Month: June 2019

Why you should take long road trips with your spouse or significant other

If you have at least one kid, you know that your time is limited. Your day is full of requests from sippy cups to “take me to the park” or “can you drive me to my friend’s house” if your kids are older; we are actually just breaking through that one.

Now, with four kids life can really feel upside down at times. Very quick you learn that even using the bathroom for a few minutes is a privilege. A moment that allows you to think and straighten your thoughts quickly before breaking up the next fight or accommodate everybody’s requests.

In the midst of all the commotion you might find yourself isolated from your spouse even when she or he is just a couple of feet away. Sometimes it’s hard to find he time to talk and when you do you may be so freaking tired that it might simply not happen.

But how about if when your conversation finally happens you realize that your spouse is living the FIRE dream? Quite settled in FIRE-ville trying to find purpose in life, pondering what is important for her and talking about causes that are meaningful to her?

Here is the best: She doesn’t even blog or reads about finances. She has never visited Mr. Money Mustache corner or listened to any podcast! Your money or Your Life says nothing to her!

It seems like my wife is living the FIREd life

It’s summer 2019 and this our third summer sending our oldest kids off to camp. Actually we drive to drop them off. This year trying to be economical and sticking to the budget we decided we could keep two kids with the grandparents as we took the trip 5.5 hours away, drop them off, turn around and get back for a total of eleven hours in the car. We thought it would be a good time for us to talk and catch up with no kids in the mix.

We started the trip talking about random things, about, of course, the kids, but quickly the conversation turned into our retirement plans.

If you have read some of my other posts you know that I am planning on retiring in 2029. You can read My Blueprint and find out the details.

Om my end, I really don’t want to stop working but I do want to work for myself. I want to free myself from the shackles of working for money. I want to not have to worry about pissing off my boss because the scores are X and not Z. Or because Jimmy is reading 105 words per minute instead of 106; therefore, he is not college and career ready.

My wife though, is a different story. She gave up her then dreams of teaching as soon as we had or first child. She had just completed her master’s program through UIC (University of Illinois at Chicago), had a full-time teaching position and after a month of dealing with daycare we decided we couldn’t do it anymore. Leaving our baby in the hands of someone who was doing what we were meant to do as parents, as a business didn’t make sense anymore. And so we went from having two professional salaries of about 36K each, to just that; thirty six thousand dollars. We were barely having enough to cover our mortgage and basic expenses. No more money to eat out and frivolous spending. We were getting donated baby clothes through a nonprofit organization. We were tight.

My wife didn’t work anymore out of the house. Our second kid was born and it wasn’t even a question. She wanted to have that special time of being there for them and we simply made it work. We went from two cars to one, to cut expenses in transportation, made our own bread, granola, did some canning, lots of DIYs were on me, and the bottom line was it worked out. We even survived 2008.

Now our kids are older, but we also have two more, with youngest being almost KG age. This may be a turning point for her to decide if she wants to go back to work or continue staying home. We both agree that just because the kids are all in school doesn’t mean that there is no need for anybody being home and regroup or plan the logistics of the day.

Regardless, our current situation and opportunity to talk during our trip opened up a window to think about possibilities. My first thought was, would she want to go back to the school system and be a teacher? She immediately confirmed what I thought with a quick “NO.” What came after that was what really surprised me. In her first few sentences she made clear that she wanted to work on something where she could help others and didn’t have to have a boss breathing down her neck. She said she wanted to work for cause that she really believed in.

I found all the things she said fascinating because after doing so much reading and pondering about FIRE these are very valid points that are important to find purpose in life and consequently bring happiness. She wasn’t even considering a job per se where she could earn an income. She was even thinking about some volunteering time working with kids at a hospital in our area.

My big Aha! Moment

As the conversation continued, I let her know how cool it was that she had the freedom to think about work in those terms. Money in the form of salary was not a concern, she wanted to do something she believed in, something she found purposeful, with flexibility, and she wants to help others.

I told her immediately “you are making me feel what it must be like to be FIREd. That is the FIRE mentality!”

After our conversation there was a pause in me to digest all this, and almost to rejoice the moment.

Granted, financially speaking we are not there yet. We still need my paycheck. BUT we are making all the changes and putting in all the work to make things happen in 2029.

In retrospect, as I read other people’s stories and learn more about finances, I can see how trying to FIRE may be frustrating. We want things to happen quick. Sometimes we make changes and they don’t seem to make any difference or as significant as we wish. But changes in our behavior as consumers and in our relationship with money do make a difference.

In our case, thanks to small changes we have gone from receiving clothes donations for our first child to being potentially 10 years away from retirement.

