The Problem with Simple Living

 akron sunset

Filling water balloons really gives a person time to reflect. Life has been feeling complicated, and I’ve been feeling guilty about that.

After all, scores of articles suggest that life would be more manageable if I just simplified it.  Their short, percussive paragraphs try to soothe the soul. They inspire me to clean out my kitchen junk drawer, because if I had less junk in there, my life would definitely be better. Zombie-like, I close the tab and start throwing away broken pens in a passionate quest to regain control.

Next I’m told to attack my closet with a vengeance. If I get rid of perfectly good clothing and replace it with sustainably-made tees, I will muster enough dormant brainpower to invent the next Facebook. Or at least appear on Shark Tank.

According to these sources, it’s not just my belongings that need to be simplified. My schedule is also a disaster. If I stopped hanging out with anyone who brings me down, I’d be a lot better off. If I just said “no” to all the stuff other people want me to do, I could say yes to what I truly want. I will find peace.

I beg to differ.

What Does Simple Living Mean?

Simple living used to be a euphemism for resisting over-consumption. Living on less certainly makes life easier. Cutting the stuff we don’t care about, like pedicures and elaborate birthday parties and toddler tee-ball, saves so much time and money. “Simple living” in this sense allows us to be a one-income family and do volunteer ministry.

Recently, the terms simplicity and minimalism seem to encompass all of life—your time, experiences, relationships, possessions, work—everything. I agree with so much of this thinking. Cultural trends to over-schedule kids in lots of extracurriculars, stay hyper-productive at all times, or work crazy hours to pay for crazy stuff are bogus and need to be challenged.

But why do I leave the simplicity articles feeling frustrated by my not-so-simple life?

The problem with “simple living” is that…

Life isn’t simple.

Having a family is complicated. Sometimes I’d like to have a less hectic calendar with more flexible days. We are not “overscheduled” in the traditional sense. Our 5-year-old has taken one structured class, ever–swim lessons. He hasn’t been to a day of school in his entire life (no, I’m NOT homeschooling).

So how’d our schedule get so complicated? Well, there’s the part where we lead a home church and various small groups. There’s the part where I oversee the children’s ministry for our church. And there’s the part where my husband wants to make as many fun memories as a family while our kids are still young enough to like us. I wouldn’t trade these for all the simplicity in the world.

When life feels convoluted, I have to remember that I’m married. I have children. And these people have opinions and preferences that I must take into consideration. There’s nothing simple about that.

Relationships are complicated. Having friends brings so much joy, but it’s also complicated. Weeping with those who weep and rejoicing with those who rejoice doesn’t simplify my feelings or my schedule. I’m far from a perfect friend, daughter, or sister. But I do devote time, energy, thought, prayer, and emotion to the people in my life.

Living in a broken world is complicated. If simple living means finding what makes you happy and filling your life with that, people will starve. Humans will be sold into slavery. Orphans will go homeless. I don’t imagine we will end these horrors entirely. But simple living shouldn’t mean ignoring the immense need all around so we can be more comfortable. Rather, helping those in need should motivate us to free up time and money, not for our own peace and enjoyment, but for the sake of others. We can all be activists for at least one cause.

Find Purpose, Not Balance

In light of the world we live in, we don’t need to “find balance” or “live simply.” We need to live on purpose, and that is going to feel both complicated and imbalanced at times.

Of course we need to take care of ourselves to avoid burn-out. We need to relax, refresh, and reflect on a regular basis. We very much need to recognize our limitations and accommodate those.

I’ve fallen into the trap of thinking my life would be calmer if I could find the perfect ratio of activities and downtime. Or figure out when to say yes and when to say no. Seeking a rational schedule is fine, but expecting my life to feel straightforward is irrational.

I’ve been striving for simplicity in the superficial areas: my calendar, my spending, and my junk drawer. What I really need is simplicity of purpose. And I already have that. We hope to inflate others’ lifestyles instead of our own. I know many other minimalist/simplicity movement people are doing the same, but I hope the purpose doesn’t get lost in the practical when it comes to applying their advice.

Does life feel complicated? What cause are you passionate about?

Pretend Not to Have a Birthday

Turning 2--so exciting! 31? Not so much.

Turning 2–so exciting! 31? Not so much.

Birthdays: we all have ’em. They’re the best day of the year when you’re a kid, but the excitement drops off rapidly after age 21.

Perhaps adults try to artificially recreate that childhood joy with lots of birthday festivities extending far beyond one day. Hence the oxymoron “birthday week” entered common parlance. You know, you go out with your friends the Friday before your birthday. Then your spouse takes you on a special birthday date, or perhaps throws you a party (good spouse!). Then your parents take you out to lunch, or invite you over for dinner. Then the in-laws want in on the birthday action. At each point, gifts and food are lavished on you and countless hours are spent celebrating your mere existence.

I’m all for celebrations and even gifts. But what if you just pretended not to have a birthday? After all, birthdays are about growing up, and growing up is largely about realizing life is not about me.

Downplay the B-day

Let me confess I was a bit spoiled in the birthday department while growing up. Of the five kids in my family, I was the only one who got to celebrate my birthday with a full-on birthday party every year. I attribute this not to favoritism, but because my grandparents had a pool. And who doesn’t want to close out summer with another pool party?

My son was born 10 days after my birthday. His impending arrival overshadowed my day somewhat that year. The next year his first birthday did the overshadowing. Last year it was my trip to India.

And you know what? I really liked it.

Sure, family and friends wished me well and I received some gifts. But there was no drawn-out festival surrounding what amounted to just another day of my life.

