our Fully Funded Lifestyle Change has to include a few things and mountains is one of them. We grew up near the Appalachians, so we like the feel of those mountains and are looking forward to being back there. I also love the Rockies, and could be there too, but as long as there are mountains and 4 seasons I’ll take it any day!
Our nominees for the Sunshine Blogger Award are (in no particular order):
Man, was this a rough month for the budget in the SSC household. As I’d teased last month, we were expecting a few overages due to the A/C repairs, new tires, new greyhound adoption and the like, but I wasn’t expecting the hits to keep rolling. Fortunately, there haven’t been any breakdowns, repairs, or otherwise costly expenses that have cropped up yet this month, and we’re almost a third of the way through it. A quick glance at the bar chart shows June (appropriately orange) topping the charts in almost every category except the stable ones like mortgage, car note, and home utilities. How did this all happen and where did the money go you wonder? Since we don’t have the usual “numbers” chart for this month (it will return in the July update and you can peruse it then) I’ll just tell you.
Ouch, June hurt!
Phone, tv, internet got hit with a $65/month increase due to 2 years’ worth of discounts finally running out. I called ATT, asking about any other ways to reduce our bill, and besides getting a 3 month $40 discount applied to our account, it was just lip service. I shopped around and 2 days later have our service switched and added bonus, NFL Sunday package is included for free this year! I count that as a win, since I’ll probably have to pony up for that one from my discretionary funds if we continue it in the future. Increased daycare costs – no clue. I’m guessing it’s a combo of short month in May, little longer month in June, and the difference was made up in June. Groceries were okay, trending a little higher than usual, but we’ve been on a “grocery spend watch” just to see if we can keep it steady.
Home repairs… Oh, home repairs…. Besides the A/C drip line getting clogged up (~$450), we also got 2 solar screens made for the bathroom windows (~$140) and it is now cool as can be in there, and not sauna like every day. We also had our wall mount A/C controller go out, so there was some added cost there. When we looked at replacing it with the same unit, we realized we could try the Nest for a little less (~$250). So far it’s been working great! The garage door springs also broke in this month, and that was another $440 to get them replaced. The car needed new tires, so I went a middle of the road option for that, but it was still ~$650 we didn’t want to spend.
The kids had their birthdays this past week, and we had a party. No, no, not some thousand dollar extravaganza with entertainers, balloon animals, and bounce houses. Oh wait, there was a bounce house, but upside, it was paid for over a year ago, and overall, not that pricey. Essentially we just had friends over and did snacks, drinks, and appetizer sort of food, beyond the cake and ice cream.
Both cakes came out nice!
I designed and decorated James’ cake, and Mrs. SSC did Marie’s.
James wanted a construction cake, so I built this one.
With the food and extra drinks, juice boxes and gifts (For our kids not those give away bags for the party, I just don’t get those) it was still ~$200 or so for entertaining.
The bigger kicker of the month was our shower in the master bathroom. The metal for the hinge on the door fatigued and split. When this happened the pin that rests on this tubular metal hinge now sat about ½” lower and started hanging up on the lower part of the door. Imagine any door you use dropping a half inch and you get the idea. After hours of scouring the internet and talking to 4 different shower companies, we found out that they don’t make replacement parts for the style of enclosure we had. Seriously, what a racket! None, no parts. They have to be connected to the mob somehow, but no, they just expect you to replace the WHOLE thing if something like a tubular hinge fatigues and splits. So, after getting 3 quotes all within $50 of each other, we got our shower replaced to the tune of $1350….. Ridiculous! Now you understand where the comment about fixing all the “custom everything” on the Living Big Sky show came from, as it was playing the night after we’d ordered our standard shower door replacement. Ugh…
Finally, we got the newest member of the family our new greyhound, Coffee!! Kidding, we went with Lola instead of her racing name “Rusteze”. She’s been great, but the adoption fee of $250 and the $200 vet checkup/heartworm and tick/flea medicine and some other costs added up to just over $500.
Happy and relaxing
Sound asleep!
So to recap, we’re about $3600 over budget this month. Fingers crossed that we don’t have the same string of spending in the next few months, but I see it trending back downward again.
