Friday, April 10, 2015

Finally Financially Independent: Can You Live a Rich Life on $3,000 a Month?

Yesterday was my last day at Megacorp (gulp) and I'm not 65 years old yet, I'm not even 59 1/2!   Anxious?  Excited?  Terrified?  Yes, yes, yes.    Is it something that you could do too?  Yes, you too.

Call it semi-retirement, retirement, a mini-retirement, early retirement, embracing the simple life, the mid-life crazies, taking a break from burn-out...I'm not sure what label fits yet.   The truly kind people at Megacorp gave me a subtle kick-in-the-pants and I am eternally grateful.  The choice was to conform to a job that just wasn't a great fit or get the heck out of the way.  

I took it as a sign from the universe to RUN, not walk, from a bad fit to finding the people who need exactly what I have to offer.   I may never work full-time again and just volunteer, or work by-the-hour, or even find another, better-fitting job -  not sure yet.  But I do know that this will test the financial freedom plan I'd been preparing for years.  Nothing is more satisfying that being the master of your own life.

Game.  On.  

$3K per month financial road map - This is a high level outline of my financial readiness checklist that may help you if you are planning or even just dreaming about walking away from the corporate cube.  If I can stick to the $3K per month plan, I can choose where and when I work and keep my financial independence for the reset of my life. 

1)  Debt.  

None.  The only credit card debt I have is paid off each day.  I use the credit card every day in order to score the rewards and pay the card each night with a transfer from my online bank.  

No mortgage.  Sold the townhouse I was renting out and added that cash to my "cache."  Found a place to rent that is cheaper than a mortgage plus upkeep (thank you Michael BlueJay!).    I do choose to help my daughter pay on her student loans, but I can opt out at any time.  My name isn't on the loans.  (No worries, honey, I'm not planning on stopping payments in this lifetime.)

2)  Cash in the Bank. 

Over $350,000 in retirement funds plus almost $80,000 in cash.   I have two pensions I can tap into beginning in 3 years.   It's squeaky tight, assuming my nest egg growth is equal to my personal inflation rate, around 1.3%.  

3)  Monthly Overhead -  $2,999 per month

  • Housing - $600 per month for 280 square feet.  

Hello tiny house living!  (See photo above. It sounds cheap, but it's actually expensive for my area -- the rent is a little over  $2 per square foot which is double local rental pricing.  But it's in a great neighborhood, covered by a canopy of 100 year old oak trees.  I can walk to the grocery store and say hello to my neighbors sitting on their front porches.  It's truly a juicy spend - frugal yet satisfying
  • Medical, Dental, Vision, LTC - $800 per month.
$500 for COBRA coverage, $100 for long-term care, $125 for meeting annual deductible and $75 per month for prescriptions.   I do take advantage of an HSA, so may get a little back next year in tax benefit.
  • Utilities - $229 per month
$60 for electricity - another benefit of tiny house living is that you just don't need as much cooling and heat.
$35 for water and sewer.
$68 for cell phone service
$66 for high speed internet (yes, this is my juicy enough splurge).
No cable television, I use rabbit ears and get all the public television that I need, plus ABC, NBC, CBS and Fox.
  • Food -  $430 per month
$220 from the grocery store, $210 budgeted for dining out, coffee, etc.  I save on dining out by doing a lot of happy hours - fun, social and satisfying but cheaper; and I use strike point pricing for grocery items.  I'm also blessed with a significant other who likes to take me out to eat a couple of times a month.  Love, love him.
  • Transportation -  $450
My state is notoriously backwards in providing public transportation and has a high insurance rate, so this is a tough category.  Not much wiggle room.
$125 per month for insurance.  $80 a month for fuel. ( I have a hybrid Honda Insight)    $200 per month in a savings account to build up funds for repairs, new batteries for the car, a new-to-me car when this one draws it last energy-efficient breath.
  • Gifts/charity/helping daughter with student loans - $250 per month.
This category might get shaved down a bit, but there's no way I'm going to stop giving.  It makes me happy to give gifts and to donate to every high school car wash and Girl Scout cookie sale I stumble upon.
  • Clothing - $65 per month
I have plenty from years of clothing purchases in corporate world.  But do need new running shoes and sundries from time to time.  Can you say "Goodwill.?"
  • Personal supplies, grooming, etc.  - $75 per month
  •  Household supplies - $100 per month.  Includes food and litter for cat, paper goods, cleaning supplies.  
(caveat - this plan has so little room for error, as my friends/experts/free financial gurus over at Early Retirement pointed out.  So I will continue to work as a freelance digital marketing consultant for awhile.  Expected monthly income from that will offset costs of new computer.)  

Does this seem extreme to you?  Or is it close to your monthly budget per person in your household?  Would love to get thoughts, comments and suggestions here from the readers.    

