Sunday, August 20, 2017

Letter From My Future Self

August, 2022

Dear Self of 2017,

Hello from half a decade in the future! I know you must be a bit surprised and confused to hear from me, Self of 2022, but given the inherent challenges of long-term debt repayment and the fact that you seemed pretty darn glum this past weekend, I thought I should write you a note of encouragement. 

Five things I want to emphasize:

1) You're doing great! Like, truly great. You're sticking to your budget, you're paying off some serious debt every month, you're not wasting your money on crap, and you're not filling your time with pricy activities. Not easy, especially when everyone you know seems to be buying whatever their little hearts desire (vacation here, new car there...) Trust me, you'll appreciate these sacrifices and efforts a few years down the line. 

2) You have so many options in 2022. You want to buy a house? You can! You want to take a fabulous trip to the Caribbean every year? Go for it! You want to invest? Be my guest! You decide to work part-time instead of full time? YOU CAN DO THAT TOO! Without that crushing weight of debt, you're free to do pretty much whatever the heck you want. 

The you of 2017 is putting $1600 bucks a month towards your car loan, your credit card debt, and your student loans. But in 2022, you can funnel that hefty chunk of cash into any number of things: savings, vacation fund, whatever you like. The world will be your oyster.

3) On the hardest, financially skimpiest days, remember this: Well before your 45th birthday, your debt will be gone. Nonexistent. Obliterated. That leaves you with (ideally, anyway) decades to revel in a debt-free life. Five years of frugality for many, many more years of freedom. Playing the long game is one of the hardest things you'll ever do, but it will pay off in spades.

4) Time moves slowly in the moment but oh-so-quickly in retrospect. I know what you're thinking right now: five years is forever. But is it? Think back to 2012. That seems like yesterday, right? The time between then and now flew. The next five years will fly by, too, even if the days seem long. So stick with it, kid, and in the meantime...

5) Enjoy your life. You don't need money to appreciate all of the great things happening right now in this moment. You live in a gorgeous area. You can step out your door, walk two miles, and be in the mountains. You have a healthy family. Your kid goes to a fantastic public school. Yeah, I know there are many things you can't do right now while you're paying off debt, but don't let yourself focus on those things for too long. Identify all the great, fun things you can do with the resources you have. 

Take it one day at a time, one month at a time. Stick to your budget. Keep your eye on the fiscal prize.

You've got this.

Your 2022 Self 

Wednesday, August 16, 2017

Winning, August 2017 Edition

So far, our August has been all about going back to school and work (or in Fortysomething's case, starting his new job), hanging out at the lake and skipping rocks, and striving to stay within our tight budget. We knew going into this month that we were going to have to hunker down a bit, and that's exactly what we've been doing. We've become true pennypinchers.

Although I'm proud of us for sticking with our financial goals, I'm going to keep it real and admit that I also feel bored, frustrated, and even a little sad: bored and frustrated that I can't always do the things I want to do (like go out to eat or participate with friends in activities that cost money... and so many of them do indeed come with a pricetag), and sad that the summer is coming to an end. I love summertime and the possibilities and freedom it offers, and I just wish it'd last a few more months.

I'm trying to see this mid-August tedium as a prime opportunity to step back and reflect on what's going well so that we can stay motivated for the rest of the month. I need that motivation right now. So here it is - three ways we're winning this August:

(1) We made a budget for back-to-school clothes, and we stuck with it. The Kiddo sorely needed new clothes this school year, thanks to a growth spurt that left him with a closet full of too-short pants. (Him: "I don't want new pants! I like these pants! They still fit - see?!" Me: "You're wearing capris! Those were not designed as capris!" Does anyone else argue with their children about clothing? It's super fun.) I set a budget of $80 for a new wardrobe, and through a combination of thrifting and Target deals, we landed a variety of shirts, shorts, pants, and shoes for a grand total of $73. (Okay, fine, full disclosure: more like $78, as I used some of the leftover money to bribe him with ice cream.)

(2) We experienced the benefits of renting. It's been a warm summer in an apartment with no air conditioning, and our ancient ceiling fan - I think it's been here since this complex was built in the 1980s - has been running nonstop. Last weekend, it stopped working. The maintenance guy came over, fiddled with the motor for a few minutes, pronounced it dead, and ordered an entirely new fan. He installed it on Monday while we were at work.

