Monday, December 4, 2017

Digging Out: Saying Goodbye to the Mortgage

In the past few weeks we surveyed our expenditures and income, wanting to come up with a fresh approach to our frugal life.  Where could we make a change and see a difference?  We live frugally, could anything significant be done?

The elephant in the financial numbers was there, but we'd ignored it in the past.  We justified the expense.  Mortgage interest is a deduction.  Having liquidity is important when you are both self-employed.  With the apparent end of the mortgage interest deduction due to an increased standard deduction, and the stability of my legal practice after 12 years of putting it together, we were ready for a big change.  With a few clicks here and there, we moved money from our brokerage and paid down a significant portion of our mortgage.  Instantly saving $350 a month (we were paying $460 in interest, now it will be about $110).  But we are not stopping there.  A conservative path has us mortgage free in 24 months.  My aggressive personality says let's pay it off by 12/31/18. The fire I had to pay off $97K in student loans in 7 years is back.  Will we do it?  Time will tell.  The big unknown will be our 2018 health care costs.  We opted for something other than the $1,300/month with a $13,000 annual deduction health plan off the exchange, electing coverage that kicks in only with hospital and surgeries.....other medical, dental, and eye expenses will be ours to bear. 

2018 is brewing up to be a sail down uncharted waters.  Joins us for the journey.  We welcome suggestions on both sides of the frugal equation -- living on less and maximizing income.  Be well, and thanks for reading.

Winter 2010-11.  Our first winter in our home.  Digging out from a major snow.  Symbolic of our efforts to dig out of our last debt, the home mortgage.

Monday, November 27, 2017

The Power of Cash in a Frugal Life

Whether it is Icelandic Kronor or American Dollar Bills, cash is a powerful tool in the life lived on a frugal path.  Cash keeps you honest.  Cash keeps you on your toes.  Cash evokes a feeling when you hand it over more so then swiping a credit card or punching in numbers on a debit card.

On recent travels to Kentucky and then Iceland we paid in cash for our discretionary items.  And in both cases we came home with a surplus.  A voice in my head tells me we'd have gone over budget, just a tad, if we had paid with credit cards.  Now we pay those credit card balances in full each month, but spending at or under budget is key in our frugal life.  So we've lifted the travel with cash and applied it to everyday life.  Each week I head the bank.  I deposit payments received into my business checking, and from our joint checking I take out what I'll need for the week ahead: groceries (that's the big one); fun activities, and other miscellaneous items. For the first month in I cannot remember, we've spent less on groceries than we budgeted.  I credit that to knowing we have $x, do we want to spend it on take-out or just make a meal at home, and only putting items in the cart that will be eaten in the week ahead.

Cash -- it's a powerful tool. Anyone else with me on this aspect of a frugal life?

Thursday, November 9, 2017

Life at 60 Degrees

It used to be 62 degrees, Fahrenheit where our thermostat rested.  Over the years it was our comfort zone, but near freezing for the unaccustomed visitor.  With our push to fill the hole in our budget caused by drastic increases in our health insurance premiums our new norm has become 60 degrees.  At times we nudge the thermostat higher to 62, and will make sure we keep it high enough to prevent frost from forming inside -- two spots are most prone, the corner of our son's bedroom and the seat of our oversized bay window in the living room.

Life at 60 degrees, made possible by:

  • space heaters in the bathrooms -- an efficient way to heat up a room in the morning or after an evening shower.  We can be comfortable without heating the entire home;
  • slipper socks -- when your feet are cold everything is cold;
  • letting the sunshine in as much as possible -- enjoy the free warmth of mother nature;
  • long underwear make great PJ's and are not reserved for sledding or outdoor play;
  • sipping hot tea;
  • put on a sweater.....and a scarf doesn't hurt either.
Pushing new limits to save costs.  It will help our budget and ease our strain on the Earth.  Not sure if it will help or harm our health (just kidding, all that tea is a good thing, right?)

Sunday, November 5, 2017

That's A Big Hole: Paying for 2018 ACA Health Insurance Premiums

On a icy night in March 2005 my husband and I met, and chief among our common interests were a fondness for coupons and all things frugal (not cheap, but an efficient use of time and money).  Twelve years later we both own our own businesses (me a legal practice, him an electronics engineering design firm), where frugal living goes a long way in allowing us to follow the path of ownership and not navigating the forest of employment.

With the decision to both employ others and not be an employee comes the purchase of health insurance independently.  That, as you may guess, is down through The Exchange.  This year we have a policy through Dean SSM, where we pay $700/month as a premium, but have a $13,000 annual deductible (we pay the first $13K before insurance co-pays kick-in).  In reality it means we need to earn $1,000 a month, pay our income taxes, and then have $700 left to pay the premium.  We opted for Dean SSM because they were cheap.  And the quality of care was not great.  In fact we started going to our old providers, paying out of network fees.

With 2018 we are going to go with a plan that works with our preferred providers (Associated Physicians and the UW System).  But we will pay a price.  Our premium is increasing to $1,275/month with a $13,000 annual deductible (for reference, the 2017 plan would be $1,005/month).  We earn too much for a subsidy, so it is up to us to fund the entire bill. That is a pretty big hole to fill.  Since there is no money tree in our backyard, we have to fund the gap through increased revenue and decreased spending.

As we move into 2018 follow along as we take a pretty frugal life even deeper.  When we look at the numbers there really is very little room to cut towards the $500+ gap.  That means we need to earn more, something we can do since we both work for ourselves.  Our kids assumed this meant we were simply going to work longer hours.  Yes, in part, but it really means we need to work smarter.  Where can we increase profits by cutting expenses?  

