Category: Uncategorized Page 4 of 6

First trimester went by and we are still plowing through.

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On April 7, 2019

In Uncategorized

Missed in action

When I first started this blog I want it to be my accountability piece. My source of feedback and inspiration to continue my journey to Freedomville- AKA FIRE.

I had so many things in mind I wanted to write about but never had the time. I barely managed to write some of those ideas and draft them so that I can come back to them at some point…

Life threw a curve ball (Very personal here, feel free to skip this section)

My family has been through a whole lot of stresses and taking on more responsibilities.

As you know, if you have read some of my other posts, we are a big family. Two adults and four kids, plus our dog. However, last year my mother joined our family also. She came in April of 2018. She speaks no English and had never experienced winters in the Midwest.

We went through a lot! And my family life got turned upside down. Moving to a country with a different language and experiencing the polar vortex in the midst of your 70’s is not easy task. Neither it is to leave your country at the brink of complete economic collapse. I hope I never see myself in that situation. Feeling like you have worked all your life, accumulated enough wealth to live for the rest of your life and suddenly you have nothing. Just fiat currency that’s easy to weight than to count it when you are going to buy food.

Our family dynamics were thrown off balance. We had to figure out many things for her such as health insurance( More on that later) and a new purpose in life. Her stay with us made me reflect a lot on what would my life be and what I want it to be when I retire. The critical aspect of having always a purpose, which may well be a hobby, a passion or desire for learning a new skill. All these experiences made me think deeply about the importance of remaining mentally flexible as I go through different stages of my life.

Some of the challenges we faced had to do, first of all, with space. We own a 1,800 Sq Ft home, which we feel fitting for us. However, three bedrooms for my wife and I, four kids, and now grandma left little room to not feel a bit crammed or in need of a small space to have a breather. Added to that, one of our kids is in those pre-teen years, which adds energy to any sort of stress.

We were able to find a job for her with very flexible hours, in a non-stressful environment and doing something she loves- A dream come true, right?  But she was terrified to drive and so we ended with a combined round trip commute of 3 hours. My wife would drive her in he morning, go back home and I would pick her up at the end of my day. Each of us took one hour and thirty minutes each days she worked. Three hours combined added to our regular day of dealing with our kids, job, classes, etc. Most of the weeks she worked three days which became extra nine hours of driving.

All these little things also created extra expenses of gas, food, and an increase in utilities and a huge toll on our stability as a family. My wife and I were left with very little time to even talk. And when we had the opportunity to talk without kids or my mother we were so freaking tired that we would just crash. I definitely go to know personally what people refer to as “decision fatigue.”

At some point I even flirted with the idea of forgetting about our financial goals and procrastinate them. But we didn’t! We managed to have those few money conversations and to stay the course to FI.

2019 Financial Goals

As we set sails at the beginning of this year 2019 we decided that the best we could do at this point is to redirect some of the contributions we were using towards my 403B and get rid of my wife’s student loan that we have been paying now over 12 years.

We still contribute to my 403B, but instead of doing $350 per pay check, we are doing only $100 for the  time being. We took a HELOC on our rental, lowering the interest rate from 6.5% to 4.5% and we are expecting to kill it by 2020.

The student loan balance is 22K, and so far this year we have to increased our payment from $230 to $716 a month. Fourteen payments of $716 will amount to $10,024. Almost half half way there and…and…we already got three of those payments knocked out; it’s easier when you see the journey to your goal chunked down!

Tax return

We are also counting on a decent tax return. We received our 2018 return and stashed it away. We received almost 10K!!!! 5K will go to the student loan and the rest will sit in cash as a small emergency fund. So far the money is just sitting there as I scan the horizon of possible unexpected expenses, but I can’t wait to pull the trigger and put down all that punch-in-the-face money towards the loan.

Once we receive our tax refund for 2019 we will do the same again. Split it and completely pay off the loan. We will have to increase my payments a little bit to cover a small remainder. I am estimating about 2,000 left that I will have to make over in the next 10 months, which we will get taken care of one my salary goes up in August and we switch our health plan from PPO to HMO( That alone $274 savings a month).

