Guess what day it is? Guess what day it is??
Never gets old… :)
It’s also the day we play a new game called, “Things I can afford when ____ is gone!” Woop woop! Right after, “My biggest expense costs me WHAT now?”
But first, let’s backtrack…
Last week I asked all the smart readers of this blog to download a new phone app so I could poll y’all on some sexy money questions. It looks like over 250 of you listened (I thought I had at least 2,000 smart people here, but guess I was wrong…) and the results of our first question was surprisingly shocking!
I asked how many of you guys will be taking on a “No Shopping” challenge with me for the next month, and over HALF of you agreed to join me. Half! That’s incredible! And only proves to me again how smart you guys really are! ;)
Here’s the results of that question so far:
I genuinely thought the numbers would be reversed, with “No ways” being in the 50-70% range and the “in spirits” being in the 20% range. And then of course we have the nerds who actually enjoy having a life, pshh…
We had some pretty cool comments being sent over through the app too:
“Just paid off all my plastic and 2014 taxes owed, now everything except utility bills and some grocery $ is going right to savings and Roths!! Bring on a spending ban!” – Anne Marie
“Hey J $ Uggghhhh, I will be joining you! Just paid off alot of debt. And trying New things to save $. This will be a bonus to my plan. Let’s Go!” – Tawana F.
“I’ll try but I’ll donate $1 to an animal rescue every time I slip.” – Crystal S.
“Just paid off the last debt besides mortgage – can’t wait to fatten my savings/investing by not spending!” – Dude on a Mission
“Don’t think I’m quite that hardcore yet, but going to work on cutting back some on the unnecessary spending.” – Ange C.
“I just set up a reward system for my 7 & 4yr old for showing responsibility and a good attitude they get a milk shake at the end of the week. Bad attitude or dont do their responsibility money is deducted. So hey, I’m teaching money lessons!” – Melissa M.
“Today’s my birthday and I’m def going out to eat/drink tonight and tomorrow… Just saying ;-)” – Joseph G.
Very very impressive… And if you notice the trend, those who are heavy on paying off debt – and accomplishing it – seem to be those who are gladly accepting the mission to keep the momentum going. They’re already used to “living on less” and now turning those debt payments into savings and want even MORE of that juicy $$ to hit their goals! What a beautiful thing!
And I send love to all y’all who answered the poll too regardless of how you answered :) Just the fact you’re interested in continuing the $$ talk offline shows you’re in it to win it. It’s been a fun experiment so far, and would love for more of you to join us.
Now I don’t know how y’all are doing w/ the ban so far, but I’ve already slipped up twice:
- I got free coffee at an entrepreneurship meetup (score!) but then turned to find a strategically placed tip jar (Uh-oh…). I instinctively reached into my money clip to pull out a dollar as is customary, and as I’m literally dropping it into the jar I suddenly remember about the ban! ACK!!! “Does this count?” I ask myself real quick. “Is anyone looking at me right now??” I then think as I’m scanning the room… Ultimately I decide that yes, that dollar is going to be dropped into that jar so remove your grubby hands, please!, and no – I don’t think it should count towards breaking my ban because a) I find it’s important and respectable to do, and b) technically it would be a business expense as I’m there to network and grow my biz/etc. Think that’s the right call?
- I drove to McDonald’s as carefree as could be to buy my son his first Happy Meal. We had visitors in our house for the first time in probably 6 months, and after the kids worked up an appetite after running around our house 1,800 times, I was put in charge of take out. It never crossed my mind until late that night that I just broke the ban as I was so caught up in what a father I now feel like getting a Happy Meal for someone other than myself! Hah! So this one DEFINITELY broke the ban and I deserve a hard slap on the ass for it (also interesting to note – it’s the first time I’ve eaten there in maybe a year?)
All things considered, 1-2 breaks in almost a full week is actually pretty good. I won’t be winning any Perfect Awards anytime soon, but it’s important to remember that our brains take a while to adjust to such a new – and sometimes drastic – mindset when its so used to humming along status quo. That doesn’t mean we should get lax in our No Shopping mission here, but just to keep in mind we’ll screw up and to try and be more conscious about it in the future.
So don’t any of you give up just yet!! Still got a handful of weeks left! :)
My biggest expense costs me WHAT now?
Horrible segue, but over the weekend I also put together a bunch of numbers for a meeting come up with my accountant (that’s right – I pay a person to do our taxes and wouldn’t have it any other way!), and in doing so I saw that big scary number of how much we paid for daycare last year.
It pains me to even type the numbers out right now, but here goes… (holds back vomit). Last year we spent over $16,000! $16,951.00 to be exact, ugh… Now we’ve already covered all the reasons why we have our kids there so I don’t want to rehash that again, but the takeaway here is that it’s a large freaking number and you can do a LOT of other amazing things with it instead if you were fortunate enough to do so.
And this is where our “what can we afford instead?” game comes in.
