Hello dear readers! Since it’s been five months since my last post, I guess I’m a bit overdue for an update. I just read through that last one, and it was sort of like reading a journal entry. All of the things I mentioned are still going well. And in my normal overly-optimistic-about-how-many-hours-are-in-a-day fashion, I accepted another writing assignment a few months ago, so I’m now writing the content for our own site, along with three others. I’m still making hay while the sun shines, and the sun is still shining!
Spend as little as possible = save as much as possible
We’re continuing to stash away money every month, with a strong goal of financial independence and a vague goal of early retirement. We still enjoy our jobs, but there’s certainly plenty of other stuff we’d do instead if money were no object. So our favorite thing to buy is shares of Vanguard index funds, in an effort to give our future selves the gift of freedom.
We’re still maxing out our tax-advantaged accounts. We’ve got an HSA-qualified health plan again (after having non-HSA-qualified plans for several years because the premiums were lower), since it’s the lowest-cost plan in our area. The bonus is that we’re able to contribute to an HSA again, which we did this year. We’re also continuing to put 25 percent of our salaries into our SEP-IRAs, and maxing out our regular IRAs (a combination of traditional and Roth—we put as much as we can deduct into the traditional, and the rest goes into Roths; the amounts in each one vary from year to year depending on our income, but we always max out the total amount).
We’re also still stashing away money in 529s for our boys—we have about $23,000 between their two accounts, which is proof that small amounts certainly do add up over time. We opened each boy’s account the month he was born, and have always contributed $100 per month to each account. This year we bumped it up to $150 per month. We have no idea what the status of higher education a decade from now, but we get a state tax deduction on our contributions, and the whole process is automated so we can just forget about it. As they get closer to college-age, the funds automatically tilt more towards bonds and away from stocks, but for now, we’re still relishing having little kids!
We still put $125/month into a Capital One 360 account that we’ve had since about 2006 (back then, it was ING). It currently has about $5,000 in it, which is earmarked for the next time we need a new vehicle—hopefully in about ten years, since our 7-year-old Mazda5 is going strong! I suppose we could just move that money over to our Vanguard taxable account and close down the Capital One 360 account, but inertia is a strong force!
In addition to our tax-advantaged accounts and regular savings accounts, we put money into our taxable brokerage account at Vanguard every month. It includes two funds:
- We have a bond fund, which is earmarked to pay off our house in the spring of 2018—although if interest rates stay low, we might opt to just continue making minimum payments even after the interest rate resets. Our plan all along has been to pay it off in full when the initial five-year payment locked interest period was up, but we’ll cross that bridge when we come to it. The money is in the account if we want to pay it off, but we could opt to wait if the interest rate stays low enough. We currently owe about $88,000, and it will be at about $76,000 when the initial interest rate (2.44 percent) expires.
- We have a stock fund that we generally consider to be our early retirement account. This is where we put all of our extra money once we max our tax-advantaged accounts each month. If we were to retire before age 59.5, we’d be able to use this money without having to jump through any tax hoops to get our IRA money early (there are plenty of strategies for doing that, but we figure this is just as good since we couldn’t put any additional money into our tax-advantaged accounts anyway).
We still have laminate counters, our $10/month first-generation iPhone, thrift-store wardrobes, 100% home-cooked meals, and fabulous entertainment that consists of the great outdoors, the library, and each other. Our kids caught a toad in the backyard this morning and built a little house for him in the grass. They hiked to the top of a 14,000+ foot mountain with us this summer. They are loving everything about Harry Potter right now, as we’re reading the series together. Every day, they pull weeds in the garden and the various gravel areas around our property, and are doing an excellent job of keeping the weeds at bay all by themselves. All in all, we’re having a fantastic summer—and we’re still able to do it while putting a big chunk of our income into savings.
Adventures on Craigslist
My husband and kids are currently picking up a new-to-us printer that we found on Craigslist for $15. The old one finally kicked the bucket, and although we try to be as paperless as possible, there are times when we need a printer. Speaking of Craigslist, we sold a travel harness system last week that our kids had outgrown. It retails for about $150, but I think I paid somewhere around $25 or $35 for it on Craigslist a few years ago. I sold it for $35, so either way, it was a good deal for us.
The guy said he’d meet me in the Costco parking lot, and that he’d be in a light blue convertible. He didn’t mention that it was a Tesla. I had a lot going on that day, and didn’t notice that it was a Tesla until I actually looked at the car when he was driving away. We had chatted briefly during the transaction, and he mentioned that his wife was taking a sabatical from work and they were going to take their kids and go somewhere, but they hadn’t decided where (hence the need for a travel harness). Once I really noticed the car, I was reminded of this MMM post. I love the idea of someone having enough money for a Tesla, but still being happy to shop on Craigslist. It’s a perfect example of spending money on the stuff that’s important to you (which is different for each of us, obviously) while saving money on the stuff that either doesn’t matter or is just as good second-hand.
I’m still reading The Frugalwoods blog (loving their new adventures) and MMM, and I occasionally pop in on some other early retirement blogs. We’re still working out on our gymnastic rings and rope, and I finally managed to climb up the rope without using my feet! My deadlift (for reps) has increased to 205… not much of a change since last winter, but slow and steady wins the race, right? Our garden is fair-to-middling this year, with some successes and some things that are struggling. We switched to no-till cover cropping last fall, so we’re still in the very early stages of that transition. Our yard is also slowly starting to look like a forest; our evergreens are mostly at least seven feet tall now, and they were tiny little twigs when we planted them. All in all, all is well! I hope you’re all having a fantastic summer!