Another, BIG FINANCIAL goal for 2019 was to max out my payment with my school district. So far I am just 3 credit hours( One more class) away. This was a $880 expense that will result in a 6K increase for next year, starting in August; not a bad deal.

Conclusion

Things are going as planned or even better. I continue using Mint as my quick snapshot but I find using spreadsheets is critical to stay the course.

We are trying to reduce debt and liability by killing the student loan and widen the gap between my income ( I am the only income and I am a teacher) and our expenses.

I am also trying to maximize my income. If things work well, by August I should be approaching the six figure milestone.

By being frugal and mindful about our spending we are plugging the leaky money holes. We tackled the ups and downs of expenses, pay for professional development that will bring more money in through my job, managed extra expenses with a new family member and we even booked our summer vacations at our favorite camping spot.

Our cash flow after glorious March and its 3 pay days is looking like this:

small budget retirement spreadsheet.

January and February were a bit tight but March was a relief. August will be the next month with 3 pay days.

As I was typing this post my oldest daughter said to me “didn’t we have more money before we moved to this house?” -We have been living at our current location for three years.

To which I responded:

“Honey, we used to live from paycheck to paycheck, and many times we had to use credit cards to cover expenses.”

NO MORE! It feels so freaking good to be out of that rabbit hole.

We still have a wonderful life. We have each other. We have health. The kids get to do their activities, and I go to work every day walking a little taller knowing that my years at my job are numbered. We have a small emergency fund, a rental and a bit invested. Couldn’t ask for more!!

I also, finally, figured out how to work my property value in Personal Capital and although my net-worth is mainly equity three years ago it was a negative.

This is how we are looking like these days:

Personal capital

This might seem small for some, but for someone who came to this country(U.S.) with only $800 in his pocket few years ago, this is incredible; at least for me.

Forever thankful to the FIRE community and all the podcasts and blogs put out. All the information given out for free.

I hope my story inspires others as I have been inspired by the so many stories I read every day.

I welcome any suggestion or take-away from your first 2019 trimester. Feel free to share your struggles and thoughts about this first quarter.

 

 

Setting up new financial goals and resolutions in 2019

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On January 8, 2019

In Uncategorized

Reaching financial goals is possible

This is a great milestone for our family and we definitely feel like celebrating!!!

The beginning of a new year is usually kind of slow and somewhat filled with uncertainty; especially when you are in debt. My family and I used to land in December with at least 2-3K added to our credit card and gasping for the relief of a still far-away tax return.

This year that is not the case and I am extremely proud about it. I feel in charge of my finances! Empowered because I feel like I know what I am doing and nothing is left to serendipity. It has not been all roses and certainly my wife and I have had some moments of tension but here we are. We even managed to get a brand new roof on our home without any financing and credit cards are still clear.

More importantly though, we have come up with a plan to hit some serious financial goals in the near future.

In the past few years, I have been contributing regularly to my 403B. However, if you have read anything about how much money you need to retire and reach FI without consuming your savings, you may be familiar with the 4% rule; which basically says that you need to save enough money through investments so that you can safely withdraw about 4% of your savings yearly. In a nutshell, if you want 40k a year you need about a million dollars. Another way to look at it is by saving 25 times your yearly expenses, which will add up to the same amount. 25 times 40k= a million dollars.

Well, in my case and my situation reaching an amount of a million dollars by just investing in the market is not very likely; plus, as I have said before, in ten years I want to be ready to call it quits with my job if I want to and potentially dive into other endeavors and interests of mine. Including sharing more with my family.

In order to do that, the most likely way to do it is through real estate; especially since we already got our feet wet as landlords. We have been renting our first home for three years now and what once seemed to be a mystery of life I can sincerely say it has been the best financial decision and risk we have embarked on as a family.

We not only profit through the rent, but we also benefit building up our property’s equity and shelter our hard earned cash through the art of yearly depreciation.