It’s a chance to have some fun and play a little “what if” action so you don’t go and beat yourself up too bad. Even though, of course, you DO need to sit back and reflect on such spending to make sure it still makes sense in your current situation and you’re not just getting complacent. In our case it does right now, but only for another month or two until the wifey finishes grad school and we change up a huge chunk of our lives.
[FYI: this is partly why my early retirement spreadsheet says I can’t hit financial freedom until I’m 54! Daycare is strangling us! Imagine what the totals would be if we were still tracking all baby costs?]
But first, a shout out to fellow reader Hannah who inspired this game after chiming in on our post about living off 50% of your income over 3 months ago (which I apparently still think about :)). Here’s what she graced us with:
Here’s a blog post for you: Things I can afford to do when my youngest child starts first grade.
I’ll get you started:
1. Hand three people $100 every week
2. Buy a brand new bike every month
3. Max out someone else’s 401K (not quite for one kid, but for 2 almost guaranteed) every year
4. Pave my driveway in $20 bills
It’s funny because it’s true!! We pay ridiculous amounts of money for things that are important to us that could easily be sent elsewhere. Kinda reminds me of our Lifetime Wealth Ratio too – comparing all the money we’ve earned our entire lives vs that what we’ve since spent! Can never save it all, of course, but would still be nice to be able to save a majority of it…
Here are “all the things I can afford to do when daycare is gone”
(Based on the current $2,000/mo we’re paying, or $24,000/year, with baby #2 going full-time)
- Pay a whole year’s worth of mortgage/rent!
- Fully fund a 401(k)/Sep IRA
- Fully fund FOUR Roth Iras!
- Fully fund a 401(k) AND a Roth IRA and still have money leftover
- Put down a down payment on a house/condo/boat/benz/island
- Buy a brand new car (or two) in cash money
- Give $5,000 to every member of my family
- Invest it all into Vanguard’s VTSAX and make hundreds of thousands of dollars over time
- Start a new business from scratch (or 50 online businesses ;))
- Donate it all to a charity and get my name on a plaque
- Buy 24,000 scratch off lottery tickets (and make $5.00 in the process)
- Buy unlimited coffee for the rest of my life (except from Starbucks, that would only last 1.5 years)
- Pay for 1 year’s worth of daycare… oh wait.
How fun was that??? Hmm….
Your turn :)
But first, you have to know what your #1 biggest expense is
Not all of you fortunately pay for daycare, or at least *that much* depending on where you live and how many kids you have and who stays at home vs who doesn’t yada yada yada, but we all have our #1 money crusher. Perhaps for you it’s your mortgage or rent, or car payments, or debt/student loans, or even that scrumptious food you scarf down 3x a day.
Whatever it is, channel it, and then play our game!
And because I just couldn’t put on my patient pants, I already shot out another poll to my Reacht VIP’ers yesterday to get a glimpse into some of these categories.
Here are the top areas you smart people are spending on:
The results may look a bit different by the time you’re reading this (you can see the updated %’s here), but it’s apparent that we prioritize the roofs over our heads more than anything else… For some strange reason ;) If that’s you, just plug in “mortgage” or “rent” into the game instead.
Though, actually, why don’t we change the question to something more empowering instead. Like, say:
“Once my #1 expense of _____ is gone, I’ll be able to _____ instead!”
Yeah…. I like that one better.
Fill in and answer this question down below in the comments or by commenting within our new poll set up, and we’ll then see all the awesome stuff we’ll be able to do one day! Woohoo! :)
I’ll go first.
Once my #1 expense of DAYCARE is gone, I’ll be able to HIT FINANCIAL INDEPENDENCE 4 YEARS SOONER instead! Awesome!
PS: I know what you’re thinking now, you want to see how many years you can shave off from working too. Here’s the link again to find my Early Retirement Spreadsheet – let ‘er rip!
Killer resources and apps:
- Best Budget Templates & Spreadsheets (FREE)— The best free budget templates from around the community! Including the ones I use :)
- Personal Capital* (FREE) — A great app to track your investments and net worth. You can see an in-depth review we did here from a millionaire who checks it daily 😂
- You Need a Budget (YNAB)* (FREE TRIAL, then $14.99/mo or $98.99/year) — One of the BEST budgeting methods in the space, with new users saving $600 on avg their first two months, and more than $6,000 over their first year! Check out my friend Vic’s review of YNAB here that went on to completely change his finances 💪
- Digit (FREE 6 mo. Trial, then $5/mo) — This is one of my favorite apps for automatically saving money, and I even came on board as an advisor I believed in them so much! You can see my full review on Digit here.
- Acorns* ($3-$5/mo) – Similar to Digit, this app helps you automatically INVEST money by rounding up all your transactions to the nearest dollar and then investing it right away for you. My full review of Acorns can be found here.
- Honey (FREE) — By far my favorite coupon service out there! Click the Honey button any time you're about to buy something online, and BOOM - any discounts it finds will be automatically applied at checkout. You can see my write up on them here.
- Credit Karma* (FREE) — An easy way to check and monitor your credit score AND report! See my full review of these guys here.
- My Favorite Blogs + Books < -- Click here to see all my other recommendations!