Lifestyle Choices

This is going to be one of the hardest topics yet to cover at a very high level and also my first mention of FIRE in my writings (financial independence retire early). My goal is just to inform you of two choices and get you rethinking, especially if you feel like you don’t have choices and are stuck in your current financial position. I am by no means claiming to be an expert on the topic or to get into the HOW in this post. I have just dabbled with both lifestyles mentioned and I feel like there are not enough people (especially women) who are thinking about or providing information on the topic..so looks like you are stuck with me. 😜

The above picture is the best way I could summarize the concept of lifestyle creep. For now, as mentioned, this is just to introduce you to the topic, so I have a few stats and thought provoking questions to hopefully do so.

First..the stats tell an alarming story. I recently read in this USA Today article https://amp.usatoday.com/amp/34378157 that the average household is bringing in around $75,000 annually, and of that, they are spending 90% of it, which equates to $67,500 outgoing and only around $7,500 extra annually. (which the article states a lot of this is going towards interest payments on consumer debt). This breaks down to $5,625 in expenses each month and $625 extra. That doesn’t leave much wiggle room and helps paint a picture as to why people aren’t putting anything or very little towards saving, investing, emergency funds and retirement. 😳

Essentially pointing out that people are living a paycheck to paycheck lifestyle. I don’t know that this was a surprise to any of us, but it may be a surprise that people are making the choice everyday with their actions and spending habits to live this way. Disclaimer that there are people living in poverty, so for the sake of my post, I am referring to the middle class mentioned above.

Now on to the questions. Feel free to answer in comments if you want to share, or just answer to yourself or as an internal conversation or with your significant other. Keep it real because denial is a great way to protect yourself from the truth right now, but long term in fact it just ends up hurting you more.

1) Are you living paycheck to paycheck like the scenario mentioned above?

2) Have you noticed that no matter what you do, you just can’t get ahead?

3) Do you receive regular raises or have you changed jobs to make additional money over the course of your career, yet you aren’t seeing a difference in your monthly budget after expenses because they always seem to match what’s coming in?

4) Do you ever pay attention to how much you spend on conveniences like pre-made food, someone to mow your lawn, someone to clean that big house, someone to wash that new car, someone to groom your dog, someone to do your hair/nails/makeup, etc because you are too busy working to do these things?

5) Have you ever wondered why things are like this for you and probably a lot of people you know, yet it’s still a taboo topic to discuss money, so everyone just keeps working harder and staying in the vicious cycle mentioned above?

6) What will happen if you change nothing and keep following this path?

Please reference the above picture as you are going through these questions to see if lifestyle creep has found a way to creep into your life. Remember..be honest.

Next, know that there is another option. As mentioned above, lifestyle creep is a choice and I’ve said this so many times on purpose. So many think they have no choice unless they make more money and this is far from the truth.

Lifestyle creep is a path that many in our society have walked and not challenged until recent years. Here are some questions to ask yourself and see if you’re one of those ready to challenge the traditional path and choose a different way.

1) What upsets you the most about always being broke and living paycheck to paycheck?

2) How has constantly feeling stressed from working so much and not having any money to show for it affected you?

3) What are your values and what are you spending your money on? Do they line up?

4) What are your passions and what do you dream about doing?

5) What could change if you have an open mind and put in the work, I mean really put in the work, to change your current financial path and mindset? Think of one quick and easy way you can change today.

6) What will happen if you start to live a lifestyle designed by you instead of others?

As mentioned, a lot of people have started looking at the above stats and questions, and are starting to make the decision to customize their lifestyle based on their own unique values, not what society tells them to value. Spoiler alert..it’s not through making more money as mentioned above..it has never been about that. It’s about a lifestyle of being content with only those things that bring you value. Luckily, it usually don’t cost anything at all, just the basics needed like food, shelter, experiences and none of the extra crap. 😊

Don’t get this lifestyle design twisted with a life of going without, because it’s actually the opposite of that. You have room for so much more when you let go of stupid shit.

Well..shocker..I have lots more to say but I’ve said enough for one day. What are your thoughts or questions on the two different paths mentioned above?

