Month: November 2018

November Net Worth Update

Wow! It’s almost December, which means we’ve got just one month left of this year. This year has definitely been an eventful one for our family.

November Net Worth Update www.thethreeyearexperiment.com

This month has been a good one. We’ve been surprised by how cold it’s gotten in Charlotte during the fall (it’s been in the 20s this week in the mornings, but it does warm up to the mid 50s or 60s during the day). The boys both seem to have gotten into a groove at school, I’m running now with a running group, and Mr. ThreeYear has been regularly playing tennis.

Last night, we went to our town’s downtown Christmas celebration via trolley! We parked in a parking lot at the edge of our neighborhood and the cutest little trolley picked us up. The boys actually got to ride standing up in the back of the trolley as we cruised the four miles downtown.

Once we got downtown, there were carriage rides, vendors, a Christmas tree display, bands playing, and Santa Claus. The boys and my niece, who was with us, had a blast. It made me so glad we decided to move to this town, because it’s ridiculous how festive and involved our town is. We are freakin’ Mayberry over here. I absolutely love it.

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Since we’ve achieved the latter goal, we’ll be primarily focused on the former in each of these reports going forward. Each month, I record our progress on our net worth and our spending. Last year, we increased our net worth by 32% over the year before. This year, we tried to increase it by more than 65% from where we started in December 2016. Even though it looks like we’ll miss our target by a wide margin, we’re keeping our goal in place to see how close we can get in 2019.  Continue reading “November Net Worth Update”

Why We Bought a Smaller, More Expensive House

When Mr. ThreeYear and I moved from New Hampshire to North Carolina, we bought a house that was about 1000 square feet smaller. It was also significantly more expensive than the house we sold. So why did we buy a house that was more expensive and smaller? Well, there are a couple of reasons.

Why We Bought a Smaller, More Expensive House www.thethreeyearexperiment.com

It all started a year ago, when we visited Santiago. We stayed in the apartment we own there, which is about 550 square feet in total, with 3 bedrooms and 2 bathrooms (they know how to pack things in in the big cities). Despite its small footprint, we had a wonderful time together. Little ThreeYear really enjoyed being so close to us, and just being able to call out to find us in one of the bedrooms.

When we got back to New Hampshire, we had several talks about selling our house and moving into a smaller condo to speed up our journey to location independence. We looked into several smaller condos at the beach, and I even wrote a post about it.  In the end, we moved to North Carolina and bypassed the condo altogether.

But the seed had been planted. A smaller space was something that we not only could live with, we wanted  to live with.  Continue reading “Why We Bought a Smaller, More Expensive House”

Drinking My Coffee Black

Hope you had a wonderful Thanksgiving! I’m back after a short break. This past week, I was at the family beach house for Thanksgiving. I had every intention of posting, but my computer battery had 15% life left (and doesn’t work when it’s not plugged in to the charger due to an unfortunate coffee spill a year or so ago) so I had to take it in to the repair shop.

Drinking My Coffee Black www.thethreeyearexperiment.com

Guess what? New battery, $169.99, guaranteed for 90 days. PLUS, the computer now works if it’s not plugged in! It’s a MacBook Pro, so no way was I going out and buying a new computer for $1500. The fact that we could replace the battery relatively inexpensively AND it now works better was an awesome surprise this Thanksgiving!

While at the beach, I was helping my parents put together a budget for the first time. They’re not budgeters, and while they have investments, real estate holdings, and a pretty high net worth, they’ve never really had to think about controlling their expenses because they’ve enjoyed high incomes for most of their adult lives.

I could tell the experience was stressful and painful, especially as they kept thinking of new expenses to add to the total.

The First Budget

I remember the first time Mr. ThreeYear and I budgeted. It was right after I’d found The Total Money Makeover back in 2008, and I was trying my hand at estimating our monthly expenses.

I had a similar reaction as my parents. A little bit of panic. Shock, that we could spend so much, and disbelief that we’d ever be able to save anything, since we currently spent everything we made! Continue reading “Drinking My Coffee Black”

When You’re Considering a 30-Year Mortgage

Recently, long-time reader Sarah asked me about the difference between getting a 15- or a 30-year mortgage. I’ve written before about why I love our 15-year mortgage. We’ve gotten a 15-year mortgage on three properties: our house in New Hampshire, our house in North Carolina, and our apartment in Chile. A 15-year mortgage has helped us build equity, save more each year, and pay less in interest.

But what if you live in a high cost-of-living area, and the payment on a 15-year mortgage isn’t feasible? What if you plan to stay there for awhile, and renting doesn’t make a lot of sense? Or what if, for a variety of reasons, you want to buy a house, but you can’t make a 15-year mortgage payment work?

