When I started this blog, I was pretty on fire to cast debt to the side and move on with life. Jos and I lived a modest life during our two years in Oregon, and with our more frugal lifestyle and my solid job (as well as some pizza delivery on the side, you’ll recall), the debt seemed to melt off pretty quick.

Life happens though, as they say, and late last year we made a few steps financially – some forward, and some backward. We saved a down payment for our house and put 5% down to get into it. We are seven months into home ownership and we couldn’t be happier. That said, the whole process ended up being much more expensive than we had anticipated. Our down payment wiped us out financially, so the things we “needed” to get for the new house ended up on a 0% intro APR credit card. Our credit card debt had been zero going into buying the home – but in just a few short months at the beginning of 2020 we were back to over $8,000 in credit card debt. Ouch!

Well, we were finally able to get in front of that debt and get it paid off without accruing any interest on any of it. I’d call that a win, except for the fact that I had sworn off credit cards long before that, and there we were using them again. But I never claim to be an expert on this blog. My writing will hopefully always document the mistakes alongside the wins. The other thing that set us back for the past year was a dumb mistake that was all my own, and that was buying my first electric car, the 2016 Chevrolet Spark EV.

The Spark was a mixed bag for us. It was incredibly economical when we drove it, not using a drop of gas. We loved how it didn’t need oil changes or any other maintenance other than tires and windshield washer fluid. It was quick and fun to drive, very nimble. It basically was a trial run, in my mind, for us to eventually get a long rang electric car. I felt I needed to convince Jos that having an electric car was a good idea before we put a bunch of money towards one.

We had the car for a year. Here are some stats about it for you numbers folks:

Purchase Price: $8,800 + $450 in dealer fees

Terms: $9,250 borrowed for 60 months @ 4.49%

Monthly Payment: $174/month + $80/month for insurance

Miles driven: ~5,000 in one year

Sell Price: $7,000

I had a heck of a time selling the Spark. Electric cars are already not popular here in Montana, and short-range electrics even less so. And for good reason. I found out quickly that the Spark’s strengths were short drives around time for groceries and social outings downtown. It was great for that, but trips outside of town were not possible due to the limited range and lack of charging stations in our geographic area. As you can see, we didn’t put nearly enough miles on the car to justify the cost.

I posted the car for sale on May 2nd, and just closed the deal on it yesterday. It took three months to sell the car, which is pretty rough!

I had some interest and low-ball offers on the car over that time, but nothing that I was interested in parting with the car for. I looked into either trading in or selling the car to Carvana for $7,800, but I quickly learned that I would need to trailer the car myself down to Denver, CO, which is a 13 hour drive for me. Hardly worth it with needing to rent a car trailer and the gas, not to mention all the time, and likely expenses like lodging and food along the way.

I did some more research and found Vroom, another online car dealer that buys used cars. I found that they DO pickup used cars, which was a huge plus. I plugged in my numbers for the car and it spit back an offer of $6,000. I was disappointed with the lower offer, and once again was not willing to part with the car for that.

Much to my surprise, a few days later, I got a follow up email from Vroom saying that my appraisal value had gone up! The new offer was $7,000. This I could do. I sat down and collected all the documentation needed, and filled out some information online to get the sale process rolling. They were very responsive and the process has been easy so far. My paperwork is submitted, and I made a $595 payment to cover the remaining balance of my car loan in addition to the $7,000 sale price. All in all, a very good experience so far, and awesome that they will schedule and pickup the car here at my house.

I am glad to be done with that car experience. I learned a lot. Having a car loan is stressful: making payments, budgeting for it, having to pay higher insurance rates on a newer vehicle. It didn’t help our debt pay down progress, and in fact it really hindered it in significant ways. If we hadn’t gotten the car, we could have used the nearly $255 per month in car payment money and insurance to go towards the student loans. But I am a sucker for cars, and I justified it. I am hoping I will be able to be content at least for the next year so we can finish paying off these remaining student loans.

I must say that I feel a bit foolish writing posts like this. But I didn’t set out to be an expert, just to learn by doing, and analyzing my mistakes along the way. I am looking forward to having a more lean budget again, and making progress toward becoming debt free except for our mortgage.

Finances are fun, and they are important. But there are times when life throws you a curve ball, and adjustments must be made.