I don’t want to sound ungrateful for all the birthday wishes, calls, gifts, or parties I’ve received over the years. And I’m no humbug about other people’s birthdays. I’ve thrown parties and baked cakes and all that. I’m just not going to make much of my own anymore. If only this could slow down the aging process as well 🙂

Don’t Pretend Others Don’t Have Birthdays

If you want to celebrate with someone close to you, here are some ideas for keeping it special, yet simple. Just pick one or two!

  1. A call or card. Call, ask about birthday plans, but don’t keep the person on the phone too long. Or get a simple card and write an encouraging, meaningful message about what he or she means to you.
  2. Make them a cake. I inadvertently brought a friend to tears one year simply by making her a cake. My husband doesn’t like cake, so I’ll make him a favorite food. One year I prepared an epic nacho bar for him & his friends.
  3. A small, thoughtful gift.  I don’t believe in buying birthday gifts just to buy them. You will not see me stocking up on Bath & Body Works stuff to hand out to random friends throughout the year. If I have a great idea or know they need something, I’m more likely to spring for a present. Neil and I do exchange gifts, especially since we don’t shop much for ourselves.
  1. An outing together. To avoid birthday week, this should be reserved for the SO or BFF. Some of my favorites have been going for ice cream, a free concert in the park, going to a beach, or watching the Perseides Meteor shower. My condolences if your birthday doesn’t fall during this awesome spectacle. Oh, and when my friend took me to see A Midsummer’s Night Dream at a gorgeous outdoor venue! That was fancy.
  2. Leave them alone. When Neil asked me what I wanted for my birthday this year, I might have accidentally said this. For the introverts in your life, alone time could be the best gift of all, especially if they have kids.
  3. Babysit. We were so grateful to have a babysitter so we could eat delicious Nepali food in peace. Free babysitting is one of the best gifts you can give a parent.

In summary, I try not to make a big to-do about my own birthday, and try to make a small to-do about others’ birthdays.

How do you celebrate your birthday? What do you do for others’ birthdays?

5 Money Euphemisms to Avoid

“I’m going to invest in a good pair of running shoes.”

“My neighbors just bought another car–their lifestyle inflation is getting out of hand.”

“I’m sorry, but I just can’t afford that outing to the lake.”

“We paid an extra $270 for the privileged traveler passes, but we have a kid so it’s worth it.”

“I know we could be saving more. I really need to look at our budget.”

Can you spot the money euphemisms in the statements above? (Don’t worry, I’ve said them all too.) Language powerfully molds the way we think about the world, often in subtle ways we might not realize.  With each of those phrases, there’s a proper meaning that compactly expresses so much about reality. There’s also a potential euphemism that puts us in danger of believing lies that will keep us from our financial goals.

Let’s take a look at each one.

1. “I’ve already gone through three pairs of cheap running shoes this year. It’s time to invest in something better.”

Newsflash: investments are meant to make moneyLet’s not confuse investing with spending.

Yes, I agree it is time to purchase some shoes that will last. They may be an investment in your health or sanity. But your stinky, sweaty, swiftly depreciating shoes are not a financial investment.

Here is the proper way to use the term: “I’m going to invest in Vanguard index funds.” Go you! “I’m going to invest in a rental property.” Good luck! “I’m going to invest in these stupid knickknacks that sell for four times my cost on eBay.” We’ll take it!

2. “I really fell into lifestyle inflation last year when I bought that boat.”

Forgive my frankness, but how much of what we deem “lifestyle inflation” is really just plain greed?

We’re all greedy at times. We all want more of something, whether it’s fun toys in the garage, gorgeous clothes in the closet, or money in our portfolio. It’s when we continually spend more than we make (exempting those in poverty) that we are allow greed to drive our lifestyle

Lifestyle inflation, or even materialism or consumerism, sounds a whole lot nicer than raw greed. But the first step to change is admitting you have a problem. Lifestyle inflation sounds like a minor indiscretion. Oops! Greed sounds like an ugly, deep-seated issue I’ll have to unravel through introspection, sacrifice, and accountability.

I recognize greed is not the only contributing factor to living beyond your income. There are societal pressures, keeping up with the Jones, falling prey to slick marketing, and soothing unhappiness or insecurities with spending. Look at the whole picture, but don’t rule out the possibility of old-fashioned avarice.

3. “I’m sorry, I can’t afford to go camping. Or pay a sitter. Or help the poor.”

Sometimes I’m tempted to say we can’t afford something when really, I just don’t want to spend my money that way. Or when I just don’t want to do that thing period.

Other times, we “can’t afford” something because we already spent the money in other ways.  In that case, it’s not a problem of affordability. It’s a matter of choices. You are 100% entitled to make these choices with your money. But let’s stop using “can’t afford” euphemistically. In the name of honesty, I’m trying to replace “I can’t afford” with the truth.

Telling the truth doesn’t mean you have to be tacky and say, “I think it’s stupid you expect your friends to spend $40 each to celebrate your birthday.” A simple “No thanks” is often sufficient. You might also say, “I already spent my fun money for the month.” Or find a less expensive way of participating, like pre-gaming a restaurant outing.

Of course, there are things I truly can’t afford. Ditto for you. That would be the right time to say “I can’t afford…”

4. “We spend $50 at a restaurant once a month, but it’s worth it to get a date without the kids.”

Direct quote from yours truly. I’ve deconstructed and repented of this statement already, but I hear and read people all the time justifying their extra expenses by saying “it’s so worth it.” “Best money we ever spent.” “It’s invaluable to us.” “Worth every penny.”

This sentiment calls to mind the Mastercard commercials of the late 90s/early 2000s. They’d show a family on vacation and narrate: “Airline tickets, $800. Beach toys, $15. Condo on the beach: $1000. Your children’s memories? Priceless.”

