June is rolling along nicely and the black cloud of taxes, car repairs, mower repairs, etc. seems to be behind us. We went over budget on Father’s Day yesterday, but Mr. PoniesandFIRE had an above average check this week, so it balances out. Obviously would have been better to stay on budget and use the extra in a better way, but we had such a nice family day yesterday that it’s hard to feel too down about it.
We sold some DVDs last week for $30, which was nice. It had been a few weeks since anything sold, but now I’m fired up again to list more stuff. I’m trying to stay on the de-cluttering bandwagon!
I found out we have a “Once Upon a Child” store nearby, so I’m thinking I may bring some of our son’s outgrown clothes there this weekend and see how that works. I have a few pieces that he outgrew before even wearing and I’ve been trying to sell them through FB marketplace with no luck.
We paid a little extra with the regular truck payment, which was exciting. We’ve been basically ignoring the truck payment and letting it roll along, but now I’m itching to pay the damn thing off. I love the truck, it makes me money, but I am getting really sick of the payment.
TIME TO KILL THE TRUCK LOAN! :)
This is our financial plan for June:
Mortgage (includes taxes and insurance) - $1,950
Truck payment, plus extra: $1,000
Electric: $100 (hoping we are under budget here)
Spending cash: $50
Father’s Day: $25
Expected income: $6,600 (This is an estimate as we are never sure how many hours Mr. PoniesandFIRE will get per week)
Extra snowball: $1,592
Where is our extra snowball going in June? Towards a family vacation we are taking at the end of November 2018. We have not been on a real family vacation since 2015, and even then, that was only because of a family member’s destination wedding we attended. My goal is to have the vacation paid off in full by the middle of July, then we will go back to saving money for home improvement projects to prepare to sell in 2019 AND towards paying off our truck.
**Note for new readers** Yes, we still have a truck loan, our only BS2 debt left. We have fully funded BS3 and are putting 15% towards BS4. We intend to now go back and pay off the truck, but it wasn’t a priority as it was purchased for my side business and was an expense for the business. I know it’s out of order for hardcore DR fans, but that’s where we are putting the “personal” in personal finance. ;)
In 2011, Mr. PoniesandFIRE and I bought a house while newly engaged, in every wrong way possible. It was a foreclosure that needed some major work. We barely put down a down payment and what we did put down was mostly from a 401k loan that we took out. We rolled closing costs into our mortgage and actually mortgaged more than the purchase price.
We took out a 30 year mortgage with a 4.75% interest rate. We dropped probably another $8k the first few months living there, when we found we had burst pipes from them being improperly winterized and that we needed a pellet stove to heat the place, plus a variety of other expenses to make the home livable (read, NOT nice).
It was probably two months later that I found myself in front of a computer googling “how to get out of debt,” and came across Dave Ramsey. That was our real entry in personal finance and we then cash flowed a wedding, paid off credit cards, student loans, the 401k loan, vehicles and more. We had PoniesandFIREjr. We figured out daycare costs. We eventually got to the point where we were able to pay extra on our mortgage.
Things were cruising along financially, but it felt like some funds were slipping through our fingers. We weren’t as tight on our budget as we had originally been and while cash flowing some expenses, it felt like weren’t making any progress on our house.
Mr. PoniesandFIRE suggested a refinance, but I was against it as, on paper, we should be able to make big progress on the mortgage and pay it off soon, so why go through the hassle of a refi? I dug my heels in a bit on this, but when I realized we could reduce our interest rate and that there would be very minimal closing costs, I was swayed.
In October 2017, we refinanced from our 30 year 4.75% to a 10 year at 3.25% with our local credit union. At that point into our 30 year mortgage, a regular payment was only reducing our principal by around $370 a month. Our first payment on the 10 year reduced our principal by $1,000!
If we don’t pay ANY extra between now and the loan’s maturity, just by making this refinance, we will save ourselves over $50,000 in interest!
I know there is strife over paying off mortgages early in the FIRE versus Dave Ramsey worlds, but for us, we still plan to shoot for being mortgage free as soon as possible. Once our mortgage is gone, I could get rid of my side hustle with zero negative financial effects to our lifestyle and make huge improvements in our quality of life.
For us, the 10 year was such an improvement in our interest rate, as well as being the kick in the pants we needed to stay on budget. Rather than our extra payments dwindling like last year, they are built in now, but it’s not so tight that a bad month financially would be hard to make the payment. Even if we go through with selling next year and downsizing, the progress we will have made in the 18 months on the 10 year will be hugely helpful!
If you haven’t considered it before, I definitely suggest checking out a 10 or 15 year mortgage refinance and don’t forget to check your local credit union! Our credit union could beat every other bank we tried by at least ½ a percent!
My side hustle is running my own horse training business and last week I was at a competition with 6 of my students from Wednesday through Sunday. I used vacation time from my regular job and Mr. PoniesandFIRE planned a week of vacation at the same time, to get some stuff done around the house and be home with PoniesandFIREjr.
