Financial Planning

"He who fails to plan, plans to fail."

One of the reasons that I've always enjoyed working with money is because the numbers are always right there in front of your face. You can look at your bank accounts down to the penny. You can see where and to whom every penny from your last paycheck went. There's nothing mystical or mysterious about your money. It's a piece of paper, metal, or an electronic number on a computer screen. It's equity in a house or holdings in a company.

If you've known me for any length of time, you know that I'm all about the truth, and numbers don't lie! We can dream all we want of financial freedom and early retirement, but unless we have a plan and are working towards a goal, we will get nowhere. Because of this, there are a few tools that I have learned are the most effective in helping us to achieve our goals.

I was talking to a few friends of mine and was surprised that most of them had not heard of Mint (click to go there). This is probably the most useful and easiest financial tool available on the market right now, and it's FREE. Mint tracks your credit cards, bank accounts, purchases, mortgages, and investment accounts. Basically anything that you do electronically with your money will be automatically recorded once you enter in your account information. Mint even makes graphs of your spending and tells you your net gains and losses. It also will tell you what your current Net Worth is. It allows you to make a budget and sends you reminders when you go over. It's available as an app on iPhones and Androids and also works if you go directly to the link. Once you can see exactly where your money is going, it's easier to see places where you're spending too much money. If you remember, it was when I was on vacation in August and figured out that we had spent over $500 on entertainment in July that helped to wake us up from our wasteful spending and sent us on the path we're on now.

Probably the most effective way to meet your financial goals is by setting up automatic contributions that come directly out of your bank account. After you've figured out a budget for yourself, immediately put into place a direct, monthly (or bi-weekly) transfer to the investment of your choice. I guarantee you won't miss the money, and it's almost scary how easy it is to set up these automatic contributions online. For us, the majority of our investing is going two places right now: my TSP account through the shipyard (which automatically withdraws 29% every paycheck), and our mortgage. We want to move in 2-3 years, and in order to do so we have to put about another $15,000 in equity on our house so that we'll have enough money when we sell it to put 20% down on our next house which will inevitably be more expensive than this one. I don't have automatic payments set up for the mortgage because I normally will put as much extra money on it as we have available every month (But I still figured out that we need to put about $500 extra every month down to reach that goal). I also have $100 that comes out of our account every month and goes directly into our emergency fund so that it is always slowly growing. We've dipped into it a number of times so it's comforting to know that we're always replenishing it to some degree. If you want to dive into the psychological reasons for why automatic investing is the way to succeed, check out Ramit Sethi's book I Will Teach You To Be Rich.

One of the things I've consistently read about investing advice is that the most important thing is to just start investing. The stock market can be such an overwhelming thing, but the most important thing for any investor is just to get started. You're going to lose far more money delaying your investing than you are going to lose by choosing the wrong fund (if you're just starting investing, I would stay away from individual stocks, and instead invest in an index fund that tracks the whole market). A good example of this is that my wife and I opened a Roth IRA when we first got married and even though the funds we ended up buying were a terrible value (high expense ratio), we still only invested about $6,000 and the value right now stands at about $8,500. Even though that isn't a ton of money invested, if we had never set up those automatic contributions that money would never have been saved, and we still have made over $2,000 with our money just sitting there.

I can't stress enough the importance of having some accountability for your spending habits (it really doesn't get any easier than Mint), and setting up automatic contributions for your investing and savings goals. Most people don't want to spend a lot of time on budgets and putting money into savings and investments, so if you're just able to spend a little bit of time up front and automate everything important, you'll be able to have the peace of mind that comes from your financial plan without the headache of having to consistently manage it. 

February Failure

You know, I'm in one of those moods right now where I'd like to just mope for a little bit. I think, maybe if I show how much of a failure I am, then I can give some hope for everyone else out there. Because the truth is, I've been doing a great job of NOT following my own advice recently. 

