Articles with lifestyle creep

Road Less Traveled – SSC Style

Last week, the folks over at Our Next Life proposed a challenge called The Road Less Traveled. They laid out what seem to be the “Commandments of FIRE” and they’re hilarious and pretty spot on, you should go read them if you haven’t already. Some of my fav’s are “Thou shalt make thy choosing between Vanguard index funds or dividend-yielding stocks” and “Thou shalt be frugal in all things, and shall not partake of worldly temptations like cable television. Bigger riches await those who partake only of self-powered travel.” Outside of these sort of Personal Finance community commandments, the challenge is what do you do that is different than these sort of “rules” everyone seems to profess and follow. I don’t know that we have much that is different from “The Commandments”, but I’ll let you be the judge.

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Small Decisions, Big Outcomes; How I met Mrs. SSC

Have you ever read any of those choose your own adventure books? I’m probably dating myself, but when I was a kid there were books that let you make a choice at some point in the story. For instance, your character comes to a door in a castle and then you’re offered a choice. If you choose to go through the door, turn to page 109. If you choose to keep going down the hallway, turn to page 95. This would go on until you get to a resolution, typically I died a lot… However, I would usually go back and read all the different choices to see what various outcomes I had missed out on. Too bad you can’t do that in life, but it’s moving ever forward and ever onward. A favorite blog of mine Our Next Life wrote about this referring to it as “Sliding Doors”, while other folks may think of it as a butterfly effect.

Like those choose your own adventure books, have you ever looked back and identified key points in your life where a decision you made seemed to greatly affect your life’s trajectory from that point forward? I have a couple pretty significant ones, but I was reminded of one recently that put me where I am today in SO many ways. This one began on a Monday night, but not just any Monday night; a Monday Night Football (MNF) night.

I love watching football, especially at the beginning of the season, when you’ve been starved of football action for months, so I was excited there was a double header that night for MNF. I was in grad school and still working full-time as well, so I was pretty beat, because I’d been at work from 6am until 2, then school from 2-6 pm. As I was heading out of the building a friend asked if I was sticking around for a talk by a recruiter from one of the major oil companies. I told him, “Nope, I’m going to watch some MNF, have some beers, and relax.” He asked if I could help get it set up at least, since I was also a fellow officer in our American Association of Petroleum Geologists (AAPG) student chapter. Reluctantly I agreed, and set everything up and then ultimately decided to stick around for the talk. Little did I know how much that seemingly small decision would affect my life.

Afterwards, I noticed some people talking with him and another company rep about setting up interviews for the next day. I had looked at their online interview schedule previously, and it had been full, so I considered it “taken care of”. However, I went to stand in line to ask if I could get an interview spot, when I heard 3 different people in front of me mention the online scheduling system wasn’t working right for them and didn’t allow them to block out an empty spot. The recruiter said she would open some more interview spots to accommodate that, no big deal, so when I got to her, I also mentioned I couldn’t get a spot booked either. Of course, I didn’t mention it was because they were full, but I got an interview slot just the same.

Maybe I could work here?
Maybe I could work here?

The rest of the night was spent watching MNF in the background and totally reworking my resume. It was a nightmare because I hadn’t updated it in what seemed like years… Years! Plus I needed to get it in a good state to highlight how I could be an asset for this company even though I had zero Oil and Gas experience. I highlighted all my work experience with managing projects, drilling crews, reports, new bid proposals, and more to get it into decent shape for my “early” interview at 10am. The interview went well, and a few months later I got an internship offer for that summer which I accepted. Woohoo!!

We wandered around here a lot on the weekends.
We wandered around here a lot on the weekends.

My internship was in New Orleans, and they put us up in a hotel near the office since the company figured this was easier than having a bunch of interns in sketchy housing they found themselves. There were only 3 Geologists in the whole group of ~30 interns, and we were the oldest of the group by far. When we heard another geologist would be joining us in a few weeks, it was exciting to have the prospect of someone else older than 25 that we could hang out with. I remember the first time I saw this geologist, she walked into the lobby to meet us all for lunch, and I remember thinking, “Why can’t I be with someone like that?” Little did I know this was the future Mrs. SSC.