It’s safe to assume that if you made the purchase, you thought it was worth it. So let’s not feel the need to justify every expense this way. And try not to care whether others agree about it being worth it. It’s your money, not theirs.

Let’s also be aware of the opportunity cost of our spending preferences. That’s how you truly ascertain what your money’s worth.

5. “I wish we could pay off debt faster. I should really look at our budget.”

Instead of looking at your hypothesis of what you’ll spend in the future, why not look at exactly how much you spent in the past?

Take three months of real data. This is called tracking, and it’s the other side of the budgeting coin. It’s reactive—you can’t change the past. But it can help you assess what to cut in order to meet your goals. Use tools from Personal Capital, Mint, or your bank’s online tools to track and visually depict your spending.

Runners up include “I got this half-off on clearance and saved $20!” and the word “mortgage” (hint: it literally means “death pledge”).

I’m sure to inadvertently use all these again since they’ve taken on colloquial meanings. Still, it’s good to strive for thinking accurately and speaking honestly about money.

Which of these have you used before? Can you think of any other money euphemisms? Please share!

Pretend to Be Grown Up–with Epic Spreadsheet Share!

I guess I'm a grownup now!

I guess I’m a grownup now!

Back in college I always joked about how I couldn’t wait to be a “real person.” You know, someone with a degree, a job, and even a family. I’ve “arrived” at my youthful definition of adulthood and found there’s much more to it than I once thought. It’s impossible to capture the essence of maturity in one blog post, but here are some steps that have been part of my journey.

1. Make a financial spreadsheet. I’ve always been a saver and planner, but for years the numbers were just swirling in my head, or floating around on bits of scrap paper. Then my husband Neil, an engineer and Excel-lover, made an epic spreadsheet that’s tracked and motivated our financial goals for years.

The spreadsheet helped us visualize the progress of short-term goals like saving for a down payment or a baby . It’s also how we budget and track our net worth, retirement accounts,credit card rewards, and more.

Not sure where to start? Plug your numbers into our 9-page sample spreadsheet. (The numbers are fake, the formulas are real.)

2. Give money. It’s all too easy to put off charitable giving until we feel more financially secure. Regular giving will never feel easy, as we’re all prone to increasing our expenses along with our income. If you give a little when you have a little, you’ll be more likely to give more when you have more.

3. Volunteer overseas. We each traveled separately on an international mission trip and found it very worthwhile. We are so grateful for the opportunity, as it truly changed our perspective and deepened our sense of purpose. Of course, you don’t have to cross borders to help out. The step outside my comfort zone wasn’t quite as large during domestic service trips, but they were still profound experiences.

4. Pay off debt. Many people our age are still nursing student loans, while adding credit card debt, car loans, and mortgages. While we can’t control the cost of college or the borrowing choices we made as teenagers, we can move forward by taking debt payoff seriously.

Debt is a major source of financial stress, so why add more of it to your life? Get your numbers into our sample budget spreadsheet and explore the possibilities—could you cut from areas like entertainment, travel, or clothing to get out of debt faster? Is there are any way to the lower the top three expenses of housing, transportation, or food?

5. Max out retirement accounts. In your 20s and 30s, retirement feels far away, almost mythical. Perhaps that’s why 40% of millennials don’t have a plan for retirement. Yet it’s so important to temper enjoying the present with planning for the future.

Even before your debt is completely out of the way, it makes great sense to start investing because an early start allows compound interest to work its mathematical magic. We struck a balance of investing 15% of our income while aggressively paying down student debt. After that we increased our rate of investing.

6. Have kids. Raising children is so hard at times, but it’s softened my heart unimaginably. And while most sources say kids cost a pretty penny over the long run, having them also motivated us to get our financial act together more than ever. Read about How Having Kids Has Improved Our Finances.

7. Make time for friends. Often as people marry and have children, friendships fall into the background. As a mom of little ones, I completely understand the draw to hunker down and just try to survive! But there is no time that you need your friends more than as you enter the new roles of spouse and parent. While we don’t go out with friends as much as we did before babies, we continue to see them at church, invite people over for dinner or coffee, and plan fun little outings with other families.

8. Dream big. I can be pragmatic to a fault. Case in point: when a curly-haired cutie asked me out to lunch on the second day of college, I answered dryly, “I already ate.” (We’ve been married ten years now.)

If I just slog through the details of daily life without a bigger purpose in mind, I’m at risk of only doing what others expect of me. And that’s very dangerous for both my finances and my soul. Dreaming big helps you clarify your motivation for any grownup action items. We’re much more likely to follow through on steps that fit into a bigger picture.

We also find ways to incorporate elements of our dreams into life today. That’s why we’re Rocking the Burbstead!

Sometimes I can’t believe the college girl who turned down a lunch date is now a “real person” with a family, an IRA, and a financial spreadsheet. None of those inherently comprise adulthood, but they’ve been part of my journey. What about yours?

What’s on your grownup checklist? What is your next action step toward a bigger goal?

How to Pursue Happiness

What is the good life?

What is the good life?

Happiness has been a hot topic this summer in the personal finance blogosphere. Mr. Money Moustache, Frugalwoods, Our Next Life, and ThinkSaveRetire have all shared their philosophy of happiness recently.

It’s great that the money people are taking on transcendent topics. There’s more to life than money, as we all agree. Keeping our happiness in view helps us balance and direct our financial goals within the bigger picture of life.

But before we embrace any philosophical belief, we must scrutinize its underlying assumptions. I’m all for “life, liberty, and the pursuit of happiness,” but I want to do it right. The foundational presuppositions of the “primarily pursue happiness” viewpoint include:

  1. We know what will make us happy.
  2. What makes us happy is good for us.
  3. Happiness can be pursued directly.

Do We Know What Will Make Us Happy?