For a while, we had thought about using some equity as leverage to buy another property but we have discovered through this financial journey that we are conservative investors and would prefer a more secure path. We like to sleep well at night.

So far the only debt we have is our home and rental mortgage. Plus a pesky 22K student loan that has been juicing us for a while (easily 13 years) in $300 monthly payments.

Therefore, the plan is the following: I already dropped my 403B contribution from $600 monthly to only $100. We are increasing our student loan payment from $300 (minimum payment is $268) to $716. Added to that, we are putting 5K down from our 10K tax return. The other 5K will be stashed away as an emergency fund for our rental. By March next year, we will kill the student loan using part of our tax return, and free up the cash we were using towards it. Finally, we will be able to buy a brand new car!!! Just kidding.

After paying that debt we will have $1016 free and clear available for our next debt pay-off: Our rental.  The mortgage balance on that property is 122K. By next year after we are done with the student loan we will add the $1016 each month to the principal and regular payment plus a little extra from the monthly rent cash-flow. I calculated our payments at $2600 monthly so that we can pay the mortgage off within 5 years.

This coming school year 2019-2020 I will be getting another raise of about 6K, after finishing 8 credit hours in course work.

Once the property is paid, we will save $1218 in monthly payments. There will be about 21K free and clear coming in from rent, plus $1016 saved from the student loan we would have already paid off. All this combined, would total approximately $47,000 yearly, extra. That is incredible! Literally, it is hard for me to believe that this is at my reach in relatively a short period of time. As a teacher, the only source of income and father of four, this is like having a second job while sleeping.

For this reason, I have given up on the idea of continuing pouring my income into the market for now. I would need to save over $1,000,000 to draw that kind of money from the market. I still have a small contribution going to my 403B and I am planning on using my yearly salary raises to increase it, but for now, due to my age (45), the most efficient path to building wealth, in my opinion, is through real estate.

At the time of reaching these goals, I would still have 4 more years before I reach 55 and I am able to retire( taking a huge penalty). At this point, I will re-assess my situation and explore the idea of getting 2 or 3 more properties in the same area.

I feel that by having the safety net of the first property, saving and acquiring some other properties should not be difficult every other year.

January never excited me this much, but 2019 certainly is different!

Any word of wisdom is welcomed in the comment section. Do you have any financial goal that you are working on or that you have reached recently?

How much do you spend to work?

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On December 13, 2018

In Uncategorized

 

 

One of the expenses that many times go unnoticed is what we spend at our workplace. Depending on the kind of job you have you may have to comply with a specific dress code or look, that demands a lot from your budget. Also, the more people you work with the more opportunities you will have for birthday celebrations, secret Santas, Halloween boo’s, Go-Fund-me’s, baby showers, retirement rendezvous and an endless plethora of reasons to potluck.

I don’t want to sound like a Debbie Downer but I just can’t figure out how people can afford the congo-line of celebrations. Seriously! One thing is someone having a heart attack and you along with some co-workers lend a hand to the family to cover bills with a Go-Fund-Me or throw a baby shower here and there, but holy cow can it get expensive!

I must look like the biggest jerk, but some time ago I decided to be very selective with my contributions at work. Boss’s day was the first one to go. I am sorry, that’s like the biggest brown-nosing celebration. Why would I spend money on someone who says hi when she/he feels like and makes 3 times more than me?

Baby showers, I am sorry but they are also very particular. Usually is young people, recently hired at your workplace, you really haven’t even talked much to the person and you are asked to contribute for a shower. The same goes for weddings! Why do we have to be gifting for weddings too if we are not even invited?

Folks, it gets expensive! When it comes to holiday cards and a simple $2.50 card can do…No! We have to go for the $10 card with freaking music and lights or it is just not good enough.

I can easily spend over $1000 a year in cards, flowers, pumpkin day, tomato day, go-fund-me’s, showers, weddings, school fundraisers, meal trains, adopt a family for Christmas, coat drives, food drives and many more. Simply, I can’t. I am all about giving, but I do think that we need to conquer our finances before we can help others. Furthermore, I believe that helping doesn’t have to come in the form of money. Help, can be in the form of guidance to others, listening, caring for others or simply having a genuine relationship with someone that goes beyond Hallmark cards.