About two weeks ago, my bike was having trouble shifting so I took it to Bike Beat to find out what was going on. They've always taken care of me there and because I bought my bicycle there they rarely charge me for any of the work that gets done. I've developed a good relationship with the manager, who I share a mutual friend with, and I've been happy to give them business when I can. This past time, the manager wasn't there and I spoke to a few of the other associates that work there, and they informed me that I needed a new rear cassette, chain, and break pads for my rear wheel. I also have been wanting to put on a bigger ring up front so that I could travel faster with the new road tires that I recently installed. They also did some adjustments to my brakes that were giving me problems as well. When all was said and done, and I went to pick up my bike, the bill came out to $280. This was after I had just spent another $200 over Christmas on new pedals, shoes, and the before-mentioned tires. When all was said and done, I easily put over $500 into my bike these past two months, and the bike store informed me today that I have another $50 part that needs to be replaced soon. I could probably have saved about $120 if I had done all the work myself, and probably another $100 if I had listened to my own advice and eschewed comfort and convenience. But I also understand that riding my bike is very mentally taxing for me and the faster and easier I can make my ride to work, the more likely I am to get on my bike every morning and get out the door, and that is worth more than all of the money I spent. I also understand how powerful of an investment tool riding my bike is. 

My wife and I also celebrated our 5 year anniversary! We decided to splurge and get a hotel out at the beach since it's the off-season and we figured we could get a good deal. We ended up finding a nice room at a decent rate, and proceeded to live lavishly for a couple days. When all was said and done, we spent over $350 on our weekend. Now, we could have made the excuse that we needed to celebrate even bigger because of the momentous event. And I am not disappointed at all with the money we spent because we had a blast and I think it is necessary to let go every now and then. But I also understand that we could have had just as much of an amazing time together and spent a third of the money we did, because what made the weekend special wasn't the hotel room or the fancy restaurants, but the opportunity to share time together.

I've also been spending wastefully on a personal level. I'm halfway through February and not only have I blown my entire entertainment budget for the month, I also spent every last penny that I've earned babysitting  as well. I've been going out to eat, and throwing money away on energy drinks, snacks, and alcohol.

All in all, we could easily have another $500 in our bank account right now. And I should easily still have $40 in my pocket to spend however I want to. But you know what the crazy thing is? We still invested at least $1100 this month. And I made a $1,000 transfer into our savings account, and we have about $4,000 left in our checking account. We should be able to pay a little extra on our house this upcoming month as well, because we are beginning to put money down on the house so that we will be able to move within 2-4 years. 

How is this possible? How is it that we could have such a shameful month of spending, and yet still have more than enough money to meet our immediate goals? It's because we've designed our way of life to not just live below our means, but well below our means. And if we have any hope of reaching financial freedom and/or early retirement, months like this one have to be few and far between. Because even though we've had some nice progress this month, we really need to be aiming to invest over $2,000 a month, which we easily could have done this month if we hadn't been wasteful.

The moral of the story is that most of us have absolutely no excuse for living paycheck to paycheck, or with constant stress over our mounting debt. With hard work and diligence, even relatively wasteful budgets can easily allow us to have more wealth than 90% of the people around us. And there is no reason that within a year or a few years that we can't have a safety net around us so that if the unthinkable happens, money is the least of our concerns. 

Financial Freedom's Two Enemies

In our effort to achieve financial freedom, there are two enemies which, if we are not vigilant against, will always cause us to fail. It might not be what you think. Many people are worried about a catastrophic illness, or losing their jobs. But there are two other enemies that we must face and overcome each and every day if we wish to secure our freedom. Here is the first: 

Comfort.

Gasp...I shudder just to hear the word, because I know it is mercilessly clawing away at my freedom! Comfort is never satisfied. There's always a bigger car, a bigger chair, a bigger television out there begging to coddle us. There's always a nicer hotel room, a beach with whiter sand, and a fancier restaurant calling us to relax longer and more luxuriously while we are served. Comfort can even keep us from getting out of bed in the morning to make it out to earn our living. 

Comfort, in and of itself, is not a bad thing. In fact, without any comfort, we would be unable to rest and sleep, and we would quickly die.We would freeze in the cold and melt in the heat. So comfort is essential for survival. But where do we draw the line? If we go back to what science has proven through hedonistic adaptation, after our basic needs are met, any more or less comfort has no bearing on our personal happiness. True, there will always be moments of bliss in situations where our comfort exceeds our normal levels. But for whatever level of comfort we are accustomed to, it is that much easier to enter that blissful state. A man who sleeps on a bale of hay in a barn would find bliss on a futon inside a warm house. But a man who has all the wealth he could ever dream of must search the world and spend extravagant amounts of money to achieve that same feeling as the other man. In reality, it is a beautiful thing that in every country on our planet, the poorest man can be just as happy as the richest man.