Our curve ball came in February when my Dad began to not feel well. Something was off, and he spent the next weeks and months trying to get a handle on why he was having low energy, nausea, and other difficult symtoms. There is a lot to the story, but I am not sure I want to get into detail about it here. It will suffice to say that in mid-May, we were finally given a diagnosis for Dad’s condition, and a timeline as well: 2 – 4 months.

This came as a total shock.

I am certainly in the middle of actively processing this brutal news. On the positive side of things: my work has been extremely gracious and flexible, allowing me to spend time with Dad while working remotely from his place. My immediate family has been able to spend a lot of time with him, doing many of the things that he loves. Spending time with him is a huge gift, and I do my best to not take the time for granted. Most days, he is in high spirits and generally pain free which I am so grateful for.

If you as a reader think of it, please pray for my Dad. For strength, peace, and a miracle, as I do believe that God still works through miracles. Thanks for your patience as the blog takes a pause during this challenging and heartbreaking time.

I try to go on regular walks during the week. Today as I walked out the door and down the street, it was quiet. Really quiet. Hardly anyone driving the streets of our neighborhood, and during the course of my 45-minute walk, I only saw a couple of people. The one person I encountered walking towards me on the same sidewalk deliberately avoided me (for good reason) and stepped off the sidewalk to pass farther from me in the street. The sky matched the mood, threatening rain with dark streaks streaming from the sky on the horizon. The feeling was nearly apocalyptic.

This pandemic seemed so far away for many of us when it was first reported. Every day, it seemed to grow more and more ominous, reaching closer and closer to home. Some parts of our country started to practice social distancing, then restaurants and bars started to close to serving the general public. Before we knew it, only “essential” business was allowed. As the giant gears of our economy and society seemed to grind to a seeming halt, all of a sudden there became a new fear of not enough work, and with it, not enough money to get by. The stock market tumbled and erased all the impressive gains our current president has seen during his time in office. Unemployment applications skyrocket each day, with more than two million claims made just this past week. There is a staggering amount of fear in the news, in our homes, and in our minds. These are unprecedented times. Is there any hope?

I’ll just start off and say that yes, there is hope. As my walk continued, the clouds above the mountains broke slowly and exposed the previously-hidden sun. The warmth on my face reminded me that the world continues to turn, and life does go on, even when it seems that it may all be falling apart. Now, I don’t want to discredit anyone that is going through a particularly rough patch right now. I know there are some extremely challenging situations facing people out there. But you already know all these things simply by turning on the news. I think a different tone and take on things can be helpful.

In the very near future, relief is coming in the form of $1,200 checks for many Americans facing an immediate need. Soon, many businesses should have access to various forms of relief via low/no-interest loans and other financial supports to help float them in these tumultuous times. Mortgage payments are being deferred or suspended in some cases and in some parts of the country. Most notably for this blog, student loan interest AND payments are paused until the end of September.

All of that said, there can still be a lot of panic about what can be done before that relief arrives. While some things may be out of your hands, there are a number of things that are still in your sphere of control. Here are a few things I would suggest:

• Keep cash in hand. Not literally, but try to stay as cash-rich as you can.
• Hold off on paying your student loans for now (double-check with your loan company before doing this). If your loans are federal, they are not accruing interest right now, and payments aren’t expected until the end of September.
• Avoid at all costs any unnecessary expenses if you are short on cash. Review your recent bank statements, and cut out any “extra” expenses that you typically incur. If you are short on cash, one of the best things you can do right now is to minimize expenses.
• If your work has laid you off or your hours have been significantly impacted, file for unemployment. Our country has these systems in place for you as a tax-payer to leverage when there is a need.
• Avoid taking on debt if you can, especially on credit cards. It is tempting to swipe a credit card in these trying times, but take a step back and evaluate if your purchase is truly necessary. If you are honest about it, you might find it is not a necessity.
• If you own a house and are truly in a pinch, check with your lender to see if your mortgage payments can be lessened, postponed, or if something else can be worked out. REACH OUT TO THEM before you become delinquent on payments (this is true for any debt you have). If you are a renter, reach out to your landlord and try to reach an agreement. In all likelihood, they will be reasonable about payments.
• Take a deep breath. This too shall pass. It really will. While we don’t have a solid timeline yet, we do know this won’t last forever.

This pandemic is causing a lot of mayhem, but it is also a gift that we may not see if we don’t recognize its disguise. Time at home may give you the opportunity to reconnect with your spouse, your kids, or your pets. If you haven’t talked to a loved one or a friend in a while, now is a great time. Chances are, they have a whole lot of nothing going on right now, just like you!

