Category: Money Management

We’re working towards financial freedom. How we save, invest, and spend is a big part of that. Read about what we do to save more, invest better, and spend wisely in alignment with our values (family, travel, and FI).

May Net Worth Update

We’re well into June now, and the end of school is almost here. Our school year ends Wednesday, and then we’ll be spending entire days packing and getting ready for our big move to North Carolina. The weather in New Hampshire has been beautiful–cool mornings and warm days, with lots of sunshine. This time of year always has the power to hypnotize you with its beauty and leave you wondering why you were ever complaining about the weather.

May Net Worth Update www.thethreeyearexperiment.com

On the home front, I’ve been finishing school work, packing, and doing graduate work (I have three courses more in my master’s program and I’m taking one in June and July). I’m so frayed that I’ve let all the non-important stuff go (you know, like dishes and laundry). Our house looks like we hosted a college frat party, minus all the empty bottles. We have all these random items in our corner, waiting for a yard sale, and there’s a dresser standing on its head in our entry, waiting for its Facebook buyer to come pick it up.

Mountain of moving boxes May Net Worth Update www.thethreeyearexperiment.com
The mountain of boxes in our basement.

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. 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. Given the wild ride the market’s likely to take us on this year, I’m not sure it’s doable. But we’re going to try.

May showed us more steady growth. Much of our financial progress was on autopilot last month, as we found a buyer for our house and looked for places to live in our new town. We know that our net worth will take a big dip when we sell the house, so I’m enjoying these numbers while we can.

Continue reading “May Net Worth Update”

Pay Off Debt or Invest?

There’s a big debate in the personal finance community over whether it’s best to pay off your debt, or keep low interest debt (like a mortgage) and invest more.

After all, with low interest rates, you can likely earn more over time investing more of your money in the stock market and keeping low interest debt around. However, while the math may support keeping debt around, it certainly doesn’t account for the behavioral economics side of things. After all, as smart and logical as we’d like to think we all are, it’s all too easy to prefer a new car or vacation over disciplined investing, especially if a partner is pushing for those things.

And what about the feeling of being debt free? Being indebted to no one? If you carry a mortgage, you have that debt burden (and responsibility) over your head. Continue reading “Pay Off Debt or Invest?”

What Our Cars Really Cost

On Wednesday I wrote a post about all of the cars Mr. ThreeYear and I have owned in our time together (it was actually about most of the cars we’ve owned. There were a lot!).

Today I thought I’d delve into the financials of those cars, or as much as I can remember and piece together, and see what the total operational costs of our cars have been over time.

I predict that I will be shocked and disgusted by how much we’ve spent on transportation. A keystone to Mr. Money Mustache’s low spending is his reliance on bikes. Operating cars is one of the big three expenses that we’ve worked on reducing. But I suspect we’ve still spent a lot.

Let’s dive in: Continue reading “What Our Cars Really Cost”

How to Choose Cars that Match Your Financial Goals

Mr. ThreeYear is a car person. I am not. But we have both owned a lot of cars in our fifteen+ years of dating and married life.

We have made good car decisions. We have made bad car decisions. We have had car payments. We have owned cars outright.

Currently, we have two of the best, if not sexiest, cars we’ve ever have, and they match our financial goals pretty well. But how did we get there?

Today’s post contains all the details of our wonderful cars over the years, and how they’ve worked with or against us.

The Laser

I realized that I was marrying a car person when, soon after we started dating, Mr. ThreeYear decided to buy a new car. For our first date, he was picking me up outside my apartment in Santiago, and he told me he had a pretty old car. I had gotten locked out of my apartment, so I was waiting for him on the sidewalk, watching cars drive by. I have to admit that I was looking at some clunkers, and thinking to myself, “Please don’t be that car. Please don’t be that car.” He pulled up in a dark blue Ford Laser that was as old as I was (at the time, 22). But I thought, “I can live with this.” True, he had to adjust the radio with a screwdriver, and the interior was a bit worn, but the car took us where we needed to go. Continue reading “How to Choose Cars that Match Your Financial Goals”

I Spend a Lot. So How Do I Save?

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I have always loved to spend money. Over the years, I’ve had to teach myself to save despite my spendthrift ways. It’s been a lot of trial and error and sometimes I do better than others.

This month, with the advent of Spring after such a long, harsh winter, my inner Spendthrift has broken free.

Some people, Mr. ThreeYear included, can’t understand this behavior. He grew up in a household where frugality wasn’t just a good idea, it was a way of life. Spend too much on electricity? Not enough for food. It was kind of that simple. So he grew up with such anxiety around spending that it’s hard for him to spend now, even when he wants to.

I had no such constraints. I have found that especially during times of upheaval, or during season changes, or Christmas, my impulse is to spend more. What does that look like?

