Saturday, January 31, 2009

Weekly grocery trip

At the beginning of January we decided to implement a once-a-week grocery trip. Previously, we had shopped in a very haphazard way: a few items one day, a few more items another day... Oops, forgot this and that, now it's back for a third day in a row... Of course, every time we went to the store, we were prone to selecting items we didn't need or that went to waste.

The once-a-week plan is working out really well for us. We always take some time beforehand to go through our supplies and make a grocery list. Once at the store, we do not deviate from the list - even when our son points to items that have Elmo plastered on the front and starts screaming plaintively from the cart, begging us to let him take his little red monster friend home.

Yesterday, we had a great grocery trip: we spent $100 in total, and I'm pretty sure that will last us through next Friday. Our pantry is completely stocked now:

Items we already had in abundance included rice, pasta sauce, frozen vegetables, and soy milk. We did purchase fresh vegetables, apples and bananas (we rarely purchase other fresh fruit in the winter unless it is on sale and looks good), pasta, a lot of canned goods (see above), frozen berries, four boxes of cereal (the men in this family consume cereal at a breakneck pace), and some vegetarian items like soy hot dogs. We didn't purchase meat. Though we are not vegetarians, we don't enjoy cooking meat or fish; we eat a vegetarian diet at home.

Whenever possible, we try to buy organic goods, especially if it's something our son is going to eat. We ended up with Annie's Macaroni and Cheese (which he usually has for lunch), organic apple juice, and organic frozen waffles.

Because the Superbowl is on Sunday, we treated ourselves to nachos, salsa, and guacamole ingredients (avocados, tomatoes, red onion, and lime juice), plus a pack of beer. Did we need it? No. Would it cost more to go out and celebrate? Yes.

For us, it was a good trip. We're happy if we can limit our weekly bill to $150 or less ($150 when we have to purchase diapers and other baby supplies). It's nice to know that at the max, we'll be putting $600 to the groceries every month.

Tuesday, January 27, 2009

(Not) Afraid to Look

A couple of years ago, I didn't know where we stood financially. I was clueless. I could only vaguely recite my credit card balance ($3000? $4000? Somewhere around there...). I had no idea what Trent owed on his cards. I couldn't have told you what my school loans looked like. To be quite honest, I wasn't even sure what our average monthly expenses were - which might explain why, on several occasions, our checking account dipped into the negative numbers.

I finally started to get a handle on our finances when we began shopping for a mortgage on the house we now own. The bank needed to know where we stood, so therefore I needed to know where we stood in terms of both our debts and our earnings. I became even more interested in this when we came up with our sailing goals.

Taking an honest look at our finances was painful. Deep down, I'd always known we were dabbling with debt, but seeing the numbers - large, red numbers - on a spreadsheet made it a reality for me.

Admitting we had a problem changed how we handled our finances. In the last couple of years, I've gone from being a fiscal ostrich, always burying my head in the sand, to being a fiscal owl who peers at the family accounts on a regular basis. Every day, we stop by our checking account, savings account, and credit card accounts, just to be safe. At least once a week, I look at my school loan website. And every Saturday, Trent and I pull out our debt spreadsheet and fill in how much we currently owe on 1) each credit card, 2) each school loan, and 3) the mortgage. Sum up those columns and, yes, the number seems colossal. But we've also seen those numbers decrease significantly in the last six or seven months, and that motivates us.

Additionally, we've made an effort to start cataloguing our regular expenses. We've tried to calculate how much we spend per month on water, gas, electricity, groceries, Internet access, and fun stuff like going out to eat (more on how well our fun budget is working in an upcoming post). Our exact monthly budget changes, but getting a general estimate allows us to have a better idea of how much money we can expect to put into savings and debt relief. 

I'm not always pleased with the amount we have in our bank account or the rate at which we're reducing debt, but one thing's certain: having the courage to look was the first step in getting the numbers to go in the right directions.

Sunday, January 25, 2009

Staying motivated

On any given boring, humdrum day, there are several publications and websites that help us stay energized about, and focused on, our sailing dreams. In no particular order, here they are:

Cruising World Magazine -  Cruising World is a magazine for "cruisers" - people who sail full time - and wannabe cruisers. The print magazine is (in our opinion) better than the website, but we like to check out the articles and pictures. 