While it may be difficult to see the light at the end of the tunnel, I would encourage you to take advantage of the gift that is today. Try to lead a balanced life when possible, eating as well as you can, exercising when you can, and turning off the news. If you are a person of faith like me, take this time to pray that these difficult days would soon pass us by.

If you or a loved one have specific questions about your specific situation, feel free to drop me a line at justinovenell@gmail.com. I am not a financial expert, but I would be happy to verbally work through your situation with you. Sometimes it’s just nice to have someone to listen.

Above all, stay well, stay healthy, stay six feet apart. 🙂

Ready for a way to get free money today? This isn’t a scam! It’s just being smart with your money.

Have you set up a retirement 401k or IRA with your work already? If you haven’t, this would be the first step. You can typically reach out to your HR department to get started with this. If you have done that already, well done, you are headed in the right direction. It is usually very easy to enroll in your company-sponsored retirement account, and I can’t stress to you how important it is to take this step. The magic of compounding interest over the course of your working career is crazy!

The way to get free money, legitimately, from your employer is to take advantage of the company match (if it is offered). My most recent job included a 100% company match up to 4% of what I contributed. This means that if I made $50,000 a year (this is just for an example), and I contributed 4% of my annual paycheck, which would be $2,000 that I would contribute to my retirement each year. With that match though, my company would throw in an additional $2,000 to match the $2,000 I had put down. Without hardly lifting a finger, my retirement savings have already doubled! That is free money if have ever heard of it!

One of the tough things about getting out of debt is knowing when and where to cut back or contribute to your savings, spending, retirement contributions, and other financial goals you may have. Unless you  are completely strapped for cash on a paycheck to paycheck basis, the minimum you should be contributing to your retirement account at work is whatever it takes to max out your company’s match. If they match  4%, I’d recommend contributing at least 4%. If they match 8%, first pinch yourself because that is a great deal, and then contribute at least 8% yourself.

While it is easy to think that you will be able to save more tomorrow, there really is no time like the present. Here is a quick example of what your retirement account would hold if you put in $1,000 at the age of 25, 35, and 45, and retired at 65. This is assuming you made no other contributions, and earned a conservative 8% on your investments:

Age 45 – 65 (20 years): $4,926

Age 35 – 65 (30 years): $10,935

Age 25 – 65 (40 years): $24,273

Pretty crazy how much the age you start at has such a huge bearing on how much your money can grow. Sure, you may have more disposable income as you get older and further along into your career, but without compound interest working as hard in your favor, catching up is extremely difficult, and sometimes impossible to do.

If your company offers a match of any sort on your retirement account contributions, take it seriously and think about how much your future self will thank you!

As I have noted previously in other posts, I use a handful of online tools and apps on my phone and computer to keep a pulse on our finances.

One of the most important things for us in making progress in our financial journey has been having a clear picture of the money that we owe. As the saying goes, the first step in recovering is admitting that you have a problem. This is true with debt as well. And one of the best tools to track that “problem” that I have come across is called Undebt.it.

The concept is pretty simple. You manually add each account that you owe money on – the total balance, interest rate, due date each month, the monthly payment, and other information if you’d like to add it. You go through and add each account separately, whether it is student loans, credit cards, personal loans, medical debt, whatever it may be. While this can seem overwhelming, this is an awesome way to come to terms with all that you owe. Once you know what you owe, it’s much easier to come up with an effective gameplan to get moving in the right direction financially. For the sake of transparency and for an example, here is what my main dashboard currently looks like. The Quicksilver credit card has an introductory 0% interest rate, and we are going to pay it off in the next couple of months, so not to be too alarmed.

 

Once all of the information is entered for each of your debt-related accounts, you can begin to get an idea of how to best attack each of the accounts to effectively and efficiently pay each of them off. That’s where the usefulness of this tool really begins to shine. Under the Payoff Plan section, you’ll find the Debt Snowball table.