I was dreading going a little bit, mostly because it’s a long time away from home and long hard days. I always enjoy it when I’m there, I love working with my students and seeing them and their horses progress, but the days before I always feel like not going.
Funny enough, it seemed like I blinked and was already back on the road home. Today I’m working on my billing and, while it’s not a lot of money if I were to break it down hourly, I’ll be about $1,000 richer once my clients pay. Sometimes it’s hard, but I have to keep reminding myself that the long days of extra hours of work do go by so fast.
I have three more weekends of horse shows before another day off, which is a little rough, but the nice weather and possibility of making some extra payments on the truck by the end of June has me pretty pumped up. I’m feeling like there’s going to be good progress made in June!
On my post "25 Ways We’ve Tightened Our Budget and Saved Money " (https://www.poniesandfire.com/blog/25-ways-weve-saved-money-and-tightened-our-budget), number 16 was unplug unused electronics.
Prior to this spring, we were rolling along with a pretty high electric bill. We run a dehumidifier in our basement and our pellet stove (main source of heat) runs with an electric auger. We also left tons of things plugged in 24/7 even when not in use, like cell phone chargers.
I was skeptical that unplugging things like our coffee pot and PoniesandFIREjr’s nightlight would make much of a difference, but I decided it certainly couldn’t hurt and got on board with taking the time to unplug.
Through the winter, our electric bills were $120-$130, on average. When we received those audits from the electric company on how we compared to our neighbors, we were always at the top of the average or higher. Ouch.
It finally warmed up enough to turn off our pellet stove a few weeks ago, which I know is the main reason our recent bill is lower, but I have to think my diligent unplugging has also made some difference too!
Our bill came in yesterday and was $88.16! Over $30 below the previous bill! I can’t wait to see if I can get that even lower this next month. Once the spring rain is over, I’m thinking we could probably use our dehumidifier sporadically, rather than 24/7. I’ve also got to stay on top of air drying rather than using the dryer. We were a little lax on that this month.
The only thing that could derail this newfound low electric bill would be the air conditioners. We have two window units in our bedroom and PoniesandFIREjr’s bedroom for when it gets super-hot while we’re sleeping. Our house is 118 years old and the insulation upstairs isn’t fantastic, so it’s cold in the winter and warm in the summer. I’m hoping we can hold off as long as possible this year though.
Goal – below $80 on our next electric bill…
It’s been four days since Mr. PoniesandFIRE and I agreed that downsizing would be a good plan and neither of us have changed our minds! All the other times we’ve discussed this, we’ve changed our minds within 48 hours or less. I guess this time we are going to do it!
We have been working out a tentative timeline and list of projects we need to finish before it’s realistic to list our house. About a year ago we had a couple realtors go through our house with us, so we have a good idea what needs to be done to make it more appealing to the average buyer.
Mr. PoniesandFIRE also told me last night that he’d really prefer we have the truck paid off before we sell as well, as it will be one less payment to worry about while we are in limbo. I like that plan, but that’s $22,440 to pay off. We have sent a timeline of 11 months to get the house on the market, so we had better get our keisters in gear to accomplish all this!
We have about $25,000 in renovations (smaller projects to be done by us, with a couple bigger projects to be done by pros) and some major decluttering/selling of stuff to do. We already have $6,500 towards these projects saved, so that’s a start at least! We are estimating high on some of the projects, so ideally we will come in under budget somewhere.
I’m going to go home this afternoon and list at least three things on FB Marketplace and Let Go. We need some stuff to start exiting our house and any extra income we make selling our junk is going to be put to quick use on these goals.
Our house is large, as in 2800+ square feet. We are a family of three, plus two dogs and a cat. It turns out, we do not need four bedrooms and we literally have rooms we don’t even walk into for months at a time.
I love our house. I love the location, the view, the land, but I don’t love the payment and I don’t love how big it is. It takes forever to clean, it is expensive to heat and we tend to accumulate a lot of stuff, just because we have so much space to stick stuff. The extra rooms are great when family visits, but that’s only one or two times a year. Lately, that just doesn’t seem like enough to justify the space and expense.
We purchased the house as a foreclosure in 2011 and got a great deal on it. It had been sitting empty for a year and it was during the mortgage crisis, so the market locally was a bit dead. Its value, with the minimal work we’ve done, has probably increased $45,000+ above what we spent on it in the last seven years.
We refinanced last year from a 30 year mortgage at 4.75% to a 10 year mortgage at 3.25% and are making huge headway because of that, but the thought of having that mortgage for 9.5 more years, when we could downsize and end up with little to no mortgage is hugely appealing. That extra cash flow would easily allow us to max out our 401ks.
Honestly, without daycare (PoniesandFIREjr starts kindergarten in fall of 2019) and our mortgage, either Mr. PoniesandFIRE or I could stop working one of our jobs and still make the same progress on our finances with a huge increase in quality of life.