I appreciated this mildly-inconvenient incident because I've been enduring a recent bout of housing envy. Sometimes I feel like everyone else is buying houses and settling down within their own, unshared walls. I'm a bit jealous. The fan situation was a welcome reminder that although renting can be a real PITA, it also has its benefits. Had we owned said ceiling fan, the time and money to fix it would have been entirely on us. Instead, the landlord took care of all of it, and we didn't spend a dime.

(3) We haven't dipped into savings this month. Not even a little! We knew August's finances would be tight because we're adjusting to Fortysomething's new pay schedule and salary. I was fully expecting to hit up the emergency fund in the first half of the month. Thanks to careful planning, though, we didn't need to. In fact, we still had $400 in the checking account before Fortysomething's first paycheck came through. It feels immensely gratifying to see that our fiscal attentiveness is paying off.

What about you? What are some of your wins this month, financial or otherwise? And is anyone else struggling with the end of summer?

Friday, August 11, 2017

Making It Work In An Expensive Town (That We Love)

Last year, we moved from the flat, rural Midwest to a picturesque mountain town known for its ubiquitous pine trees, comfortable summertime temperatures, and close proximity to some of the western U.S.'s most popular national parks and monuments. 

Like this one:

And this one:

Aaaaand this one:

(Sorry. I'm a little obsessed with public parks.)

It's a lovely place to live, but it's also exceedingly expensive. Hang out in any coffee shop or bar downtown and you're bound to hear frustrated conversations about the disparity between local salaries (average household income: $65,000) and housing costs (average price for a single-family home: $350,000; average rent for a two-bedroom apartment: $1400/month). High cost of living and homelessness are perennial issues here. It's not New York City or San Francisco, no, but the majority of non-millionaires we know are struggling. 

At least from our wallet’s perspective, we’d have it much easier if we returned to Indiana, where we paid a grand total of $500/month for a three-bedroom house with an enormous front yard. Yet we haven’t even considered it. The mountains, the climate, the outdoorsy culture, and the sunshine (266 days out of the year!) all lend to a quality of life that is exponentially higher for us than where we previously resided. 

That clinical depression that's hounded me for most of my life? Yeah. It’s been in remission since October of 2016, the month we landed here. 

I’m convinced it’s the mountains. We’re not going anywhere.

We're committed to making it work, but in order to afford living expenses AND keep up with our debt repayment plan, we have to be strategic. Here's how we do it: 

(1) We both have salaried jobs. First, can I just say that we are lucky, lucky, lucky? We didn't move here with these gigs. Yes, we worked our butts off to find them, but opportunities are somewhat limited, and we feel incredibly grateful. Prior to this, Fortysomething spent 10 years as a contract worker. Contract work can be lucrative, but it can also be unpredictable, and in this town we need income predictability. Two regular paychecks and employer-sponsored health insurance are crucial for us.

(2) We keep our transportation costs low. We own just one car, and because we never have that far to travel, we budget only ~$45 a month for gas. Fortysomething, the Kiddo, and I all walk to work or school. My commute on foot is about 45 minutes each way, which gets me outside and it allows me to forego my employer's pricy parking pass, an expense that would set us back by at least $500 a year. 

(3) We signed a longer lease. Our apartment complex has month-to-month options as well as a variety of longer options (9-month, 12-month, 16-month, etc.) The longer the lease, the lower the price, so we decided to sign a year-long lease. It's a bit of a gamble in a complex like this one because you never know when you're going to get a noisy neighbor, but so far, it's working out fairly well.

(4) We shop at thrift stores. We have some well-stocked, independently-owned thrift stores here, and we’ve learned that we can find quality goods at low prices. We bought some of our furniture, a bunch of kitchen gear, and part of the Kiddo’s fall wardrobe from these stores and have saved at least a couple hundred dollars in the process.

(5) We stopped going out to eat. Our little town boasts some amazing restaurants, but they’re generally priced for tourists. We were paying anywhere between $50 and $80 every time we went out for dinner. So we gave it up. We'll go out for special occasions, like birthdays and anniversaries, and live it up when we do.

