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Saturday, December 20, 2014

What to “Sacrifice”?

Posted by Dave on November 11, 2014

The basic premise of any retirement plan, whether it’s at 70 years or 35 years is to abstain from spending today, so there is money left at some future date. The difference between early and a more “advanced” retirement is the level of savings over the accumulation stage of life. My wife and I have chosen 45 as our goal, as our savings rate when we started this plan seemed to allow this to work out.

As people who have read this blog know, I have a few non-frugal hobbies that I enjoy, and my wife loves to travel, also not a really cheap thing to do. These are things that we want to do, knowing that they would be a significant hindrance to our early retirement plans. In order to balance off these relatively expensive activities, we have to give up other “grown up” things.

One of the major things we’ve given up is a “nice” house. We have lived in our house for almost 6 years now and have really done nothing to it. There’s a pretty long laundry list of things we’d like to do to our house that would update our current living situation from “student chic” (builder grade everything from the late 90’s) to something much nicer.

We like the small changes we have made – some new flooring to go over the plywood that was here when we moved in, and some paint that we applied shortly after that. Our next “major” purchase (which should be exciting) will be some matching blinds that will allow us the option of privacy in the kitchen in the evenings (the old blinds fell off and we never replaced them). We would like to take out a load-bearing wall to open up our closed-off first floor, but that would mean giving up a year’s vacation, and right now, that doesn’t seem worth it, for now – especially with winter coming.

When I write posts like this, I realize that these are particularly first-world problems – what “cool” stuff are we trading off in order to not have to minimize the number of years I have to work? These are really small issues to have, but still is a topic of conversation in our house. We are fortunate to have good paying jobs that even afford us the option of weighing these kind of choices.

Realistically, if we cut out doing everything that cost us any money, we could retire in a very small number of years, especially if our retirement plans continued with a really frugal way of life. Our issue, and the reason why our retirement plan is taking us 15 years instead of 5 is that we like the “extra” stuff.

What have you given up to achieve early retirement? How did you decide what expenses to keep?

Winter Activities

Posted by Dave on October 21, 2014

As I’ve written previously, my wife and I basically hibernate in the winter – spending most of our time holed up in our house and staying as warm as possible. Last winter, we noticed that we barely socialized at all. Although we’re mostly okay with that, it is nice to see people the odd weekend, so this winter we’re going to make more of an effort to hang out with friends on a more regular basis. In the summer, I have a built-in excuses to hang out with people – either through golfing or by inviting people over for barbecues and to visit on our patio. This winter, we needed new plans.

I really like to cook, so that’s one way to get people to our house – have a Pad Thai night, which most people usually enjoy, and is quick and easy to cook for a few people with most of the prep work done before people show up. Tacos are also lots of fun to do – getting the cast-iron pan glowing in order to make home-made masala flour soft-shells (our favourite).

Another activity that we both enjoy is boardgames. We’ve found a few couples who share this interest, and it’s mostly making the minor effort to set up a “play-date” together on a Friday or Saturday night to get together. Right now, we’ve found that good “couples” games are Settlers of Catan and Cards Against Humanity. I prefer more strategic games, and own the Euro-Games Agricola and Carcassonne. The games I like are significantly less social in nature, and require a lot more planning and long-term strategy than the 2 previous games, but are an excellent way to pass a cold winter afternoon or evening.

I also seem to read much more in the winter – attacking many more of the almost infinite books I’ve placed on my “To Read” list on Goodreads. Additionally, I try to increase my days in the gym from an average of two to three days a week to three to four days, attempting to balance my lack of movement from spending time indoors.

The thing that most of the activities need to have in common for us is that they’re cheap and don’t require us to be outside at all. We don’t like the cold, but are hoping that winter will go more quickly if we share our misery with our friends.

How do you plan to pass the winter?

Using the Information

Posted by Dave on October 14, 2014

I was talking to a couple of guys at work over the past week – they knew that my wife and I had paid off our mortgage earlier this year and had a lot of questions about spending. Both guys seem to be living paycheque to paycheque, and have trouble making it through all of their bills by the end of the month. I explained how my wife and I set up our finances and how we prioritize our spending on a month-to-month and annual basis.

One thing that I told them might help them find “holes” in their finances would be to use an app and track every dollar they spend for a month or two. There are a ton of free apps, and a lot more for under $5 that have easy tracking of expenses along with weekly and monthly reports and comparisons. From the standpoint of someone “not knowing where the money is going”, this kind of thing would be really helpful.

Personally, I’ve never used budgeting software – almost every cent I spend in a month is on my credit card, so I can easily look at a statement and see where my paycheques have been spent. What I have used in the past is diet tracking apps on my phone. I’m 6 feet tall and weigh somewhere between 175 and 180 lbs at about 15% bodyfat (based on the handheld tool I own). I have this goal of getting my bodyfat percentage down under 10% to demonstrate that I have abdominal muscles.

I used the calorie tracking app consistently for a few weeks – tracking each and every thing I was eating….until I didn’t feel like doing that anymore. There was a weekend where I knew I wasn’t going to hit the caloric goals that I was supposed to, in order to achieve the lofty goal I had set for myself. So, I didn’t count calories that weekend, and then went back to tracking during the week when my diet is much healthier and stable.

What makes this kind of tracking stuff work, is actually using it. If I had a day where I was supposed to eat 2,000 calories and basically ate a whole pig instead, tracking anything isn’t really all that beneficial. Similarly, tracking expenses doesn’t really do anything if you aren’t willing to give up spending on things that you find are causing you to run out of money at the end of the month. The tracking doesn’t really work if you don’t use it.

Do you track anything on a daily basis? How do you stick with the tools?