Which also brings me back to one of my favorite quotes:

“A journey of a thousand miles starts with one step”- Lao Tzu

Practicing gratitude

Along with all this reflection is the mindful practice of being grateful for what we(You and I) have.
I could find things I can complain about and feel sorry for my self because I am not FIREd yet, or I am not traveling the world like many people in the FIRE community. However, I choose to see my glass half full.
When I think about work, sure I would love to live an endless summer adventure and be fully retired. But when I think about our current situation Ii couldn’t think of a better scenario. My wife has never had to work and she has been able to spend one of the most precious times of her life with our kids. She is under no stress of putting up with a prick as a boss threatening to fire her and jeopardize her family financial stability. She is happy. And our kids love having mom home.
On my end, I am the bread winner but I get to spend the summers with my kids and all other holidays. When they are in school , I am in school too. I work until 3:30 PM; sometimes 4:00. My commute is ten minutes.
Out of the 52 weeks of the year, I work about 39 of them. 185 days a year. In other words, I can kind of consider myself part-time retired. I work half of the year.
I could certainly leverage my way into more real estate to make things happen quicker and open the flood-gates to a world of stress trying to FIRE earlier but I really do not think the trade off is worth it.
I am saying all this not with the intention of bragging or my life to be a point of comparison with yours. That’s the worst we can do.
Rather I invite you to reflect and always search for the silver lining in your life.

I would love to hear what’s your ideal work situation once you reach financial independence? How long will be your path to reach your number? And please share some of those silver linings in your life as you pursue FIRE.

How to get your car insurance for almost half price

Do you ever find yourself frustrated because after reading so many articles about saving money you realize that you are already doing all the tricks under the sunt? Sometimes I wish I was the latte drinker, so I could just cut it out and save a ton. We budget, plan meals for six, get down with almost every DIY out there, side hustle, etc, etc, etc. At the end, we feel like there is no much more we can do other than keep riding towards FIREville slowly and steady.

With that said, sometimes you do hear advices from different bloggers and podcasters in the FIRE community that stick with you and kind of become part of your toolbox. One of those tools that always has stuck with me was the words of J. Money at budgetsaresexy.com who I heard once saying “make sure you challenge every expense in your budget.” Yes, budgets can be a pain at the beginning but once you got yours down it becomes the most eye-opening experience financially speaking. Not only you realize where your hard-earned salary is going but it also helps you to project how much you will need in future months, as well as it can give you a starting point in your FI journey( I did it to figure out My Plan)

 Anyway, 2018 was a great year for my family. We managed to stay completely out of credit card debt, and we got used to budget and track our income. We also managed to pay cash for a brand-new roof and keep our saving ratio untouched.

We have gone through each item in that budget scrutinizing how much we are spending in each category and how we can either cut back in expenses or tame the wildest beast called “miscellaneous.”

Now, some expenses are a true pain in the Arsch. Why? Because they are time consuming. They require research, looking up terms and lingo that you are not familiar with and sometimes you even do some reading your state laws to make an educated decision.

For a while, I have had my eyes on our car insurance. It seemed to me that $100 a month, $1,200 a year for two cars was too much; just as a speculative observation. Regardless, I was thirsty for some more savings and $100 a month seemed like an opportunity to challenge. But again, I needed time to do my due research and shop around for better options. I didn’t want to call my agent without knowing exactly what is in my coverage and end up confused and intimidated with all the jargon.

With the arrival of my teacher summer break this was on top of my priority list.

As I mentioned before we were paying $100 monthly for two cars. We have a Corolla 2004 (177k) and a Dodge Caravan 2005(140K). Our lives unfold within a 15-mile radius. We haven’t had tickets in more than 6-7 years. My expectation was to lower that bill to maybe $80. That would have made me very happy.

The Results

Starting July 2019 we will be paying only $40 a month for both cars, which will save our family $720 yearly. Another added bonus this was that we realized we never added our new (used) car to the policy. That would have been a huge disaster if one of us would have gotten into an accident!
Let me explain. We used to have a Grand Caravan that died with a transmission problem and we went on to buy another used Caravan; notice it’s not “Grand” but just Caravan. Since the insurance card still said Caravan the needed change went unnoticed. We have 4 kids, super busy tending to them and we missed. No excuse though. It was a terrible oversight.

This makes reflect on the importance of looking carefully into all these things. Many times we all tend to pay things as we go and we don’t question much.

It’s scary to think that if we would have gotten in a car accident with that car, we could have been found ourselves in a predicament with no insurance to cover for damages, potentially sued, etc, just because we did not make a simple phone call to change it.

Straightening this up is probably the greatest saving of all…

Slaying $100 beast: What we had and what we have now…

Well, in terms of liability everything stayed the same. Our coverage for our liability under “Bodily Injury” stayed 100K for each person involved, 300K each occurrence. This is what my coverage would be if I get in a car accident, someone gets hurt. My insurance will cover that amount.

Under property damage, which would pay damages to other vehicle I wanted to cut back. However, it seems to be a preset with the “Bodily Injury” coverage I mentioned before and there was no additional cost. So I kept that. My reasoning for trying to cut back was the fact that the average cost for a brand new vehicle in the U.S. is 36K. I figured, I could go with half the coverage for property damage (50K, rather than 100K) and save some but it wasn’t possible. So that stayed at 100K as it was.