On a back-of-the-napkin calculation, it’s clear to see why many people choose a 15-year mortgage is superior. You pay a lot less in interest. But, you also have a much higher monthly payment (for 15 years). Continue reading “When You’re Considering a 30-Year Mortgage”

50 Ways to Become More Frugal

I was not born into a frugal family, and frugality has never come naturally to me. Over the years, I have developed more frugal habits, very slowly. But if you’re not naturally frugal, then frugality, spending less, being careful with your money, or whatever you’d like to call it, IS a habit that you can acquire.

Why is frugality so important? There are many who argue that you should keep your main focus on earning more money, because there’s only so much budget you can cut, but an unlimited amount of income you can create. True, but, the truth is, most of us waste an incredible amount of money, and focusing on becoming a little bit more frugal doesn’t just help us save $1, it helps us save an after tax dollar. Meaning, if your tax rate is 25%, when you save $1, you’re really saving $1.25.

Once you’ve adopted a frugal habit, it will stay with you for years. Get in the habit of cleaning your own house? That’s $150-$200 per month that you’ll pocket for years. You don’t have to keep hustling to make more dollars–once you’ve adopted the habit, you can keep at it ad infinitum. Continue reading “50 Ways to Become More Frugal”

October Net Worth Update

Hi! I’m back with another net worth update.

October Net Worth Update www.thethreeyearexperiment.com

October was a fun, warm, leave-changing, slow fall month for us. I say “slow fall” because in New Hampshire, the leaves started changing colors around August 1st (every year!) and then from mid-September to the first week of October, went into riotous “bloom” until a heavy rain would take them out and all the leaves would be bare. Fall was brief.

In North Carolina, fall has slowly moseyed its way in, the leaves have taken their time changing color, getting darker and darker over weeks, not days, and are also taking their time dropping to the ground, as the temperatures shift between 40s and 50s to 60s and occasionally, 70s (F).

I know I talk about the weather a lot. But when you spent the last eight years as a Southerner in exile in bleak New England, you get at least a year to geek out about the amazing warm weather in the South.

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Since we’ve achieved the latter goal, we’ll be primarily focused on the former in each of these reports going forward. Each month, I record our progress on our net worth and our spending. Last year, we increased our net worth by 32% over the year before. This year, we’re trying to increase it by more than 65% from where we started in December 2016. It’s looking more and more like we’re going to miss that by a wide margin. But since we know we don’t always reach our goals, especially our BHAGs, we’ll just keep working ’til we hit it!  Continue reading “October Net Worth Update”

It’s All Relative

Yesterday I went running with a group of women from my neighborhood. We recently moved to a large neighborhood in Davidson, North Carolina, and the neighborhood we moved into, to use terminology from The Millionaire Next Door, is “income affluent.” That means that people in this neighborhood tend to have high incomes, but also spend large amounts of money so that they have a low level of net worth.

In other words, they’re broke.

I was proud of myself–I had gotten on Facebook and posted a message to the neighborhood women’s group we have there. I found several women who were interested in starting a runner’s group, something I sorely needed since I have about motivation to run as I do to clean the toilets (read: none). But running, unlike toilet cleaning, is good for me in myriad ways, predominantly mental health-wise, so it’s helpful to have accountability partners in the journey. Continue reading “It’s All Relative”

A Year of Good Food: Cook for the Week

Happy November! I am very proud to report on our October food spending. Due to a week away at Disney and Mr. ThreeYear being away for a week, we spent the lowest amount on groceries that we did all year.

Not that it was easy. There were complaints (from the Big Guy). So many complaints! Apparently if the fridge doesn’t look like the produce aisle then something’s wrong.

But I held fast and we survived, and we clocked in our month way under budget.

The Reason for This Experiment

This year, our family is challenging ourselves to spend less on food so we can save and travel more. Last year, I adopted one habit a month that would translate into better money moves for our family. You can read all about our A Year of Good Habits here.

That experiment worked so well that we tried a new one this year. In 2018, we are challenging ourselves to do better at our food spending. Last year our family spent over $12,000 in groceries, or $966 per month.

This year, our goal is to spend 20% less on groceries. That may not sound like a lot, but it’s almost $200 per month in food savings. The extra $200 per month is going into a travel savings fund, so we can see the results of our hard work in spending less on food.

We could have adopted a radical goal to keep our spending under $500 or something like that. But we know better. We thought it made much more sense to consistently hit our modest target, month after month, for an entire year, to show ourselves we could do it, than to maybe hit the $500 goal once or twice and then face plant with more $1000+ grocery bills.

And if we consistently hit sub-$772 spending, then perhaps we’ll challenge ourselves next year to shave off more.

Each month, we’re trying out a new way to save money at the grocery store. Last month, I just kept doing what we’ve been doing that has worked: shopping at Aldi, keeping side trips to a minimum, making a list, making a meal plan, and taking inventory before I go to the store.

Continue reading “A Year of Good Food: Cook for the Week”