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My Biggest Financial Mistake

We left off on my last post in 2005, driving a gas guzzling 2001 Dodge Durango while commuting an hour and gas being $4 a gallon. 😬 Go back and read Part 1 if you haven’t, because there’s lots of entertainment there that I can look back on now and say..what the?! 😂

Back to the Durango part of the story..I had just started Financial Peace University and had also just started dating my now husband in 2007. I really wanted to do the debt snowball and keep the Durango and pay it off. But I was young and stubborn..and well..still financially irresponsible and just flat out stupid. 🤷‍♀️

Sooo..long story short..in 2008 I traded that ole Durango in for a gently used 2007 Nissan Altima. I couldn’t qualify for a car loan with under a 16% interest rate on my own, so my boyfriend (now husband) co-signed. Why are y’all out here enabling my bad decisions by co-signing..can we say enablers?! While I am absolutely grateful for the help on the loans, the now wiser older version of me is like..well..that was a sign I shouldn’t be getting a loan..period!!! If I wouldn’t have had that option, then maybe I would have figured out a different solution that didn’t involve another loan and $300 car payment. 🙅‍♀️

With marriage, my husband brought a 2002 Nissan Maxima that was paid for. We ended up deciding in 2015 to trade it in for a 2014 Nissan Pathfinder SUV that we “needed”. So we did make that Maxima last a minute, and we even kept the Altima after we paid it off. (and my husband is still driving it today with over 200k miles) It smells weird and has different sounds, but it runs and that’s what our requirements list looks like for a car these days. 😜

We ended up selling the Pathfinder because it had transmission issues and pissed me off at the wrong time on the wrong day. The Altima was also causing some troubles, so I decided it was no longer safe to commute in. We ended up doing some minor repairs and my little brother used the car for a year or so. Fast forward to 2017 and impulse buying my 2015 Infiniti Q50..cause I need a luxury car that my kids can spill their drinks and empty snacks all over in, and slam the doors into anything that is there when they open them. It’s also important to have premium gas for a commuter like myself. 🤦‍♀️

Happy ending though..sold the Infiniti and replaced with a paid for in cash 2013 Nissan Altima with 124k miles on it. So we now have NO car payments and two Nissan Altimas to get around in.

I think it’s time to analyze the overall effect this financial mistake of having a car payment for 18 years had on my overall financial wellness. Hopefully this will help prevent it from happening to others in the future. If you take an average of $350 a month over that 18 years, that’s $75,600.

🙄😬😭🤢😳🤬🤔🤦‍♀️

I could have easily had one or two cars last me through that timeframe for under $10,000. What would life be like had I taken that money and invested it or saved it and used it for down payments on 4-5 rental properties? I could have used the cash flow to pay for a car of my choosing. Also, did having to ensure I could cover that $350 every month make me less of a risk taker on chasing dreams and playing it safe for a steady paycheck? Deep thoughts and questions we will never know the answer to.

What I do know is that I drove myself down a road paved with bad decisions for 18 years, but better late than never to realize it’s time to take a different road. 😉

I’m curious..what is your biggest financial mistake and what did you learn from it?

6 months down!!

What better day than Amazon Prime day to give an update on how my No Spend Year is going. I wouldn’t have even known about it if it weren’t for my coworkers. 🤷‍♀️ While shopping holidays like today have never really appealed to me, I will say the No Spend has been a bit of a challenge the past few weeks. 😬

Timing was just right that I had a really amazing friend gift me some clothes that I absolutely love and am so grateful for (my new fave skirt..it has pockets!). I did end up buying sunglasses a few months back because mine broke, which I considered a need for eye protection. I also bought some stuff, including a T-shirt for a fundraiser for a friend, but I don’t count that since it was for a great cause. I’ve been battling with buying a pair of sandals for work. I can technically wear flats that I have, so not sure this qualifies as a “need”. Do my feet really “need” sandals when it’s 100 degrees out, but still frigid cold in the office? Probably not. Lastly, I bought a new AppleWatch and new Nike running shoes, but these I can explain..I promise. I work for a great employer, and both were FREE as part of my employee benefits package. Yes you read that right..and yes we are hiring. 😉