I’ll quickly review two of the most popular methods for paying off debt: the Debt Snowball and the Debt Avalance. The Avalance method is the logical way to pay off debt. You start by making the largest payment on the debt with the highest interest rate and work your way down the list, paying off the highest interest debt to the lowest interest debt, until all of the debts are paid. This method will typically guarantee that the least amount of interest is paid over the lifetime of your loans. The second method, the Snowball, is slightly less logical, but more psychological. With this method, the smallest debt is attacked first, followed by the next largest, and so on. We’ve been using the Snowball method ourselves as it has proved to be an excellent motivator to stay the course as the smaller accounts have “dried up” and gone away as we have successfully paid them off. It’s how I was able to extinguish all of my undergrad debt, paid off our initial credit card debt after getting married. We still are running with this strategy today.

The real fun comes in with Undebt.it when you start to calculate what you can pay on your debt each month. To be able to know what you will be able to put toward your debt each month, an existing budget is necessary. With the zero-based budget, you’d basically add up your total income, subtract all of your monthly expenses and spending categories and then whatever is leftover would be part of your debt snowball. In this screenshot, you’ll see what the first few months of paydown would look like for us if we were sending $2,000 per month toward debt:

If we did this $2,000 per month toward debt between the two of us, all of our debt would be gone in 39 months, or 3 years and 3 months from now.

Perhaps we were only able to send $1,500 per month toward that debt instead. This would balloon the payoff timeline to 4 years and 5 months. Much less appealing.

Now say we were able to really ratchet down our spending and send an outrageous amount of money to our debts, say $3,500 per month. That would shrink down the pay-off timeline down to only 1 year and 9 months. Pretty crazy swings in the amount saved in interest and the time it would take to pay everything off. Even making an extra $50 or $100 payment each month on debt can make a pretty large impact on the amount of money you save and the amount of time you take to pay it all off.

For me, this “hypothetical situation” tool is awesome in keeping me motivated. Every dollar that can be freed to help fight debt is a small win that multiplies.

You can see here that there are two very basic truths that arise with this payoff process. Decreased expenses are extremely valuable, and so is increasing income. Side hustles, getting a raise, a promotion, a bonus, or any other influx of income can make a huge difference in making this process a better experience. Got a tax return in your near future? You can use the Additional Payments section of this site to visualize what kind of progress this would help you make if you sent some or all of this amount toward your debt instead of potentially spending it elsewhere.

Tools like this can be daunting and sobering, pushing you to stare your true financial situation square in the face. But this can also be a huge opportunity to realistically evaluate your situation, construct a gameplan, and start to execute it.

Perhaps this is a tool that you would like to use, but don’t know where to begin. I would be happy to get you going in the right direction with a free tutorial and quick test drive of the website. I think it is that valuable! You can reach me at justinovenell@gmail.com.

I will also mention that the creator of this website offers a premium Undebt.it+ version and subscription to their site. I think it is great to support other people’s work, and this is a great way to show appreciation for this innovative author’s creation if you feel so inclined.

Spark EV Video

For those of you that may not know, I’ve owned a 2016 Chevrolet Spark EV (electric vehicle) for about 9 months or so. I bought it as a way to save money on gas (the tie to this blog) and for the tech it features. It’s great not having to use gas at all and being able to charge up at home. Hopefully you enjoy this first video of mine! Hoping they get smoother and easier to watch as I get better and producing them.

I have meant to write about this topic for some time now, so today I’ll finally bite the bullet and get ‘er done.

This is a word of advice to any of you who find yourself in a serious relationship or married, primarily. I know everyone has their own way of approaching finances, and I’ll just open by saying that this is my opinion, and nothing more. Like anything written on this blog, you are free to take what you like and leave the rest! So without further ado…

Trust is a vital cornerstone of any relationship. Trust is something that is earned and built over time, not overnight. Every small action every day in a relationship either builds or erodes away at the trust between two individuals. In finances, this is no different and is maybe even amplified. So how is financial trust built?

Transparency – Like I said, I know people get it done in different ways, but we have found that complete and total transparency is absolutely critical in being able to build healthy financial trust. Our primary checking account is through a bank called Simple. With Simple, we each have our own personal account, and then we share a joint checking account in between. Sort of think of it like a Venn diagram. We each have a very small amount of money in each of our personal accounts, but the lion’s share of our money at any given time is in that shared checking account. When I got to BestBuy to purchase a gadget, I slide my debit card for that shared account, and both Jos and I get a notification on our phones instantly with the business and total amount spent from the account. If that makes you sweat, you should probably have an inward look at why that might be!

