09/5/15

An Update on My Path to a Simple Life

Well, I obviously haven’t been writing weekly as I said I would in my last post. Some things have changed, but not a lot. I’m still moving forward. Here’s the latest:

We’ve moved

We sold our house and lived in an apartment for a short time. It was cramped, but it was shelter until we could move to a new city. The city we’re in now is less expensive, so our chances of finding an affordable house are good.

We lived with family for a while until we could find a place. We had intentions of buying, but decided it would be wise to rent until we have reduced more debt and until we are sure we’ll be happy here.

We kept the cost of moving down by doing it all ourselves. I’ll write another post on how we did it.

We’re making money

My contract got extended until the end of the year. It was originally set to expire in October, but I got a couple more months added. This has actually been a good experience because I am able to take time off as I need. I still have to notify someone, but I don’t have to ask permission or worry about using up all my “PTO” days.

I’ve also taken on some side projects that is helping bring in more money. Yes, I’m working a few more hours, but this will get the debt taken care of quicker. I’ll work harder now so I can take it easy later.

Debt

I think I have it planned to pay of our high monthly payment vehicle by the end of September; 9 months ahead of schedule. This is $320 a month that I can apply to other things. In this case I’m not paying off my lowest debt source first as you would do with the Snowball Method. In this case I’m paying off the highest monthly payment which will allow me to apply more to the lowest debt source.

The reason for this is that the amount to pay this off is not much more than my lowest debt source, so the monthly returns will be greater.

We’ve had some setbacks. Again.

The biggest problem with not having a regular “job” is that you have to pay for your own insurance. Insurance and healthcare in the US is ridiculously expensive. For my family it will cost over $600 monthly. That’s more than my monthly budget I had planned for a house.

Finding a rental house that fit our needs was more difficult than I thought it would be. Everything we were seeing was either too small or too big. Having been cramped in a small apartment, then a smaller area in our family’s house made us decide on a bigger place. It’s more monthly than I wanted to spend, but I think in the long run, it will have been a good choice.

Conclusion

I think that’s it for now. I think one of the biggest things I’ve learned so far is to make a plan, but be ready for changes. When the change happens, don’t get discouraged. Adjust but keep the same goal in mind. You may not reach your goal the way you expect, but you can reach it if you keep going toward it.

04/20/15

6 Month Plan to Start Life Over

It’s been a few months since I’ve posted anything. The reason is simple; I got complacent.

A little history, if you’re new here – I have been dreaming of a “free” life where work came as a convenience, not a requirement. I wanted to work my on my own terms, not having to ask for permission to go to the doctor or take a few days off.

I had figured out that the saying “the more you make the more you spend” was exactly true. I was making a good living and spending more as a result. The problem was, I was no more happy than when I was making much less money.

But what happened was that I started to back into bad habits and to “deal” with the inconvenience of having to ask permission. I learned to spend less, which was good because my savings grew and my debt shrank. I decided “this isn’t so bad, I could learn to live like this”. I got complacent, but overall I was no more happy than before.

Then…

I got laid off. Again. If you’ve been following along, you’ll see that this is the fourth time I’ve been laid-off.

My position was being eliminated. I design & build websites and this very profitable company said they couldn’t afford to keep my position. All of my reviews have been stellar. The primary product that I was building and co-created was getting rave reviews. They just didn’t want to pay me anymore, I guess.

My goal has been to be able to live life on my terms by this May. I’m very close, but the layoff has set me back again. I have the house sold, so we’ll get to buy something that is much more affordable. The debt is on the decline.

I just accepted a six-month contract that will get the money coming back in. This is the basis for my plan. The end of the contract is my deadline for having my plan in motion.

So, here’s my six month plan to start life over.

Finish paying off debt
I still owe a small amount on an auto loan and on one credit card. I can easily pay one of them off and take a big chunk out of the other. Then all debt is GONE!!!