Cruiser's Forum - I signed us up for this forum a few months ago and was initially intimidated by the number of people there who can call themselves real sailors. I was afraid to post anything for fear of being laughed out of the discussion (at that time, I had no idea what terms like "tack," "jib," and "spinnaker" meant). Now that we've taken sailing lessons and done a little sailing on our own, I've started commenting on some of the posts. This site contains a lot of advice, a lot of encouragement, and a lot of messages from people who desire to live off the beaten path. It's nice to know we aren't alone in that respect.

SetSail - This is a collection of blogs written by individuals, couples, and families who are currently sailing. It's a little slow right now, but it should pick up in a couple of months. Our favorites are the family blogs, as we'll eventually be sailing with our son.

Seven Seas Cruising Association - This site is really for people who are already cruising, but it has a discussion area for sailing and finances. Oh, and it provides updates on piracy issues. 

And finally...

Sailboat listings - I spend way too much time looking at this site. Still, there *are* a lot of great boats out there that don't cost a ton of money. It gives me hope.

These sites serve as reminders that help keep us focused and hopeful.


Saturday, January 24, 2009

The pros cons of being sick for three weeks straight

First there was the post-vacation cold.
Then there was my severe allergy from hell.
Now it's the stomach flu (Trent and our son have had it; I'm trying to avoid it and have washed my hands raw in an effort to slough off the germs).

Three weeks, maybe a little more than that, of illness. I hate being sick. I hate feeling lousy. I hate laundering pukey clothes. I hate being stuck in the house. I hate not being able to eat what I like to eat and/or not being able to taste what I like to eat.

But it's not all bad. Being sick has its benefits:

Pro: We've filled up our gas tank only twice in January.
Pro: We've avoided spending money at restaurants.
Pro: We've had time to read all the magazines we subscribe to (relatives have purchased a lot of these subscriptions for us), but which often lie around the house untouched.
Pro: We've no desire to hit up the wine and liquor store.
Pro: Our grocery bill decreased.

That's my attempt at looking for the silver lining. Of course, the money we've saved in those respects will probably go right into higher heating and electricity bills (sometimes, laundry really does require a lot of hot water, and it takes energy to keep the humidifier going night after night).

Here's hoping for happier, healthier days very, very soon.


Monday, January 19, 2009

Medical bills

I'm feeling good as well as eh tonight: good because I've finally bounced back from a horrible five day streak of hacking, wheezing, and slurping on disgustingly sweet cough drops, and eh because I had to shell out big bucks at the doctor's office and pharmacy today. 

When I woke up this morning, just as congested and miserable as I'd been yesterday and the day before that and the day before that and the day before that, I finally admitted I needed to seek professional care. We went to the local walk-in clinic. The doctor was helpful - he diagnosed me with a severe allergy, which surprised me because I thought I just had a cold - but his help doesn't come cheap, and our insurance doesn't cover office visits (yes... we have cheap individual health insurance that barely covers the cost of a Bandaid, but that's a topic for another post). Then we spent over $100 at the pharmacy. The medication worked, so it was worth it, but wow. Money goes fast!

All in all, I estimate this one episode of sickness will cost us around $400 in total, at the least. 

I'm proud of the way we've paid for it, though. All the over-the-counter medicines, cough drops, etc. were purchased with our debit card. My doctor's visit will run through insurance before they send a bill (just in case my insurance company is in a generous mood), but when we do receive it, we will pay it right away - again by debit card. And as for the medication, I put that on my one active credit card that I maintain and pay off each month in an effort to make FICO happy. So all in all, the money is gone...but we won't be accumulating interest on it. It won't become part of our debt load.

Sunday, January 18, 2009

Fun Money verses the goal

I'm a runner and have run two marathons and two 5 k's.  The other day during a run I was thinking about our limited fun budget and how it fits into our larger goals.   From a purely mathematical standpoint it doesn't fit in well.  The fun money, from a math god's point of view, should be going towards debt; it doesn't and here is why:

During a 5k race (about 3.1 miles) I do not take any sort of break (fun money).  I can make it to the end without taking water, food and without walking.  If we were a few weeks or months from our sailing goal I'm sure we would not have a fun budget.  We would not need a break as we would be so excited to save every penny.

During a marathon (about 26.2 miles) I need a break.  I need water and maybe a walking break and some food.  Without water I would be unlikely to finish a warm summer marathon and would finish much later in any weather.  In the same way, our fun budget recharges us, keeps us going, and might get us to goal faster.  We would likely go nuts without a fun budget for the next 5-7 years, just as I would likely "hit the wall" faster without food and water during a marathon.