Before making happiness our life’s goal, we’d want to be confident that we can predict what will make us happy. Plenty of research suggests we can’t do so reliably. A couple good TED talks on the topic:

And surely we’ve all experienced a failure to forecast what will satisfy. For example, I never wanted to marry. Then I tied the knot at age 20 and have been happily married for 10 years. People think a career in business will make them happy only to return to school for a teaching degree a few years later. And we’ve all made fun purchases, thinking the object or experience will make us happy, only to look to the next purchase all too soon.

Is What Makes Us Happy Good For Us?

It’s easy to think of examples of unhealthy things that make people feel happy, but there are plenty of legal, good pastimes, possessions, or traits that make us happy for a while, but don’t deliver in the long run. Hollywood is littered with successful, beautiful, wealthy people whose utter unhappiness is tragically on display, and we’ve all known plenty of cases close to home, too.

  • People who have traits others believe comprise happiness—wealth, smarts, beauty, talent—actually report lower happiness levels than their average counterparts.
  • Olympic gymnastics gold medalist Shawn Johnson described how disappointing her Olympic experience was.
  • Quarterback Tom Brady reported feeling completely empty despite his hugely successful football career, massive wealth, and supermodel wife.
  • Dave Chappell ran away to South Africa after making $50 million by age 32, and stated “It seems the higher up I go, the less happy I am.”
  • Sigmund Freud declared that the “pursuit of happiness is a doomed quest.”
  • The author of Ecclesiastes recorded the results of his search for happiness. He tried women, wine, work, wealth, and education. His conclusion? “Thus I considered all my activities which my hands had done and the labor which I had exerted, and behold all was vanity and striving after the wind and there was no profit under the sun” (Ecclesiastes 2:11).

We want to find the perfect cocktail of financial stability, hobbies, friends, productivity, and creativity to make us happy. But what if it can’t? We are prone to imbalance and to wanting “too much of a good thing.” Even more subtly dangerous is wanting too much from a good thing.

Conversely, is what makes us unhappy bad for us? It all depends. Of course unhealthy pursuits and relationships are toxic, but periods of suffering are often viewed as the most redemptive or life-changing within a few years. An American Sociological Association study showed childless couples are happier than those with children. Of course! Raising kids is HARD! While I often feel unhappy when I’m being nagged, woken up, or pooped on, I am so happy that I have children. I’ve grown a lot already and the whole experience is very humbling and amazing.

Can Happiness Be Pursued Directly?

The reason our plans for happiness tend to evade us is that happiness can’t be pursued directly. It’s kind of like falling in love: you can’t force it. You can take some steps that are within your power; that’s fine and good. I’m not saying we should abandon everything that gives us cheer to wear sackcloth and ashes. Happiness and wanting to be happy aren’t wrong. Enjoying hobbies, experiences, and material provisions is awesome. “God has given us every good thing to enjoy.”

We all know you can’t buy happiness. Turns out you can’t chase it, either. TED talks by psychologists Dan Gilbert and Nancie Etcoff explore why happiness can’t be pursued directly. C.S. Lewis makes a wonderful case for this principle in Surprised by Joy. He searched for happiness his whole life, only to discover that you can’t find it. It finds you, often when you’re least expecting it.

So what are we supposed to do? I believe happiness comes from:

Above the sun. If everything under the sun is ultimately meaningless and unable to deliver true, enduring happiness, we need to look to a transcendent source. This is what surprised Lewis: a lifetime of searching for a feeling state left him unfulfilled. Meeting the Author of Joy brought an unexpected joy that rose above circumstance and emotion.

Be happy with what you have“It’s not getting what you want, it’s wanting what you got” Sheryl Crow sang, and the apostle Paul agrees: “If we have food and covering, let us be content” (1 Timothy 6:8). Research concurs that, once a reasonable standard of living is secured, additional income doesn’t increase happiness. The principle of diminishing returns often applies to other areas like success or leisure time. The true secret to financial freedom isn’t reaching financial independence, or early retirement. It’s contentment.

Having a purpose. What brings real fulfillment and contentment is knowing our lives mean something. You may be ecstatic for a short time, but that doesn’t impact your overall life much in the long run. When I think back to my life just twelve short years ago, I scarcely remember my emotional state. What I do remember is my purpose at that time. And this is also what we remember about others, whether our grandparents or modern or historic heroes.

Making others happy. I’ve framed this many ways—Inflate Your Usefulness, Not Your Lifestyle, Inflate Someone Else’s Lifestyle Instead of Your Own, and Real Worth vs. Net Worth to name a few.  I’m almost sorry to beat this drum again! But according to my experience, others’ research, and the wisdom of Jesus, it really is better to give than to receive.

Bringing others joy lies at the heart of having a purpose. If it’s all about me, I’m just chasing a moving target, a carrot tied to a stick. While getting happiness can’t be our primary reason for caring about others, it’s a likely side effect. And if directly pursuing my own bliss is ineffective, I might as well brighten other people’s lives.

Now, after all that philosophy, go enjoy this feel-good dance video.

What do you believe makes people happy?

How I Spent Less Than $8K on Cars in 17 Years of Commuting

Don't be afraid to do some repairs yourself.

Don’t be afraid to do some repairs yourself! Babies love working on cars, too.

This post was written by Neil, an experienced car guy. He’s got lots of great practical tips; enjoy!

What is it with America’s obsession with cars? Even the most frugal among us get swept up in the hype. I’ve owned lots of cars. If I think real hard, I can remember my first car. My momma said it could take me anywhere. (Anyone?) It was a 1988 Toyota Celica GT, 5 speed Black with black interior, with flipup headlights. Suffice to say it was a chick magnet. I purchased it in the last few months before my 16th birthday for $950.