Find affordable housing
We are currently looking for a place that will cost us a total of $50,000 – $60,000. I know this means an absolute sh** hole in some parts of the world, but where we are we can find something that won’t be a palace, but will be what we need.

Reduce our monthly expenses
I’ve identified a few places that we can spend less, including cable bill, cell phones, groceries, insurance and more. We don’t need all the channels. In fact we will likely take our second attempt at “cutting the cord” and just keeping internet. We can also reduce our insurance by having higher deductibles and our grocery bill by planning our meals better.

Increase our savings
I’m a horrible saver, but somehow I managed to have enough to get us through this layoff. I need to get better and make sure I’m putting as much as possible back. Those rainy days never hit you when the sun is shining.

Be my own boss
I’ve found it doesn’t do any good to rely on another company or person for employment. At any time they can decide that they no longer need you and can let you go with no notice or concern about your well-being.

I have skills that are in demand, including web design, copy writing and video production. Will I get rich? I don’t care. I want to make enough to support my family, live simply and not have to ask to have time away from a cube. It’s going to be hard work, but it’s possible.

I’m going to start writing here again with weekly updates on the 6 month plan. I hope you’ll come back and read more.

And, if you need any help with web design, copy writing or video production, hit me up!

11/4/14

Downsizing Your Home

One of the biggest ways to simplify your life is to downsize EVERYTHING. I’ve talked about this before. Reduce the number of things you own and keep, walk to work rather than drive (if you can) and downsize your living space.

We are currently in the process if downsizing our home and I couldn’t be more excited and somewhat depressed at the same time.

We have more hose than we need; three bedrooms, 2.5 bathrooms, living room, family room, rec room (or “wrecked” room as it usually called), two car garage. We don’t need all of this. We’ll still need the three bedrooms, but we don’t need all the other space.

So, what does it take to downsize? Here’s how we are doing it:

Reduce the clutter

I’ve spoken before about my method of getting rid of your possessions (you can read it here) and it has worked really well. We got rid of so many things that we didn’t need but just kept for no apparent reason. We went through boxes and Rubbermaid tubs full of stuff and either put it in a donate pile or a throw away pile. They were big piles, too.

We then looked at all the furniture we have and did the same thing. We were surprised to find that we had tables, dressers and shelving units that had no purpose once we emptied them of all the stuff that went into the two piles.

We went through all the closets and cleared cloths that hadn’t been worn for a while, including shoes and dainties, and put them in one of the two piles.

Once we had our two piles completed we took them to the appropriate places. The excess furniture that wasn’t broken was donated, the broken furniture was either broken down and thrown away or placed on the curb for an “urban recycler” to pickup. *Side note – it’s very common practice where we live for people to place unwanted items on the curb for others to take. I call them “urban recyclers”.

Now that all that excess stuff is gone it is amazing how much bigger our already oversized house seems. My anxiety level has dropped quite a bit, too. I don’t have so much stuff around me all the time. The space is so open and clear. Amazing what it has done.

Clean, prep and sell the house

Now that all the clutter is gone you will see many things that need cleaned and fixed. I would say to “clean like there’s no tomorrow”, but if there ain’t no tomorrow, I don’t care if it’s clean ;). Seriously, this is your chance to thoroughly clean everything, touch up paint, deep clean the carpet and more. You’ll need to do this before you can sell your house anyhow.

Now you’re all clean and it’s time to list your house. This is the part that stresses me.

I’ve always had a problem with listing with a real estate agency. I really don’t understand how they can demand such a high price for selling.

If you’ve never bought or sold a house, real estate agencies charge a percentage to sell your house, the standard price is 6%. This doesn’t seem like much until you crunch the numbers.

Let’s say you’re selling a home for $100,000. At 6% you have to pay the agency $6,000 plus fees to list your home and put a sign in your yard. If you’re selling a home for $200,000 you have to pay them $12,000 to list your home and put a sign in your yard.

Now, I know there is a little more work than what I mention above, but honestly, not much. Plus this fee is usually split between the buyers agent (the person who helps people find homes) and the selling agent.