We hit it off that summer, and spent most of our free time together; at work, outside of work, duruing lunch at work, and we realized we wanted to be together. Then the internship was over and I returned to Denver and she returned to Chicago to finish up school. Booo, long-distance. We talked daily, and traveled as much as our schedules would allow, and I proposed to her that following Spring when she came to visit. She said yes, and we started our lives together that Fall. It was a pretty short engagement, and yes, we ultimately married within about 15 months of meeting each other – long distance no less, but I wouldn’t change anything for the world.

Us a few years later in Tahoe, with our oldest.
Us a few years later in Tahoe, with our oldest.

Just that small decision to not go watch MNF changed the whole trajectory of my life. Had I gone home, I wouldn’t have gotten that interview slot, nor would I have gotten that internship with that company and never met Mrs. SSC. All stemming from a decision of “Fine… I’ll stick around and listen to the talk.” I would’ve accepted a different intern offer, and I’m sure my life would be pretty different. Mrs. SSC helped me realize how to not spend all the money you have. She’s showed me how to be more financially responsible and the power of investing. She’s done a lot for me on the financial side of life that helped get us where we are today, but even more she’s showed me a lot about how to be a better person for her, for myself, and now for our kids as well. She’s been a great friend, supporter and confidant, and added so much positivity into my life, and it all started because I decided not to be lazy and go watch MNF. Amazing…

Looking back I had no idea of the power of that decision, even though now it reads like a choose your own adventure book type of decision point. I chose something atypical for me, and my life literally changed paths from what typical Mr. SSC would do. I can imagine had I not made that choice, I’d still have credit card debt, school loan debt, car loans, probably a boat loan, home loan, and wondering why I am still struggling with money even though my salary had more than doubled. I’d complain about how it’s tough to make ends meet, and be oblivious to the fact it starts with me and my spending habits, and has less to do with how much you make than how you allocate it in your life.

Wait, I need those dollars!
Wait, I need those dollars!

I learned that if you keep doing things the same way you’ve always done them, they will stay the same they’ve always been. I made another decision that night and that was to do something I typically don’t do. It’s like the Seinfeld episode where George decides his inner voice has been wrong his whole life, so he does the exact opposite of his inner voice. He becomes wildly successful, gets a hot girl, everything changes for the best starting from that decision. I made a similar choice, and that was if I wanted things to change, I needed to start making different decisions than I would normally do, and for me it all started on that night.

Have you had any seemingly small decision affect your life in a big way? I’d love to hear your stories!

How do you define success?

Dollar, Dollar bill y'all! Oh wait, those are just dollars...
Dollar, Dollar bill y’all! Oh wait, those are just dollars…

It’s no wonder that we as a society are such consumers and create such financial issues for ourselves all in an effort to keep up appearances that we have money and are successful. You can’t go anywhere without seeing ads showing what success looks like, and therefore what we need to strive for. The bigger question that we forget to ask ourselves is, “What does success mean to us and who are we trying to look successful for”?  It all seems to be relative though, driven mostly by how you define success. When you’re constantly looking forward striving for bigger and better and more, at what point do you declare yourself successful enough?

Then what measure do you use to determine “success”? Is it having enough free cash to do what you want with? Is it the “He who has the most toys wins” mentality? By those standards, I should keep the job I have now for many more years, and spend money like I have a good oil-field salary. Why can’t I have a boat? I love to spend time on the water, the kids are old enough to enjoy it now, and we can afford it. Check – we’re getting a boat! We should get some nicer cars too. Right now we can drive past people and they don’t realize the kind of coin we’re bringing home, not anymore. Check – we’re getting newer, fancier cars! Plus, we need something to pull the boat! Now that I have a boat, I don’t want to spend 1-1.5 hrs on the yard each week to save $25 and I like boating better, so we should get a yard guy. Check – we’re getting a yard guy! You know what, now that I think about it, I like eating out for lunch at the office. I’m tired of my home made sandwiches and chips and apple every day, day in, day out. Check – I’m eating out more! We also need to vacation more, because we don’t get a lot of down time to reflect on our “success”, so you know what, we’re taking more vacations!

Dude, now this is success!! I’ve got a nice boat, a better ride(s), no lawn worries, and I get to have someone else make lunches for me and they’re WAY tastier than my ol’ sandwich. Plus, I get to plan our next vacation for the end of the year and the ones for next year. Talk about living the good life! See, it’s pretty easy to measure success, just look at all our stuff. We have SO much stuff, we even have a storage unit now to hold our extra stuff. It reminds me of when Homer told Monty Burns he was the richest guy he knew, and Monty responded with, “Yes, but I’d trade it all for a little more.” 🙂 So does more stuff equal “more success”?

