New goals

It’s been an age since I last updated, and not for not trying. I have a bunch of drafts saved since I’d get an idea for a post, and then decide not to publish it. I think I’m to the point where blogging about money isn’t as motivating as it used to be. Paying off the debt was an accomplishment, and then once that happened, it kind of felt like we were ‘done.’ Sure, we’re saving now, but it doesn’t have the urgency that paying off the debt did. And, it kind of feels like bragging. We’re proud of our accomplishments and know we are very lucky and blessed to be able to do what we’ve done, but we don’t want to make anyone else feel bad about their situation. So, it’s a fine line.

I think laying out our new goals may be helpful:

  1. Continue paying for husband’s graduate school tuition without loans.
  2. Continue saving aggressively for retirement.
  3. Put some savings into taxable investments for potential future home purchase.
  4. Continue saving for travel.

So far, it has worked well to put the tuition bills on a rewards credit card and then claim the rewards for travel, then pay off the bill when it comes due. Upon some advice via the MMM forum, we got the BarclayCard Arrival MasterCard for travel, which has netted us nearly $900 in rewards this year (which includes the $400 bonus for signing up). We took an amazing trip to Germany and France in July, which wasn’t too horribly expensive, though it was a splurge in some ways but not in others (we stayed with friends for one week and my mother rented an apartment for us for the other week). We both really enjoy travel, so we want to keep doing that as time allows. I may do an entry just on our trip, so will save details but share one photo…

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Me (blue dress) and my sister (scarf in hair), walking along a street in Paris. It was about 100 degrees that day, so I feel bad for the guy in long sleeves and pants!

We are waiting to consider a home purchase until after my husband is done with graduate school. His future job has the potential to be higher paying than my current job, so we don’t want to get tied to a specific geography until we know where he’ll be working. Right now, we are perfectly situated within about a mile from each of our workplaces and from school, and we like the convenience of that so would want to try for a similar situation once we know where he’ll be. One challenge for us is that we aren’t really handy or into yardwork, so we’d have a lot to learn upon buying a home,plus it would be more work to maintain, so it might not be the best option for us, since we’ve managed to live in a one bedroom apartment for six years.

We happily celebrated our sixth wedding anniversary just a few weeks ago, as well, but didn’t do anything too lavish to celebrate. We both had the day off, so just spending quality time together was nice. We saw an afternoon showing of ‘The Hundred-Foot Journey,’ and for dinner, went back to the restaurant where we had our reception, and they gave us a free appetizer and dessert. It was a lovely day.

Don’t take financial advice from broke people

One of my favorite Dave Ramsey sayings is “Don’t take financial advice from broke people.” I think this is great, because if your goal is to not be broke, why would you do anything that a broke person tells you to do? Unless they are warning you not to do what they did to become broke, be wary of where you get financial advice, and always do your own research.

Look, there are a lot of financial blogs these days. And pretty much anyone can write a book and publish it, purporting to be an expert on just about any topic they choose. Dave Ramsey used to be broke, but managed to do what he does best–give folksy, easy-to-understand financial advice to the average person–and amass a fortune doing it. He’s great at telling people that bankruptcy is worth avoiding–because he and his wife Sharon lived through it.

I am pretty wary of most articles, blogs, and books on personal finance, because the type of advice they typically offer doesn’t fit with what I already know about money and investing or simply doesn’t go far enough for my taste. My latest favorite is Mr. Money Mustache, because I have no quibble with how he managed to save over 50% of his income for 7 years and retire at age 30. Also, he has laid out all of the numbers for anyone to see how they did it. He’s also shared their annual spending, which is actually pretty boring, and I hope to do similar posts in the coming months. We don’t have a huge stash at this point, but we’re definitely at a point where we easily save more per month than we spend. I hope to do a post on how we do that sometime soon. Stay tuned!

How to get married for less

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How to get married for less than $25,000

Every year, we hear about the average cost of weddings, and every year that goes by that I’ve been married, I am thankful that we spent about $5k for 50 guests to share our wedding day with us instead of something larger and more costly. So today, I will share our wedding budget and how we kept costs down. We also planned the whole thing in about 6 months (engaged in early February, married in early August). I’ll add some photos, but you can see more on my Pinterest board. Our wedding happened pre-Pinterest, so now there are many cost-saving ideas out there. Our goal was to have an elegant, low-key wedding with our closest family/friends. My parents liked this idea a lot, and were supportive of a small wedding, and so paid for nearly all of it. I think the ultimate breakdown was that we paid about $1,000 and my parents paid about $4,000.