Then, there is also the social pressure of the attire for work. In that regard, I think women have it worse than men. It seems like women feel more compelled to dress up and look the best possible at work. As a guy, I watch in awe how some of my co-workers talk about just running into great sales and simply buying something because a deal is just too good to pass. Well, in my experience when a deal is too good to pass, it is worth it waiting it out and think it over. Most likely it is actually too good to be true and consequently, it’s better to let it pass. As far as sales go… the best sale is the one you just don’t buy; great savings that way.

I firmly believe that in order to eliminate some of the expenses at work you must look at your job as a business. Your job should be an extension of your responsibility as CFO of your money. It makes no sense to go to work for $100 a day if you have to dress up in $100 outfit. Or if you must have enough outfits so people don’t notice that you are wearing them more than once; who cares? You shouldn’t.

If you wear $100 outfits every day, go to work on a 30K ride that conveniently you switch every 7 years, join every potluck and celebration at work, pay for daycare for 1 or two kids, pick up your coffee at the drive-thru, buy lunch and take another coffee for the commute home I just can’t imagine what is left of your paycheck! Debt?

Even if you have a nice six-figure salary to cover all this, you are simply throwing money away that could certainly buy you years or early retirement. No question about it.

On my end, I try to look professional and clean. With that said, I own about 3 pairs of work pants that I use through the whole year; each one about $15 a piece. Sometimes, I wear the same pair of pants through the week. All I do with those pants is go to work and come back home. Once at home I jump into my shorts, sweatpants or jeans. I absolutely do not care if people talk about me wearing the same pants. I do change my underwear on daily basis in case you are wondering and shower daily; so no concerns there.

I also have a collection of about 10 shirts that I use regularly, where some of them are as old as ten years old but still look nice. Every year when we go on our summer vacation I hit a store in the town where we camp and buy a few shirts for about $10 a piece.

I estimate that my yearly clothing expenditure orbits around $150. Depending if I need shoes or not. I try to buy shoes for under $60 and they must be built to last at least 2 years.

To illustrate my point I wanted to make a comparison between what I save going to work compare with a typical co-worker.

Itemized expenses Go with the flow & spend as you go yearly expense Small Budget mindful worker yearly expense
Car paymentx12 $3,600.00 $636.00
Boss’s day contribution $10.00 $0.00
Baby showers $10.00 $0.00
Wedding shower $10.00 $0.00
Meal train for someone sick $10.00 $0.00
Students/kids fundraiser $10.00 $0.00
Secretary day $10.00 $0.00
Potlucks( Fall, winter, spring) $30.00 $0.00
Clothes $50 a month, being conservative $600.00 $150.00
Coffee (2)x(5 days)x(4 weeks)x(12 months) $2,160.00 $0.00
Gas, a small car using a tank a week for $25×52 weeks $1,300.00 $1,300.00
Lunch (5 days=50)x(4 weeks)x(12 months) $10 ea $2,400.00 $0.00
Yearly $10,150.00 $2,086.00
Plus 2 $10 contributions for the year

The $636 for car payment comes from my calculation, based on our last purchase of a used minivan for $2,000. For gas, I am using the same amount for both scenarios. However, my proximity to work allows me to get almost two weeks out of one tank. Likewise, I do work with people whose commute is 40 minutes for 20-25 miles away; bad choice for the budget.

Another item that I am completely low balling is clothing. I constantly hear coworkers talking about the clothes they buy, and for sure they brake the $50 mark.

All these things are critical in order to save money and fund investments properly. I firmly believe that if I go to work and I am being paid for what I do, it is a must to make money; as much as I can. In order to increase earning I have to options. I can either get paid more or reduce my expenses to maximize my earnings. Ideally, I would do both.