I recently had a discussion with someone who insisted that getting a new hybrid will be such an efficient use of resources the car will basically be paying me to drive it. He didn’t know who he was talking to. Over the course of my decade and a half driving career I’ve spent $7700 to keep myself mobile.  I’ve always commuted, never taken public transportation, or rode a bike for any significant time during those years. That’s forty-three bucks a month for wheels. Not bad, not great either. (Yes, of course I spent on fuel, repairs, and insurance. I also sold them later. This post focuses on buying a car. )

1988 Toyota Celica GT  $950
1990 Acura Integra $3,000
1997 Ford Taurus $0      (Read the story in “Free and Broken“.)
1990 Dodge Shadow $750
2002 Ford Focus $3,000
Total $7,700

Okay, they weren't the prettiest cars, but they worked.

Okay, they weren’t the prettiest cars, but they worked. The net cost of this beauty averaged out to $5/month.

What I don’t get is people pretending to be frugal and dropping big bucks on cars like it’s no big deal. By big bucks, I don’t mean $10,000 for a used “economy” vehicle. My car purchases for the past 17 years come to less than that! What gives? The following are unacceptable excuses for buying an expensive transportation device:

I just want to be safe.”

All cars made from 1995 are quite safe relatively speaking. If you were really concerned with safety you would stay off the road entirely. There are few riskier things we engage in on a daily basis.

“I just want my car to be reliable.”

Price and age of car care not indicative of its reliability. Consumer reports will tell you the same.

“I don’t have time to work on a car.”

How much do you value you your time? Working extra decades to fund your car choices is a lot more time-consuming than turning the occasional wrench.

“I just want to enjoy my commute.” -and/or-

“My car makes me happy.”

Why is your commute so long that you have to buy a fancy car to enjoy it? Can you see how self-defeating that is? I’ll compound my crappy commute by spending butt loads of money on it too.  Listen people, a car ain’t going to make you happy, just like any other material possession.

Would somebody please think of the children?”

Children do just fine in any four door car or wagon with the LATCH system. (Though these are not even necessary.) No need to get a fancy minivan with built in dvd players, stow and go seating, and the whole nine yards, to accommodate a couple tiny humans.

“I gotta get better gas mileage to save money.”

This is a slippery slope. Be sure to run an ROI calculation on that. I highly doubt getting a different car will actually have a reasonable break even point. Please check out my spreadsheets detailing real-life scenarios I ran for friends: Gas Mileage vs. Vehicle Cost.

“I have to have a nice car for work.”

Most likely not the case. Do you actually cart around clients that demand to be chauffeured in a special vehicle? Or are you just telling yourself that? Could you for the rare case this is true, rent a car for that day or week?

These are all bogus excuses my fellow frugal friends! You can get a good cheap used car and not have to put much money into it. It always amazes me that people justify getting a fancy car by saying they got screwed on a used car they purchased once. How is it that for over 15 years I was able to eek loads of reliable miles out of a handful of very cheap cars? Am I just lucky? Nah. Pick wisely. More on that later.

Th truth is Americans are obsessed with cars. I have taken countless negative remarks about my hoopties of the years but really, who cares? If you’re into reading these frugal blogs you’re sure to have implemented some odd frugal tips. It’s funny to me that people get so into maximizing their bulk cinnamon purchases but then completely over-justify their need for a fancy car. If you want to win with money, you must get your car spending in control. Housing and transportation are most people’s biggest expenses. It’s worth it to maximize savings here. Once you get those under control, then move on to your bulk oatmeal calculations.

How to Buy a Used Car

You want a car that has passed 100,000 miles. This is the magic number. People think that once their car passes this milestone it is worthless trash and will sell it for next to nothing. One hundred thousand used to be an achievement for a car. Today, it means nothing. All cars can double this number without major component replacement. It’s not a big deal. Look at the following graph.

Used car value over time

Data from Edmunds car depreciation calculator.

Maybe people think that because they claim rights to one of the excuses above, then the depreciation curve doesn’t apply to them. No one escapes the depreciation curve, no one! Notice how the graph flattens out after 100000 miles or about 9 years. This is the time to buy a used car. Refuse depreciation. Ideally you’d be like this guy who doesn’t pay anything to drive, but he’s got some extraordinary skills.

The next most important thing is that the car was reasonably maintained. At 100,000 miles you want to see the car has had its timing belt changed. You want to check the front end for clunks. Check for leaking fluids. Open the hood. Check the oil. Look at the coolant. Maybe I’ll do some follow-up posts of what to look for with each of these. If you’re not knowledgeable about cars, get an third-party mechanic to check it over for you.

Take the car for a test drive. A hard test drive. If it’s an automatic, floor it. Yes, floor it. Make sure it shifts where it’s supposed to and doesn’t grind its gears. If it’s a manual, see if you can check the clutch adjustment. Get it up to highway speeds. Get it all the way to operating temperature. Check for leaks.

Look at Edmunds car reviews for common problems for the particular model you are looking at. Determine in a worst case scenario if that issue were to happen would the car still be a good deal. Consumer Reports used car ratings are okay but not nearly as good as Edmunds. Consumer Reports will have you rule out several years of a make and model because of a transmission issue. However, one could avoid that issue by getting the other type of transmission (manual vs. auto for example).

Buy American. Seriously. Yes, Japanese cars used to be a lot better; that’s not true anymore. American cars can hold their own in the reliability department. You want to buy American because American cars lose value much faster than Japanese. This is a GOOD thing. You want to find a car that’s value drops like a rock. You are buying way out on the depreciation curve that way. You will minimize its affects. Korean cars are also a good value.