(6) We’re choosy about activities. Things that are out: skiing (we don’t have the gear and we’re not going to rent), bike tours, concerts, and basically anything with an entrance fee. However, there’s still plenty to do without paying a cent, including movies on the town square, music in the park, the library, hiking, and running. I’m not saying we never feel like we’re missing out. Sometimes we do. (And by "we," I mostly mean me.) But the longer we live here, the easier it is to find free fun.

Like going to the lake:

Or taking a hike:

Or catching the sunset:

Thank you, nature. You're the best.

Do any of you live in a particularly expensive area? How do you keep your expenses in check?

Disease Called Debt

Saturday, August 5, 2017

The Shame Trap: Why We're No Longer Letting Financial Regrets Get The Better Of Us

The other day on Twitter, Debt Free Geek asked readers to share financial decisions that they've come to regret. I replied with a summary of our massive financial oops-a-daisy in the early aughts: taking out student loans to help cover a mortgage we clearly couldn't afford and racking up more than $50K in needless debt in the process.

After telling our story, I expressed my ongoing sense of embarrassment at our predicament. After all, we were in graduate school when we made this choice. We were/are intelligent people - at least according to our grades and the reputable school that admitted us. So it's hard not to look back and wonder: Who were those textbook-smart-but-financially-flippant kids who thought purchasing a house on a grad student salary was a good idea? Why did they insist on buying when renting was obviously the better choice? What were they thinking? 

It's easy to get sucked into a shame spiral, but here's here's the thing (and if you've seen the light and are in the process of debt repayment, too, I know you get this): being embarrassed about our past mistakes isn't helping. If anything, until we finally got over ourselves and decided to take decisive action, that embarrassment set us back years. Here's why:

(1) Being embarrassed about our situation created a head-in-the-sand situation: Because our finances felt so, well, WRONG, we chose to ignore them altogether. The thought of assessing my credit card debt was enough to make me wilt with shame. So we, and especially I, rarely checked our accounts and barely read our statements. Occasionally our willful ignorance led us to go into overdraft on our bank account, thereby incurring additional pointless fees. We'd pay the monthly minimum on any balances, but we assiduously avoided the hard numbers of our debt load, and we certainly didn't make any debt repayment plans. 

Of course, it's hard to get out of debt if you a) don't know how much money you have, b) don't know how much debt you have, and c) have no roadmap for finding your way out of said debt. It seems ridiculous now, but at the time, it was all because we were afraid to face the truth.

(2) Our embarrassment hindered our communication as partners. Fortysomething and I would frequently make purchases without consulting with one another. We were both guilty of this, but I was particularly bad about it: If I decided I needed new clothes, I'd run out to Target and stock up. If I wanted to take a weekend away, I'd book the hotel and "surprise" him later. If we decided to spend $50 on each other at the holidays, I'd ramp it up to $100 because hey, it's Christmas! And I wouldn't tell him how much I spent or even that I spent anything. 

By the time we realized we were in a true financial emergency, we had absolutely no idea what the other person's credit card or student loan balances were. We avoided sharing because we didn't feel good about our individual choices. There was a whole category of our lives that we did not share with one another.

(3) Our embarrassment led us to hide the truth from the other people around us. Even as we were running up thousands of dollars in debt, we cultivated an illusion of security. From the outside, it looked like we were doing well: attending a strong graduate school program, living in a small but cute condo, and taking nice vacations. Nobody knew about the massive disparity between appearances and our actual financial situation.

I'm not saying we should have broadcast our predicament to the entire world, but had we been able to talk honestly about our finances with the people closest to us, it would have a) helped us confront reality and b) created a sense of accountability. Our trusted friends and family would have helped hold us in check. 

So what's changed?

I'm still embarrassed. I don't know if that feeling will ever disappear. The difference now, though, is that the communication lines are open. I'm honest with myself and my spouse: I keep track of what we spend, I look at our accounts every single day, and Fortysomething and I talk about finances all the time. The budget, needs and wants, and unexpected expenses are frequent, necessary (if sometimes boring) topics of conversation.