Someone recently told me, “but you are a teacher, isn’t it all about the kids?” To which I responded, ” I give everything of me when I am at work, and enjoy very much my job, but I go to work for money.” Don’t you?

I would love to hear other people’s opinions on the subject and how you handle expenses at work.

Work party 2

 

buying a used car

Should I buy a brand-new car or a new-used car?

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On December 5, 2018

In Uncategorized

Ohh cars! You gotta love them. How not to? They are such an art! They are designed with such ingenuity. They represent a summary of generations’ hours on end of trial and errors, trying to achieve efficient engines and fuels in order to combust progress and economic growth. Their interiors become every day more and more comfortable, to the point that their seats look more appealing than our couches. They are also loaded with technology that allows you to navigate the radio airwaves or demand phone calls with the command of your voice; as long as you don’t have an accent like mine, that is… a plethora of bells and whistles such as cameras to help your driving, integrated navigation systems so you don’t forget where you grocery shop, heating systems to warm up even the parts of your buddy that never see the sun, safety airbags ready to save your life, and in case you forget to use the brakes they got you covered… Gosh! How not to love them?

Well, unfortunately, it doesn’t matter how much we pay for a brand new car and how new it is, the fact is that it will break down sooner or later. Having a brand new car is no guarantee that it won’t break down, or even worse that it won’t be involved in some sort of collision where you may total your investment and get just a fraction of its cost after the insurance company makes the depreciation calculation. Now, that might be the argument for some people to go ahead and purchase a brand new vehicle and enjoy the perks of a warranty for the first two years or so, plus a hefty insurance policy, just in case.

However, when you calculate the number of hours of work you must invest, and consequently hours of your life, to pay for …what many consider such an investment, you might reconsider your spending.

According to Carfax and similar sources, a brand new car is bound to depreciate 15-20% in the first year of ownership after being driven out of the lot. Twenty percent! To add insult to injury, long gone are the days when you could find a simple car with just the basics. Now with all the bells and whistles that cars are sold with, it is extremely difficult to find a family car for less than $20,000. And once that you are sold into spending $20,000 in a vehicle, why not to spend a few more thousands in all the luxury that everybody craves. What difference does it make if your car payment of, let’s say $500 becomes now $550 for some extra safety features or technology “coolness for your ride?” Right? Just a few extra bucks!

About six years ago my family and I were in need of another car (The one we had got a trans problem). Convinced by a good friend of mine we made it to the Toyota dealer. At the time we were interested in a minivan Sienna. The financing, of course, is always a hook; especially when they offer to finance your 30K+ vehicle at 0%. I just couldn’t wrap my head around the idea of paying such a high price and for such a long time. Also, for something that I knew would end up needing car repairs regardless of how much I care for it.

We moved on from the idea of buying new,  we spent some time thinking about it and came up with the final decision; we were buying used! We spent some time on Craigslist looking around for options and right away we found plenty. We chose a 2005 minivan. It was year 2015, so at the time it was a ten-year-old vehicle. In the pictures, you could see some rust but in general, it looked great. We went to see it and it was solid. There were no noises, oil leaks, rattling underneath or anything like that, and the engine felt very responsive. Needless to say, we made a move. For $2,000 we bought our next car hoping it would last at least two years. I figure, if it lasts 2 years it would cost me about $83 a month. Much less than the car payments of $550 a month that the dealer had offered me previously for a new Sienna.

We have used that car now for 3 years and it’s still running strong. We take it on vacations, to the beach, everywhere. The best of all is that I don’t care if the kids walk in with muddy shoes or sand. If I have to go and buy some wood at the hardware store I am totally comfortable loading up bags of mulch, pavers, cement or whatever I need. If the dog leaves some hair behind after going to the park or beach I can care less. I own the freaking car; the car doesn’t own me emotionally or defines my life. I am paying, after 3 years $55 a month for this car. If I keep it for 2 more years, which I am planning on doing it, the price will come down to $33 a month ($2,000 divided by 60 months).