This brings up our next foe, one that has a stranglehold on our society:

Convenience.

A quick trip to 7-Eleven is all one needs to see the price of convenience. And if you look around, people are more than happy to pay twice what they would in the grocery store across the street. But every trip to the restaurant, every phone call to the handyman, every time we drop off our cars to be fixed, our freedom is being drained for the price of convenience. We absolutely have to have cell phones on us at all times in case we need to make or receive a call. And even that's not enough because we also must have the internet available as well! We need laptops and tablets so that we can conveniently experience media in the comfort of our couch. 

Convenience keeps us from learning things on our own. It keeps us from making mistakes and learning to do things the hard way on our own.

In reality, if we had no desire for comfort or convenience, financial freedom could easily be attained in under 10 years. One could easily live on $7,000/yr and have all of their needs met. In reality, if you were extreme enough, you could live for free by the sweat of your own brow. At the other end of the spectrum, we have those that are so focused on their careers and earning money that they are able to outsource everything and put all of their effort into learning how to increase their income. This gives them the ability to hire personal trainers, even have people clean and cook for them. Both of these examples are extremes that most of us will not relate to and could not see ourselves doing.
But which method is better for us? Why not work our tails off so that we can live the ultimate life of comfort and convenience? I obviously am partial to the first scenario. The most obvious reason is because money, comfort, and convenience will never make us happy, but overcoming challenges and being able to conquer our own problems will add to a sense of fulfillment in our lives. But I think that there are also more rational reasons for leaning towards frugality instead of towards having the ability to pay everyone to do all of the things that you don't want to do. For one, the less money that you need in order to meet your basic needs, the earlier you are able to become financially free, because the amount of money that you have to save in order to live off the interest will be significantly smaller. Also, the more you are able to do things on your own, the more likely you are to be able to endure a great financial collapse, which is a possibility fresh on the minds of almost every American right now. For me, the most important reason for aiming towards the life of frugality is my desire to be free. I don't want to be stuck in the job I'm in just because I need the money. I want the freedom to pursue the work that I choose. I want the peace of mind to know that if LeAnn or I lose our jobs that we have plenty of time to recover and find something else.

What do you want? Are you more interested in comfort and convenience, or, like me, do you wish to be free? 

Riding into Riches

Ah, it's the post that you've all been waiting for. 

I know you've been waiting for this one because if there's one thing that has people looking at me cross-eyed more than anything else, it's my decision to commute via bicycle to work every day. I've eagerly awaited this post as well because I'm about to blow your mind once you realize how foolish you've been driving your car to work!

OK, ok, so maybe that won't happen today. But I've honestly come to the point where when I reflect on the pros and cons of riding to work, I smack myself in the head for even considering sliding into that comfy seat and lazily driving to work. Seriously, it's as easy to decide on whether I should ride or drive as it is if I should brush my teeth or not every day. 

So where's the disconnect? If it's so obvious how we should be getting ourselves to work, why isn't everyone doing it? It's because we've all been BRAINWASHED!! Part of the American Dream is making life as convenient as possible. Almost everything that we're marketed is supposed to make our lives easier and more comfortable. We've been wired this way so well by society that even the thought of riding a bicycle to work is repulsive to almost anyone I come in contact with. When I tell people I ride a bicycle to work I almost feel like I just told them I'm a believer in Scientology  They'll smile and make a friendly comment about it, but inside they're thinking, "What is wrong with this guy??"

So let's get down to the brass tacks. First, we'll explore why I should not ride my bike to work. Because obviously, there are some serious hurdles to jump over before making the commitment.

1. Riding your bicycle is NOT SAFE!!!! There is definite truth to this statement  Although I've never been hit in the ~2,000 miles I've spent on the road, I once was cut off and had to stop so suddenly that I flew over my handlebars at about 18 mph. Although I received a nasty bruise, I didn't miss a day of riding. I also learned from another guy who passed me every morning that I wasn't that visible in the dark, so I've added a lot more reflective gear and haven't had any other problems since. One interesting thing to note about the safety issue is that there is a very small chance that I will get seriously injured or killed while riding my bike, and yet there is a very great probability that riding my bike will actually ADD years onto my life. And I believe with the proper safety gear and lighting the risks can be greatly minimized.

