The Average Joe’s Ultimate Guide to Getting Out of Debt

What would your life look like with no more payments? No more car payments. No more credit card payments. No more student loan payments. How much extra money would that give you? Imagine the freedom to travel, to build your dream house, to finally retire. It’s a new year. And a chance to finally, once and for all, get out of debt. But what if you’ve tried before, and nothing’s worked? Or you’ve gotten out of debt only to get back into debt?

If you’re reading this, you may have an overwhelming amount of debt to tackle. Or you may be a personal finance guru, and need this advice like you need an extra helping of pasta with dinner.

Never fear! This guide is designed to help you get out of debt, but much of this advice will also work for other large, looming goals you’ve set for the year.

But why, you may be asking yourself, should I listen to this random voice on the internet? What does she know about how to get out of debt or how to accomplish my goals?

Our Story

I have written every detail of how Mr. ThreeYear and I managed to get out of debt in this post and this follow up post, but in case you’re new, here’s a recap.

When Mr. ThreeYear and I got married, we were both debt free. This is something of a miracle when most college graduates finish college with debt. According to Tica, The Insitute for College Access and Success, 76% of graduates from New Hampshire, where we live, have college debt upon graduating as undergraduates, and the average debt burden is $33,410. That’s for undergraduate education!

I was fortunate to have scholarships to college and parents who paid the rest. Mr. ThreeYear was fortunate to live in a country where undergraduate education is more reasonably priced: Chile. When we met (in said country), neither of us had any debt. We spent a few years living like the DINKS we were, but Mr. ThreeYear’s way: we bought everything in cash. If we couldn’t afford to buy it with cash, we couldn’t afford it. I scoffed at Mr. ThreeYear as he saved up to buy a car, in cash. “Why don’t you just take out a car loan?” He looked at me like I was crazy. “I don’t want to take out a car loan! I’ll just wait and buy it when I have enough money.”

Two years later, we moved to the States. We moved to the fast and furious city of Atlanta, where Mr. ThreeYear, and then I, found jobs, and slowly, every-so-slowly, we began to adopt the Atlanta way of life. First, we bought a house. We had been renting a very nice, 1100-square-foot apartment that was 15 minutes away from Mr. ThreeYear’s job (it was literally two miles away from us, but you know, Atlanta traffic). It had tennis courts and a pool, and a low rent (we paid around $850 a month for a two-bedroom in the heart of the city), but we decided we should buy a house, instead. Continue reading “The Average Joe’s Ultimate Guide to Getting Out of Debt”

To Sell or Not to Sell?

Our family has been planning to become location independent and move for a while, now. Our dream is to double our net worth by the time I’m 40, and find jobs that will allow us to travel more, split our time between two continents, or live in a foreign country for a few years. Because… we only have one life, right? And the kids will be little for like ten more seconds and then they’ll be grown… but making the decision to sell our house? It’s not easy.

To Sell or Not to Sell?--www.thethreeyearexperiment.com

One of the reasons we travel so much is to remind ourselves that there is another way to live than the way we currently do. We are a family of habit, and it’s easy to become so immersed in the routine of our daily lives that we never question our decisions or habits.

But one question that Mr. ThreeYear and I have had nagging at the back of our minds for a while now is… should we sell our house and find a smaller place to rent?As I wrote about in The Best Way to Avoid Lifestyle Creep, keeping your housing costs low is key to financial independence. And we’ve had the unsettling suspicion that our house is a little too big for us for awhile.

After we got back from Chile last week, that suspicion was confirmed. We spent most of our time in Santiago staying in a less-than-600-square-foot (52 sq. meter) apartment. It was small, and with three bedrooms and two bathrooms, was extremely space efficient. Yes, it was a little tight sometimes, and cooking was a bit difficult. But there were definite benefits, as well. One benefit was the shared space. We were able to go downstairs and use the common areas for the Junior ThreeYears to ride their scooter, or swim in the pool. There were tons of other kids playing, too, and while there wasn’t a lot of interaction, because of the language barrier, that would definitely change if the kids had spoken the same language.

