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Posted on Jul 22, 2013 | 0 comments

A New Car with a Side of Friendship

Small but mighty!

Small but mighty!

Over the last few months, several times Dan and I have brought up selling our GMC Jimmy and buying a vehicle with better gas mileage. Though we had only owned the Jimmy for a little over a year, we’ve had multiple repairs that we’ve had to make in addition to only getting around 15 mpg on average. We figured out that even though we only are planning to own our cars for one more year or so, there was still significant savings to be made so we starting searching for a reliable car with good gas mileage. We got a little help from the financial blogger Mr. Money Mustache who has a list that we used of the top rated small cars for reliability.

We quickly found that we really liked the look, efficiency, and pricing of the Scion xD and xA hatchbacks. These cars are stylish and fun while getting great gas mileage and having plenty of interior room for the three of us. (Note: they are still pretty small cars so anything more than 2 adults and 2 small kids is going to feel cramped.) We found an xD on craigslist only about 45 minutes from us and decided to check it out.

As Dan went on the test drive (we had Carter with us so I stayed behind) I started talking to the couple that currently owned the car, Kyle and Becky. The conversation sounded something like this:

“So, why are you selling your car?”

“Well, we’re pretty much selling all of our stuff because we are moving to Belize.”

“Really? Are you going there to do anything specific?”

(apprehensive pause) “We’re planning to be self-sustaining farmers and work at an orphanage there.”

How cool is that! Just in the course of a few minutes I got to hear about how this couple about our age are getting ready to head out on their own epic journey and follow their hearts off of the well worn path. Even though I could tell Becky was obviously nervous about telling us their plan (as I understand completely) I’m so glad she broke the ice. We were able to share some of our experiences in trying to plan for the unknown and made new friends. Most of all it was so encouraging to meet other people who share in common with us their belief that we are not prepared for our current life to continue on without change. Their journey will be very different from ours, but it comes from the same desire to live more extraordinary lives while we have the opportunity.

We were happy to be able to help fund their goal in some small way by buying their car (which we love by the way) and if you would be interested in buying their house in Lincoln, Illinois here is the listing. We wish the best of luck to Kyle and Becky and hope that they see their dreams come to fruition very soon. Maybe if we make our way over to Belize in the next few years we will meet up with them again.

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Posted on Jun 27, 2013 | 0 comments

Boat Review: Morgan Out Island and Cape Dory 33

While we were in Panama City we decided we should take a look at a few boats that were potential candidates for us in the future. Most likely none of these exact boats will still be on the market in a year from now but it was important for us to get an idea of what condition boats were actually in that would be in our price range. It’s one thing to tour beautiful, brand-new boats at a yacht show and something else entirely to get a look at what we could realistically expect for $50,000 or less. We were a little apprehensive before going in though cautiously optimistic due to the amount of research we’ve already put in.

First up was the Morgan 41 Out Island. We have seen a lot of these on the cruiser’s forums as recommended family liveaboards (though it didn’t make the Mahina list). It has two good-sized staterooms and a nice big settee as well, so I can certainly understand why families with kids would like it so much. The center cockpit was also large and spacious and would certainly make a great space for entertaining. There was a lot of storage space throughout the cabins and the extra living space in the aft master stateroom would make for a relaxing retreat.

There were only a few negatives (in our opinion, they might not be for others) that we noticed about the boat. First, we aren’t very big fans of having 2 heads aka bathrooms on a boat. That might not seem like a problem, but we figure it’s wasted storage space and more hassle to deal with. Also, the walk-through hallway is pretty darn tight, as in Dan and I could not pass each other at all and we aren’t very big people. There is plenty of cabinet storage but I have a feeling that it would be somewhat cumbersome to use with how narrow the hallway is and it would be especially tight trying to work on the engine which is also accessed there. Overall, the Out Island was a very nice boat and one we wouldn’t be disappointed with, but we just weren’t really feeling it. (This particular one at least. The Out Island can be found in many different layouts and every boat is different.)

The next boat that we saw was a Cape Dory 33. To be honest, we really should have looked at this one before the Out Island instead of after. We came away feeling like it was just too small for us which was compounded by the fact that this specimen wasn’t very well cared for and had a lot of junk piled inside of it. I think even a nice one would probably be too tight of a squeeze for 3 people, but it could make a good cozy boat for a couple. The galley area was actually more spacious on the Cape Dory than the Out Island with more working counter space, but that’s about the only thing that was bigger. One of the most pressing issues that I would have living in this boat is not just the living space but the non-existent storage space. I don’t think that our SCUBA equipment would be able to find a home on this little boat and therefore neither would we!