  • Not being as careful at the grocery store. Buying without having a meal plan or list.
  • Buying clothes I don’t need
  • Going out to eat because I don’t feel like cooking
  • Making a convenient choice rather than the slightly-more-difficult-but-much-cheaper choice
  • Impulse travel

Continue reading “I Spend a Lot. So How Do I Save?”

Will This Plan Give You More Money in Retirement?

I recently ran across a USA Today article called “How Not to Run Out of Money in Retirement.” In it, the author shares the details of a new retirement plan, the brainchild of an actuary who’s been studying retirement for three decades.

It’s called the “Spend Safely in Retirement” plan, and the premise is simply that you wait until age 70 to claim Social Security and use the IRS’s required minimum distribution table to determine how much to take from savings each year. The Stanford Center on Longevity, working with the Society of Actuaries, published a study of hundreds of ways to create income in retirement, and this plan, one of the simplest, ended up being the most sound (surprise, simple things work well. Who knew?). Continue reading “Will This Plan Give You More Money in Retirement?”

The Boon of Investing Early

Mr. ThreeYear and I have made plenty of mistakes during our financial journey, but one thing we did right was to start investing early. That boon of investing money early has given us a much higher net worth than we would have otherwise had.

The Early Years

I began to learn about investing in college. Unfortunately, I hadn’t yet learned about IRAs and didn’t save any of my job earnings. But, I did begin to learn about investing in individual stocks. This was around the time that Scottrade was founded, and my dad began to make individual stock investments. I did a very small amount of research and began to invest some of the money I had in individual stocks, which were mainly blue chips, or well-established companies that paid a higher dividend each year, like Coca-Cola, Johnson & Johnson, and energy companies. I began my portfolio with about $4000 and slowly added to it during college. I did minimal trading and practiced the buy and hold strategy.  Continue reading “The Boon of Investing Early”

How We’re Saving for Our Dream: Guest Post on Mustard Seed Money

Today I’m very excited to be featured on Mustard Seed Money. Rob paid off his house and is approaching early retirement before 40, while never earning a 6-figure salary. His website is full of practical advice and specific ideas you can use to improve your financial life.

On his site, I’m sharing ways that Mr. ThreeYear and I are saving and investing to become location independent.

Here’s an excerpt from the post: Continue reading “How We’re Saving for Our Dream: Guest Post on Mustard Seed Money”

April Net Worth Update

Happy May! How are things going for you? We finally have no snow on the ground as of yesterday, and that is not an exaggeration. Winter definitely held on as long as it’s ever held on this year, which is my eighth winter in New Hampshire. For the past seven winters, we’ve had all snow melted by April 23rd (even if we’ve gotten a freak snow storm in May afterwards) but this year, we had snow cover for a whole extra week (lucky us!).

We did get some beautiful 70-degree days at the tail end of this month, which made everything feel hopeful and Springy. Our crocuses have bloomed (all 2 of them) and our daffodils are pushing up, as well as our alliums and the dahlias. We spent this month doing a variety of activities, some of which I’ll be revealing down the road (hint hint!). It’s been a busy month. Over Spring Break, Mr. ThreeYear and I took a fun trip to Portland, Oregon, while my mom flew up from sunny South Carolina to watch the boys. She had horrible snowy, icy, weather, so we appreciate her sacrifice even more!

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. 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. Given the wild ride the market’s likely to take us on this year, I’m not sure it’s doable. But we’re going to try.

Last month, even though we enjoyed more lackluster results from the stock market, we got a huge jump in net worth since Mr. ThreeYear’s annual stock gift was given out. Each December, his privately-owned company, which is 100% employee-owned, invites outside auditors to set the stock price. Given the wild surge the stock prices took in December, his company’s stock was given a much higher valuation than the year before. That meant all of the stock we currently hold in the company rose substantially, and we received more stock (valued at more money).

Continue reading “April Net Worth Update”

What You Shouldn’t Spend Money On and Why You Shouldn’t Listen to Me

Mr. ThreeYear and I have, over the course of our ten years of paying attention to finances, amassed a pretty decent net worth. We have done it by prioritizing spending in the areas that we care about (like saving for the future) and cutting spending in other areas. Many times on the blog, I write about the things that we do spend money on, like travel, and I can’t help but get excited and implore you to adopt similar spending habits. However, the truth is, this is a mistake on my part, and I apologize for it. You should not necessarily spend your money on the things I spend my money on. Nor should you save your money for the reasons that I save mine.

Why? Because you and I have different values. I’m sure some of our values coincide or else you probably wouldn’t be reading this blog for very long, but it is almost definitely true that you and I value some different things. Your values are based on where you grew up, how you grew up, the challenges you faced, things that went well for you, and special circumstances you currently have in your life. You prioritize your spending based on those values. Continue reading “What You Shouldn’t Spend Money On and Why You Shouldn’t Listen to Me”