2015 summary

In terms of finances, 2015 was a pretty great year. We were able to travel to the Netherlands in May. My husband was able to quit his job in late August in order to begin his graduate school internship. We paid the last tuition bill for graduate school in December, without loans of any kind. And we received word that my husband got a very helpful fellowship, which will see him through his last semester of graduate school and into the job market in 2016.

I’m already gathering tax documents for 2015, as well. I adjusted my withholding in late 2015 in order to have a bit more in my checks to see us through that last tuition payment; this worked out well, even if we owe some taxes in April, we’ll have our savings built back up by then.

One thing that’s totally up in the air at the moment is a future job for my husband. We are, obviously, hoping and praying that he finds something wonderful very quickly after graduation, but we have planned for a period of unemployment.

Some of our major savings efforts slowed in 2015, mainly due to paying tuition and living on one income, but we did manage to save a significant amount nonetheless, close to 30% of our income. That percentage will likely drop in 2016, as we will have one income for more of the year, but we have accounted for that in our planning.

We are both looking forward to a trip to Indianapolis later in the year, as part of the fellowship award. We are hoping that I can go on the trip and and find fun things to do while my husband has training during the day. Indianapolis isn’t exactly Amsterdam, but it is the current city of author/vlogbrother John Green, so we may run into him and become best friends.

Here’s to a happy and healthy 2016!


Brief update

I’d like to make a brief update to note that my husband and I are still on track with our goals, and things are going well. My husband is more than halfway through his graduate degree, and is receiving a lot of high praise from his professors. The major hurdle right now is obtaining an internship for next year, and while he’s has some excellent leads and interviews, nothing has materialized yet. We are both hoping this works itself out soon so we have a better sense of what his schedule will look like for fall/spring semesters.

We are still planning to pay directly for his tuition without student loans. We discussed maybe taking out a loan for one semester (maybe his very last), but he only qualifies for unsubsidized loans and so interest would accrue and origination fees also are a bummer, so we’ve decided this isn’t a good option.

We also have another big trip planned for the spring. Details and a budget will be shared when we return.

It’s also the anniversary of the Affordable Care Act being signed into law, and I just want to note that this has literally saved us thousands of dollars since I was able to sign up for health insurance via our state exchange. My employer’s coverage was a fairly expensive HDHP, and via the state exchange, MNsure, I was able to get a much lower cost plan and put my benefit dollars into retirement savings instead. It’s also a huge relief for people like my diabetic sister who can rest easy knowing they won’t reach some ridiculous lifetime maximum or be denied coverage due to a preexisting condition.

You are traffic


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.

A possibly shocking post

One of my favorite posts on my newest favorite blog, Mr. Money Mustache (MMM), is about the Shockingly Simple Math Behind Early Retirement. MMM explains the relationship between what you spend and what you earn in incredibly simple terms, and demonstrates how quickly you can achieve freedom from your job. I like my career, but I really like the idea of not needing a job.

I had always planned on retiring before age 60, ideally by 55, but my math was much more convoluted and complicated before reading his blog post. I already track our income and expenses closely using Mint.com and my stack of spreadsheets, so it was easy to sit down and do my own simple math.

While we were aggressively paying off debt, we made rather large payments every month. Sometimes it was $500, sometimes (like in an extra paycheck month), it was over $3,000. Note that this was on less than two ‘teacher incomes‘–and I have a salary and my husband is an hourly earner. Now those huge payments are getting paid to… us. We have no car payments, and no mortgage. We pay off our credit cards every month and use up our rewards points on things we need (like Amazon.com points for textbooks and gifts or Old Navy points for clothing). This isn’t complicated financial planning, it isn’t anything ‘special,’ nor do we have a magically amazing income. We just spend significantly less than we earn, by making choices about where we live and how we live.

Between what we have been throwing at debt every month, what we put into 401ks, what automatically gets taken from my paycheck and put into a retirement account with PERA, and what we plan to put into our IRAs, we are easily at a 50% rate of savings. And that doesn’t even include what we are currently paying for my husband’s tuition, a temporary cost which will eventually lead to a higher income. All of this math was extremely exciting.

So now this blog takes a new focus: the goal of early retirement. How early? Hard to say right now, but I’ll be tracking our progress and offering more money musings on our way. Stay tuned.

Gaming frugality – month two

A brief update on our goals:

