2015 whizzed by so very quick... Asa and I have played the year looking back game and you know... in between so many ups and downs since we left Portland in search of our boat in the last year alone, we've met so many amazing people; reconnected with past friends; and have set a course and direction with reckless calculated abandon.
Thanks to the new year, looking back to where we were in chasing down our dream that started with both an up and a down, we can continue to look ahead to what 2016, the year where we're ready to seriously look at boats with the intent to buy, will bring.
Give Up and Put All Your Money in an IRA
Last year in January, we took a big step in both our relationship and opened a joint savings account. Before that, we had stuffed everything into our Boat Fund jar. It was great motivation to see the jar slowly fill up to overflowing, necessitating the eventual need to put the fund into something a lot less easy to lose...
Linda counted it all out and converted hard cash into cashier's check ready to be deposited somewhere else
We had set up an appointment with another bank and financial services institution and brought along our filled out applications and the check.
He offered two pieces of advice.
- "I've asked everyone and we don't think what you're trying to do is possible. You should put it into an IRA [for us to manage] and save for retirement."
Both our hearts quietly sank. It was difficult not to abandon all hope... but that's how we felt for the remainder of the day and that week.
Don't get me wrong, it is sound advice for anyone looking to retire around 70.
- "You guys have an amazing ability to save."
It wasn't until a week of introspection that we realized that though we're still working to resolve the barrier from advice #1, we concluded that what the advice really meant was that we would fail if we attempted to accomplish our sailing dreams the conventional way.
Focusing on the negative, we would have given up at an important milestone.
Focusing on the positive, it means that there's hope. And where there's hope, and a will... there is a way.
To us it meant that while we'll need to find another way, there was a way... and continuing to save and getting better at spending our money wisely will be one piece of the puzzle.
Doing what we do well better
For us, our incomes are pretty fixed. We know exactly what our incomes would be and how long it would take us, at that current rate, to save enough to finance our circumnavigation dreams.
So you start to ask yourself: What can I do to save more? and What can I do to earn more?
Let's tackle the save more part first since the earning more part is a bit more difficult to do.
The first thing is to reduce our cost of living. We looked at all our fixed costs, and found that our biggest expenses were:
- Motor vehicle ownership
Number 1. Rent is expensive.
Rent makes up the vast majority of our income. Our rent event went up 17% for the stated reason of, and I quote,
"Your rent is below market."
That's something we'll need to take care of... as it makes no sense for us to keep sending money to our landlords for no appreciable gain other than a place to store our things.
Number 2. Motor vehicle ownership is expensive.
My brother Ben had given me a CBR600RR motorcycle and between that and our two bikes... that was what we used to move about Portland. We also had a bike trailer, but that was stolen by a departing resident from our apartment. The apartment managers merely shrugged off our protestations and told us that we should've had renter's insurance.
But if you think about it... paying about $40 a month (yes it can be cheeper but for it to actually be worth it, you need more than the bare minimum) for a year would be more than the cost to simply get another trailer ($15 off of craigslist).
These kinds of inefficiencies which exploit the fear of the unknown can sap savings faster than you expect.
Think about it... there's car insurance that can cost $1200 a year for something that may never happen... just so that you can drive from point A to point B in a bike friendly city. I can leave 20 minutes earlier in lieu of paying for the convenience of a car.
The motorcycle was sold because depending on that for daily transport increases the likelihood of me getting into a serious dream ending accident.... not to mention that one night where I almost skidded out on a patch of black ice with an oncoming semi... you get the idea.
Since moving to Florida, we found that a car was necessary for me to seek higher income employment... and in that case, the expense balances out in our favor.
Number 3. Convenient Food is a luxury.
We started our grocery list and doing our grocery budget a year earlier... and what we found is that the bulk bins in combination with our love for making our meals from scratch saved hundreds every week.
Eating out is easy and the lazy pizza order make the long days easier... but it's not without a price. $20 for a pizza when we already have everything we need to make our own for $2 is a luxury.
In fact, having other people prepare and serve your food for you is extremely expensive and a luxury.
But eating out is a part of enjoying the culture around us. So how can we resolve this issue?
As it turned out, we had already found a solution that works for us. Fortunately, the portion sizes in America are humungous.
So how do we exploit this? Well, we observed that we've been splitting our orders. What that means is when we go to a restaurant, we'd order one or two things and split it. For the same dollar, we can now experience and enjoy twice as much great food.
We also made a greater effort to finish our leftovers. When we get a mega portion at a place, we'll take our leftovers with us and consider that to be a meal we wouldn't need to prepare later.
When we make something, we'll make a large batch of it from ingredients purchased in bulk.
Huge pots of chili, making our own sauces, baking our own bread... making enough for more than one meal... that satisfies the occasional need for convenience because we always have something quick and tasty to snack on.
The net effect is that eating out becomes a last choice amongst a bevy of more convenient choices. And when we do decide to eat out, we make the most of it as well.
Number 4. Things are expensive.
Things. There are things everywhere. Most of it we only really use a few times before stowing it in a box or corner somewhere after the newness and novelty has run out.
So this is a tough one to tackle. How can you know what you really need and how can you know that you really do need it? How do we know that we're not just impulse buying something before seeking alternatives?
Our Need-Want List is what we came up with to tackle this problem.
The idea is to make a list on a sheet of paper with two sides: one for needs, and one for wants.
Anything can go on the want list, and things we agree are a need go on the need list.
The general rule is that if we find a good deal or price for a need, we should go ahead and get it. If it's on the want list, then we both have to agree to buy it. Put the list somewhere highly visible like on the fridge.
What we discovered is that this created a time delay that stopped impulse buying cold. It means that we don't double-spend on something. And finally, it means that we are always on the lookout for a better deal for something we've decided that we need... and that we'll only buy something from the want list if we both determine it'll add something to our lives instead of just taking up space.
Interestingly enough, the side effect of doing this meant that we found our Portland apartment was way too big to house our things. And from there, it wasn't hard to decide that we needed a smaller apartment... which eventually lead us to look for a better priced storage unit for our things.
Number 5. Entertainment
I'm still on the fence about this one... and this is something that we're not doing a good job with. It would be awesome to go to more shows, have every channel on a nice TV, have fun games to play on a console, go to festivals, cheer for a sports team, etc... but all of those things all carry very hefty price tags.
I don't know what it is about entertainment in the US, but they've found the price points that are always a few dollars outside our budget.
Sure there are services like groupon and stub hub that very often can knock huge chunks out of the retail price for tickets, but then we'd be limited to only experiencing things that are being promoted... much like with coupon clipping.
$50 per ticket to see Weird Al play is a tough decision. On the one hand, I'd love to see his show (I hear they're amazing) while he's still doing them. On the other hand, 50 bucks can accomplish so many other things... or be 2 nights out somewhere else.
The net effect of all this is that in just 2 short years, we've been able to save up enough to not only finance a cross country RV adventure, but have saved up enough to seriously consider buying a boat as well!
2016 - Boat Search
For the last 2 years, we've been busy preparing ourselves to be able to purposefully search for a boat.
This year, a new list went up on our inspiration wall - Boat Search 2016.
On this list, we're putting down every possible place that we think we can find our boat. On the right, the pro's. On the left, the con's.
We'll continue to add to this list and use it as a guide for regular searches and inquiries. While we're not very good at finding boats at the moment, maybe after a year or so of this we'll figure something out that'll work for us.
2016 will be an interesting year. :)