And although I don't walk around in my everyday life yammering on about my debt, I'm more forthcoming with people about my budgetary constraints. For example, last week a friend invited me to join her for a pricey wine-and-paint event. I found myself falling into a knee-jerk rationalization: that spending time with a friend would be worth the cost. Then I thought it through, and I decided to come clean with her: We just don't have the money this month, I told her. Maybe I can budget it in for next month, or maybe we can do something free? She totally understood. Now that she knows where I'm at, we can build our time together accordingly, and I don't have to feel guilty about an unnecessary expense.

From here on out, we're battling the debt monster every single day. We're longer willing to let shame or embarrassment prevent us from moving forward and building greater financial security. Do I wish we'd started sooner? Yes, absolutely, but at least we're now on the right path.

So here's my word of advice: If you know you have debt but the thought of confronting it makes you want to cringe and hide under the bed, don't. Face it head on. Start by just looking at the balances on your credit cards, student loans, mortgage, etc. Tally it all up. At least then you'll know what you're working with - and then you can get to work making a plan to get rid of it all (more on how we did that in a future post). But whatever you do, don't hide the truth from yourself. 

Wednesday, August 2, 2017

July In Review: A Solid 9 Out Of 10

July was a winner of a month here at the 76K Project. Work was low-key (a welcome respite from the craziness of our early summer busy season), we completed the Frugalwood’s Uber Frugal Month Challenge, we spent a lot of time outside, the Kiddo and I took a relaxing and wallet-friendly vacation to Seattle, and Fortysomething trained for his new job. On the budget front, we wound up a little less than $1 over… something I’m not really mad about given that we had some unexpected expenses AND paid off one of our credit cards

From our wildflower walk! Free and beautiful.

Our complete budget is shown at the end of the post, for anyone wanting to compare our intentions with what actually happened.

Where we were right on the money: With respect to rent, debt repayment, phone, Internet, compost, and several other expenses, we followed the budget pretty much to the letter. In some cases we came in under budget: the Very Expensive Feline wasn't quite as expensive this month, and we didn't spend as much on gas as we thought we might. Wins!

Where we went over: Although I'm still pleased with our grocery bill improvements, we exceeded the budget by a few dollars in that category. Same went for insurance (I'm not sure why this varies by a few dollars each month and need to look into that), Hulu (apparently we hadn't paid the bill in full last month), and our vacation. We did have quite a few unexpected expenses, including my used Hokas (I still contend that was a well-considered purchase!) and a room air filter (we were smelling smoke from the neighbor's apartment and decided an air filter was a necessity). 

The items shown in purple in the table below are expenses we didn't initially plan on but that we added to the budget later in the month. They included some logistical expenses related to Fortysomething's new job and a school-related fee for the Kiddo.


Between paying off one of our credit cards and continuing to make payments on our other cards and loans, we reduced our debt load from $77,289.31 to $75,281.42 - a total of $2007.89!!! If you're interested in the details, check out the link to The Current Debt at the top of the page.


We used savings to pay off the credit card, but we still have $1098 on hand in case of emergencies. We'll start replenishing this account in September, when a side hustle will bring in some extra cash.


I'd give July a solid 9 out of 10. Yes, we came in slightly over budget, but we also made a dent in the debt. Thanks to the Uber Frugal Month Challenge, we dialed in our spending. No going out to eat, no unnecessary purchases, a lot more free fun. 


Financial: The August budget is going to be tight, mostly because Fortysomething’s new gig has a payment schedule that differs from that of his previous job. We’ll have to be strict about our spending and possibly borrow from savings until we get paid more at the end of the month. Our primary goals are to simply stay on track with our repayments, stick to the budget, and hang in there until September, when we’ll have more financial breathing room and can start saving for end-of-year expenses, such as a trip to see family at the holidays.

Personal: August will be hectic. My goals here include adjusting to our family’s new work and school schedule, writing at least twice a week on the blog, and ramping up my running (I had an injury in the Spring and am building my mileage back up… It’s a slow process).

July Budget: The Plan vs. Reality

Car and Renter's Insurance
Student loans and credit cards
Car Loan
Thousand Trails
Gas in car
Netflix + Hulu
Work Trip
Medical Bills
Work Clothes
Trip to Seattle
NYT Subscription (final)
School Fees
Work Expenses
Total Expenses

Letter From My Future Self

August, 2022 Dear Self of 2017, Hello from half a decade in the future! I know you must be a bit surprised and confused to hear from...