Wedding Budget

Reception:
Food and Beverage        $1,600.00
Books for table numbers        $200.00
Wine      $0.00
Total:    $1,800.00

For our reception, we chose a local fancy restaurant, with no dance. We really just wanted to be able to talk to each of our guests, and we had no desire to dance the night away. Originally, we were going to use the restaurant meeting room space, which had no rental fee, but they generously offered to set aside part of the main restaurant (they have curtain things to make areas more private) so we could more comfortably seat 50 people, also with no fee. They also happened to have musicians that evening (a pianist and violinist) so we got to enjoy the lovely music without dancing. We used our favorite children’s books as table numbers (I think we had 7 tables) so the restaurant staff knew where to seat folks based on our rather complicated seating chart (we didn’t want chaos with seating since we were in a small space). We did pay a corking fee to bring in our own wine for toasting (most of our family aren’t big drinkers and DH’s aunts gifted us with the wine), and we limited meal options to two selections so we could anticipate the cost. At the end of the night, my dad just paid the check like you would at any restaurant, and the owners generously gave us a $50 gift card as a wedding present-we used it on our 1st anniversary to go back and celebrate.
2955940894_8016003670_oAttire and Beauty:
Gown/Alterations        $175.00
Headpiece        $50.00
Bride’s Shoes        $75.00
Groom’s Suit        $200.00 (gift)
Total:    $300.00

My gown was a J.Crew wedding dress on sale which I bought before we were even officially engaged (short story: I had loved the style for a long time and so when I saw it went on clearance, my now husband said to just get it, since he was in the process of ring shopping). I had a custom floral hair piece made by Myra on Etsy (no veil), and I got my ruby red silk Caparros shoes on Zappos, which went perfectly with my silk wedding gown. My husband’s godmother is a tailor/seamstress and helped with slight alterations to my gown and also generously purchased a nice black suit for him to wear, and we got a red tie that matched my shoes. My sister did my hair on the big day and I did my own makeup.

Ceremony:
Location Fee        $300.00
Officiant Fee/Donation        $100.00
Musicians        $250.00
Total:    $650.00

We got married at our church, which happens to be the local Cathedral, an already beautiful space. We didn’t add any decorations, since the space was newly remodeled. They charged parishioners $300 for the location, plus suggested a $100 donation for the priest. We hired one of the regular church cantors (songleaders) to sing, and one of my cousins played the piano and helped us choose wedding music, which was a very lovely personal addition to the ceremony/mass.

Flowers and Décor:
Roses        $135.00
Hypericum        $109.00
Ribbon/pins        $10.00
Bird nest for rings  $10.00
Total:    $264.00

We used Fifty Flowers and Grower’s Box for the bouquets that we put on the tables at the reception venue and which I held, plus boutonnières for our attendants and petals for the flower girl. My mom and a close friend helped me put together the flowers, and my mom had purchased clear vases at Goodwill and Savers to put them in–probably paying about $.50 per vase, so I didn’t include that in the price. We then let folks take home the vases/bouquets to enjoy, and we kept one. I made a little bird nest for the ring bearer to carry in our rings with supplies from a local craft store.

Photography:
Photographer        $500.00
Printing of photos        $200.00
Album from Target        $20.00
Videographer   $0.00
Total:    $720.00

This is the one area where I would recommend spending money, because the only thing you have at the end of the day are memories, and photos are a great reminder. We had a friend who was a skilled photographer, but who had never before shot a wedding, do our photos. He’s now a professional wedding photographer in the Twin Cities. One of my cousins did wedding videography for us as a gift, which was very generous. My uncle/godfather owns a photo printing shop and printed all our photos at a nice discount. I put 4×6 shots into an album from Target, and we also framed a number of photos which are still displayed in our apartment.

Stationery:
Invitations/Reply Cards        $300.00
Announcements:     $50.00
Envelopes        $25.00
Postage        $95.00
Total:    $470.00

We designed our own invitations in Photoshop, and had a local printer print them. We purchased fancy folding envelopes from some website I can’t remember (they were like folders), and got custom stamps with our engagement photos on them from Zazzle. Since we had a small wedding, we sent announcements out to those we didn’t invite to let them know our new names/address.

Wedding Rings:
His Ring        $325.00
Her Ring        $120.00
Total:    $445.00

We got both of our rings from e-weddingbands.com, which I highly recommend. They are great quality, and have free engraving. They were the cheapest we could find for 18k white gold bands. We tried on bands locally to get an idea of width and get our accurate ring sizes.