The best yet is that if I do decide to sell this car, the Kelly Blue Book trade-in value is between $300-700. My guess is that I would be able to sell it privately for $800 to $1,000. Even choosing the worst case scenario of $700 would leave the price of this car at $1,300. After five years of driving it: $1,300 divided by 60 months= $23. How does that look next to any car payment out there?

When I compare our minivan against my Corolla the difference is significant. I bought my Corolla brand new in 2004. It was pretty basic.  I paid $16,000 for it and paid it for 6 years. Dividing $16,000 by 14 years and 12 months, it comes up to $95 a month even after all these years. I still have that car and it runs great but it is still almost double than what I pay for my used minivan.

I don’t know you but I don’t think I will ever buy a new car again. When the need arises I will buy something that is at least 2 years old. Although I think that a car between 5 to 8 years old would have more potential for some serious savings.

You may feel very apprehensive about buying something used. I understand. I get it. Here is my recommendation to you: First of all don’t get the same ideas that some of my fellow teachers get. Don’t switch cars every 5 years or so. There is absolutely no need for that. That is the biggest waste of Benjamins!

Second, if you are uneasy about buying a used car, just hire a mechanic! How much can it be? $150? Even if it was $300, it is still worth it. You are saving thousands of dollars that will make a great deal of wealth in your 401k/403B.

Third, internalize that cars are disposable. With that said, understand that as you junk them you are also throwing thousands of potential savings. Literally tens of thousands of dollars!

 

Vacation on a very small budget

By

On November 29, 2018

In Uncategorized

Michigan beach for a vacation on a budget

One of our favorite places to hang out.

 

As a teacher and father of four kids, summer vacations is something that we plan for with a lot of anticipation and look forward to.

From the beginning of our marriage, traveling was a necessity because my family didn’t live in the U.S. We took a few trips down to my native country in South America and enjoyed ourselves. Nothing extravagant, and for the most part we had where to stay for free.

As the years went by, we got more responsibilities and our trips became more sparse; instead of traveling every year, we did it every other year, then every four, five, and now we really don’t go anymore due to political and safety reasons. Especially after becoming parents it was just too much to afford the airplane tickets. For the six of us to fly there would be easily over six thousand dollars. Thankfully, we never got crazy with credit cards to make it happen. I wasn’t thinking about Financial Independence back then, but I always had in my mind the idea of “you can’t pay for what you can’t afford.” So, we were Ok with it.

At some point, we had a trip to Disney that was gifted to us by my in-laws. We all traveled together to ” The Magic Kingdom” and sure we had a great time ( the most exhausting time ever). But definitely a great contrast with what we have been doing for the last 8 years.

Most of us you know how hard it is for adults to escape social pressures and collective desires for wishing things. Even more difficult it is for kids when they go to school and talk to their peers. Working in a school it is not unusual to hear kids talking, even those in financial need, how they spend their weekends going to a plethora of places such as movie theaters, arcade places, trampoline ville, coffee shops, etc; especially in the winter months, although summer time doesn’t lag too far behind. Those kids conversations translate into lots of “wants and demands” from our kids, particularly at a young age.

We have never liked those places for our kids. Not even the play places from fast food restaurants. We also hate the idea of paying money to buy little trinkets through tickets and reward games. We feel that all those places are germ pools. I don’t think of ourselves as germophobics, but you know how it is, kids are sneezing, coughing all over the equipment, balls, game controllers and it is just inevitable.

Beyond that, there is also that feeling of being overwhelmed by people all wound up trying to win prizes, frenetically, shouting out their excitement with a soundtrack of some random upbeat pop music blaring from somewhere. Kind of like the same feeling as when you go to a mall. Everybody is there to consume food or buying goods of some sort.

Or like going to the grocery store when you are hungry, right? You end up buying more than what you actually need. You go to the mall, where everybody is buying and consuming and it looks so normal. Why not buying an ice-cream cone to each one of your kids so they can be like everybody else? Before you know it you are nearing your first hundred dollars spent; even when you could’ve pleased the family sweet tooth with a 2 for 1 sale at the grocery store for under $5 and still have ice-cream for another night.