2. Riding your bide takes MORE TIME. This is the only other reason that holds any weight in the argument for me. I usually have to get to bed at 10 p.m. so I can be up a little before 5 a.m. to get ready for my morning ride. The ride really only takes me about 15 more minutes than a car would, but when I get to work I like to take a shower. I also try to leave wiggle room in case I get a flat tire, and traffic progressively gets worse the later I get out the door. I hate the fact that I have to give up an hour of time with my wife every night so that I can get enough sleep.

3. Riding a bike is HARD WORK. As I've come to believe, this argument should actually be on the pro side of the list, because one of the best things about riding a bike is that it provides me with a daily challenge that I have to overcome. There are times when it's rainy and cold, and times when the wind is blowing so hard in my face that I feel like I can hardly move forward. There are times when people honk their horns and yell at me as they ride by. Then there was this morning when I woke up sick with a cold*, and the last thing I wanted to do was exert the energy on my bike to get to work. But an awesome thing happens when you decide to bite the bullet and do something you believe in even when everything in you is crying, saying: "BUT I DON'T WANNA!! WAHH!!" (I kid you not, there are mornings when I mope around the house with a little temper tantrum complaining to myself how I don't want to ride to work that day.) For one, riding my bike to work has gotten progressively easier. I can remember the first day that I rode to work and I felt like my legs were about to fall off. There are times now that I'm almost disappointed at how easy the ride was. So things that are hard when we first get started get easier and easier. Secondly, overcoming obstacles and challenges always adds a measure of fulfillment in our lives, and it give us a greater confidence that we will be able to tackle bigger and better challenges that arrive. It should be also noted that it really blows when you get a flat tire in the middle of a busy street, and some simple bike maintenance (putting air in your tires and greasing your chain) needs to be done almost daily. But even with this there is a great feeling of accomplishment maintaining something with your own hands and not relying on somebody else.

Alright, I think that pretty much covers the negative aspects (at least for me), of riding a bike. Now let's see why I think it's a no-brainer to make the choice EVERY DAY** to hop on my bike and pedal off to work.

1. Riding a bike SAVES MONEY. Duh!! That's what this blog is all about, and really this is the one thing that consistently gets me back on my bike every day. How much money does it really save me? Probably more than you'd expect. Let's look at the bare minimum of what it actually costs to drive a car: The government puts the costs of fuel, maintenance, and depreciation on a vehicle at about $0.50/mile. Let's say we drive a more affordable and efficient car and end up at around $0.35/mile. My commute is about 20 miles round trip, so I'd spend about $7/day, $35/week, $140/month, $1750/year. On top of that, LeAnn and I share a car, so we save about $60/month on car insurance, or $720 year. We also avoid the dreaded personal property tax on that vehicle, which we'll say would be a reasonable $150/year. So, in general, we save about $200/month and about $2500/year. That doesn't even take into account the initial cost of buying a car, which we'll say is about $10,000 for an economic, low-mileage car that will last us for 10 years. What would happen if we instead decided to invest all that car money into our financial freedom? Well, if we take the initial investment of $10,000 and sock it away in a retirement/investment account, and then continue to make $200/month contributions to the account and we get a conservative 7% return on the money, we could have $55,000 after ten years, or $110,000 if you let that money sit and grow for another 10 years after that! Ride your bike for ten years and invest that saved money until you retire 40 years later and you'll have yourself a half million dollars! And you can add on top of these financial benefits the reduced health costs associated with a lifestyle of frequent exercise. As I said before, this is a conservative estimate. If you're able to buy a new truck every 5 years and you make the change to riding a bike you can probably triple those 3 previous amounts according to the amount of money you're able to invest.

2. Riding a bike adds to my QUALITY OF LIFE. You don't have to be a brain surgeon to know that strenuous exercise has immense benefits for our well-being. Since I've been consistently riding my bike again, I get comments all the time about how I'm slimming down. I also have more energy for life in general, and my overall outlook on life is consistently happier. I get sick less, and when I do get sick it's not as bad. I also get to enjoy more delicious food because my body actually needs the calories I'm eating. Riding my bike also provides me with many opportunities to see stars, beautiful sunrises, feel the warmth of the sun, and feel crisp air in my lungs. It also provides me precious time to clear my head and think.