This transparency has become as normal and easy as breathing for us. The point is not to be the police for one another, but rather it is to keep each other in check. If I saw Jos swiping for a coffee a few days in a row, I might ask her about it. When I buy something technology-related, say for $50, she is going to kindly ask me what I bought. Both of us know where our money is going. “Our” money – this will lead me to my next point.

Togetherness – The Bible tells us that we are not to keep track of a record of wrongs with our spouse. This is basically scorekeeping, right? Keeping a scorecard of the way that our partner has hurt us or messed up. So why would we do that with finances? I am a firm believer that the bulk of a couple’s money should be in a joint account, with both names on it. When you get married, the two become one flesh, and the bank accounts should too. When Jos was in graduate school and unable to work, I didn’t lord it over her that I was making money and she wasn’t (or at least I didn’t try to – sorry honey, for when I did!). The money that landed in our account from my payday was always OUR money, not my money. When she needed to go out and buy some new clothes for a placement or internship, I didn’t tell her to go use her own money. It’s our money.

The main reason I would encourage this mode of operation is that it is so easy to get into the mindset of owing this or that to one another. This way of thinking clouds the fact that in a relationship, both sides bring specific talents and abilities to the table. Currently, my salary is a bit higher than Jos’. Ask me to decorate or make the house feel “more like home” and I am basically useless. Our house would look like the inside of a prison if the interior design was left to me. Jos loves to cook and is an incredible hostess! If I was in charge of that, it would be Little Caesar’s pizza every time. When I get dressed, I can barely get anything to match or look decent. If it wasn’t for her, I’d go out on the town on a Friday night looking like trash. One of the biggest ways that we’ve been able to cut down our spending the last few years have been with meal preps on Sundays. Once again, ring up a bunch of points for her for all the ways she contributes to our financial well-being. There is way more to a relationship than simple dollar amounts. We each pull our own weight in unique and completely valuable ways.

My last point I’ll make about togetherness is that the victories and defeats are shared when all the money is a collective “ours”. Early on in Forest Grove, we had to replace the wheel bearings in the front of our 2008 Prius. It was $600 and we had very little money to spare. Instead of this turning into a fight about who was going to pay for it, or who’s car it was and who’s the responsibility it was to maintain it, we both were able to discuss it and spend the money from our joint account. On the flip side, when we finish paying off a loan, it is a chance for us to both rejoice equally in that win together. She didn’t pay it off, I didn’t pay it off. WE paid it off. So let’s go celebrate!

Teamwork – Life is more bearable, and more fun, when you have someone on your team. Ecclesiastes 4:10 says that “If either of them falls down, one can help the other up. But pity anyone who falls and has no one to help them up.” There are days when I do not make good choices financially. I want to go out to eat when we’ve already been out recently, or I want a new gadget to add to my tech collection. There are days when I just want to say screw it! and give up on our journey towards being debt-free. And Jos is always right there to help remind me what we are doing and why we are doing it.

When I have a strong paycheck or bonus, I don’t feel the need to pocket it or put it in my personal account, because I look at all the ways Jos lifts me up along the way, and my heart’s inclination because of that is that I want to help put us both into a better financial position. We both contribute, we both make loan and debt payments, we both keep one another on course for the goals that lie ahead. Because of the trust we have, we are able to spur each other on.

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Trust takes time and it takes intentional steps. But the reward is worth it. You will find that financial trust spills over into other areas of your life and relationship, and can bring you much closer than you would be otherwise. Trust builds intimacy, intimacy grows love, and the cycle can continue to feed itself.

If all of this sounds like too much or too scary of an ordeal, start with a simple conversation. Try to be honest and open with your significant other about where you are at, what your expectations are, and how you would like to help one another toward achieving your goals (financial and otherwise) together. You’ve got this!

As the title implies, a lot has changed for us in the past few months. We are new homeowners! But that update will take a while to unpack for the purpose of this blog, so I’ll try to get into it. Perhaps the easiest way is to bare our current debts, and then walk through an explanation of how we got to where we are. So here is the current breakdown:

Jos’ Student Loans – $52,959.46

Personal Loan – $2,863.36

Credit Cards – $4,924.65

Car Loan – $8,289.29

Total Current Debt (not including mortgage) – $69,036.76

The student loan balance was falling sharply over the course of 2019. Our beginning balance in January 2019 was $75,147.74 if you can believe that. So we actually made a lot of progress on those loans over the course of the year. This progress was generally put on pause (we are just making the minimum ~$600/month payments on them currently) as we saved for a down payment on a house.