Luckily, the next two boats we toured were ones that we would be thrilled to pick up when the time comes but we will save those for next time!

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Posted on Apr 24, 2013 | 0 comments

Margin of Error

A financial safety net is just as important as a physical one.

A financial safety net is just as important as a physical one.

Whenever we are dealing with finances Dan and I like to plan for a pretty decent margin of error. (Dan would appreciate it if I would practice this a little more in dealing with scheduling as well; I am consistently 5 minutes late.) If you could listen in to some of our mini-planning sessions we frequently have, you would hear the phrase “worst case scenario” at the beginning of most of them. We figure that if we plan for the worst case – within reason of course, we aren’t going doomsday here- then we will be left with a much higher comfort level and safety net in times when we’re living on the other end of the spectrum.

The margin of error is especially important when we are talking about making a budget for a lifestyle that we have never lived before. Sure we think that we will be fine living on $1000-$1500 per month based on our research, but that’s all it is right now, research. It’s crucial for us to know that if that doesn’t end up being true we aren’t left high and dry (pun intended). The whole basis of this adventure is our desire for freedom but you can’t have freedom if you are constantly worried about how you are going to pay for the next time your engine needs a tune-up.

There are a couple of big ways that we are dealing with the margin. The first is in how we are planning out our rental income. Dan has created a spreadsheet that we use to evaluate any potential rental properties that we look at which takes into account all expenses (including property management costs at the highest rate we’ve seen in our area) and also vacancy rates of our tenants. We have separate columns for vacancy rates at 0%, 4%, 7%, and 11%. The current accepted vacancy rate in our area is a very low 2-3% but we use the 7% rate as the amount that we use for budgeting purposes. We hope this will give us a very safe expectation of income from our rentals even if the market worsens a bit before we leave. Hopefully we’ll continue filling vacancies within a week or two as we have done with our first 2 houses and also find a manager we like at a lower price, but if we don’t we are still fairly comfortable.

The second part of the plan is maximizing our income earning potential while cruising. Dan is currently a certified PADI Dive Master and plans to become a PADI Open Water and Specialty Instructor as soon as possible. Because PADI is recognized worldwide we are hoping that this will give us a nice back-up option if our income falls short of expenses. We also intend to log our sailing time once we start cruising to begin the process of getting Coast Guard Captain’s licenses (6-pack at least) which would allow us to complete deliveries and also increase Dan’s marketability as a SCUBA instructor who is licensed to carry divers himself. Finally, investment income on other savings and maybe some future swing trading as described in Live on the Margin in addition to some small income from this blog (yes we have recently added ads to the site) eventually could all add to a few hundred a month for extra flexibility.

Best Case Scenario: our costs will not overextend our rental income, we will have renters who stay for years at a time and financial stress will be a thing of the past in our new life. Worst Case Scenario: we have crappy renters who tear up our houses, our boat breaks down too often and Dan has to take up part-time work doing his favorite hobby. Sounds like a pretty nice life either way.

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Posted on Apr 12, 2013 | 0 comments

Digging a Little Deeper

Sure it can eat through mud and snow...and your wallet.

Sure it can eat through mud and snow…and your wallet.

Now that we’ve taken care of most of our “big-ticket” items to improve our savings, Dan and I are trying to tackle the smaller ways that we can find extra dollars in our budget. Not only is this important for increasing our savings to maximum levels but it also is helping to prepare us for living more frugally while cruising. If we want to have any kind of decent chance at living on $1000-$1500 a month than we have to get serious about knowing where each of our dollars goes and how to cut that down as much as possible.

The tracking part is made much easier by the online financial website that we use: Mint.com. We have all of our bank accounts, credit cards, loans, and investment accounts tied in so they automatically update whenever you long in. We’ve used this program for a few years and we’re pretty happy with it, though it can be a lengthy process to set everything up and figure out what budgets you want to set for yourself. Once you have been using it for a couple of months, it can really help to show you where your money is going every month. For some time now, it has been giving us a pretty clear indication that we have been spending too much in the Food and Gas departments, so we’ve finally decided to get those under control.