3. Riding a bike makes me DIFFERENT. It may sound strange, but I love doing things that I know are smart that everyone else thinks is stupid. I love to challenge people's mindsets on what is possible. I love that what is  "normal" to me is absolutely nuts to most people around me. I've always enjoyed challenging the status quo.

In the future, when I get a more affordable bike and a trailer, I'd like to start running most of my errands with a bicycle instead of using a car. Things like going to the bank and going shopping are easily within riding distance, I just don't feel comfortable taking my bike to those public places.

*It wasn't actually THIS morning, but it was this morning when I first started writing this :)
**There is one condition that I won't ride my bike in- thunderstorms. In the middle of the summer Jaden is off of school and I drive the car to work the days when storms are probable. I've still had some scary moments riding into/through storms though!!

Wrapping up 2012 - When the Stars Align

It's been a fantastic financial season for the Simmons' household. I started this blog just two months ago and the first mountain we had to scale was our Timeshare debt. At that time we owed $16,000 on that ugliness, and I was able to make the last payment on it the final day of the year. What a reason to celebrate!

And, on an even more positive note, my career at the shipyard has taken another amazing turn: I just got a promotion! I'm working on a new boat with another coworker of mine who was also promoted to supervisor. I'll be working for him as his work leader on the project. I couldn't be happier because this guy works like crazy, takes care of his people, and is a blast to be around.

I've worked hard for the past four years. I graduated near the top of my class and have also had exemplary attendance. But I still know a lot of people that could work circles around me at the yard, and I consider myself just an average guy who tries to do the best he can. And at every place I've worked it's been the same thing: it's not always the most skilled people who get things, it's often the ones who have the best attitude and who continuously strive to improve and better themselves. It's the ones that decide to love their jobs and the people they work with regardless of the negative pressures to do otherwise.

And it's the same way with money too. Most rich people in the world aren't the richest because they have the highest paying jobs. They're the richest because they have consistently made wise decisions with their finances. They consistently were able to separate wants from needs, and they knew that ultimately "things" and "stuff" wouldn't make them happy. And you'll find time after time that it's these people who most feel like "the stars aligned" for them and they ended up rich. But I believe the stars align for the people who are ready for it, the ones that have day after day put in the work and believed that anything was possible if they gave their best.

That's the fantastic thing about being in America. You and me, just average Joe's making an average living, have the opportunity to die incredibly wealthy if we just choose to do so. We can leave a legacy for our future generations, and prepare them to have it even better than we did. Or, we can follow the majority of our peers and live as slaves to debt and consumerism for the rest of our lives, living our final years dining on Spam and off of the pittance of Social Security we hope will still be around.

One of the things I've been working on is my optimism. By nature, I tend to be pessimistic (or, as we like to call it, "realistic"), and pessimism can never take you as far as optimism can. That's why I started this thing off saying, "I am rich", because I know now that financial freedom is not only going to come through hard work and discipline, but also through a mindset that believes it is an inevitable result of one who optimistically hopes for the best for themselves. See, hard work and discipline can only take you so far in money, but optimism has the ability to positively effect every aspect of your life: your work, your family, and even your own personal well-being.

So, what's up for 2013? I'm super excited because this will be the first year that we are able to seriously begin accumulating wealth. The first thing we plan on doing is maximizing out input into my TSP fund (the government’s version of a 401K), which is $17,500 for the 2013 fiscal year. In order to do so, I figured out that I will have to contribute 28% of each paycheck into the fund. After I do this, we need to build up our emergency fund again because I drained it paying off the Timeshare. Then, I have to determine if I want to invest our extra money into our mortgage so that it will be easier to move in a few years , or if we will start buying index funds to build our portfolio, or doing a combination of both. I have to redo all of our numbers after I see what my paycheck will look like after the new TSP deductions.

Most of the country is worrying about the fiscal cliff, but for those of us who are learning the value of money, 2013 can be our most profitable year yet! Let's go!