The point is, why should someone selling a $200k house pay twice the amount as the person selling a $100k house when they get the exact same services? I don’t think they should.

The other option is to sell it yourself through a site like fsbo.com. I’ve not done this, but have friends who have with success. It’s not as daunting as it seems and these sites will walk you through the process.

Realtors will try to scare you away from using this method (understandably so) but it can be a way to save thousands of dollars.

Planning for your new home

Ridding yourself of all the excess stuff not only cleared your current house, it also gives you a clean slate to work from when choosing your new home. Now you don’t have to find another big place to put everything, you can find a smaller place and decide what you absolutely need. You may not even need to purchase anything new.

This will also mean your moving party won’t have to be as big and take as long. And your friends will not seem to be too busy that day to help if they see you have less to move.

06/18/14

Stay Positive In Bad Situations

In my last post I discussed how I had some setbacks to my debt free way of life. I had the emergency room visit and my A/C unit needed a major repair. The two of them combined put me back quite a bit and was quite a blow to my enthusiasm.

Neither expense was devastating to my bottom line and goals, but they were enough to set me back quite a bit.

After the first event (emergency room visit) I was concerned. I knew it would set me back a bit, but it didn’t bother me a great deal. After the AC went out I started to sink a bit. My enthusiasm was had really taken a blow. Although I knew that they weren’t going to totally ruin my plans, my mind started working against me.

I started to think “What next?”. I knew that just as soon as I accepted the setback, I’d be hit with something else. This was a bad mindset to allow myself to get into. Immediately I started thinking “I might as well just spend, maybe buy a new car”. And I almost did.

Now, I know this isn’t nearly as bad a situation that many people are dealing with. This is small in comparison and I can hear many of you saying “Dude, quit your crying”. And that’s what has helped me snap out of it.

Since my minor financial problem I’ve had three friends lose a parent. One had gone in for a broken arm only to find out they were riddled with cancer and he died two weeks later. Whoa.

That really put things in perspective for me.

I was quickly reminded that we can’t let a bad situation get us down. It may sting a little, but you have to find the positive side of a bad situation. Having the right attitude can get you through almost anything.

In my emergency room visit there was some extensive scanning done. It could have shown all sorts of ailments or problems, but it came out clear. That’s awesome! In the case of the AC needing repaired, well, now at least I’ll be able to keep cool this summer and I could have had to replace the whole thing which would have been much more expensive. Both of these situations had a higher positive to negative ratio.

Sure there are situations that are going to really be devastating, but there is always something to be positive about. Find the good thing, no matter how big or small and focus on that. The right attitude and outlook on a bad situation will get you through it much better than dwelling on the negative.

What about you, are there some tricks you use to get through the bad times?

 

06/9/14

Getting Out of Debt – Update

When I first started Path to Simple, I outlined my plan to get out of debt so I can start living life on my terms. This was back in November of 2013 and I’ve made some decent progress, but have had a couple of setbacks as well.

Where my debt is now
I’ve been sticking to my plan and almost have my biggest credit card paid off. I started at about $5,500 and after this month’s payment I’ll be down to about $1,700. I originally hoped to have it paid off by now but miscounted the number of months it would take to pay off. I’m now looking at August for a final payoff.

My auto loan has also been going down regularly and I’m down from about $9,500 (my balance in November) to about $7,500. Luckily I have a low interest rate so there has been a great deal of the monthly payment going to the principle instead of the interest. For what it’s worth, I don’t plan to ever get another car loan. I’ll buy cheap cars that I can pay cash for instead.

Setbacks
I’ve had a couple of unavoidable setbacks that hurt quite a bit. They haven’t killed my spirit, but I’m a little off schedule now.

Setback #1: Emergency room visit – I had an unexpected health problem that required an emergency room visit. I have health insurance, but the deductible so I’m currently paying that down. The total cost there was $5,000, my share was $1,400. Ouch.