    • give up beer until summer – Update: Have not purchased any beer. I think I’ve also lost 3 lbs. because of this. We did buy one bottle of Malibu rum because we could get the giant bottle for $10 after a $4 rebate. New goal: forego beer as long as possible.
    • one fancy coffee drink per month  – Update: I think we got a couple coffees each in the last month, using them as a reward for doing something else. Husband is trying to wake up early a couple days per week and get to a free class at our gym, so is using coffee as his reward. New goal: we can get fancy coffees if there is a BOGO, but only if we have met the previous month’s gym goal of 12 visits or made it to a class at the gym.
    • both will bike/walk to work once it is warmer than 30 degrees when we leave – Update: wow, this is tough, because for a couple weeks, it rained every afternoon when it was quittin’ time for me, so I elected to drive. Husband rode bike quite a bit in June, though. New goal: try to walk at least 2x per week, and if driving, must pair it with some other errand (immediately go to gym after work, for example).
    • only eat out together for dates, not as a convenience – do more meal planning – Update: this has been going fairly well. I think we only broke this rule once in the past month and a half. New goal: just keep on planning a couple meals per week and have cheap/easy things so we are not tempted to eat out.
    • husband will not get professional massages, and will visit the chiropractor only once per month, as needed – Update: still going well; I think husband visited the chiropractor once last month. New goal: not needed.
    • no new clothes unless essential for work – Update: I did buy a new swim suit because one was completely shot, and a pair of shoes when I was in Chicago. New goal: keep using Pinterest for ideas to use pieces I already own.
    • no new makeup, nail polish, other frivolous lady temptations for me – Update: I threw away some almost-empties in Chicago to have more room in luggage, and purchased a new BB cream and powder, for less than $10 total. New goal: continue to avoid these aisles.
    • I will eliminate lady temptations by only going to Target for groceries – Update: I bought the aforementioned makeup at Target. New goal: not needed.
    • Buy gifts primarily with credit card points for Amazon.com – no gift purchases yet, but still accumulating points. New goal: not needed.

    Also, I requested and started reading John Bogle’s The Little Book of Common Sense Investing from the library and shifted some of our investments based on this.

Gaming frugality – month one

Early in April, I posted about the serious discussion my husband and I had about being seriously frugal to meet our financial goals sooner rather than later. So I thought I’d report on how we’re doing after a month. The stated goals and their follow up:

  • give up beer until summer – Update: our fridge and cupboard are now beer-less, after drinking the remaining Stella, Hoegaarden, and Third Street Brewing company remainders we had. I believe we did buy one six-pack right before my birthday at the end of the month, so on this count, we basically failed. New goal: no beer until the 4th of July.
  • one fancy coffee drink per month  – Update: Total and utter failure because of our vacation to Seattle, world capitol of coffee and fancy coffee drinks (which were part of the vacation budget), plus BOGO deals at our favorite local coffee shops. New goal: we can get fancy coffees if there is a BOGO, but only if we have met the previous month’s gym goal of 12 visits.
  • both will bike/walk to work once it is warmer than 30 degrees when we leave – Update: holy cow, winter lasted forever, so this is only a half failure. When we returned from Seattle, I felt really stupid driving my car less than a mile to work, so I started walking. Husband is still driving since he gets done with work at crazy late times (3:30am sometimes!). I drove one day last week since I needed my car for work, and I drove today because I woke up late. New goal: pump up my bike tires and continue walking or biking every day that I can. Encourage husband to bike when he doesn’t work late.
  • only eat out together for dates, not as a convenience – do more meal planning – Update: we actually did plan a few meals in the past few weeks, and we bought easy things to make so we have been doing pretty well on this count. I am counting this as a win. New goal: just keep on planning a couple meals per week and have cheap/easy things so we are not tempted to eat out.
  • husband will not get professional massages, and will visit the chiropractor only once per month, as needed – Update: total win, no massages, and only one chiro visit in April. New goal: not needed.
  • no new clothes unless essential for work – Update: I did buy one purse before our vacation. New goal: use Pinterest for ideas to use pieces I already own.
  • no new makeup, nail polish, other frivolous lady temptations for me – Update: I bought one new nail polish, and counted it as a birthday present. New goal: avoid these aisles altogether.
  • I will eliminate lady temptations by only going to Target for groceries – Update: total win, have gone to Target only for groceries. New goal: not needed.
  • Buy gifts primarily with credit card points for Amazon.com – haven’t needed to buy any gifts, but we do have points to use for this. New goal: not needed.

Overall, not great, but not terrible.

Gaming frugality

After stumbling upon the Mr. Money Mustache blog and reading a few posts, I was intrigued. Here’s a guy and his wife (Mrs. Money Mustache*) who have pretty much cut out every unnecessary item from their spending and retired in their early 30s in order to start a family. They have a lot of the same habits that my husband and I do. They got rid of all debt, because debt is a major emergency. They lived close to work, don’t borrow money for cars, don’t buy stupid cars, have no cable television, etc.

With our incomes, we can live quite comfortably on about half of our income, but we enjoy some frivolous things on a regular basis, with the justification that we already pay down debt and save pretty aggressively by most standards (we put toward debt or saved over 33% of our take-home pay in 2012). However, we have a couple long term goals that would be helped along if we gave some things up for a while. These goals include a trip to Seattle at the end of this month, paying cash for graduate school tuition for my husband, visiting France in the summer of 2014 or 2015, and satisfying my major love of bling with the last couple pieces on my jewelry wish list. We also both like the idea of buying a house with cash. This is totally within reach, if we are patient.