Transportation:
Car Rental        $0.00
Total:    $0.00

My close friend’s boyfriend (now fiance!) worked for a local car dealer, and got us an awesome vehicle as our “getaway” car, and also acted as our chauffeur. It was amazing to ride in a VW Phaeton, and we actually went through the Starbucks drive-through in it before going to our reception. This was an amazing gift.

Gifts:
Favors (Mr. B’s Chocolates)        $140.00
Favor boxes        $30.00
Total:    $170.00
Personal Additions:
Marriage license        $40.00
Premarital Weekend by Diocese        $140.00

We hated the idea of throwaway wedding favors, so we did something everybody loves: sweets. We got fancy Belgian-style chocolates in our favorite flavors and bought favor boxes online. This was the only truly “putzy” thing we did for the wedding, assembling those boxes and putting two chocolates into each box. We then set one box at each place setting at the restaurant, and we heard later that people loved this, trading each other for different flavors. Also, a Minnesota marriage license was $40.00 in 2008 (no idea if that’s gone up), and we were required to attend a marriage preparation course by our diocese, which cost $140. I would say this was worth it, as we also got to meet with a married couple for our premarital counseling and find out where we differed on our premarital assessment (required by the diocese).

Grand Total:    $4,999.00

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Long layered DIY haircut

Video

I actually cut my own hair last week using this video tutorial. I watched the video a couple times until I felt comfortable with how Silvia went through the steps. Then, I got my supplies together: a couple larger hair clips, a fairly narrow-toothed comb, and a hair cutting shears, plus a spray bottle with water.

Next, I combed through my wavy/curly hair and decided how much hair to trim–a quarter inch seemed about right, since my last haircut was in late August, and it wasn’t so grown out that I could still see where my stylist last cut my layers. I sectioned off my hair just like Silvia in the video, except I spritzed my hair with water very lightly so that it was slightly damp but not wet. This helped keep the frizz to a minimum (I never brush or comb my hair when dry, it makes the curl go crazy). I then trimmed up the layers, and shazam! Free haircut. I washed my hair afterward and double-checked the layers when wet, doing a bit of cleanup, but overall, I think I did a good job. Photo below.

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I mostly keep my hair in the same style and length, but I usually lop off a couple extra inches in the spring, so will try my hand at that once the weather warms up.

How to save (potentially) thousands more for retirement in one easy step

Keep your investment fees (otherwise known as the expense ratio) low–this means on everything you have invested: your IRA/401k/403b/457b/taxable investments. This interactive infographic from PBS’s Frontline explains what fees are and why you should keep them as low as you can. If that doesn’t light a fire under your butt and get you looking at what fees/expense ratio you are paying, I don’t know what will.

So, what’s a “low” fee? If you are looking at your employer’s list of 401k investment options, you should be able to compare their expense ratios as well their rates of return. But for a comparison, Mr. Money Mustache likes the Vanguard VTSMX index which has an expense ratio of 0.17%. I have a Fidelity IRA in FUSEX, which has an expense ratio of 0.10%. And my 457b with my employer is in VIIIX, which has an expense ratio of 0.025%.

You might also notice the examples I’ve given are all index funds. That’s because actively managed funds generally have higher fees than a straightforward index fund which simply tracks the S&P 500. You can find a million other articles about index funds, or you can read one book: John Bogle’s Little Book of Common Sense Investing (preferably free from your local library). I read most of it in a weekend, and then immediately switched a bunch of our mutual funds to index funds. Fun stuff.

Marketing and the things you already own

Objectified_coverThe documentary film ‘Objectified‘ is a favorite of mine. It discusses the design of objects and our relationships with those objects. I often think of a quote from that film when I am walking down the aisles at Target or through the mall. It’s a quote about the things we already own, and to me, it’s a very powerful thought.

Rob Walker, New York Times columnist, speaking in ‘Objectified’:

If I had a billion dollars to fund a marketing campaign, I would launch a campaign on behalf of things you already own. Why not enjoy them today? Because we all have so many things that are just around – they’re in the closet, they’re in the attic, whatever… that we don’t even think about anymore because there isn’t enough room left in our brains because we are so busy processing all the exciting new developments.

At the end of the day, when you’re looking around at the objects in your house and you’re deciding what here really has value to me… they’re going to be the things that have the most meaning in your life.