Chilean apartment--www.thethreeyearexperiment.com
We made living in a tiny space work for us while we were in Chile.

While we were in the apartment itself, we didn’t get in each other’s way, surprisingly. The boys each had their own bedrooms, and they’d take their few toys we had packed and go play or read in their rooms. We did homework each morning on the small round breakfast table, then would move the school books to another part of the apartment when it was time for lunch. I even lost Junior ThreeYear in that tiny space at one point! (He was on the balcony, reading, and I didn’t see him because of the curtains).

The thing that was so nice about the small space was that we were together, we were cozy, and we were able to enjoy each other’s presence. Our current house is so big that we can’t see or hear each other when we’re in our rooms, and it can feel lonely. Most of our time is spent in the common area, our dining and living rooms, which are basically one big space (and are larger than the entire apartment in Chile, by the way).

Little ThreeYear has grabbed my hand at several points since we’ve been back and asked me to come with him to some remote part of the house, “because I’m scared to go to the basement alone, Mama.” Our basement, by the way, is not a dark, bare-boned forgotten space in the bottom of the house. It is finished, carpeted, and filled with Little ThreeYear’s toys, as well as a comfy couch and chairs. But after all that togetherness in Chile, Little ThreeYear feels lonely in the vast swath of basement without another person.

Basement--www.thethreeyearexperiment.com
Our basement at home is bigger than the entire apartment in Chile.

But does it make sense to sell our beautiful home, which we bought in a short sale at a very good price, with its spacious backyard, forest hiding-spots, and ample space for visitors, to move to a condo with no garage (a huge negative during New Hampshire winters), much less space, and community fees? Continue reading “To Sell or Not to Sell?”

2018 Goals Revealed!

Ahh, a brand-new year. There’s something so beautiful in the promise of the next 12 months, yet unfettered by mistakes or regrets. I am, without a doubt, a goal-oriented individual. Mr. ThreeYear eye-rolls, my family cringes, but I absolutely love setting and achieving goals. Last month, when we’d paid off our two outstanding debts, it felt so good to feel the finality of all that hard work and singular focus. And it feels really good not to have those payments coming up this month.

2018 Goals Revealed--www.thethreeyearexperiment.com

My 2018 Goal Sheet

As I did last year, I have a Goal Sheet for 2018. And like last year, I’ve followed a similar format to setting up my goals, with one notable exception (or addition, I should say). Continue reading “2018 Goals Revealed!”

A Year of Good Food: Spending Less and Eating Well

It’s incredible to believe that we’ve completed one year of our Three Year Experiment! Our goal as a family is to double our net worth and become location independent within three years, or right as I turn 40. Our family currently lives in New Hampshire, which is a beautiful state, but far from both my and my husband’s families. And so cold! For someone who’s suffered from seasonal affective disorder (or SAD) for years, winters are really tough for me.

Year of Good Food--www.thethreeyearexperiment.com

So, we sat down just over a year ago, and created the big, hairy, audacious goal of doubling our net worth in just three years, so we wouldn’t be as dependent on traditional jobs and therefore not as tied to one place. Our dream is to be able to split time between two continents, or perhaps move to an international country for several years, and travel extensively, as we love to do.

Further Reading:

Last year I dubbed “A Year of Good Habits.” Each month of the year, I focused on adopting one new habit to help us achieve our goal (I wrote about the results of that experiment here). I found that yes, making your bed each day does help you get better at financial stuff. Strange, but true. When you start the day with small accomplishments, you start to believe you’re someone who gets things done. You begin to trust yourself more. And that trust carries over into how you manage your money, how you spend, and how much you save. We were able to save up cash for several costly home repairs, completely pay off our apartment in Chile, and kill our last car loan. We increased our net worth by more than 32%, getting us really close to hitting 1/3 of our goal of doubling our net worth in Year One.