Food was first and it was somewhat daunting to me to be honest. Not to play the martyr working mom bit, but it is really hard to provide home cooked meals during a working week. There’s just not enough time to be able to figure out what to make every day and go pick things up from the store so I had to find a different approach. A couple of weeks ago I mentioned that we have purchased a subscription to 5meals1hour.com for five dollars a month. Well, we’ve completed the first months’ worth of recipes and I can honestly say that we are way ahead of where we were last month, but I can’t give all the credit to the menus. We only used about 1/3 of the recipes on the menus, but we have still been eating at home on average of 5 days a week, which is a huge deal for us. I think just the change in mindset about grocery shopping every two weeks for actual planned meals has been the biggest positive change that 5dinners1hour has made for us. We can still improve a lot in this area, especially because I’m not a very experienced grocery shopper yet so I think we’re paying too much for our groceries, but we’re seeing a definite change in attitude and habits.

Gas spending is our other cash hog. Like a lot of people we know, it’s just something that we haven’t taken seriously before. But looking at our accounts, we have spent almost $1300 in gas alone since February 1! That’s averaging $18.50 per day, yikes! Here are a few strategies we are implementing to help us cut down this silent killer.

  1. Drive less…obviously. Eating meals at home isn’t just saving us money in the food department, it means less driving too.
  2. Walk and Ride Bikes, and not just for leisure riding. Dan has started riding his bike to work most days and we are planning to use our bikes for trips to the grocery store, library, and other close to home errands.
  3. Get rid of the gas guzzler in the driveway. We’re still working on this one, but the goal is to eliminate one of our 15 mpg SUV’s for a 30+ mpg compact car. Even if we have to spend some money over the sale of our Jeep, we should get most of it back in the end when we sell it in a year. This one has the potential to save us in the realm of $250/month!

Hopefully, we’ll find some good success using these strategies and find others to help us keep our everyday spending in check. If you have any suggestions, let us know in the comments!

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Posted on Mar 21, 2013 | 0 comments

A Fresh Start

Each one of those is about 21 seconds of cruising. Start counting!

Each one of those is about 21 seconds of cruising. Start counting!

I am a sucker for new beginnings. New Year’s, birthdays, and even Mondays can generally make me feel like this time is going to be different. True, I’m usually right back to my normal routine by Wednesday, but there’s always next week, right? My most recent enthusiasm for new beginnings has been brought about by finally moving into our new house this last weekend. I mean, I love Dan’s parents for sure and am super grateful that they’ve welcomed us into their home for the last 2 months, but there’s just something about having your own space.

We’re hoping that with a new house will come some new habits and a new budget to go along with them. We’ve developed some habits in the last few years that are hard to break and hard on the pocket book, namely eating out almost every day and constantly being out running around for entertainment. You wouldn’t think that the running around part would be that big of a deal, but with $3.50/gal gas prices mingled with the propensity to buy random stuff we don’t need when we’re walking the mall for fun and then the  added likelihood of eating out if we’re already out of the house, and maybe you can see how kicking that habit could add almost $1000/month to our cruising kitty.

So how do we plan to change our bad habit? Well, first we have to start by wanting to be at home and therefore having plenty of entertainment for ourselves, sans television preferably. If the only thing we have to do at home is chores, then we don’t exactly want to spend a lot of time there. That means games, books, and possibly a new garden in a nice spot in the backyard. Also, our new neighborhood has sidewalks (yay!) and is fairly close to a couple of different parks, so walks and bike rides are definitely in our future – assuming of course that the future is warmer than today. Thirty degrees in March is precisely why winter is on its way out of my vocabulary.

I’ve also found a new meal planning subscription that we are trying out called 5 dinners 1 hour. One of my biggest problems with cooking at home is planning what we are going to have before I want to make it to ensure that we actually have the food on hand. No one (in our family at least) wants to go grocery shopping after work and then still come home and make dinner. 5 dinners 1 hour is a subscription service that provides 5 dinner recipes a week with a full grocery list and advanced preparation instructions to have all five of your entrees ready to go in an hour over the weekend. Then all I have to do is heat it up and whip up a side dish during the week. There are even 3 separate menu types to choose from: classic, clean eating, and gluten free (we chose clean eating) so you can find the right plan for your family. We just started this week, so I’ll try to post an update in a couple of weeks on how we like using it.

Do you have any suggestions for us to try? Games or great books to read? A recipe that your family loves? Leave a comment and let us know!

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