Well, when it comes down to vacation time there are plenty of places where you can spend your money as if it grows on trees. Waterparks, amusement parks, museums, aquariums, zoo, you name it.
In our case, about 8 years ago we decided to go camping with our two first girls. My wife had some camping experience with her parents, and I also had my share of camping with friends in my native country.

With the girls being not older than 4, we decided to take a trip around The Great lakes. We started in our Chicago suburb and went up north through Wisconsin to spend the night with a friend, who kindly offered to host us in the Upper Penninsula of Michigan; better known as the U.P.

Beautiful scenic driving, great conversations with my wife and lots of sharing with the kids, as well as the expected crying and bathroom emergency needs.

We crossed the whole peninsula and made our way towards the Mackinac Bridge. We didn’t quite know where we were going to spend the night but were up for whatever.

My wife had heard about a place called Leelanau County, west of Traverse City, with various camping opportunities in the area. We decided to take the drive and made it to one of the campgrounds late that night. We helped ourselves to a campsite, set up and spent the night.

The following morning we woke up in the middle of a gorgeous forest about 50 yards away from the turquoise blue shores of Lake Michigan, with miles of white sand. Lots of historical sites to explore, mom and pop restaurants, quaint little towns and just magnificent scenery everywhere. Since that one time, we have been going back every summer to spend our family vacation time together in the same spot.

With my photography side hustle, I have been lucky enough to travel as far as Hawaii to cover a wedding event. I absolutely loved it. Also, in my younger years, I traveled on a dime to Europe a few times to stay with friends and explore what I could.

You may be asking, so what? Well, to each their own, but when I think about what makes a vacation a “vacation”, to me it is not necessarily where you go, or how fancy of a place you stay at. Sure a nice dinner by the ocean might be nice, but like the little trinkets you get at the arcade place, those things wear off. How much you spent in a hotel room, the wine you drank, the water slide at the water park, and all those things are just that. Things! What truly makes a difference in your vacations is the people you are with; how many times you laughed, chatted and truly spent time together.

Visiting a nice place is nice; don’t get me wrong. But I question how many times we judge our vacations by the level of fanciness and price tag on it vs. quality time that we spend with each other.

It took me a while to realize that I was just as happy going camping in Michigan with my family as I can be going to Hawaii to a fancy hotel. It may seem simple, but this thought really enlightened me. Many times we absorb desires from our social environment and we fall into the trap of making an irrational connection between happiness and material things. At the same time, these connections are costly and perpetuate a self-imposed obligation of keeping incurring into the same expenses that we expect will grant us happiness.

If there is one thing I love about the pursuit of FI is the idea of helping me align my priorities; time with my family Vs. possession of material things.

Usually, our summer vacation runs for about $1500. Six people plus a dog, for two weeks of camping, full of canoeing trips, kayaking, paddle boarding, swimming, biking, rock hunting, cherry picking, beer/cider drinking, lots of fires with smores and sharing.

I would not trade my very affordable vacation for Mickey ears or the most amazing Luau.

How about you? What’s your affordable way of having a memorable and affordable vacation?

Sharing memories by the fire with smores.

Lots of memories close to the FIRE.

 

How to fix your engine light under $10

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On November 28, 2018

In Uncategorized

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Right at the traffic light before I fixed my engine without even getting out of the car.

Nothing worse than being in your car, listening to some old classic rock, thinking about how great you are doing with your freshly reviewed budget; having some flashbacks of that cheap but delicious beer or wine you drank the night before in honor of your great plan to FIRE and there comes up that damn light to ruin your day!!! Because you know that means one thing: Money, money, money.

If you are like me, who chooses to drive a 14-year-old car, and who chooses to invest wannabe monthly car payments into my 401K, student loan, mortgage or any other sort of investment, you know that feeling then. It seems like when everything is going well, with no extra expenses and you are starting to look up for a brighter tomorrow it always happens; more expenses come your way.

Your mind starts roaming with the what ifs and you just don’t want more car debt or having to buy another vehicle.