Since last year’s experiment was such a success, I thought this year needed its own theme, a new challenge. Mr. ThreeYear and I sat down and talked about the one thing that we could do to help us reach our goal more easily. Both of us decided that we could do better in food spending. In 2017, our average monthly spending was $966. We spent almost $12,000 in just groceries last year. While we live in an expensive part of the country for food, we feel that we waste a lot of food, and could do much better at our food spending. Continue reading “A Year of Good Food: Spending Less and Eating Well”

2017 Net Worth Update

At the beginning of 2017, our family of four started a three-year journey to double our net worth and become location independent. Doubling our net worth in just three years is our family’s big, hairy, audacious goal, and becoming location independent is a work in progress. We’ve still got to figure out where to move, what jobs we’ll have, how our kids will go to school, and lots of other decisions. We have many ideas that we’re working on, but we don’t have one clear decision made about what we’ll do at the end of 2019. But big, life-changing goals are like that sometimes. We muddle through and take each step on faith, hoping that we’ll eventually see the light at the end of the proverbial tunnel.

2017 Net Worth Update--www.thethreeyearexperiment.com

Already, we’ve seen amazing progress this year that we didn’t think we were capable of. I completed A Year of Good Habits, we paid for a new roof in cash, we saved and invested more money than we ever have, on top of that big expenditure, and thanks to a very robust stock market…. Continue reading “2017 Net Worth Update”

Notes from Chile: Lodging and Transportation

Our trip to Chile is coming to an end. We’ve been here almost three weeks and have enjoyed a trip to the most arid desert in the world, plus lots of sightseeing in Santiago, the country’s capital, where we’re staying.

Here's where we stayed and how we got around the city on our recent trip to Santiago, Chile. Check it out if you're planning a visit to South America. @lauriethreeyear #santiago #chile #visitsantiago #santiagolodging #santiagotransport

Where are we staying, exactly? Santiago has tons of AirBnBs, hotels, and hostels. But we didn’t want to spend money on those options when Mr. ThreeYear’s whole family lives here. So we’re staying in… our apartment!

San Miguel

Thirteen years ago, Mr. ThreeYear and I bought an apartment for his mom to live in, right before we left Chile to live in the US. All of the details of our purchase and payments are detailed in this post.

The apartment is located in one of Santiago’s 37 comunas. We’ve argued about the best way to translate this word, but I think they’re best described as neighborhoods, although they are official units of governance within the city. Mr. ThreeYear says the correct translation is municipalities.

Comunas de Santiago--www.thethreeyearexperiment.com
Santiago is divided up into 37 “comunas,” or neighborhoods.

The “best” comunas are in the Northeastern sector of the city–La Reina, Las Condes, Vitacura, Lo Barnachea, and La Dehesa, a community so exclusive it isn’t even on the map.

Our apartment is located in San Miguel, a comuna that’s right in the middle of the city (which I never realized!), just under the big red Santiago comuna. San Miguel is famous for, among other things, being home to Los Prisioneros, probably Chile’s most famous rock band from the ’80s. It’s where Mr. ThreeYear grew up, and where a lot of his family still lives (it seems like every other day we run into a distant cousin when we’re out walking). Continue reading “Notes from Chile: Lodging and Transportation”

A Year of Good Habits: End of Year Reflections

Happy New Year! As this post is being published, it is now 2018. I hope you’re having a great year so far!

Just under a year ago, I started writing this blog in earnest. I published a few posts in the fall of 2016, but had done absolutely nothing to promote them. In January of 2017, though, I began commenting under others’ posts and listing my website. Mrs. Frugalwoods, who lives close to me, graciously met with me, and she filled me with inspiration and practical ideas, as she is wont to do. I went home from that meeting with a lot of ideas percolating, one of which was to start blogging about the habits that could help me in achieving our family’s goal of doubling our net worth and becoming location independent in three years, which I dubbed “A Year of Good Habits.”