What would it look like if I defined success by a different measure; a measure of time and freedom.

You're doing what?!
You’re doing what?!

If I tell someone that instead of pursuing all of that, I want to quit my 6 figure job, give up the boat, give up ever owning a fancy car (goodbye BMW dreams), eating out all the time, and give up a “big, fancy house”, so I can try to live off of $50k/yr they’d tell me I’m nuts.Heck, I told myself that before I got on board with this whole lifestyle change we’re striving for. Honestly though, after reviewing our spending this last year or two, I don’t see why we would need to live on more. Yes, more money could be more comfortable, but I’m already comfortable now. Yes, we could feel a little more secure having a paycheck show up each week, but I’m okay with withdrawing money as needed from our savings, as per the plan. You know what I will get more of though? Time and freedom.

I can’t BUY that right now. Let me rephrase that. Right now, I am currently buying future Mr. and Mrs. SSC time and freedom by forgoing the boat, the BMW, a bigger house, and bringing my own lunch to work each day. We still vacation enough for me, and after our lifestyle change, we’ll have more time to do more of that. So I can buy time, but it’s in the sacrifice of current convenience and luxury stuff now. But what about being successful, because I’ve worked my whole life to be a “success”!

Seriously, I don’t know how you could be more successful than by choosing to dictate your life how you want to live it. For me, I want to spend more time doing more family things, and to paraphrase the great Winnie the Pooh, I want to do more “Mr. SSC things.”

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

Even more importantly, I want the freedom to do them when I want to do them. Not when they fall into an empty slot on my schedule and I also have the energy to do them. My current schedule has openings between 7pm and 11pm weekdays, weekends (sort of), and every other Friday (sort of). The sort of is a reminder that I still have “life things” to do like dentist appointments, car maintenance, house maintenance, errands, groceries, yard duties, and appointments for who knows what else, like haircuts, kids haircuts, kids dentists, kids birthday parties, dog things, and more. It’s amazing how easy it is to fill those days with things I’d rather not do in my “free time.”

In the end, it’s all about how you decide what success looks like to you. As the Grateful Dead put it, “sometimes we live no particular way but our own” and this rings true all over the PF blogosphere and life in general. We all have different ways we want to live our life, and we all have a plan in place to get to achieve those dreams. Some of us will get there sooner than others and some of us may never get there, although I hope we all get to where we want to be. But I guarantee that none of us will get there if we try to measure up to someone else’s definition of success.

What’s your definition of success? Do you have something you see as a success that others might think “wouldn’t count”?

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?

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!

Lifestyle creep: Is it killing your early retirement?

I have recently come to realize a couple of key things about the SSC household finances. First of all, I realized how out of touch with them I really was… Bad Mr. SSC! Secondly, holy crap are we living way below our means! Way to go SSC family! “Why do I bring this up?” you ask, well… let me tell you. I am personally shocked by how little we live on, given the state of our financial comfort and relatively decent salaries. Yet, I don’t feel slighted, I don’t feel broke, and even more importantly, I don’t feel like I’m wanting for anything. We’ve discussed in other posts, where the money goes, and what our budgets are, and how we got to where we are by diligent saving, and yada, yada, yada. I point to something else as a larger reason that we are in the situation we are today – I think it’s that we have mostly avoided lifestyle creep. That’s year to year creep, like my waistline, slowly expanding until one day I wake up and think, “When did I get fat?!”

I started thinking more about lifestyle inflation the other day after a late night of perusing Facebook. I noticed a friend, let’s call her June,  offering up her used clothes dryer for sale for $150 obo. She also offered the washer with it because it was broken, and since her new washer didn’t match her old dryer, well of course she needed a whole new set. June listed the make, model and all that, so being bored I decided to look it up. It was an $1,100 dryer! That got me thinking, “Man, I bet the washer could be repaired for less than $500 even if it was a motherboard replacement or some other circuitry issue.” Another friend pointed out “the steal” and the fact she was giving up an $1,100 dryer for 10% of the original cost. She pointed out that the new wouldn’t match the old, so please someone come get them.