We don't want to go nuts. We want to go sailing without debt.


Thursday, January 15, 2009

Hey! We've got comments! And a cold!

I logged in today and was thrilled to see comments on some of the posts we made last week. It's exciting! I wasn't sure anyone would read this. It makes me eager to post even more (if you can't tell by the ratio of my posts to Trent's posts, I'm the one in this relationship who can't seem to shut up).

This week, Walgreen's has consumed a nice little chunk of our (dwindling) checking account. I woke up two days ago to the cold from hell: chest congestion, nasal congestion, sinus congestion. Sleeping was so impossible last night that I didn't even bother. I stayed up until 6 a.m., ate some cereal, rummaged through the pile of medicine we purchased in the last 24 hours, found something that contained a sleep aid, and took a nap. 

The winter colds we've suffered in our family are good reminders to have some emergency cash in the bank just in case. Granted, this doesn't really qualify as an emergency, per se (though I've had moments when I felt like I might keel over and die as I try to get some air into my clogged lungs), and Walgreen's brand drugs aren't exactly expensive, but what if it hadn't been a cold? What if someone had broken an arm or a leg? What if the cold were to turn into something that required a doctor's visit? Last time I checked, our doctors charge around $200 per checkup (and of course, our insurance doesn't cover any exams outside of a yearly physical).

Trent and I talked this morning about putting more into our savings account. We are both concerned about the seeming inability of the economy to get back on its feet. We worry that five or six months from now, our contracts might stop rolling in, the offers will dry up, and we'll be in a high-stress financial situation. Putting more into savings means paying less to our credit card company (we've been paying more than the minimum), which under normal circumstances doesn't make sense. In the future, though, we may have greater concerns. Like paying our mortgage.

People talk a lot about savings accounts and how much money to put into them. Financial guru Suze Orman has said it's a good idea to sock away enough to cover eight months' to a year's worth of living expenses. I'm a little embarrassed to say that we are nowhere near being able to do that. We pay ahead on our mortgage, but if the job train slowed to a crawl, we would be in trouble. 

We'll need to take another look at how much we've been handing to the friendly Visa and Mastercard companies and see if we can make any adjustments. Of course, now that we've given up our tricked-out cable package and a monthly prepared meal service, we can send that cash right to the bank. I can't wait to see how our recent efforts to live more frugally will pay off in the long run.


Monday, January 12, 2009

Hungry for a bagel

Trent and our son are at Panera right now, getting me the wheat bagel with honey-walnut cream cheese spread I've been craving for the past two days. I feel a little guilty, but we can take this out of the fun money budget for the month of January.

Trent and I used to go out to eat or order takeout three or four nights a week. We lived in a location where very good Indian, Japanese, French, and Italian cuisine were easily within walking distance; we could smell the aromas from our apartment window. Nowadays, we go out to eat maybe twice a week at most, and our destinations are places like Panera and Chili's - where we don't have to worry about our kid being too loud or disturbing other patrons. It's a distinct improvement to our budget.

I'd like to say we'll stop going out altogether, but realistically, that won't happen. We need to be realistic if we're going to save. Especially because we work from home and spend what seems like 24 hours a day, 7 days a week, cooped up in our modest-sized condo, we sometimes hanker for the chance to get out and experience society. Going to the park and participating in our running group helps, but we need to find other (cheap) options, as well. Those will become more readily available when the weather warms up.

In the meantime, I'm going to enjoy my bagel and not worry about it. For us, frugality isn't about depriving ourselves. It's about setting and staying within limits, and we're doing that.


Saturday, January 10, 2009

Goals for 2009

We have a few fiscal and sailing goals for 2009. Given the unstable economy and shaky job market, we've decided we need to make the most of our current employment contracts and earnings. For us, 2009 is all about frugality, saving, and laying low. At the same time, we will continue to hone our sailing skills so that we can gain confidence and be prepared to take more advanced sailing lessons in the future.

Fiscal goals:

-Pay off Trent's last credit card.
-Put at least $75 a month into our cruising kitty (for a total of at least $900).
-Once the credit card is paid off, bump up our monthly student loan payments by $50 each.
-Stick to a "fun budget" of $150 per month - this budget covers things like going out to eat, coffee runs, alcohol, and babysitting expenses.
-Put 15% of earnings into our retirement accounts via automatic draft.