This gets us to the second debt listed here, the personal loan. I took out this small loan as “insurance” as we were working towards closing on our house. Basically, I wasn’t sure if we would have enough cash to cover the down payment and all of the closing costs. This was sort of dumb since this could have wrecked my credit right before getting the mortgage dispursed, but I feel that explanation must come in a separate post. Looking back, I probably would have done this differently.

I will briefly touch on a few things regarding being a first time home buyer. There is so much we didn’t know until we came face to face with it in the closing processes. Your credit score matters a lot both with your interest rate on the mortgage, and if you get PMI, or Private Mortgage Insurance. The amount you will pay for PMI also relies heavily on your score. The amount you put down on the house impacts the interest rate you can qualify for. If you put even slightly more down (which we did, and this stretched us) your PMI can go down, and you can also lower your monthly mortgage payments this way. As I write this all out, I am realizing that to do all these topics justice, I may need to post a few times this week.

The credit cards are cringeworthy since I had basically sworn them off in the past few years. I hate them. The thinking here was to get an interest free for 15 months credit card to put some initial expenses on as we moved in. We were strapped for cash down the stretch as we saved every dollar we could to put down on the house and on closing costs.

Last up is my car loan, which I haven’t explained much up to this point. Late this past summer I purchased a used 2016 Chevrolet Spark EV with 36,000 miles on it. When we moved back to Missoula from Portland, I knew that the Miata was no longer going to be a viable primary vehicle for me. It is very small, unpractical, and having a convertible in Montana is asking for trouble. I bought the car right after we got married a couple years ago for $5,500, and was able to sell it this past summer for $5,000 which I was super excited about. Outside of the usual insurance and fuel costs, the only real thing I had to do to it was get new tires on it, which were inexpensive for such a small car. All that to say, I was basically able to drive a first-gen Miata around in Oregon over two years for only $500. Pretty much a steal.

Being back in Montana, I knew that the Miata wouldn’t cut it especially as the weather turned in the fall. I have been pretty interested in EV (electric vehicle) technology in the past few years. I researched them a bunch and found that the options were basically to get a very expensive one (over $30k in most cases, all the way up to $100k for a Tesla Model S), or get a used, compact one off-lease for a little under $10k. I found the Spark EV, a car that GM did almost nothing to advertise to the mainstream marketplace. I believe they only built a couple thousand of them in total. They were basically compliance cars for GM to balance out their gas-guzzling portfolio of vehicle offerings. The Spark EV was never meant to be a standout or a money maker.

These cars originally retailed for almost $28k from 2014-16, the only years they were ever built. I was able to find one in Idaho Falls for about $8,500, huge savings over the new cost. I couldn’t resist. We’ve since put about 3,000 miles on our Spark EV. It has proved great in the snow (with snow tires, of course) and it uses no gas at all. It is rated to travel 82 miles on a single charge. Not much, but more than adequate and really ideal for around-town travel, which is what we use it for. Okay wow, I am way off-topic. I’ve been meaning to write about the Spark more, perhaps another post is in order for that in the near future.

We have decidedly gone against a few of my primary principles of finance in the past few months: taking out a loan for a car, taking out a personal loan, spending more than you make, and using credit cards. All that said, there was some method to the madness.

Housing prices in Missoula and around the country continue to rise each year. Just looking over a housing report for the past eight years or so in Missoula, the median home price has risen at a rapid rate each year. Sure, the housing market could take a dip at any given moment, and it may still, but right now, that is not the case. Interestingly, from the time we made an offer in early December until now, houses that are nearly the same as ours on our newly developed street have already risen in price $10-15k in some cases, in just a few short months. Things do not appear to be cooling off. We decided to jump on the train now, and suffer some short term debt in order to get in before things continue to climb.

Buying a house is always somewhat of a gamble. Things could always tank. But we knew a few things: we didn’t really want to rent again, we likely aren’t moving away from Missoula anytime soon, renting in Missoula is expensive, and in the end we really just wanted to be in a house.

I can’t recommend the steps we took to everyone. I think in an ideal world, I would have loved to pay off all our debt, save up a proper 20% to put down, and maybe even tried for a 15 year fixed loan instead of a 30 year. But life comes at you fast, and sometimes you’ve got to call audibles and make changes on the fly. We are loving our house, we are able to start building equity, and I definitely don’t regret this decision. It does come with a set of consequences that we are working through currently.