Also, American cars have cheaper parts. Go onto a car parts website and compare a few common replacement parts (exhaust, ball joint, radiator) for a Ford and a Honda. No comparison. Both of these cars will go 200,000, probably more. Japanese cars just don’t command the premium price that goes with them anymore.

Use Kelly Blue Book as a starting point for negotiations. You want to buy a car from a private party at the private party price or below. Deals too good to be true in used cars usually are. I have no problem paying private party KBB if the car is well maintained.

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Where are you on the car purchase spectrum? How could you work your way down?

10 Things They Don’t Tell You About Decluttering

Not my kid, but close enough.

“You threw away my favorite, moldy rubber duck?” (Not my kid, but close enough.)

I felt a bit frazzled during a recent purge. It was all worth it when my mother-in-law, a total neat freak, noticed that “you’ve been cleaning up lately” after seeing my basement. “All the rooms are so clean!” Music to my ears.

There are approximately one million articles about the benefits of decluttering , and I contributed one  or two to that mess. I genuinely enjoy clearing our home of excess and find it makes life easier in the long run. However, there are some drawbacks I’ve experienced throughout the process.

I imagine these are the very reasons people stop short with this task, or don’t get around to it in the first place, so let’s just all acknowledge that decluttering and minimizing is hard! And that’s why we need one million articles reminding us why it’s good.

So don’t to be surprised when it’s hard. This is all a normal part of the process. Here’s what I experienced:

  1. You will neglect other chores. Dishes, laundry, yard work, vacuuming…something’s gotta give if you’re going to go through all your things and then sell or donate some of the excess.
  2. You will feel more stressed initially. The joys of owning less are more of a long-term promise. In the short-term, you will actually feel more stressed out or overwhelmed as you make time ot go through your stuff, and have to make decisions about what to pitch. After you’re done, you’ll have a backlog of laundry and other chores to catch up on.
  3. You will think about stuff too much temporarily. Minimalism promises less focus on material possessions, but the actual process of minimizing requires thinking about stuff more. I found myself absentmindedly thinking about whether I needed to keep a particular item when I should’ve been focused on other things.
  4. Your kids will not cooperate. They’ll make crazy messes while you try to reduce the mess potential of your home. Especially with the stuff you are trying to go through, which will make it tempting to keep that stuff because they’re playing with it! They also might request stuff back after it’s entered the donation truck! You know, stuff that they told you they hated and never use. This was a little embarrassing but the attendant was very kind about it.
  1. You may have to go over an area more than once. I’ve gone through my closet and kitchen twice this year, and I always find more I can part with. Something I may have been on the fence about 6 months ago can probably go if I haven’t needed it in that time. I’d love to minimalize once and for all, but realistically, it’s more of an ongoing process that gets quicker and easier each time.
  2. Your house may not look that different. If you have children or a messy partner, they will continue leaving stuff around the house. Even if there is a lot less stuff in your home.
  3. You may not be able to find stuff. The second half of decluttering is supposed to be organizing. But sometimes when you do a lot at once, it’s hard to find it next time you need it! It took me 10 minutes to find Neosporin after moving our medicine cabinet. I’ve also found myself looking for clothes I got rid of.
  4. Your kids will cry months later, too. You know the toys they never touched, so you gave them away? When my kids spot those in old pictures, they suddenly spout tears and profess their eternal love for that item. Although the storm passes, it’s not my favorite part of decluttering.
  5. Your spouse may not like it. Just because you’re on a mission to clear your space doesn’t mean the rest of your family will automatically be on board. And there may be some areas that are simply off limits. It doesn’t matter that I don’t think my husband (a cube-dweller) doesn’t need 5 pairs of old, dirty pants for working on cars. He thinks he does, and it’s not worth marital strife to fight over “minimalism.”
  6. You may regret some purging. Out of sight, out of mind? You won’t even miss the clutter? Sometimes I wonder if I got too over-zealous with a few items, especially when I find myself looking for them. In the long run, it’s insignificant and I could replace the item if I really wanted to. I’m sure I hang out to more than I don’t need, than vice versa.

Lest my warnings de-motivate you, let me remind you of just a few of the many benefits:

  1. Someone else can use it. Whether I decide to sell, donate, or just give it to a friend, I love knowing someone can put my excess to to good use.
  2. Find what you need easier (in the long run). I’m not just talking about finding rarely needed items in a basement box. I’ve decluttered my kitchen and now it’s so much easier to find the items I need every day.
  3. Less to clean. I still have plenty of messes to tackle but clearing out the extra toys, clothes, and household items means there is less for my children to make a mess with!
  4. Use what you already have. I was longing for a new summer dress when I found one I’d forgotten about in storage. And I’m a lot more likely to actually wear it now that I’ve donated the stuff I never wear.
  5. Freedom from the burden of maintaining and storing stuff. Less stuff (to a point) means more flexibility.
  6. Your mother-in-law might be impressed, or even think you’re a cleaner person than you actually are!

How you experienced any difficulty with decluttering? What is your favorite benefit?

Earn More vs. Spend Less Throwdown

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What’s more important: increasing income or decreasing spending? The debate rages on, but unfortunately many answers miss the crux of the matter.

After a year and half of talking a lot of thrift, we recently broached the income side. To be honest, much of our financial progress has been supported by an above-average income. Yet we’re a one-income family living on less than half our take-home pay. We spend less than average and that makes an impact, too.

Many argue that you can increase your income by greater magnitudes than you can slash spending. But people often find their budget feeling tight even after their income grows. If you spend more than you make, it doesn’t matter how much you make. You never get ahead.