The hurricane is coming. You have 20 minutes to get your stuff and go. You’re not going to be saying, ‘Well, that got an amazing write-up in this design blog.’ You are going to pick the most meaningful objects to you. Because those are the true objects that truly reflect the true story of who you are and what your personal narrative is, and the story that you are telling yourself (and no one else) because that is the only audience that matters….”

This idea really re-framed buying for me on many levels. Rampant consumerism is one thing, but even just buying that one extra “fun thing” on a trip to Target adds up to a whole lot of extra unnecessary stuff over time. And almost none of it adds anything to my overall happiness, nor is most of it stuff I’d grab if my home were engulfed in flames. This thought also helps me to de-clutter. How much do I really care about this object? Instead of looking at things and thinking they will make me happier, I look at what makes me happy and try to feed those passions instead. I recognize when I’m being marketed to; it takes some self awareness and self control, but once mastered, it’s a very powerful tool in helping to amass savings instead of collecting stuff.

You are traffic

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This is a long post, because it’s a topic I feel passionately about. Don’t say you weren’t warned.

One of the easiest and simplest choices that will affect your ability to save money is the choice of where to live. This will impact how much time you spend in your car, which will impact how much money you need to spend on your car, or if you even need a car in the first place. This doesn’t include costs like property taxes and school levies, but those are things to think about if you plan to own a home someday.

One thing I always wanted as a kid was to be able to walk to school. I had cousins who were able to do this, because they lived within a few blocks of their elementary school and only had a couple of 4-way stops to cross in order to get there. I lived too far from school, with too many busy intersections with stoplights, and thus, by the time I reached high school, had to spend over 45 minutes on the bus twice a day. That was 90 minutes of wasted time, in my mind. Sure, I spent the time reading or talking with friends or listening to music on my Walkman or playing handheld Paper Boy, but mostly, sitting on a bus for 45 minutes really sucks.

When my husband and I were dating, we took a vacation to San Francisco. Since we were still in school and generally trying to take a holiday on the cheap, we sought a destination where we wouldn’t need a car. We walked around a lot on that trip, and it was amazing. We also took the bus when needed, and this worked out really well. We later took another trip to Chicago, which was similar–a car would have been a hindrance, not a convenience.

So when it came time to look for an apartment with my then-fiancé about a couple months before our wedding, we talked about where we wanted to live. We decided it was important to live within walking distance of the university that he was attending (mine was a 1.5 hour drive) and be close to my job (I hated even the 20 minute commute from my parents, and paying for parking). We had two older vehicles (a 1987 Buick and a 1999 Saturn), and didn’t like having to rely on them, especially in cold weather. Since the university and my job were within a couple miles of each other, we looked for apartments in between, and found one that we were both happy with, a basic one bedroom with some nice closet space.

When we finished school and got jobs (I got promoted and husband got a job less than a mile away from our apartment), did we go out and get a nice mortgage? No, we decided to pay off our student loan debt, and so we stayed in the apartment. It’s been over five years, and we’re still there.

There’s no laundry in-unit, no dishwasher, and our garage is nearly a block away from our unit, but our building is near a busy intersection which makes getting anywhere quite convenient, and our unit faces a mostly-quiet and peaceful courtyard so we experience very little traffic noise. Our only utility cost is electricity, which is about $35 Sept.-May, and $55 June-August. We are within walking or biking distance of our jobs, a grocery store, a gas station, some good fast food options, and it’s about a 10 minute drive to our gym or either or our parents’ houses.

This wasn’t some fluke that we didn’t plan. We didn’t shop for the nicest apartment our budget could withstand. We looked for the cheapest place that was close to the places we needed to go every day, and we got a little lucky that my husband later got a job nearby.

This has allowed us to walk or bike to work, and save a huge amount on cars. We literally fill each car with gas once a month. One car gets filled twice if we go on an adventure to the Twin Cities or I have to use my car for work (and get reimbursed for the gas). Our car insurance on a 2005 Ford and a 2001 Acura is quite inexpensive. Both cars have been very reliable, with no major emergency repairs required, because we selected reliable cars based on a lot of research.

And then there’s the time factor. Even when we drive to work when the weather is dismal, it’s a five minute commute. I barely have time to listen to one full song on my way to work. This means our time is free to do what we want, instead of take time to get somewhere to do what we want.

I can’t stress this enough: where you choose to live hugely affects your ability to save money. You have a huge amount of control and choice in this situation. You may not decide where your job is, but you can decide where to live.