To help balance out all these new costs, we’ve tried to cut back on our spending in other categories like eating out, entertainment, and gas (the Spark EV helps out a lot here). The new approach will be to make minimum payments on everything we owe on and start knocking down our smallest-balance debts first. If my projections are correct, we should be able to be debt-free, other than the house, in the next three years. If we really dig into it, or get raises or different jobs that pay more, that time frame could shrink.

As I said a few times in this post, I think I’ve got a lot to unpack about intricacies of buying a home, some of the related costs, and how to best plan for it. I wouldn’t say we did the best job handling the transition, but things are settling out now and I can see a clear action plan to continue making progress on our debt-free journey. I hope this is helpful to you as you read through my mumbo-jumbo.

 

Shortly into conversations with new acquaintances, the “what do you do for work?” question almost always comes up. My response is usually something along the lines of, “I work remotely for an IT managed service provider out of San Francisco.” The response back is usually “oooo that must be nice to work in your sweats!” Very clever line, I’ve never heard that one before.

Working from home is the dream of many employees, especially the generation around my age. Landing a remote job is a home run in so many ways, right? Show up when you want to, no one checking in on you, no need to deal with co-workers who talk too much or stay at your cubicle too long. The list of what makes it a dream position (in theory) is pretty lengthy. I thought I would share about the things I like and don’t enjoy as much about it. Don’t worry, I’ll weave in a decent amount of finance talk here, too.

Time – I’ll begin with the precious commodity of time. Working remotely really is a sweet spot for maximizing time. If you work at a physical office, you have to drive to and from that office to your home. It seems obvious, but when you work remotely, you don’t have to step foot in your car. No scraping ice off a windshield, no warming up a car, no waiting in traffic. I have had days where I wake up 5 minutes before my workday starts and guess what? I’m never late.

This may not seem like a big advantage, but it really can add up. Even if you had a 15-minute one-way commute, working remotely would give you back at least 2 1/2 hours each week. Over the course of a year, that’s 5.4 DAYS that you get back by working remotely. This number is dramatically higher and more significant with a longer commute of course.

Eating Out – During my days managing the hotel here in Missoula, I ate out for lunch every day. Shoot, when it got really bad I was picking up take out breakfast AND having lunch out too. It was spendy! But if I didn’t plan ahead (which I obviously never did), lunchtime would roll around, I’d be hungry, and my favorite fast food was five minutes away while my apartment was 15-20 minutes away. No way was I going home, making a sandwich, and hustling back to work.

My wife gets the biggest shout out here because she loves me so well, and one of those ways is with her excellent food skills. She’s a great cook. Before our week starts, she does a great job of making food preps (and I usually try to take care of the dishes) and then we both have pre-made, delicious and nutritious meals ready to eat during the rest of the week. This is much much better for our health, but it’s also a huge benefit to our bank account. Eating out since I’ve worked from home takes time and effort. I’d have to get in my car and drive at least 10 minutes one-way to get some food. Instead, I can walk out of my home office, open the fridge, pop my lunch in the microwave and voila, I’ve got an awesome home-cooked meal in less than 5 minutes. This is the way to go.

Vehicle Expenses – The savings from working from home don’t end there. Without needing to leave the house, my car gets way fewer miles put on it each month. This also equates to less fuel (I now have an electric car, but that is a different topic), maintenance, and other expenses like fixing rock chips in the windshield, replacing tires, and all the other wear and tear that cars absorb over the course of their lives. Since I bought my all-electric Chevy Spark EV this summer, I am on pace for only 4,700 miles per year on it. That is with Jos taking it fairly often for work and errands around town. The average driver in the US puts on 12,000-15,000 miles per year on their cars on average, in comparison.

Convenience – This is my wife’s favorite part. When she’s off work, I’m already home when she gets here. She doesn’t have to wait for me to get back from an office across town. When I clock out, I’m ready to go and do whatever we have planned that night.

If she forgets something at home, or we need to put a load of laundry in, this can all be handled by yours truly if needed.

This is where I will start to discuss the tougher side of remote work. I know I know, you were thinking it was all just rainbows and butterflies…

Along this same vein of convenience is the isolation factor. There are days where I quite literally never leave the house, other than to maybe get a walk in during my lunch break, or when I work out in the morning. No coworkers to chat with, no one else at the house. After a long time, week in and week out, this does get lonely.

