Greetings from my dusty little corner of the internet! Apologies for the blogging hiatus – it’s been a busy summer. Work has kept me on my toes, and there’s been plenty of fun that needed to be had with our littles. My husband’s family was here for a couple weeks as well… great to see everyone, but not conducive to getting stuff done!
But school starts tomorrow, so we’re back to getting up early and juggling the school schedule into our days. Our son picked our his outfit this evening: shorts and a cool shirt that I got at a garage sale last weekend for 50 cents each. There’s also a nearly-new pair of shoes that were also 50 cents. Not bad… $1.50 for the whole back-to-school outfit! We went to the school today to meet the teacher and check out the classroom. Our son was so excited this evening that he almost couldn’t fall asleep. His best friend is in his class again this year, along with several other really great kids from his kindergarten class. Most of the class is kids he doesn’t know yet, so there’s lots of excitement about meeting new friends this year. I’m excited for him, and looking forward to some one-on-one time with our younger son. And also fitting in plenty of work time while our older son is in school. I have no doubt that this school year is going to fly by just like the last one did, so I’m reminding myself to slow down, smell the roses, and not try to pack so much into every day. Here’s to an awesome school year, and to all the other mamas and papas out there getting their little ones ready for it!
One of the things I did during my blogging break was catch up on some reading. I finally read Your Money or Your Life… I know, I’ve been blogging about frugal living since 2006 and I’d never read that book?! Mr. Money Mustache wrote a summary of it a couple years ago, so you can read that if you don’t want to read the whole book. But either way, whether you read the book or the Cliff Notes, it’s got a lot of good ideas and inspiration packed into it. The authors were early retirees before there were early retiree blogs all over the place (or an internet, for that matter), and their philosophies on life will likely ring true with a lot of my frugal readers.
Our family has thankfully moved beyond debt and basic savings and we’re firmly in our ‘stash-building years at this point. We save at least 50% of our take-home pay each month, and our corporation also puts funds into our SEP-IRAs totalling 25% of our salaries (technically, our company contributes that money, but since we’re the sole owners/employees of the company, our paychecks would just be higher if we didn’t have the employer retirement fund). Almost all of the money we save from our take-home pay goes into a taxable account now, although we’re continuing to max out the SEP-IRAs because we aren’t convinced that we should focus solely on saving for an early retirement… we certainly want to retire well ahead of the traditional schedule, but it will be nice to have a financial buffer that kicks in once we reach our mid-60s.
Anyway, we’re well beyond the basic first steps that are outlined in Your Money or Your Life. We know the benefit of frugal living, and we’ve been committed to that path for many years. Our income has grown considerably over the last decade, but our expenses haven’t increased much at all, especially when you account for the fact that we have two additional family members now. So we’re able to save a large chunk of what we earn each month, and we’re both on board with how important – and satisfying – that is. One of the early steps in YMOYL is the idea of tracking everything you earn and spend. My mom has been tracking every penny my parents spend since 1970, so I grew up with this concept. And I’ve dabbled with it several times as an adult. But I’ve never stuck with it, and I’m ok with that (we put everything on one credit card and pay it off at the end of the month, so the credit card statement provides a pretty good tracking tool if we need it). I was talking with my husband about it, and he agrees we don’t really need to track our spending, because our strategy is SALAP… Spend As Little As Possible :-) Since we’ve made that a habit for many years, it’s second nature now. We’ve definitely loosened our purse strings a bit over the last few years, and our pennies no longer squeal from all the pinching, but our frugal habits aren’t going anywhere. No matter how much money we’re able to put into savings each month, I will still buy back-to-school clothes at garage sales, and search Craigslist when our son needs a desk to do his homework. I’m happier that way, and there is no temptation for us to start spending money willy-nilly.
But one concept that really resonated with me in YMOYL was the idea of a wall chart. They describe taking a big piece of paper, sticking it on the wall, and charting your spending and your income over time. I love the idea of a visual reminder of how our savings are coming along. Back when we were in debt from starting our business, I used charts and visual reminders to track our progress in paying off the debt (I still have those charts…). Charting savings is a lot more fun though – if you’re still in the debt phase, keep going, because it gets even better!
So I got a piece of graph paper and stuck it on the wall over my desk. I’m not charting expenses – just after-tax income and savings, along with dividend/interest income (expenses are pretty obvious from the chart, since the difference between income and savings is our expenses each month). My chart’s pretty simple, and just involves three markers so I can make three different colored dots each month. The goal is to get the savings dot as close to the income dot as possible, using our SALAP strategy. So far, so good. July was a tough month, as we made a trip to Costco in June that was on July’s credit card bill, and also paid our annual homeowners insurance policy (which went up about 25% over last year because there have been so many claims… yikes!). August is looking better in terms of percentage saved (about 55%), but I really want to see September be over 60%, and my handy wall chart is a great inspiration. We have plenty of “wants” that we spend money on these days, and the wall chart is a handy reminder to pull back on unnecessary spending and focus on long-term goals.
I’m sure a lot of you have read YMOYL, probably many years before I did. What did you think? Do any of you have wall charts inspired by that book?
Laura says
I’d love it if you could point me in the direction of a free printable for one of those wall charts. I love YMOYL so much that I recently splurged on a used copy from Amazon instead of repeatedly checking it out of the library!
Frugal Babe says
Hi Laura! I got my copy of YMOYL from the library, and I just used a regular old piece of graph paper to make my chart. Mine is definitely more on the simple side, but this thread from the MMM forum looks like it has an attachment that contains YMOYL spreadsheets… http://forum.mrmoneymustache.com/mustachianism-around-the-web/mustachian-web-tools-your-money-or-your-life-spreadsheets/msg50610/#msg50610
Ruby says
Hi – Any advice on house buying? I know you’re happy with yours. And, I know you felt like you got a good deal. I’m in the process of house-shopping and would like to land a house that is well-priced but also meets our needs. How did you balance all the factors when house shopping? It’s over-whelming!
Frugal Babe says
Hi Ruby,
When we were shopping for our first home, we were both pretty young (24 and 26). We didn’t know exactly what we wanted, but we knew what we could afford, and that we needed to limit our price based on our income. This was back in 2002 when mortgages were pretty easy to get. Luckily, we were more realistic than the bank loan officer when it came to what we could afford to buy. We were in a relatively high-priced area at the time, so our price limit meant that the vast majority of the homes were off-limits. That helped a lot in terms of narrowing the field.
We sat down in an early meeting with our realtor to discuss what we were looking for. He had us brainstorm all of our “would like to have” features, and just wrote them all on a list. Then he had us rank them in terms of how important they were. This was the part where it became obvious that although we liked walk-in closets and garages, not having a walk-in closet was not a deal breaker, whereas not having a garage was a deal breaker. We just worked out way through the list, and our realtor helped us understand where we’d have to compromise in order to stay within our price range. Ultimately, we found a house that was perfect for us (with regular closets, but a nice two-car garage), and was in the price range we knew we could afford.
Be flexible, but keep in mind what characteristics are most important to you – location, size, features of the home, etc. Remember that some things are easy to change once you’ve got the house, while others are not. So if you want to be within biking or walking distance of work, you’re going to have to limit your shopping to houses in that area. But on the other hand, if you’re dead-set on having concrete counters in your kitchen, you can buy pretty much any house that meets your other needs, and re-do the counters after you move in (in this case, a house with a not-so-great kitchen would be a selling point, since you’d be remodeling it anyway… and you’ll get a better price on a house that hasn’t already been remodeled).
Good luck!
Samantha says
Nice article. I love garage sales.:)