Sailing goals:

-Sail at least six times this year on the local lake. We do not own a boat, so we will need to put money aside to rent one.

Frugality goals:

-Go to the grocery store just once a week, instead of 2-3 times like we used to.
-Start using coupons when we go to the grocery store (our local Kroger actually lets us "load" the coupons onto our customer cards - no need to carry around paper ones).
-Distinguish between wants and needs: we need to pay for doctor's visits; we do not need new hardwood floors.
-Continue to look for free activities around town: the park, our running group, etc.

The beginning of the dream

Our goal is clear. We want to pay off credit cards, school loans, and maybe even our mortgage so that we can buy a boat and, in five or six or seven years, sail: down the Intercoastal Waterway, to the Florida Keys, on to the Bahamas, and maybe even beyond.

If you look at our goal from a traditional perspective, it seems pretty crazy. We both have college degrees. We both work (a lot). We have a child. And bills. We're not rich. Shouldn't we dig in for the long haul, make enough money so that we can retire comfortably, send our kid to college, become grandparents, enjoy our golden years, and then, well, die? Isn't that kind of what we've been training ourselves to do?

We've tried hard to get enthused about this well-worn road, but both of us feel the urge to do something different. We've both had so many adventures - hiking the Appalachian Trail, backpacking in the Alps, living in Korea, camping in the deserts of the Southwestern U.S. - that we're addicted to the high of getting off the beaten path.

We've been focusing on this goal for less than a year. Last May, just after we'd purchased our house and moved in, Trent and I found ourselves wondering, Is this it? Are we going to be sitting here in front of the television in 10 years, doing the same thing? In 20 years? Sure, maybe we'll take some vacations, get a raise, upgrade to a larger home at some point, maybe buy some land...but where's the adventure?

That's when Trent said, "We should do something different. We should... sail around the world! Why not?"

That surprised me. Trent's usually a realist. I'm the crazy one with the cockamamie ideas, and such a thing had never even crossed my mind. I said, "But we don't know how to sail. It's dangerous. It's expensive. And we have a lot of debt, debt we won't be able to pay off for...forever. That's impossible." After all, we'd racked up a lot of credit card debt in the eight years we'd been married, and the balance remaining on our school loans seemed absolutely colossal.

The idea stuck with us, though, and the more I thought about it, the more it appealed to me. We came up with a tentative plan that started to look more and more realistic and doable: learn to sail. Go out to eat less, purchase less, spend less on things we don't need, distance ourselves from consumerism, and put more of our money into savings. With every day that passed, we became more devoted to this self-imposed pilgrimage to find and live out our dream. The beauty of it? No matter what, we'd be better off in five years - not just financially, but as a family, too, because we'd know how to work together in an effort to achieve a common goal.

Between May and December of 2008, we managed to...

-Pay off more than $12,000 in debt, including both of Susanne's credit cards
-Learn how to sail - Trent and I both earned our Basic Keelboat certification in September
-Set up 401K plans
-Put money into a "cruising kitty" - an account we're using to save up for a boat, which we hope to purchase outright, no financing

I'm convinced that without keeping our dream in sight, we would have never accomplished so much in such a short time. 

We're not especially unique people; we're not the kind of folks you'd really pay much attention to if you saw us at the local park or the grocery store. We're average. We both work from home. We both parent our 2-year-old son. We both run. We're a normal family with a middle-of-the-road income. But we don't buy into the idea that anyone has to live a typical life if he or she has a hankering for something more atypical. And neither of us believes we should be slaves to money, as we have been for a good long while by now.

The more we work toward our goal, the freer we feel - little by little. We're confident we can make our sailing dreams happen, but if for whatever reasons we do not, we're confident we'll be better off for this effort.


Thursday, January 8, 2009

Coupon trap

Don't fool yourself into thinking your are always saving money by using coupons. A 50 cents off coupon on a brand name cereal may bring the price down to $3 a box. You are spending three bucks not saving fifty cents. A store brand cereal that tastes just as good maybe selling for two bucks. Spend two bucks, don't "save" 50 cents.


Looking for Freedom

This blog is about our search for freedom. This is not about freedom is the typical sense. We are talking about freedom to do what we want (in our case, sail and travel) because we are not piled in debt and restricted by what we or other people think we should do.