 

Still Here

Well...it's been awhile. I've got a few pages written on another post that I haven't had the motivation to finish, so I thought instead I could come up with a little something to keep the blog going. 

I haven't written much about practical steps that LeAnn and I have been taking to change our financial situation. We've made a few positive changes over the last couple of months that have helped us to trim a lot of the fat out of our budget. Enjoy!

1. We dropped cable TV. After we did this our bill immediately dropped from $105/month to $55/month. I felt like a complete idiot for ever having it in the first place (we got suckered in by those great opening deals they offer- we started at $70/month before all the promotions ran out). Here a few months later I can't remember a time I wished we had it, and I have no regrets! (have to confess there have been a few times I've missed our DVR) We've started watching Netflix more than we had in the past, and we've also found some great websites that allow us to stream live NFL games that we would otherwise miss. We've also been going through seasons of The Big Bang Theory on another website, totally free of commercials! Better than cable :)

2. One of the things that grabbed my attention the most when I was doing our finances was how much we were actually spending on entertainment. Before we began this journey I looked at one of our months and we had spent over $500 going out!!! It seemed insane. It was my birthday month and it's easy to use your birthday as an excuse for not only blowing money on your birthday but in the weeks surrounding it. We've since cut our budget down to $200/month. LeAnn and I each get $50 for ourselves and we then have $100 for family outings. It seems like plenty of money but I've actually had a lot of difficulty in this! We babysit 2-3 nights a week and LeAnn and I take turns watching the baby and add half of the money we earn to our individual entertainment budgets, which allows us to do a little more if we'd like to. 

3. You're probably wondering about the Timeshare. Well, I got pretty far on the loan application process for my TSP, but in order to finish it we have to get the agreement notarized and I've been pretty negligent in that regard. I was able to put another $1500 towards the loan at the beginning of this month, but we still need to go ahead and finish that off so that we can CRUSH this thing.

4. I've been pretty lucky to get on a job at work with a short window of time in which it has to be completed, which means there is a lot of overtime involved =) I'm also working the night shift which adds a 10% differential to my base pay which is helpful as well. Depending on how the overtime works out I'll be making a few extra grand over the next month.Consequently, I haven't been as concerned about paying off the Timeshare because after this job I'd like to see what our money situation looks like. We might only be a couple months away from having the ability to payoff the loan on the Timeshare without having to take the TSP loan. Although it won't be the most financially beneficial solution, if I can avoid taking away from money in my TSP, it just makes me feel a little bit better. I hate to take away from our net worth and put it towards the Timeshare which could not easily be turned into cash in an emergency.

5. We've started shopping at Sam's club and buying in bulk more often, and this has especially helped me with eating at work. When I ride my bike to work I need a lot of calories to keep me going throughout the day, and I knew I needed  a healthy and affordable alternative to get those calories. Although nuts might seem expensive, they are actually very affordable on a cost per calorie basis. So, I bought a big jar of peanuts, a bag of almonds, and a box of raisins and started making a giant bag of trail mix to keep in my locker at work for whenever hunger strikes. It has done wonders in providing me energy while also allowing me the ability to satisfy the urge to snack. We also bought a huge bag of rice which I've been using to make a big pot of rice that is available as a quick meal or side throughout the week. I eat it almost every day for lunch with beans and veggies of some sort, and if there are leftovers with a little meat. Rice is amazing because it is extremely affordable, but it is also extremely versatile and you can eat it every day without growing tired of it. 

6. Not buying random stuff. When you have a clear goal with what you want to do with your money, it is a lot easier to say "NO" to all the little things that we impulsively buy. At the time these things always seem like a great purchase because they are on sale or because they would just make our lives so much more convenient. I've even erased a lot of things off of my "to buy" lists. For example, I said that we'd buy a second car when we paid off the Timeshare, but we've been making it for a year now with one car and we've been fine. We have to learn that we are already happy and content with what we have now and that adding  more stuff is just going to clutter our lives up more, and will be taking us away from what we REALLY want, financial independence and freedom. 

We've got a long way to go towards my goal of living off of 50% of our take-home pay, but we've gotta start somewhere! 

'Til next time...

Quarterlife Crisis

If today's blog seems a little more intense than normal, it's probably because the music for the Insanity workout is playing in the background. Go wifey!! (and Brandon) I just can't help but get pumped about finances listening to this! 