So what’s more important—your income side or your spending? Whichever one you need to work on. It depends on the person. I can’t tell you which that is for you, but I hope the case studies and questions below will help.

Consider two case studies of real-life families:

Family 1 was often running low on money despite having a very good income. They cited their house, having a baby, and medical expenses as some of the reasons for having cash flow problems. They were right that their spending was the problem, but were citing reasonable expenses instead of looking to the ones they could decrease.

Over time, resources from Dave Ramsey helped motivate them to reassess. They were eating out multiple times each week. They were paying for gym memberships they didn’t use. They were buying convenience items. One partner was smoking. They had a car payment and student loans. Once they started cutting back in these areas, they were able to pay off their car and student loans early. They built enough equity to stop paying PMI. The smoker quit. They started cooking at home. They identified that the problem was spending, acted accordingly, and have continued to make huge strides toward financial flexibility.

Family 2 was often close to broke, but one spouse’s father would cover what they couldn’t on a monthly basis. He even gifted them a down payment on a house. The only problem was that they couldn’t really afford the monthly mortgage payments. When they had their first child, the wife left her job to stay home. The husband worked in a field with limited earning potential. They still had student loans from his associate’s degree.

While their bills were paid, they had a serious income problem: part of their income was coming in the form of regular gifts. While this was very generous, it was ultimately unhelpful. It didn’t allow the family to attack their finances from the income side, which desperately needed attention. Both partners were capable of earning more but weren’t sure how to make it happen.

See how landing on just income or just spending doesn’t solve the problem for all situations?

Do You Need to Hustle?

If you’re underearning, dissatisfied with your job, or aren’t making enough to get by, you need to work more, harder, and/or smarter. You absolutely need to attack the income side so you can gain flexibility and not have money be the limiting factor in every life decision. You need a raise, a career move, a second job or other side hustle. Here’s how we stopped underearning by overstaying at the same company.

Know when it’s time to move on. Research your value in the market. Negotiate a raise if you’re underpaid. Assess what you’d be willing to do to make more money: would you work overtime, change companies, relocate, change careers, or start a side hustle or small business?

At some point, working more, harder, or sometimes even smarter becomes undesirable as it detracts your time and physical and mental energy from what you’d rather be doing. A common belief states if you could possibly make more money, you should. I disagree. There’s a lot more to life than pushing your earning potential to its outer limits, at any cost to other areas of your life. Always keep your real worth in the balance with your net worth.

Do You Need to Cut Back?

Do you have a good income and still find yourself broke? Do your expenses rise steadily alongside your income? Do you know how much you spend on average in a month? Are impulse purchases, going out, or recreational shopping frequent for you?  Look to your spending for solutions.

I sense that people from relatively affluent homes are more likely to need to work on this side. People with the advantages of the middle and upper-middle class are more likely to earn good incomes. They’re also more likely to be acclimated to a “comfortable” lifestyle that may have taken decades for their parents to build, but they aim for as soon as they land their first job.

Whatever your background, don’t dismiss the expense side of the equation until you have a handle on how much you spend, and on what. It’s easy to say, if I only made as much as her, or if we could just catch a break from special expenses cropping up, then we could get ahead. But if you’re making decent money and not saving it or paying down debt, more money isn’t going to fix the problem.

In summary, my answer to the income vs. expenses debate is that you need to work on the area where you’re weaker until you gain traction. In some cases, you’ll need to work on both. But you simply can’t assess which one it is for you unless you have a good picture of your financial situation. We approach this by tracking our spending and creating an annual budget.

Review the last few months of your income and spending to catch a snapshot of both angles. If you cut, cut, cut, and there’s still not enough income, increase the input. If you earn, earn, earn and never find it to be enough, it’s time to decrease the output. Underearning and overspending are both a waste of precious resources.

A healthy financial situation looks like being happy with both your income and spending, while staying open to improving both sides. Once you reach this point you’re free to focus more on the angle that’s your strength.

What are your financial strengths? How have you improved your weaknesses? Any other takes on the income vs. expense debate?

The Value of a (Half) Dollar

Image result for fourth of july

For this post we’re traveling back in time to an 1866 Fourth of July celebration as described in Farmer Boy by Laura Ingalls Wilder. The “Independence Day” chapter includes a great object lesson about the value of a dollar, or a half-dollar in this case.

At the town’s Fourth of July celebration, the nine-year-old main character, Almanzo, watches his cousin Frank buy a glass of lemonade for a nickel. Frank brags that his father gives him money any time he asks, but Almanzo has never had money. Frank dares Almanzo to ask his father for money, so he reluctantly approaches his dad for a nickel and tells him why. His father slowly takes a half-dollar out of his wallet and asks, “‘Almanzo, do you know what this is?’

‘Half a dollar,’ Almanzo answered.

‘Yes. But do you know what half a dollar is?’

Almanzo didn’t know it was anything but half a dollar.

‘It’s work, son,” Father said. ‘That’s what money is; it’s hard work.'”

After going back and forth with a friend about whether a boy Almanzo’s age can understand this principle, Father asks him to describe the long, hard process of raising potatoes to sell. Then his father asks, “”How much do you get for half a bushel of potatoes?’

‘Half a dollar,’ Almanzo said.

‘Yes,’ said Father. ‘That’s what’s in this half-dollar, Almanzo. The work that raised half a bushel of potatoes is in it.’

Almanzo looked at the round piece of money that Father held up. It looked small, compared with all that work.”

His father gives him the half-dollar to keep, and explains that he could buy a baby pig with it, raise the pig and its babies, and sell them full-grown for $4 or $5 each. Or he could spend it on lemonade which is gone in a few moments.