How was your month?
Did you get any crazy unexpected bills,repairs, or new pets that threw your budget for a loop?
If you don’t know, Mrs. SSC and I like to watch home renovation shows, Renovation Realities, Property Brothers, and even home buying/selling type of shows like Love it or List It, House Hunters, and recently, Tiny House Hunters and Tiny House Nation. You’re probably thinking, “Thanks for sharing your TV preferences, but what does this all have to do with ER or finance or anything?” Well, recently Mrs. SSC discovered a new show called Living Big Sky, essentially a house hunters for Montana. It has amazing views everywhere you go, and people keep using phrases like, “we loved it so much during vacation, we decided to move here,” and “Every day we wake up we feel like we’re on vacation. Just look at these views.” Which led Mrs. SSC to ask me, “Are we setting the bar too low in the Appalachians? Will we feel like that when we retire? What if we got big views like that too?”
It’s No Montana, but it’s still beautiful!
Yes, there are some impressive views, but we’re basically talking about moving from the Gulf Coast to Southern Canada. Previously, we’d investigated places in Idaho, Oregon, Washington, Colorado, and the like, but ultimately found what we “think” we’re looking for in Virginia, North Carolina, Eastern Tennessee.
I say, “think” because, except for vacationing around those areas, hiking through those areas, and other short term type of trips, we’ve not gotten out there to visit for a week with the express purpose of house hunting, community snooping, and general poking around to get a feel of the town and surrounding area. The little things like, where are the closest grocery stores, is this area “too far” from town? We’re hoping to get there and do a recon trip in the fall, but that is highly dependent on if Mrs. SSC’s mom can cover the little ones for a few days. I’m not spending 4-7 hours in a car driving around with toddlers in the back. That sounds horrid for everyone involved.
Virginia is nice and has great properties with excellent views. It’s like we discussed, yes, I love the west and Rockies, and those sorts of views, but the Appalachians feel comfortable, and homey, and I find them beautiful. The mountain laurel, rhododendrons, streams, and green-ness of the landscape just brings me back to my growing up days of hiking and backpacking in Eastern Kentucky with my Grandad, and at Mammoth Cave National Park backcountry. I love the hollows and ravines, and rolling hills, broken up by some mountains, and most of all, Fall! I miss seeing leaves change colors, the smell in the air, the crisp bite of winter on the back of a warm fall breeze, reminding you that winter is coming. Almost as nice is Spring. Real Spring, where you feel warm air mixed in with the biting cool breeze, and see trees bud, bright blossoms emerge, and watch the brown landscape become green, lush and vibrant again. After 8 years on the Gulf Coast, I guess I really miss seeing seasons change, and realize that’s something I definitely want.
We are hoping we will have a view like this from our porch!
In the meantime, we started looking out west again. Except for some real fixer uppers that are already at the top of our budget (~$300k – with reno included) we would have to work another year for some out west living. With the experiences of fixing things in the last 2 homes we’ve lived in, plus the horror shows that unfold on Renovation Realities, and Love It or List It, I realize we could spend more than anticipated on a fixer upper. If we’re already at the top of our budget, it gets tight finding something we can afford, with land, etc… Nothing that warrants a whole extra year of working.
If I had a million dollars, I’d still probably move here.
It reminded me of one of the couples on the Living Big Sky show. They bought a house at the top of their $600k budget, saying “We’ll find a way to make it work, because this is our dream house.” It was custom everything, and they both said, “We just love the uniqueness of everything being custom.” Before I even thought about it I blurted out, “Oh you’ll love it until it breaks, and you’re paying custom prices to fix it.” Side note – our shower door broke Sunday, and after 3 estimates, consultation with 4 companies, and about 5 hours online we found out, there is no repair – only replace…
Ultimately, we think we’ll end up on the East Coast though. The land is cheap, houses are affordable, and we love the views. We may end up somewhere else, but unless we find something amazing at a great price in 3 more years, we’re most likely East Coast bound!
What are your “Big Sky” ER plans?
Are you planning on moving or staying where you are when you pull the trigger?
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
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?