Then, I thought back a few months ago to June lamenting being “car poor” because she had a plumbing issue come up and needed funds to fix it and repair the damage to her ceiling, dining room, etc… This was after she had just bought a new Camaro convertible and her husband bought a new BMW X5 within the same month. Sure, the SSC family could be doing the same thing, but I realized that we have avoided a lot of that buying for buying’s sake. We caught ourselves doing that early on, and realized we could cut the credit card by 20% each month just by asking, “Do I want it or do I need it?” We found out we don’t need a lot of things we had been buying. Also, by being mindful of our eating out, and switching it to allowances, we were able to cut a lot of spending there. So now, it’s pseudo-date like in that if we eat out, one of us pays from our allowance. Unless it’s sushi, when Mr. SSC always pays, or now we’ve decided going dutch works too, mainly because, “I eat 3x as much as Mrs., SSC.” But to the real point, we’re accountable for eating out and that saves a lot of $$.

Here’s where I am going to go on a sidenote rant though. Mrs. SSC was just telling me about having lunch with some co-workers and how they were talking about all the restaurants they go out to eat at, and have you tried, here, there, etc… These are all people a little older than us, but basically single income providers with stay at home counterparts. Let’s call one of them, Ted. Ted was talking about how he buys breakfast and lunch at work. That has to be about $15-20/day! I know, I’ve also eaten there, never for breakfast, but for lunch, and it’s essentially restaurant prices. So ~$100/week for food at work. That’s almost $5200/yr to eat at work. Ok for me to hear it put like that, it doesn’t sound like much, but that’s because I have no good sense about money. BUT, if you think of it in terms of, if you invest half of that, assuming you bring your lunch, and save $2500/yr those investments can add up to way more than a “tasty” lunch and breakfast each day. Back to the “creep” talk.

Another way we avoided creep was technology creep. I just don’t get keeping up with the Joneses in regards to Apple’s latest iPhone, or Samsung’s latest phone or the newest tablet, or anyone remember the days of GPS? When Apple came out with the first iPhone, so many people I knew, broke or not, were suddenly coming up with $300-$400 for a new iPhone, even though their old phone worked great. They were showing off apps and having loads of fun with it and I thought, “But my phone is fine, and doesn’t eat up a lot of pocket space, and works great for me.” Even with subsequent releases I would hear people lament, “Oh woe is me, I have an iPhone 4 and they just released a 5! I knew I should’ve waited, and now I have to wait 6 months to turn this old 4 in for a brand new 5!” And they had just gotten their iPhone 4. My family (blood related not SSC family) is notorious with getting a phone and using it for maybe 6 months or less, and getting another phone, not realizing the crazy costs associated with constant phone upgrades, but they add up! The “free phone” with a 2 yr contract is ridiculously expensive, when you price out buying it like on T-Mobile’s plans. (this is not an endorsement for T-Mobile. I don’t like them, but they’re lower cost, so it’s a concession I made with Mrs. SSC).

The point of how much we’ve avoided lifestyle creep was driven home to me the other day when I got an update on numbers, retirement dates, retirement income possibilities, etc… from Mrs. SSC. She’s constantly running numbers, adjustments, different forecasts and the like and letting me know where we stand and whether or not 2018 or 2019 is doable for retirement, or if it’s as late as 2020! Gah! She sent me a number and pointed out that in our early retirement, we’re going to essentially be living with an extra ~18% of buffer money than we currently are living now. 18%! I was shocked! Not that we’ll be living more comfortably in early retirement, because it’s pretty comfy now, but just that we’ll have that buffer there and it will be more than we live off of now. Ridiculous… When we get to 60 and our 401k kicks in, it will be an even bigger cushion, restaurants here I come! I’m just astounded that by avoiding throwing away money on things like new cars every 3 yrs, or new phones every year or new tablets every year, we have been able to get to early retirement that much sooner.

And getting back to that lunch Mrs. SSC was having with her colleagues. Besides Ted and his food habits, there was “Mary” who was talking about having a rotating shoe rack in her closet so she could store and view all her shoes. WTF, who does that? Do you do that? Better yet, who needs that? Another one was talking about something else that made Mrs. SSC think, “Are we cheapskates?! Are we living like suckers, “cheaping” it up to retire early?!” Then she realized, by the time we’re their age (~6-8 yrs) we will have been in our retirement home for hopefully 1-2 yrs relaxing fixing it up and spending more time with each other and the kids. So, no, like I’ve said, I don’t feel deprived, or broke, or like I want something and can’t afford it. I am looking forward to being able to house hunt for our retirement place in another 5 yrs, and enjoy sitting on a back porch or deck somewhere soon, just slowly sipping my coffee.