What would you do with the hard-earned half-dollar? Would you invest in a baby pig that, after several years could yield a 50-fold return? Or would you spend it on a pitcher of lemonade?

Almanzo buys the pig, and we all like to think we’d do the same. But what have you actually done? The half-dollar is real; it’s your hard work and valuable time traded in for a paycheck. Are you getting your work’s worth out of your money, or are you blowing it on trinkets and treats that’ll be gone too soon? Remember, the value of Almanzo’s half-dollar was not only the hard work that earned it, but also the potential value of growing his money through investment.

Somewhere in the shift from corn rows to cubicles, we’ve stopped viewing work as the opportunity cost of our spending. We looked at this principle in “What Are You Working For?” and Life Is Not About Your Preferences. Maybe we understood this trade-off when we were teens entering the work force, until our expenses got more complicated and our work became full-time and perhaps cushier.

It seems less back-breaking labor is often more soul-numbing, which is probably why so many white collars I know fantasize about becoming farmers! Whatever color your collar, gleaning from previous generations’ view of money can help us fight against the imbalances we’re unwittingly steeped in. Check out the Live Like Grandma Challenge for more throwback financial lessons.

Without obsessing about how many minutes at work each purchase we make costs, we can value our time enough not to take spending lightly. The best way to keep spending in check without obsessing about it is to set a limit on your lifestyle. Contentment is the true secret to financial freedom. Know when enough’s enough. And if you’ve already passed the threshold into “too much,” it’s never too late to turn back. Sell that junk, pay off your debt, and make the decision to inflate your usefulness instead of your lifestyle. And inflate someone else’s lifestyle by helping others with your money while you’re at it. (The only money Almanzo had handled until that Independence Day was a weekly penny for the church collection.)

Reigning in your lifestyle also allows you to enjoy life now. Rather than frantically work extra hours, frivolously spending to entertain work-numbed souls, or fretting to maintain a lifestyle above your means, why not consider what’s actually worth your hard-earned half-dollars? Cut the rest, and enjoy some free blessings like nature, friends, family, and library books. Why not add Farmer Boy to your summer reading list?.

What has taught you the value of a dollar? Do you agree that we’ve lost sight of this as a culture? 

 

All excerpts taken from my 1971 Harper & Row edition of Farmer Boy by Laura Ingalls Wilder. 

Don’t Underearn By Overstaying

lake ontario 3

If I could offer one piece of career advice to new grads, it would be to avoid becoming an eternal intern. In other words, don’t under-earn by staying too long at the same job, especially your first real job. Neil almost committed this common career faux pas before getting a wake-up call and changing jobs. We finally realized why staying in one place for your whole career is thing of the past: it’s often the best way to stunt your career and income growth.

Like many of his engineering classmates, Neil worked an internship full- or part-time throughout the second half of his education. A year before graduation, he was offered a full-time position. He didn’t even have to interview. The salary and benefits were good. It was a Fortune 500 company and he’d continue working in the same department he was already familiar with.

The only problem? “I almost became an eternal intern,” he says. In other words, he felt like he could not shake the new hire status at his first company.

The Most Dangerous Job

While his pay increased significantly post-degree, his job was boring and under-utilized his engineering skills. We continued to view the position as a good job because it paid well and was low-stress. There was a sense of security in working at a big company.

Despite being a great employee with plenty of initiative, he reached a plateau in his career. He studied hard and passed a rigorous eight-hour exam to earn a Professional Engineering license. He talked to his boss about opportunities for advancement, but that required relocation. There was no way he was going to move our family for a job he didn’t love.

That’s when he realized this job wasn’t safe and secure at all. In fact, staying there was the most dangerous career choice he could make. He was going to be viewed as an intern forever. The most successful people in his group had been hired from the outside. He wasn’t gaining marketable skills and being bored at work didn’t signal job security. It was time to make his move.

Learning Your Market Value

He started reading up on the area he wanted to get into, and applyied for jobs.  When he found the right position a few months later, he was astonished at the difference. He was hired at their highest level for engineers. Because he changed industries, he expected a learning curve, but feels a new momentum in his career. In the year and a half that he’s been there, his salary has increased over 20% compared to his last job. He finds the work much more interesting, and his boss is discussing career growth opportunities with him.

He’s noticed that the new grads his company hires have perpetual intern status, too. Even though they are very knowledgeable and hard-working, they aren’t always treated with equal respect and professionalism. He allowed his previous employer to continue viewing him as an intern simply by staying there too long.

Neil shared these new insights with a friend whom he believed was under-earning. With two weeks of beginning his job search, his friend was offered a job and asked to name his price! He secured a 40% raise. His skill set didn’t change; he simply found a company willing to pay his market value.

I’m so glad we realized the dangers of becoming an eternal intern and moved on. This is one of the reasons Millennials don’t stay at the same job for 30 years—and shouldn’t. Here are some lessons we’ve learned:

  1. Your company cares about the bottom line, not you. No one else is going to look out for you and your career.
  2. In many careers, staying in one place is the best way to under-earn. Every move you make is a chance to make a jump in salary and build your skills.
  3. The problem with your job may not be your company or boss, but your inherent status as a former intern or new hire. Changing jobs may be the only way to change this status.
  4. We should be more scared of the status quo than of change. We don’t grow when things stay the same, and we should be terrified to stop growing.
  5. Making the bold move to take a new job communicates a degree of confidence and initiative that is valuable to employers, and your career.

Neil enjoys work more than ever, but he doesn’t plan to stay at the same company until retirement. We’ve learned our lesson and won’t settle for stagnation ever again.

Have you grown your career through a job change? What is your top career advice for new grads?