Friday, March 27, 2015

Financial Freedom: The Best Frugal Tips Starting with Coffee

Maybe it's because I live in South Louisiana, sometimes called "French" Louisiana.  This part of the state just drips with warm weather, great food, free music festivals and other creative talents shared with all.   

And we share some of the same "frugal, squeeze the best juice of every moment" lifestyle habits as the Europeans.   

You don't have to live in Louisiana or Europe to recreate these same delightful daily experiences!   

Take  coffee.   It's a $4-6 per day habit.  Some say cut it out of your budget, it's a waste.   I say that's ridiculous.   In fact,  I propose that you cut something else out of the budget just to keep coffee in! 

Why?  1) It has been proven to be good for your health (and this is from the people and research at Harvard, mon ami).  2)  It's one of the best inexpensive ways to add a frugal juiciness to every day of your life. 

The Belgians love coffee so much that they serve chocolate with every cup -- free of charge.  It's a visual AND a gastronomical treat.    If you want to immerse yourself in the Belgian way, check out this blogger's post  about the Belgian café society.     "Drinking good coffee is a spiritual experience..."    Just reading the post made me happy! 

Other ways I like to enhance my  daily coffee: 

1)  Using a French press when you have time.  This is a photo of mine.  Nope, I don't make any money from Mr. Coffee recommending this French press!  I started with a Bodum, but I like my Mr. Coffee better.    Here is a nice visual tutorial if you are interested. 

2)  Try to limit drinking out of a paper cup.  Enjoy the ceramic or china in your life.  

3)  I try to buy coffee at the .50 cents per pound limit.  Frugal also means practical, of course.  I make sure to save my pennies so I can buy the best. 

Sometimes Tuesday Morning has a deal on European coffees pre-ground that are around $6.00 for 12 ounces.  Trader Joe's coffee is also about .50 per pound.  Community Coffee is one of my favorites, of course, and you can often get a coupon code for it from Retail Me Not

4)  Or sometimes I just  go to Lukes on St. Charles in New Orleans.   Chef Besh's casual dining pub has some of the best coffee service at the bar.   An inexpensive way to really enjoy the city. 

Coffee at Luke's

How do you enjoy your coffee?  Please share tips! 


Monday, January 27, 2014

Is Frugal Becoming the New Black?

I like how we are beginning to think in the blogosphere (and in the real world!) about money.    Bigger is not always better.  Less can be more.  You aren't defined by what you own.  Debt can suck the life out of you -- avoid it at all costs.

See this post from June of 2013 that is still attracting comments.

I'm constantly reminding myself that Frugal didn't always mean "cheap."  It derives in part from the Latin word frux, "fruit, produce," and "value, success."  Juicy!    As Vicky Robin says in the audio version of "Your Money or Your Life," -- it's about squeezing all the juiciness out of every expenditure so that your life is as fabulous as possible.   

Wednesday, November 6, 2013

Escape from the Cube: Financial Independence - Being a Rental Lord

It's middle of month 4 of the Landlord Challenge, and so far so good.


1.  I've  cleared about $300 or around $100 a month!   Doesn't sound like much except that $300 is on top of the renters paying for all of my maintenance costs savings ($200 per month), all of the manager's fees, property taxes, all of my mortgage interest, the mortgage itself and building my equity - about $150 per month.

2.  I'm only making $28 a month on a savings account of $28,000.   I've got $50,000 in equity in this town home, so I'm thinking making  $100-$250 a month is good return.

3.  My utilities at my new place are only $50 a month for electricity and $21 for water/sewer/trash.  I'm living in a luxury condo in the middle of the city, within walking distance of coffee shops and grocery stores, for about the same cost as living in my suburban town home with the long work commute.

1.  Rent is coming in as expected, although it is a little later than I would have hoped. The management company's bookkeeper quit and they are in process of training the new one.  By the time the management company processes the checks, it is around the 15th - not the 1st - and I'm usually so nervous about it, I go pick up the check myself.   I am looking forward to the day when that check just shows up in my mail box, as I expected.

2.  The air conditioner went out on the Friday before Labor Day.  The temperature in my part of the country averages around 98-100 degrees on that weekend!   The maintenance guy I had lined up for such an emergency was a complete waste - thank goodness for the management company.  They took over and had it fixed before 5 p.m. that day.

3.  Renters, being college kids, forgot that they had to pay for water as well as electricity.  Their water was shut off and a panicked phone call to the manager occurred on a Friday afternoon.   All was straightened out and again, I'm in debt to my rental manager.

Like I said, so far, so good.  Next month could be a completely different story!    But for those hoping to take this risk as well -- the moral so far is "hire a good manager, and stay on top of the rental checks..."