Overall, I’m SO PROUD of myself for the amount of restraint and growth I have experienced this first half of the year. I would like to thank the former “consumer” in me for knowing her weaknesses, and avoiding emails by unsubscribing to everything, and staying out of any of my “trigger stores”. 😂

I would estimate that over the past 6 months, I have likely saved upwards of $2,500. This is just an estimate based on my previous patterns. My old consumer self went to Target 2-3x a month and would average around $100 per trip, along with usually having my hair colored every 10 weeks at about $85, and don’t forget buying some makeup here and there, shoes, and at least one big “seasonal” shopping trip for new clothes around $500ish total. Don’t forget the little random purchases here and there also. 🤦‍♀️

I’m really looking forward to continuing to save and invest my money for the second half of the year, which will help keep me on track. Besides the savings of time, money and not having extra clutter, I definitely have a different mindset about money. Knowing that every day I’m trading my time for money, reminds me that each purchase, no matter how small, has to be bought with hours of my life. That’s a powerful translation of currency that will always stick with me going forward. 🕰 💵

This is us

I thought with all the new followers, it’s a good time to re-introduce the magic behind mysemibasiclife (you read that right..I totally referred to myself as the magic). To celebrate, my daughter humored me with a photo shoot, and my favorite was one of the bloopers. 😜

Sometimes life is more about what happens behind the scenes, between the “perfect” pictures, when you’re trying to pose and get the best lighting, hide that lazy eye, those wrinkles and those frizzy grey hairs. She captured all of these things, all of my imperfections, including crows feet I didn’t even know were there. How fitting to show my imperfections to all of you who have been following along on my imperfect journey to financial freedom. This is me..always laughing at my own jokes, never taking things too seriously, currently staring off into space like only a true dreamer can do. 🤷‍♀️

This is the entire family that puts up with my latest crazy schemes, understands the bigger picture behind those crazy schemes, sometimes appreciates my hilariously witty comments and penny pinching ways, and packs in the car with me for that fifth trip to the library in a two day period. 😂

You weren’t there for the early years, the dark debt days 😬 where we were living beyond our means and got ourselves into a financial spot where all of our paychecks were going towards debt. But you have now followed along as we ditched the debt, got rid of car payments and paid our last student loan off, which puts us at a grand total of $165,000 in consumer debt paid off!! You’re following as I am feeling weak, but holding strong and halfway through my #nospendyear. You followed along as we bought our first rental property and are following along now as we now search for the next one. 👀

We are excited to continue sharing our life after debt journey, including our ever changing goals, working on growing our net worth, celebrating the success, overcoming the setbacks, and the blood, sweat and tears along the way as we define what financial independence looks like for our family. 🔥

Enough about us though..I want to hear from you..what’s your story? What topics that I’ve covered have helped or would help you along your journey?

What questions do you have for me?

👇🏼👇🏼👇🏼👇🏼

Be a Goal Getter

I don’t care who you are..you need goals. Think of the old cliche saying that totally applies here..how are you supposed to get where you’re meant to go if you don’t know where that is? I firmly believe that if you take everything else out of the equation, mindset and goals are the biggest drivers of if you will or won’t do something. It also doesn’t matter if you’re on a different path than me and think I’m crazy for my recent FIRE movement 🔥, you still need goals and the right mindset for whatever your movement is, whether financial, personal, professional, relationships or health related.

Don’t be a flake and say something vague like “I want to pay off my debt” or “I want to lose some weight”. If that’s your goal, then you may as well replace it with “I don’t want to accomplish anything ever” and just get excited about carrying around those extra 15 lbs and all that consumer debt for the rest of your life. We wouldn’t have paid off all of our debt and bought our first rental by being flaky..period.

Instead, set yourself some SMART goals for whatever you are trying to achieve. Stop and brainstorm your life, past present and future state. I know everyone is “busy”, but sometimes you have to make it a priority to stop and reflect. Think about tomorrow, end of the year, two years from now, and maybe even think even farther, like 5-10 years from now. With us being halfway through 2019, it’s also a good time to look back on the past six months. What do you see? Do you like what you see? What will happen if you continue the way you are? Will you get where you want to go?