This is not the first time we’ve thought about this, but during a long car ride yesterday, while listening to a BiggerPockets Money Podcast about live in flips (this one - https://www.biggerpockets.com/renewsblog/biggerpockets-money-podcast-05-jump-starting-early-fi-plans-live-in-flipping-mindy-jensen/), we realized we were sitting on that potential situation.
We could spend the next 6 months to a year working through some renovation projects and downsizing our stuff and then sell our house and walk away with enough money to buy another smaller fixer upper in cash, or very close. We could literally have NO MORTGAGE by the end of next year by moving!
Now, like I said, I love our home’s location and so many things about it, but you know what I love more? The idea of NO MORTGAGE. Plus, we’d have the added benefits of smaller utilities and insurance costs. We’d also have the mental simplicity of less stuff and a smaller home to maintain and clean.
Have you downsized your living arrangements for the sake of reaching FI sooner or simplifying your life? I’d love to hear other’s experiences with this…
Theodore Roosevelt said it, “comparison is the thief of joy.” Dave Ramsey has his own version when he rails against keeping up with the Jones’. I try and drive it home with my own riding students, when I discuss with them that there is always a better rider with a fancier horse somewhere, but that takes nothing away from your own journey and experience in the sport.
It’s human nature to compare. I find myself comparing our financial journey with others. Part of it stems from a feeling of fear, wondering if we are on track or doing enough. I have to remind myself, to quote my dad, that “there is more than one way to skin a cat.” Terrible phrase, but applicable.
Our journey isn’t perfect. Our journey isn’t going to match anyone else’s. That’s ok.
Everyone has their own financial struggles, strengths and goals. We each have different priorities in our lives and, as long as we are aligning our dreams and goals with our actions and making steps forward, we are all succeeding.
These are three questions I ask myself when I start to compare someone else’s life to mine:
1. Is there something in my life that I want to change that this is highlighting for me?
a. If so, what am *I* going to do about it?
2. Does this take away from my own accomplishments to be happy for their success?
3. Does more people finding success and happiness build a better future for everyone?
I typically find that when I take a moment and think through those questions, I end up with genuine and sincere appreciation for the other person’s success. I can take a moment and revel in someone else paying off their house, even though I know we are years from that point. I can cheer on someone reaching FIRE, even when we’ve had a bad financial month. Neither situation changes anything in my life, except encouraging me forward, that this FIRE plan can work, because see?!? It just worked for those people!
Present day PoniesandFIRE is way more in control of her finances than a few years ago.
We have a decent net worth, retirement savings, a plan, no student loans or credit card debt, yet some days I still feel overwhelmed. The financial goals we have set seem impossible at times and the desire to hit them ahead of schedule is often on my mind. I want to reach FIRE and I want it NOW!
When that feeling of being overwhelmed by the tasks in front of us takes over, here are a few things I’ve started doing to help.
1. Review our monthly financial snapshots. Every month, I write up a word doc with some basics of our financial situation (debt, retirement account balances, 529 balance, cash savings, etc). We have almost two years of these now and it is so empowering to look back where we were 1 or 2 years ago and see the progress we’ve made.
2. Find something to list for sale on FB marketplace. The idea of selling something and having extra unplanned money in the budget is a huge mental boost.
3. Make a list of small actionable items I can do that week or month to help move the needle. I’m obviously all about lists, so this is actually fun for me.
4. Use Dave Ramsey’s investing calculator to play around with how our timeline changes in the future when things like daycare costs go away and we can raise our investments.
5. Play outside with PoniesandFIREjr, enjoy the sunshine and stop thinking about finances for a while!
6. Plan a free or cheap family activity (hiking, fishing, camping in our backyard, etc) and embrace the fun of where we are at now in life.
7. Schedule a little “me” time. I am terrible at overscheduling between my job and my side hustle and when I start to feel overwhelmed, it often means I need to dial it back a touch for a day or two.
8. Exercise. Those endorphins from a good workout are no joke and sometimes my best ideas come during a run.
9. Gather up all the spare change from our cars and house and deposit it! Those few dollars might not be a big step towards our goal, but they might be enough to feel like I’ve made some progress that day.
10. Listen to a financial podcast or re-read one of my favorite financial books or blogs. Hearing about other people’s struggles and successes is hugely reinvigorating! I always end up thinking, if they can do it, so can I!
April was not our best month between taxes, vehicle repairs and the extra-long winter, but we still made some progress!
401k balances increased by $3,091
Mortgage balance decreased by $1,016
Truck debt decreased by $551
Our emergency fund is still fully funded
We are at 7.29x our annual retirement budget
Here are our May goals:
1. Stay on or UNDER budget for groceries again
2. Pay off our car insurance in full
3. Decrease debt by $2,000
4. Add $200 to PoniesandFIREjr’s 529 account
5. Get garden planted!