The Truth

I care less about our cars. That is the bottom line. I don’t brag about my cars or are a topic of conversation unless I am talking about savings, FIRE or if I am bragging about how many miles they have; now that last one is a badge of honor,

To me our cars are temporary vehicles to go from point A to point B. They are old cars that have served us well, but I have no emotional attachment with them.

This came up as I was talking to our agent and we were going through what they call comprehensive coverage. If you look at your policy, which I highly recommend, you will find a section that says “Uninsured Motorists Insurance Limits.” Under this section you may find the comprehensive insurance coverage; at least with Allstate that’s how they call it. Basically, it means that you will be covered for some categories in the given case that the other driver’s insurance is not enough to pay.

Now, what they call comprehensive coverage is kind of camouflaged in the same section. Our agent explained to me that this is what would cover us if a branch falls on the car and breaks the windshield, or the car is in a hail storm (it just happened a week ago), the car gets broken in or hit by a lightning, etc. Well, the problem is that there is a deductible that comes with that coverage and it is $500. It is also costing us $20. Not much, but I like how $20 look in my account.

The other money pit was the auto collision insurance for uninsured motorist. In other words, if I get in a car accident and the other driver is at fault and his/her insurance is not enough to cover my damage my insurance will kick in. Sincerely, I am not interested in this for the same reason I mentioned before. We have old cars. The most we could get for our cars is around 2K and this coverage was costing us $114.

Finally there was the “automobile medical payments” for underinsured motorist. This works in a similar way as the “auto collision.” In the given case I get hurt or one of my car passengers if the other driver at fault is underinsured to cover medical expenses my insurance would kick in and over my medical expenses. This sounds great and plays with your emotions too, but we have a terrific insurance policy with my school district. If I end up in a hospital due to a car accident my health insurance would pay. So, auf wiedersehen with that too!
There were few other fees that were eliminated with the comprehensive insurance change.

So, our new car insurance monthly fee will be $40 instead of $100.

Latest update

Since I started writing this post and looking into the numbers something didn’t seem quite right. I was told I was going to pay $40, but looking at the statement for the next billing cycle it says 320.58. Divided by 6 months it comes up to $53. $13 difference.

I had to call again to clarify and this is what’s happening. For the next two months we will pay $40, after that it will be $53.

Bummer! Still god savings but not as good as it once seemed.

However, in the conversation my agent told me that I could get a 10% discount if I pay six months in advance instead of installments. That would bring my premium to $288 for six months ( $48 monthly in my budget).

But wait there is more. If I go paperless, they will give me another 5% off. The premium would be $272 every six months ($45 in my budget or insurance bucket).

Car Insurance Before After
Pemium $600 $320
10% Discount for paying 6 months   -$32
5% Discount for going paperless   -$16
Total $600 $272
Six months savings   $328
1 year savings $656
Cost opportunity for 20 years at 8% return $32,421

Side story

As I was looking into all this, I had to go into our van glove box to get the policy number from the insurance card. Sure enough the one I found was expired. I told my wife to make sure she had the updated one. At some point she had to leave, the kids are fighting over who sits where, who walks out the door first, etc. She forgets about the card.

Five minutes later, she calls me to tell me she was pulled over because one of the headlights wasn’t working and she has no insurance card. Really? I couldn’t make this up.

Luckily, since I went through all the trouble of creating for the first time my login with our insurance company I was able to pull it up right away on the screen, take a picture and text it to her. We got only a warning ticket.

Can we call that a $150 savings?

Conclusion

This is still unfolding and hope the savings remain the same through the year.

The discount was not as good as I thought it was at first but saving $656 a year I think it is still good enough to be happy about it. I think it is terrific. Especially when I never can find where to cut more than what we already cut.

The lesson though, is we all need to find the time within our busy schedules to scrutinize our expenses. There are hidden fees everywhere, and we just pay them sometimes because we don’t question them in the first place. We get used to paying the same amount month after month and we never look back to unveil hidden fees or things that we simply do not need or want to pay for.

Fees that sometimes are disguised with a “recurring fee” label or “billing origination fee.” A cloud synapsis fee or any other bullshit they can come up with to charge you more. Companies know exactly how to play these word games and appeal to your emotions to achieve their ultimate goal: take the most they can from you.

Another lesson from all this is the importance of staying on top of anything that has potential to become a legal issue or lawsuit against you. All it took me to figure out exactly what I have in my coverage was a phone call and a bit of time. Logging you’re your insurance company website will provide you with most of the information you need to know.

Last but not least, like the cool dude with the mohawk ( J. Money, that is) says: Challenge every single expense.

Have you been able to rack up any good savings after reading other blogger’s recommendations? Feel free to share any mega savings you’ve gotten or over-sighted for years.

*** Disclaimer: This post is simply my opinion based on my own experiences. By no means this intends to be a recommendation of what you should do. I am not a professional or financial adviser and take no responsibility for other people’s actions after reading this. Seek professional advice.***

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