After you think about your path and your big picture, which will be different for all of us, think about 3-5 micro goals over the next 6 months that will help you get that much closer to your big goal. Get all high tech and write them on a post it and put them on your fridge…where you see them every day. 👀 (bonus points if they fall off all the time so you have to look at them even more when you pick them up off the floor)

As you can see, I have crossed out and updated a few of mine when my priorities shifted and opportunities came my way that altered my original timeline. Be ready to adjust as life comes at you, but even when things don’t go as planned, don’t ever give up. Remember to set your goals high enough to push you while making sure they are also attainable with some focus and hard work.

Don’t forget to stop and celebrate your successes as you hit your goals. Then make sure you continue to set new micro goals to get you that much closer to where you want to be! We need to think bigger and get some new goals since we’ve already paid off the student loans, currently looking for our second rental and also pretty sure we have increased our net worth by $25k just in the past few months. So I’m curious..what are some goals you have crushed and what are some that didn’t go so well?

Net Worth Tracking

I’m almost embarrassed to admit that I never really thought about or paid much attention to our net worth until about 6 months ago. I didn’t really understand that it wasn’t just for “rich” people, and that everyone should at least have a general understanding of where they stand and where they are headed. But it’s also probably better that I didn’t, because my net worth was in the negative and that could have been very discouraging.

Now that we are almost done with our student loans, our final liability (minus our mortgages), I’m going to start using net worth as my new way to set goals and measure success and/or failure. It’s so easy to take your assets and subtract your liabilities from them.

With getting rid of liabilities and adding a few assets, we have seen a significant increase in our net worth in the past 6 months. It’s crazy how setting goals, taking action, being consistent, tracking progress and thinking about and sharing with others can really help accelerate success.

Does anyone else geek out on net worth or am I the only one?! 🤓

Curious about your own net worth?

I found a cool free app that is easy and also curious what others use to track. WealthPlus Net Worth by Little Appshttps://itunes.apple.com/us/app/wealthplus-net-worth/id933534901?mt=8

Follow me @my_semi_basic_life on Instagram if you aren’t already, and tell a friend or two if you like what you’re reading. 😉

We are officially landlords!!

It all started in December. The choice to live a more minimalist lifestyle with the No Spend Year I challenged myself to. Turns out I had a lot of extra time and money once I stopped shopping. 🤣

So I started listening to the BiggerPockets podcast, and a few other FI podcasts, along with reading a bazillion books for 60 days and kept penny pinching away. After talking to my husband, and getting him sold on my crazy ideas (besides the selling our house and living in a van down by the river idea), we set a goal to buy our first property by March 2020. Except this may surprise some of you..I’m kind of inpatient. 🤷‍♀️

We then went and looked at several places and decided to put in an offer on a single family home because we loved the location. We discussed doing short term AirBNB, but found out the city is pretty strict, so went with the long term rental strategy instead.

Closed on my 36th Birthday on 3/26 for $103k with 15% down and walked into $10k of equity right off the bat. We put a few hundred bucks on paint and new screens, trim touch up, etc. and put some weekend sweat equity in to get it rental ready.

If you remember from other posts, we recently got rid of a car payment and daycare, clearing up $1100 a month of outgoing expenses. So we have decided to pay the $700 mortgage out of our own funds, and take the $900 rent and put it in our investments account for a down payment on the next one. (We actually got a really great tenant who signed a two year lease AND paid $10k for the first years rent in full). We are going to use that rent towards our next investment and are currently in the market for a multi-family if you know of one. 👀

It still feels a little weird to say we are landlords. We dreamed about and talked about owning real estate for around five or so years. But we were so strapped with debt and were scared because we didn’t have any real estate background, or solid goals or plans put in place. Didn’t realize it was as easy as picking up some books and listening to other investors tell their stories to educate ourselves. It’s exciting to see our years of hard work and sacrifices starting to pay off now though. Only regret is that we would have taken action sooner. Next step is continuing to build our net worth and getting a little closer to financial independence every day!!