A Year of Good Habits End of Year Reflections: www.thethreeyearexperiment.com

The idea came in part from Charless Duhigg’s infinitely practical book The Power of Habit: Why We Do What We Do in Life and Business. Duhigg is great at telling stories, and one of the stories he told really stuck with me: there was a young woman named Lisa who was overweight and a smoker. She was in debt and had never held a job for longer than a year. Her husband had just announced he was going to divorce her, so she took a spur-of-the-moment trip to Cairo, because she hadn’t yet maxed out her credit cards and had always wanted to see Egypt. One morning on her trip, after feeling helpless about the life she faced back home, she got in a cab and rode by the Pyramids. She decided, as she saw The Sphinx and the Pyramids of Giza, that the only way to change her life was to set a goal to work toward. So she decided to come back to Egypt in a year and trek the desert.

In order to do that, she knew she would have to quit smoking. So she went back to the US, gave up cigarettes, and started jogging. Replacing that one bad habit with a good one led to a series of new habits that changed how she ate, slept, exercised, worked, and organized her day. She eventually started running half marathons, then marathons, then went back to school to get her masters, bought a house, and got engaged. Continue reading “A Year of Good Habits: End of Year Reflections”

Notes from Chile: Entertainment and Food

Hello readers! The ThreeYears are currently in Santiago, Chile, for Christmas and New Year’s. It’s summer here, so the weather is hot. Our family of four has been busy visiting family, traveling to the driest desert in the world, and generally enjoying ourselves.

Here's what we did and what we ate, including prices, on our recent trip to Santiago, Chile. If you're thinking about a trip to South America, don't miss this post! @lauriethreeyear #santiagochile #foodinsantiago #entertainmentsantiago #southamericantravel #travelchile

Santiago is a city of about 6 million people, roughly one third of the total population of the country, located in the very center of the long and narrow string bean that is Chile. It’s nestled in a valley between several mountain ranges–the Andes to the east (mountains known as the Precordillera–not quite as tall as the Cordillera of the Andes a few kilometers away) and the Chilean Coastal Range to the west. More mountains, a small range called the Cordón de Chacabuco, which is part of the Andes, are to the north, and to the south, there’s the Angustura de Paine, another thin mountain range that extends toward the coast. So there are giant mountains everywhere you turn. It’s one of the reason people hypothesize that Chileans are want to end so many words in “ito,” the Spanish ending that makes things little, because when you’re constantly staring at giant mountains everywhere you go, you feel smaller.

Santiago is organized into neighborhoods, or comunas. There are 37 official comunas in the city, and some (the best neighborhoods) extend into the foothills of the mountains that surround the city. Those neighborhoods can get to around 1,000 meters in elevation.

Santiago has a thriving economy that leads Latin America–its economy is the second most competitive in the region. The Economist Intelligence Unit ranked Santiago the second best city in which to live in Latin America, after Buenos Aires.

For this reason, immigrants have flocked to the country in the last two years. Continue reading “Notes from Chile: Entertainment and Food”

How to Set Great Goals for 2018

One thing is clear to me as we ride out the end of 2017: if you set great goals for 2018, it will make a huge difference in what you’re able to accomplish next year. The world we live in today is practically designed to distract us from keeping our eyes on our most important goals and work (for example, as I’m typing this, I’m trying to ignore the loud cartoon my kids are watching across the room). So focus is key. And great goals help you keep your focus, all year long.

How to Set Great Goals for 2018--www.thethreeyearexperiment.com

But how do you figure out the best goals to set for the upcoming year? Maybe you have fifteen burning desires that you’d love to achieve, but you don’t know how to prioritize them. Or maybe life is motoring along just fine, and you know you’d probably like to improve something, but you’re not sure what.

I found myself asking those exact same questions several years ago, and here’s what I’ve figured out really works when it’s time to goal set for the upcoming year.

  1. Get crystal clear on your values

It’s hard to prioritize your goals if you haven’t defined your values. What are your values, though? Values are what you judge to be the most important things in your life–the things that deep down, you care about the most. Given that definition, it seems like it would be easy to figure out your values. But it’s not always.