I think today I'm going to take you back a couple of years in the financial life of the Simmons household. We're going back to a time that I often find myself wistfully daydreaming of - the Simmons family 

Golden Years.

 

The Golden Years  went like this: LeAnn and I had been happily married for a couple years, and had gotten ourselves started off on great financial footing. We were diligently contributing to our Roth IRA, investing all of Jaden's child support into a 529 college fund, and saving a healthy amount of money on top of that. We were making about 30% less than we make now, but our net worth was steadily growing. 

When the housing bubble collapsed, and the $8,000 first time home buyer credit came on the scene, I felt like we had to take advantage of the opportunity that it provided to buy a house. I hated the idea of "throwing away" money on rent (I've since learned a lot more about the pros and cons in regards to renting/purchasing, and might go into it another time), and wanted the opportunity to buy a house and pay it off as quickly as possible, with the dream of living without rent or a mortgage for the rest of our lives. We successfully purchased the townhouse we live in now at what we thought was a great value, with the former owners meeting basically all of our demands. With help from the family, the first time homeowner's credit, and our frugal living, we were able to knock off about $30,000 off the principal on our mortgage in the first year alone! Any extra money we had or overtime I made went straight to our mortgage. The Golden Years were at their peak, and paying off the house in less than 10 years seemed more than possible, it seemed probable. We were flying high! 

Unfortunately, in my obsession to pay off the house, I made my first mistake- I decided that with the way the stock market was performing that I'd rather put the $200 a month we were investing towards the mortgage. I further justified the decision because the funds we were investing in had a very high expense ratio and I wanted to pursue investing in index funds instead when I had the money available. We also decided to send Jaden to private school and began using his child support to pay for that. 

It was around this time that I went through my Quarterlife Crisis (thanks John). I had a period before and after Autumn's birth of mild depression and anxiety that manifested itself in such a way that I thought that I was really sick. I went to doctor after doctor and even though they couldn't find anything, I felt so bad that I was convinced I was either dying or had some kind of chronic illness. In my head, my life could only get worse from that point on and I felt like I had to make the most of what little good time I had left. So, when we decided to get a "new" car that would be able to more comfortably carry around both kids, I decided that the first priority for that car was SPEED. At this time, we had an old Nissan Sentra, which we sold on Craigslist for $1200, and a Honda Civic. I scoured the internet and magazines trying to determine what car would best carry around the wife and kids at maximum fun while still maintaining some utility and affordability. (It also had to pass the boss's scrutinization* = ) ) So LeAnn finally approved of what would become our next car, the Mazdaspeed 3, and the self-medicating began! I was dying anyways, so why not see how fast I could get on the highway going to and from work every day? 

Thing was, I didn't have a $20,000 dollar sickness, and we absolutely didn't have a $20,000 car need. So we had dug ourselves a nice hole of debt. On top of that, our car insurance went up, money spent on gas increased, and the purchase of the time share around this time put the final nail in the coffin of our glorious Golden Years. 

While our income was steadily increasing, our slavery to it increased even faster. After crunching the numbers, I realized we had to do something drastic, and we decided to live with just one car: the Mazda (we also sold the Honda Civic, to LeAnn's brother, who was moving in with us and needed a vehicle). We even tried to sell the Mazda, but were unsuccessful. I ended up buying a $1500 mountain bike, with the intention of riding it to work as our second vehicle. 

Crazy thing is, it turns out that the bicycle was the medication I needed. Almost immediately after I began riding frequently my anxiety and depression melted away. All I needed was some exercise!  If I were to go back, I would have scoured Craig's list and other places I could buy used bikes to get something much more affordable. But buying a nice bike was still one of the best decisions I've ever made. 

The Mazda is still on the chopping block because I'd like to have a more affordable car. But I haven't been able to bring myself to take a possibly large loss on it, and I do still really love the car. It's also uniquely difficult to sell a car when you don't have another one to fall back on once it's sold, and I won't be making any hasty decisions on buying our next car. 

Here's to beginning a new era of the Golden Years, ones that will hopefully stay with us until the end!

*Yes, spell check, scrutinization is a word, even if it wasn't two minutes ago.