Author Topic: Right size my life  (Read 3266 times)

the_fixer

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Right size my life
« on: October 25, 2016, 11:15:37 PM »
Just found the site and thought I would share some of the changes we have made over the last year to right size our lives and step off the wheel of excess. End goal is to retire early, travel and changes were necessary to accomplish this not to mention it is just plain stupid to waste money the way we were.

Start of 2016

Debts
Mortgage $360,000 30Y 3.275% 2044 pay off date
Car loan $20,500
Credit card $15,875 ($711 in interest paid in 2015)
Tractor loan $5,000 0% interest

Bills 2015 - mid 2016
Water between $55 (winter) $450 (summer)
Gas / electric $250 average per month (elec high in summer gas hig in winter)
Cable, internet and security system $257
Rhapsody $14.00 per month
Gym Membership $127
Mortgage Payment $2435 Insurance ~$2500 and Taxes ~$4800 per year included in Mortgage
HOA $800 year


We were living a very very wasteful life 2 people living in a 4800 square ft house on 2 acres in the country.
Fully landscaped 1.5 acres of grass that needed to be watered, mowed (of course with a fancy john deere tractor) 100+ rose bushes.
Every spare min was spent maintaining the house / property or working to pay for it. We stopped riding our bikes and of course packed on extra pounds to go with our new lifestyle. 

Sold house $575,000
Sold Tractor $4500
Sold a bunch of other stuff ~$3500

Moved to new area of town that we like better and purchased a townhouse (1700 sq ft 2 bedroom 2.5 bath) that is closer to my wife's work, has Mt Biking trails right outside our door, less than a mile or two from everything we need, includes all exterior maintenance, pool, multiple hot tub's, multiple gym's and it has nicer finishes than our house we sold.

Purchased townhouse $360,000 15Y 2.78% 2031 payoff date ($175K down reduction in mortgage of $175K 13 year reduction)
Mortgage payment $1430 ($1005 reduction per month) Insurance and taxes included
Water $40 - 45 per month ($15 - $405 reduction per month!)
Gas / Electric $105 average per month ($145 reduction per month AVG)
Cable / Internet $105 (reduction of 152 per month) I know I know this is a bunch but we need internet access for work and are addicted to a few shows baby steps I guess :(
Gym Membership GONE ($127 reduction per month)
HOA $162 per month (includes external bldg maintenance / insurance and Gym, pool and other amenities
Canceled Rhapsody membership using Amazon music we already get with our prime membership

Status 10/2016
Mortgage $173,440
Credit card $9326
Car loan $15,593 (Looking to sell it or find a side hustle to pay for it)


Goals over the next year
Reduce spending
Live off wife's income only and save / invest 100% of my income
Pay off credit cards ASAP (paid 0 interest so far since changes)
take action on car
Max out both of our 401k's to reduce tax liability
Max out IRA's need to figure out what our options are
Find other ways to reduce tax liability
Increase savings
Started using Mint to better understand where our money is being spent allowing for further optimization
Find a financial planner, CPA and or mentor to help me get started on the right path not really sure what one / combination would be best I am in Louisville Colorado area 

This year has been a year of major changes!

I am happy to have found this site and hopefully I can do as well at getting things in line as most of you have... Truly impressed with your skills

patrickza

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Re: Right size my life
« Reply #1 on: October 26, 2016, 12:34:24 AM »
Welcome to the site :)

You have some pretty impressive goals considering where you started!

Frugal Lizard

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Re: Right size my life
« Reply #2 on: October 26, 2016, 07:22:58 AM »
That is a lot of change.  Bravo.

the_fixer

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Re: Right size my life
« Reply #3 on: October 26, 2016, 08:15:49 AM »
Thanks for the words of encouragement I know we have a long way to go but it is a start.

It has been tough on my wife she has had a stressful year studying for her professional engineer licenses, her mom went into ICU for 12 weeks and passed away on her birthday and our closing on the house was the day after her moms funeral. Add to that all of the changes and it has been a whopper of a year for her.

we were without a place to live for about a month between selling the old place and moving into the new place. Made the best of it and put everything we owned in a POD and took a road trip on the cheap for a month.

If we can make the changes we have in the circumstances of the last 7 months I have hope that we will kick butt and take names going forward.

So far our quality of life has improved greatly the wife gets to ride her bike most days of the week, we are cooking again and eating better and trying to figure out what to do with our new found freedom / spare time. 

Only regret is not starting sooner...

Metric Mouse

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Re: Right size my life
« Reply #4 on: October 27, 2016, 01:56:25 AM »
...So far our quality of life has improved greatly...

This is the best part of everything! Even if nothing changes from this point, you're still better off than you were! Good work, and I can't imagine the positive changes won't keep coming!

ABK

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Re: Right size my life
« Reply #5 on: November 06, 2016, 09:56:29 AM »
Fantastic! Keep up the good work.

the_fixer

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Re: Right size my life
« Reply #6 on: November 14, 2016, 04:19:15 PM »
Thanks for the encouragement.

update

set wifes 401K to 25% hope to hit the max by end of year
Set my 401k to 50% hope to hit the max by end of year

Both contributions will drop down after the first of the year and and I will get more aggressive with paying off the credit card / saving but no interest so far since we made the change so I figured it made sense to max 401k, drop taxable income and get the money earning for me now.

Credit card is currently at $8059

Reduced gas/ electric bill for the last 2 months to Oct $65 Sept $72 and expect about the same or a little less this month.  The nice weather here in Colorado has been pretty nice but normally at this time of the year we would be bouncing between heating and air conditioning by leaving it off our house has been 69 on the coldest day and 78 on the hottest. Obviously this will go up when the temps drop but we saved a decent amount for a few months and were just as comfortable.

We have a storage unit that we planned to only have for a month or two while moving between houses I have someone coming over in the next week or so to take the large items and getting rid of it will free up $115 per month

Working on getting rid of the car that we owe money on just need to figure out how to get around now that Winter is coming.

We are on track to max the 401K accounts next year

Getting a better understanding of our spending after a month of using Mint and should be able to see additional savings.

Bracken_Joy

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Re: Right size my life
« Reply #7 on: November 14, 2016, 04:44:05 PM »
So awesome! You're taking big steps it sounds like.

Be sure to kill that CC loan and car payment hard and fast (depending on rates, time left at 0%, etc).

A few things to consider:
-Do you have wills and power of attorney dealt with?
-Do you have disability insurance (short and long term) and life insurance, as needed for your situation?
-Are you maximizing tax advantaged space? IRAs in addition to 401ks?  (sounds like you're working on this one)
Don't necessarily have to have all the insurances, but know what they're for and get them if they're appropriate for your situation =)