Sometimes, you want to value something that you actually don’t care about that much. For example, when I was in my 20s, I lived in Santiago, and Mr. ThreeYear and I were figuring out where we should go next. I was offered the opportunity to become part of an MBA program where I’d complete half in Chile and half at a great school in Texas. But I declined, ostensibly because I wanted to get into a top-10 MBA school, like Wharton. In the end, though, we moved back to the US and I didn’t go to an MBA school at all. To the shock of almost everyone in my family, I became a stay-at-home mom for seven-and-a-half years. It turns out that what I thought were my values–getting an MBA and climbing the corporate ladder–weren’t really my values at all. I really valued family, which was the real reason I didn’t stay in Chile to start an MBA, because I missed my family back in the US and wanted to go home. And I really valued motherhood, and making sure my children had a secure start in life.

One of the best ways I’ve found to figure out your real values is the “What do I want?” exercise. It’s fairly simple. You take out a sheet of paper, and at the top, write, “What do I want?” Now, all you do is list the things you want. They can be as small and insignificant, or as large and pie-in-the-sky as you want. Anything that comes to mind goes on the list.

When you start this exercise, your first few wants will probably be fairly trivial and perhaps materialistic. Continue reading “How to Set Great Goals for 2018”

Our Trip to the Desert: San Pedro de Atacama

Merry Christmas! The ThreeYears are currently in Chile. We just got back from a side trip we took to the San Pedro de Atacama desert, in the northeastern part of the country, close to the Bolivian border. San Pedro de Atacama is the driest desert in the world by amount of rainfall received, but it’s also nestled in the Altiplano of the Andes mountains, so there are mountain-fed rivers and streams and salt lagoons everywhere.

Mr. ThreeYear is from Chile, and his entire family lives here, so we visit as much as we can, usually for about three weeks. We plan a side visit to one or two spots we’ve never visited for each trip, so that we can see somewhere new in South America. This year, we picked the San Pedro de Atacama desert, because Junior ThreeYear wanted to visit a desert and see an observatory.

San Pedro de Atacama Desert is a tourist destination, so it’s quite pricey. Here’s what we did to plan a great trip without breaking the bank.

The Flight

Luckily, in the last few years, a number of discount airlines have sprung up in Chile. We eventually decided on JetSmart, an airline with several flights per day from Santiago to Calama, the airport nearest San Pedro. We did an online search from the US just a week before our trip, so we could have gotten better rates if we’d planned ahead more. We looked at JetSmart and Sky, another discount carrier in Chile, and eventually chose JetSmart for its prices and flight options.  JetSmart is definitely no frills, as we found out. The planes are new and clean, and you have ample space between seats, which was very nice. However, if you took anything bigger than a small carry-on (8 kilos or less), you’d be charged for it–about $16 online per bag, $21 at the ticket counter, or $37 at the gate (the prices increase as you get closer to the plane). Also, you have to print your own boarding passes or download them to your phone, or you’ll be charged $8 per boarding pass at the ticket window. Soft drinks, coffee, and a small selection of snacks and sandwiches are sold on board (a Coke or a small container of Pringles is $2.50).

JetSmart--www.thethreeyearexperiment.com
Our plan with JetSmart, which we took to Calama.

The four of us carried two backpacks and two carry-ons, one of which was over the size limit, as we found out at the gate (the website where we booked the tickets was not clear about size limits of carry-ons). Luckily, the gate agent took pity on us, and said she wouldn’t charge us since it was close to the right size. We boarded the flight and flew two hours up to Calama, a small mining city in the middle of the desert.

We paid a total of $540.12 for four tickets from Santiago to Calama. We probably could have gotten a better deal if we’d booked earlier, but we thought $135 per person was reasonable.

The Rental Car

By far the best decision we made during our trip was renting a car. We booked the car online via Priceline, and paid $115.49 for four days and three nights. We rented through the local company Econorent and booked a four-door Nissan Sentra.

At the airport, we picked up the car, then drove to San Pedro de Atacama, after getting directions, because Mr. ThreeYear didn’t have cell service in the airport (he has an international plan through work). Driving through the desert was eerie, at first. Everything is so vast, dusty, and rocky. Continue reading “Our Trip to the Desert: San Pedro de Atacama”