We are grateful to be able to afford this increase, many cannot.  We are also grateful that pre-existing conditions do not deny one coverage.  But this is a hard pill to swallow for a family focused on living frugally where we can follow our passions and save for college, retirement, and the health care costs that will come with old age.  In 2018 we'll pay just over $28,000 in health care before insurance assistance would kick in.  

Taken in Iceland this past August, Kerid is an ominous crater lake, but is surrounded by empowering color and power.  This lake will be my meditation as we march into 2018 and answer the call to pay more for health insurance.

Friday, October 13, 2017

Perfect. It Isn't Fun. And It's Expensive

Smile, it's picture day!  Yes, Friday the 13th was school picture day for our 2nd and 3rd grade children.  Last week I thought I had perfected a parenting task -- the School Photo Hair Cut.  No, I did not pick up a pair of sheers.  I did a 180 and booked the kids appoint with my stylist at a nice salon.  She is a junior stylist, so the price is quite favorable plus you get the perks of an Aveda salon -- neck massage, fancy scalp oil, free coffee. It is quite divine.

We had an appointment, no waiting like we normally do at the classic barber shop we've used in the past.  My son got a cut while I sipped my free cup of herbal tea.  Then my daughter hopped in the chair for an extensive brushing session -- oh the tangles!  She only needed a bang trim in the end.  Then we were off to pay.  I wasn't charged for the bang trim, and even with a generous tip, the bill was $30.  That was $20 below my budgeted amount, planned earlier in the month when I thought we'd go to the regular barber shop, where both kid cuts and a tip comes to $50.

It all seemed to come together, but a few days later it was clear my son's cut just wasn't quite right.  Too long on top, not enough cut around the ears.  My hyper-Type personality thought about dashing them off to the regular barber before picture day.  The only chance would be this past Wednesday.  But my son, keeping with our frugal ways said "nah, it will cost more money and I'd rather just play after doing my homework."  Wise beyond his years!

A passage from a long-ago read parenting book immediately came to mind, "perfect is not fun".  And I'd add, perfect is expensive.  We let the hair go as is.  We didn't pay more for another cut.  We didn't rush about after school and then cram in the nightly homework.  Instead we got our work done and went into the back yard where I tossed a ball with my son while my daughter made musical instruments with containers, water and a stick. 

Today was picture day.  Was his hair perfect?  Probably not.  Does it matter?  Not at all.  We had fun, and we came in under budget.  When walking the frugal path remind yourself of my new mantra, perfect isn't fun, and it's expensive.

Tuesday, October 3, 2017

A Frugal Halloween

October has arrived.  Leaves are turning color and falling.  Flowers have dried and turned brittle.  Pumpkins are all that remain in our little garden.  And the question of "what to be for Halloween?" dominates kid conversations.

October also marks the arrival for Q4, otherwise known as the Fourth Quarter of the year.  Our family has set some aggressive savings goal for this quarter.  To meet them we'll need to work some more (we both own businesses, so that is easier to generate than if we were employees), sell some unneeded items, and cut expenses.  Here are a few ways we'll be cutting expenses in the area of Halloween:

  1. Creative Costumes -- we have close to two dozen costume props from various holidays, gifts and toys.  From those the kids had the idea to create an outfit.  Our son is considering going as the #1 Seattle Seahawks fan using all the clothing and fan gear he has.  There will be no purchases this year; 
  2. Halloween is for Kids -- there will be no "family costume" for this frugal family.  We are "older" parents compared to our peers at the school.  We are doing this 80s style.  The kids dress up, the parents do not.  I shutter at the cost that goes into family costumes -- and time to create is a cost just the same as cash; and
  3. Bowl of Trinkets -- in the 7 years we've lived in our house we have had 1 or 2 trick-or-treaters.  Kids, with the exception of ours, do no live on our street.  We do not get traffic for the holiday, so I refuse to buy a bunch of candy or things to hand out.  I do want to have some on hand, just in case.  Over the year I've saved the tattoos, pencils, book marks, and unopened candy from all those birthday party treat bags and school give-aways. 
Those are three frugal approaches to Halloween in our home.  What are your ideas?  Please share and inspire, and thanks for reading. 

Friday, September 22, 2017


What may be the most neglected garden in America today, it continues to produce a harvest.  Last Spring I put up some fencing on the south side of our house, expanding what had been a perennial bed into a vegetable garden.  We hauled some stepping stones out of a remote part of the yard, having been buried under weeds when we bought the house in late 2010, and voila, we had a path to navigate.  With shovel in hand I turned the grass over to soil, tossed in some plants from Jung Garden shop, put down a layer of newspaper topped with straw.  Tomatoes, zucchini, cucumber, and pumpkins went into the ground.  Pepper plants were relegated to pots -- I had bought more than I had space for.

The calendar pages turned, summer arrived, and I worked the busiest summer at my legal practice that I ever have since launching a solo practice in 2005.  Mother Nature had my back; gentle and frequent rains combined with cool temperatures kept the soil moist during my neglect.  And the plants put forth a harvest.   August arrived.  We left the country to visit Iceland and the same time an exterior house painting trampled all over the garden.

September has brought the heat we normally have in July.  I've watered a few times, but have really ignored the garden.  And still it produces.  Earlier this week I broiled tomatoes with sweet peppers and onion, sprinkled with salt.  Into the food processor, add some lime juice, and you have a very mild salsa.  Perfect to top a burger or plate of slow cooked pork.

2017, the year I ignored our garden and ended up with a continual harvest.  My interest in gardening has been sparked.  What might happen if I actually gave it some attention?