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, 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!
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!
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?”
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?
This past month we got hit pretty hard with insurance raises across the board. It’s around this time every year our flood insurance, home insurance, and car insurance comes up for renewal, since we moved to Houston around May 2013. Mrs. SSC nearly split her gourd when she opened the envelope with the new rates for our home insurance. They had jumped almost $700 for the exact same coverage! $700!! WTF, man?! A few days later we get the renewal for our car insurance. Again, I see Mrs. SSC open the envelope and her jaw hits the floor and steam shot from her ears. It had gone up as well, almost $250 for my car and $140 for Mrs. SSC. Immediately, we ask ourselves, “What the hell is going on? We didn’t get into an accident (I did in August, but I was rear-ended and no claim on my part). We haven’t made any home owner claims? Why would they both raise dramatically at the same time? Have we gotten into some new age bracket we didn’t know about?” We couldn’t come up with anything, so we decided to start shopping around and that reminded me of the last time we changed insurance.
When we relocated from Denver and Chicago, respectively, to Bum-squattle, LA we figured we’d both save a lot of coin on car insurance. I was coming from a policy written for an outside parking only, decent vehicle crime area, and commute of 25 miles. I figured my new policy would be cheaper because I had a garage, 5 mile commute, and did I mention car theft/break-ins in Bum-squattle were really low? Yet, my policy was going to double. DOUBLE! For the same coverage on an 8 year old vehicle. WTF man?!
Mrs. SSC was in the same boat. Her Chicago policy covered her for on-street parking, high vehicle theft/break-in rates in her area and her policy would also more than double. What we didn’t take into account was that Geico (our provider at the time) had just lost their ass with claims from hurricanes Katrina and Rita pummeling the Gulf Coast a few years earlier… However, we ended up saving a lot of coin from our previous policies just by switching to a provider that hadn’t gotten hit so badly with the hurricane claims. Big win there just by shopping around.
We ran into the same thing with home insurance. Most big providers wouldn’t even issue any new policies and it took Mrs. SSC days to find a local company that would issue a policy. (See above with insurance companies losing their ass on those two hurricanes.) We got laughed at from some companies once they looked up our new address. Literal laughing followed by, “My computer says we don’t issue policies for that area anymore…” Evidently this was a thing and even long-time residents would get dropped because the insurance companies would reach a maximum number of policies they’d gamble on for that area and just drop those unlucky enough to not make the cut. It was literally a year to year scramble to have home insurance for some people I worked with.
But, I digress…
After spending 1.5 hours online (15 minutes doesn’t quite cut it anymore, the commercials lie! lol) Mrs. SSC decided we should go back to Geico. Actually, she found they had a slightly better coverage policy offered for the same rate as our insurance prior to the price jump. So, effectively, $390/6 months saved. That’s almost $800/year! Way to go Mrs. SSC!
Ironically, for our biggest liability the house, the amount of time spent shopping for home insurance was only 15 minutes. There were ~10 emails back and forth to our home insurance agent, the first few were along the “Are you sure this is correct? WTF?! What caused the jump?”. So, maybe 5-6 productive emails, and ~5 minutes perusing the latest flood maps, since the links haven’t changed from when we bought the house. Our agent found us a policy with the exact same coverage but would save us $523/year and $430/year with flood insurance. That’s a savings of almost $1000/year! This is partly because we are not renewing flood insurance. Gasp!!! I know, I know, Gulf Coast, pseudo swamp land, what are we thinking? Well, our biggest risk is the tall pine tree getting blown into our house and letting rain/hail/creepy crawlies in during a storm. That’s covered on our new policy since water is coming from above and not upward into our home. These type of clarifications account for most of the other emails. Unless our neighbors pools catastrophically flood and beeline to our house and not out to the street, we should be good. Famous last words, right?