Well, this has happened to me several times, but after the first two. I got smart. You should too.

If you have been to the mechanic lately you know that just for taking the car in, most likely, you will be charged at least a “diagnostic fee” and they aren’t cheap. Well, a few years back, I was in need of getting my car checked because my engine light was on. I panicked. At the time the car was just about 10 years old and my first thought was “is there something wrong with the engine?” What else could it be, right? After all, it’s a light that looks like an engine.

I never felt any difference or symptom while driving the car though…

Sure enough, I take the car in and I had to leave it overnight. A total hassle.

The next morning I get a call from the shop telling me it was a sensor and it had to be replaced. If I recall right, it was around $350.

About a year later, the same thing. The light turns on. S***!!!! “This is ridiculous!” I took it in again, this time they told me it was nothing and the light just needed to be reset.  They charged me a diagnostic fee, plus a bit more for resetting the light for a total of $125. “Luckily, it wasn’t $350 again”, I thought.

The idea of getting the light “reset” got me thinking. I started researching on YouTube and some forums and I found out that particularly oxygen sensors tend to throw error codes that will cause the engine light to go off sometimes. Ha!

Now the question is, how do you know? What can you do? Do you take it to the shop? Ignore it?

Most people take the car to the shop blindfolded and trust mechanics with no other option. If they tell you, you have to replace X or Y most people probably don’t even know where X and Y are.

Well, I found out too that you can go to auto-part stores like Autozone, Advance Autoparts and the likes and they can scan the car for you to see what the error code is. Of course, you will need a part, and the part most likely will be available at the store you are at. Win-win situation, right?

Well, that got me thinking too about what would I need for a DIY engine light car diagnostic? And that’s when things got interesting and significantly cheaper.

Scanners for cars are expensive( $70+). But if your job doesn’t depend on the tool you can always shop China through websites like Aliexpress.  All you need is a tiny OBD II device with the same connector that is used when you take your car for the gas and emissions test.

If you are afraid of fixing anything with your car, don’t stop reading quite yet. It’s so easy that you won’t believe it. This port or connector that you need for the scanner usually is on the passenger side under the dashboard. It almost looks like the ports of the good old Atari; I said in my story that I was in my 40’s, didn’t I?

The part you need to do this can be bought for only $6. It takes a while because it comes from China but it’s worth it. Then you need to get an App. that works with the device. I use Torque. Your phone and device synch via Bluetooth technology, and before you know it you can even find out the temperature of your coolant.

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This is one of the windows when you use Torque.

Needless to say, there is a window that shows you all the error codes your car is spewing. If the car is not stalling or giving you any particular issue you can just press that magic button that says “reset”, and you will continue on your way to FIRE feeling a bit richer.

As a matter of fact, on my way home tonight my engine light turned on. It’s already cold in the midwest and apparently, that can affect the functioning of Oxygen sensors in a car.

With a full stop at a traffic light I pulled my phone out, opened the App, check the error code and it was the oxygen sensor that didn’t complete the reading in the car’s computer. Since the car was not giving me any issue or symptom I went ahead and reset it the light. The traffic light changed to green and I kept on driving. On the next light, I turned off the car and waited for 10 seconds before starting it again.

Once I started the car, the light was gone and once again I got that feeling of triumph. I am keeping my money and using it for better things like my 403B or simply staying out of debt.

I have done this with both of our cars, and even for friends. I have saved thousands of dollars over the years. Seriously. I have reset the engine light no less than 10 times. Thanks to this six dollar device, it has cost me nothing. Nichts! Nada!

Plus, remember, you always want to trust the people you are giving your car to. If you trust your mechanic and feel they treat you honestly and fairly, well that’s a relationship to treasure. But also think that even if your mechanic is the nicest person on Earth, his job is to make money through his job. Your job should be to keep as much of it as you can.

My disclaimer here of course: I am not advising anybody to fix their car by themselves. This post is simply commentary and my opinion based on personal experiences that help my family stay on track financially.

 

 

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