Setback #2: A/C went out – Perfect, just in time for summer my A/C unit quit working. I would love to be able to live without one, but in this part of the country it can hit 100 degrees in the summer. That’s a little too warm for me. Normally I would attempt the repair myself (I HATE paying inflated labor charges) but this was beyond my skills, so I had to pay to get it done. That came to $1,300 of which $800 was labor.

I did dodge a near third setback, though. Our dryer quit heating so I called a repair company who said it would probably cost the same to replace with a new one as it would for the repair. This was the first sign that they were overcharging for their labor. I did research on the problem and was able to determine that it was the heating element that had gone bad. I looked on Youtube for repair tips and found a very similar model where someone had done the same repair. So, I bought the replacement heating element and did the repair myself.

My cost for the heating element – $15 and it only took about 1 hour to do.

So, with the setbacks I’m in almost the same place as when I started. It sucks, but it’s not the end of the world.

My original goal was to quit working a full time job by this time next year. I may still achieve that goal, but if not I’ll still sell the house and find cheaper living. I’ll use the surplus money to knock the debt down even faster.

Of course I’m open to suggestions. Any thoughts on what I could do to stick to my original goal?

05/27/14

Overcome the Dreaded Sunday Night Blues

Last Sunday my friend called and left a nice long message about the events of his weekend and before signing off said “And as usual, it’s Sunday and I hate Sunday”. We have had conversations in the past about how we can’t fully enjoy the day off work because of the anxiety of going back to jobs we dislike the next day.

I didn’t realize that this was such a wide spread issue. Until my friend and I discussed this, I thought I was the only one who felt this way. I did a little research and found out that according to this Huffington Post article, 59% of U.S. respondents in a Monster.com poll have the same Sunday evening depression.

Fighting these feelings isn’t easy, but here are some things you can do to hopefully overcome them:

Reflect
Think about the week before this moment. Remember that you made it through the week and it might have actually gone faster than you expected. I don’t know about you, but Monday and Tuesday tend to be long days, but the rest of the week speeds up and before you know it Friday is here.

Find a positive
Monday’s pull you out of relaxation and “me” time and back into the grind, it’s really hard to find anything good about that. But, there has to be something that you can look forward to. Maybe you’ve got coworkers that you like or even (gasp) your boss. Maybe there’s a project you’re about to complete or just enjoy doing? Maybe earning the pay from your job is getting you closer to getting out of debt. Find something to look forward to. Even the smallest thing can make Monday more bearable.

Share it with others
This kind of mixes with the previous point, but why not switch the day you and your friends/coworkers go for happy hour to Monday? It’s easy to want to go party on Friday, but doing this on Monday could give you something to look forward to and help “decompress” after the worst day of the week. Happy hour not your thing? How about making Monday the day your team goes to lunch at your favorite restaurant? Again, something positive in the middle of the negative day may help make it not so bad.

Find a different job
Most likely the reason you hate Monday is because you don’t like your job. This is an easy fix; find a new job. Yes, we’ve been told the job market is rough and that unemployment is high, but have you looked at the job websites? There are a lot of jobs out there. I understand that job availability varies by field, but maybe switching careers is what you need? Maybe you’re just burned out and need a fresh start.

Quit working Monday’s
This could possibly be the best solution and the one that I think best describes me. I’ve discussed it before in this article, we spend too much time working for others to build wealth for them that we lose ourselves and our dreams. We put a lot of value in owning things that we don’t really need or want, we just buy stuff looking for that short rush of happiness. If we switch our thinking and realize that selling our time to buy these things is where the real feelings of the Sunday Night Blues comes from, maybe we can overcome them.

Maybe it’s not possible to just quit your job or quit working Monday’s right now. It may take some debt reduction in order to work less and subsequently make less money. That could be your motivation to work Monday’s for now. Know that working Monday this week and reducing debt, changing your thoughts on debt and spending, will allow you to stop working for someone else in the coming months or year.