By getting our hand forced to review our insurances and coverage, we ended up saving about $1800/year. That’s pretty sweet, but if they hadn’t raised our rates, we wouldn’t have had a reason to shop around. It’s the complacency and comfort of not changing things I guess. In Denver, and even before then, I’d usually check for better car insurance rates once a year, but never got a better rate from anyone. That’s why I had been with Geico for 16 years before the last time I switched companies. 16 years! Whew, that’s a long time… I guess it just drives home the fact that if you pay attention even when you think you’re doing everything right “frugal-wise” you can still try and find some better deals just by investing a little bit of time. If you find you’re already getting the best deal, that’s an awesome feeling as well!
When was the last time you shopped around for different rates on insurance?
Have you found better deals by shopping around for other utilities?
Have you ever moved from a big city to Bum-squattle, USA?
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?
Taking advantage of employer programs does equal free money!
It’s always nice to find out you have free money, especially when you didn’t have to do anything crazy to get it. Last summer, I was able to get a lot of free money, just by taking advantage of my new employers health related programs.
With my new company, I was subject to some lucrative benefits for signing up with the new company’s “get fit” program. While at times it can seem intrusive, there are perks as well. One of which was that I got $250 put into my Flexible Spending Account (FSA) simply from signing up. It was really simple. I just went online, created an account and input basic data; height, weight, activity level, blood pressure (if you know it), etc… and then I got my “Fitness Age”. The company doesn’t have access to my specific info, rather they just know how many employees are using the programs.
BUT, by creating that account and answering a couple questions, it was a free $250. As an added bonus, when I linked my fit-bit pedometer to the program, I earn points just for my normal day to day activity. I was even able to earn more points by clicking through online questionnaires and “learning modules” about eating healthy, exercise, alcohol use, weight loss, stress management, etc… Seriously, this is all sponsored and promoted through work. I mean, they don’t mind that you do these things at work, as long as you’re not behind. They also sponsor on-site health fairs, blood panel screenings, and other “get fit” programs a couple of times throughout the year, but the best part is that you can convert the points into cash in an online shopping mall. They even have Amazon gift cards!
The best part about those points is you earn levels, and they make your points to cash ratio better! Between June and December of last year, I managed to work up to $75 worth of points. And, because I’d done enough modules, I was in the Platinum group. Yeah, Platinum!! That got me another free $50 totaling $125. Along with the $250 in my FSA, I had gotten $375 just for participating in my company’s health focus initiative program.
Unfortunately, I’d forgotten all about the $250 in the FSA until I got a nice reminder email earlier this month. It read, “This is a reminder that all submissions for re-imbursement through your FSA are due by the end of March. If not used, this money will be retained by your provider. Our records indicate you have an outstanding balance in your account.”
I went online, got some forms and then emailed Mrs. SSC, so she could do the hard work of slogging through months of receipts and bills to see if we had anything we could use that for. Of course we did, as the medical spending last year was pretty high with a lot out of pocket expense. After some perusing of past statements, receipts, and more, Mrs. SSC found $250 worth of reimbursable charges, and it got mailed off. Hooray, free money!
Overall, it is really nice to have a company that will give you those incentives to stay healthy. I totally understand it saves them money in the long run, but listening to my retired Father-in-Law talk about his work environment, lack of work life balance, and the downright dictatorship of his company during his career makes me really appreciate what we have now. I’ve dealt with poor benefits, no benefits, horrible bosses, and horrible work environments, so I am grateful to have these programs through this company. It boggles my mind though why more people don’t take advantage of it though. I showed a new co-worker, Melissa, how it is super easy to go online, sign up, link your fit-bit (which she uses), and crank out 300 points by clicking through some modules. Her reaction, “Meh, it seems like a lot of work…” Yep, I thought, a whole lot of work… *
Everyone has their price point though, right? What seems like no work to me evidently is too much drudgery for Melissa to earn that “small” of a reward. Like me and pennies. I will pass by a penny on the street and think, “Oh, a penny!” and then keep walking and not pick it up. However, a nickel, dime, or quarter, I’d stoop down and grab it! Maybe you would pick up the penny though and think I’m an idiot for passing it by. We all have our price point.
* – It’s only April and I’m already at Silver level and have $65 earned!!
Have you experienced free money for little to no work?
Have you forgotten about a balance in your FSA and had to scramble to not lose it?
Would you use these programs or do you see them as too intrusive?
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 winningstubs 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?