Last night, I asked my husband, “How frugal would you be willing to be? And for how long?” He said, “Well, I can be pretty frugal if I am working toward something.” And so we started making a list of things he is wiling to give up, and things I am willing to give up, and things we can give up together, in order to save money and slash more debt, more quickly. We have decided to:

  • give up beer until summer (unless bringing a host/hostess gift to a party), which will have the added bonus of helping us look better in our swimsuits
  • one fancy coffee drink per month (as long as we don’t buy any the month before and meet our gym-going goals to get our reimbursements which nearly pay for our membership)
  • both will bike/walk to work once it is warmer than 30 degrees when we leave
  • only eat out together for dates, not as a convenience – do more meal planning
  • husband will not get professional massages, and will visit the chiropractor only once per month, as needed
  • no new clothes unless essential for work
  • no new makeup, nail polish, other frivolous lady temptations for me – I have tons of stuff stockpiled that I purchased on sale, so can probably go 6-12 months without buying anything new
  • I will eliminate lady temptations by only going to Target for groceries (they have the best price on some items in our area, like the largest/cheapest size of the creamer for our non-fancy coffee)
  • Buy gifts primarily with credit card points for Amazon.com

We figured we can save a few hundred dollars a month by trying this for 3-6 months. This is a challenge in order to change some of our behaviors, and we are trying to make it into a game, by making the things we really enjoy into more of a treat than a regular daily experience. I will report on how this goes.

*He considers it an extremely high honor to have given her this title through marriage.

The Target Trap

One of my financial pitfalls is that I usually overspend at a store I go to nearly every week… Target. Since there are two stores in my town and both have grocery sections, it’s very convenient for me to stop there and make one stop vs. also stopping at the grocery store. But that’s not the area that becomes the problem… it’s all of the other areas in the store, and I know exactly why: I am their ‘target’ market. I think it’s something like women between the ages of 18-40, so I fall nicely into the middle at age 31.

The problem is that I can easily drop $100 on each visit to Target. If I visit once a week, that’s $400 a month. And what do I spend it on? Cleaning supplies, groceries, random household items like picture frames and pillows, but also clothes, fun jewelry, makeup, hair products, pet items for my parents’ and sister’s doggies, and so on.

Because I recognize how easy it is for me to spend at Target, for a while when we were trying to get our debt snowball on track and save up a healthy emergency fund, I would do two things: 1) make a list of only necessary items before heading to the store, and 2) only bring in enough cash to buy the items on the list. Honestly, there were still times when I decided that new nail polish was a ‘necessity’ but overall, making a list and sticking to it really did help.

The last time I visited Target was on vacation with two of my cousins’ wives. We needed some grocery items, but also took a look at the cute baby clothes for their kids and clothes for ourselves. I’ll admit I spent about $55 on nothing much: bread, Vitamin Water (on sale), a hoodie (didn’t pack enough warm clothes), and 6 bags of M&Ms (on sale). I’m not super proud of this, but honestly, it’s better than it used to be.

Any stores that are major pitfalls for you? Tips for cutting down on unncessary spending?

The little things

Yesterday was a major spending holiday for many couples. Whether for good or bad, my husband had to work, so I spent the evening at the gym (which was very quiet) and watching a library DVD at home. I enjoyed looking at the roses he bought me last week (knowing he worked the weekend, as well, he planned ahead) and we’ve already enjoyed our present to each other a couple times: we bought a board game. It’s our enjoyment of these ‘little things’ that help us go some days without spending one red cent. Then I got to thinking about our other inexpensive or even free hobbies…

At the beginning of this month, I got of books in the mail and am keeping up with ‘one book per week’ reading schedule. I volunteered to be a judge for a major local writing prize, so the books aren’t mine to keep, but it’s been nice to read fun fiction with a purpose. All it’s going to cost me: a tank of gas when I go to a meeting to decide the winner.

We had to renew our XBox Live subscription this month, but thanks to pre-paid cards that can be found on the cheap, this ends up costing us about $.10/day for the entire year. It seems we’re always streaming something, whether it’s Netflix, music, or playing a game. I suppose we also have to count our Netflix subscription and our internet connection into those costs, but we had those before we had the XBox, so it’s not an ‘added’ cost in our budget.

One thing we have yet to do this winter is bust out our cross-country skiing gear. We borrow skis from my parents and hit the park with our $35 annual park pass, which we also use for walks in the spring/summer/fall. We actually live very close to a [very small] lake, so we also walk the path around our nearby park pretty frequently in the warmer months.

Those are just a few things, but inexpensive interests definitely help us put more money toward debt each month.

Net worth

As I’ve mentioned before, I really like the online budgeting tool Mint.com for a variety of reasons. One of which is their ‘net worth’ calculation, which takes into account all savings/investments, checking account totals, and debt.

I’ve been watching our net worth slowly go from negative in the last year (quite a bit negative) toward positive. I think this month it will turn positive and, with good planning, never be negative again. Wahoo!

This doesn’t mean we’re out of debt, it just means that all of our assets will outweigh our debts. One thing that Mint cannot connect to is my pension at work, which grows very slowly but safely. Yes, I’m a 20-something with a pension plan. I did also manually add a few big-ticket assets to Mint, mainly our vehicles. If worse really came to worst, we could sell a car since we live within walking distance of our jobs.

I am hoping that our net worth reaches $1 million sooner rather than later, and not even really just hoping, but planning and then planning some more.