Collaboration and Rapport – Not sitting close to other members of your team at work can be challenging. As mentioned above, of course, it can be nice for train of thought, and a quiet work environment. But I can’t just lean back in my chair and ask the guy or gal next to me a simple question. I have to do everything over phone or video call, or more commonly, over instant message on my computer. This may work fine for the most part, but not being in the same physical space with colleagues can be frustrating.

It can also be more challenging to build up trust and good working relationships both with coworkers and bosses. When you work in the same office together, you get to know people better, work-related or not. Working remotely does not easily lend itself to that growth that can be so valuable for career development in an office.

Work/Life Balance – When your work is so close – like right in the other room – it can be difficult to disengage your brain from work activities. I don’t know much about psychology, but I have noticed in my own experience a certain level of isolation and feeling down just because I am not around people. Whether you are trying to relax, or are crunched for time trying to get a work project completed, you are still in the same place (your house or apartment). This lack of separation can be difficult.

Working remotely is easy on the wallet, and helps save money in more ways than just the commute. It saves time, gas, wear on your car, and lowers the temptation to eat out and restaurants. It can also be somewhat lonely and it can be difficult to focus if you aren’t disciplined or don’t have a good personality type for the isolation that can accompany it.

Thanks for reading!

I have never been much of a saver. When we were young, my two siblings and I would occasionally collect an allowance for doing chores and helping out around the house. It was a method for my parents to get small amounts of money in our hands at a young age in hopes of establishing healthy spending and saving habits. The method was good, but I was a slow learner.

I almost always had my eye on a toy or set of Legos (I was big into Legos and Beanie Babies when I was really young). If I got $10, it was usually enough to get me one Beanie Baby and maybe a small Lego set, like a racecar. I rarely gave a second thought to saving any of the money I had. Easy come easy go.

That trend continued into my middle school and high school years when I worked various jobs. There was always something to buy: a tank of gas, a new part for my car, going to dinner with some buddies or a girlfriend at the time. I’d get a paycheck, and spend it all before getting the next one. I have never been a good saver.

Back in the spring of 2017, I was recently engaged and getting ready for my new life to begin in July when I would marry my best friend. It was exciting, but also scary. I was under-prepared to be a strong leader financially, I didn’t know what I was doing. I had a bunch of credit card debt and a large car payment, and I was spending the rest of what I made on eating out and other frivolous activities.

As I’ve shared before, getting married was the financial wake-up call that I needed. We got things turned around, have paid off all of our credit card debt, all of my student loan debt, and we’ve been working feverishly to defeat Jos’ student loan debt. In my last post, I shared that we are now working toward a down payment for our first house. This is a shift in our usual strategy of budgeting, then dumping any left over money onto debt repayment. Now instead, we are making standard payments on the loans, and then saving every penny beyond that toward that first down payment of ours.

In very little time, we’ve already got over $3,000 saved. It is by FAR the most money I’ve ever had saved in my life (excluding retirement plans, as I don’t count these as traditional savings). It is crazy to think how long it took for me to save just a few thousand dollars. 28, going on 29, and I was finally able to do it.

What are the biggest takeaways from this small victory? Well, there is obvious pride in reaching a goal. There is also a new sense of security, knowing that if something bigger happened, we have cash in the bank and wouldn’t need to turn to a credit card to make ends meet for a larger bill or purchase. For me, it is a glimpse into what is possible. It’s really the first time that I haven’t been in a paycheck to paycheck situation in my entire life. If we both lost our jobs tomorrow, we would be okay for at least a month or two. Before that? The cash reserves would have quickly dried up and I would have been forced to pull out the cursed credit card.

For those of you that are natural savers, good on you! You’ve mastered a great life skill that I’ve only recently experienced for myself. If you are like me and have never found saving to be worth it, or if you haven’t found the motivation to save, give it a shot! If you’ve never saved $100, do that. Seriously! Save a Benjamin. Once you’ve done that, try saving $500. Then $1,000.

As the savings grow, I am for the first time envisioning a host of benefits. Less stress at work, since you aren’t 100% dependent on every dollar that you are expecting in your next check. Savings will allow us to breathe easier when a larger unexpected expense comes up. It will enable to us to step from one financial life stage into the next one eventually (homeownership!). There is a lot to look forward to.