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A Closer Look at Our Financial Life

September 29, 2015

Here at Save Money Dammit, we love talking about money. We write about it a few times a week, we’ve podcasted about it a few times, and we even post our net worth progress at the beginning of every month (this month in particular is going to be much better than the last!).

Over time, we’ve revealed a few details about our financial life, but we feel that it’s time to dig a bit deeper and share more about our current financial situation.

We’re hardcore about budgeting

We’ve said it before — we love using YNAB. I act as the primary budgeter in the household, and we track every penny that we make or spend.

While this may seem a bit obsessive, we’ve found that this micro-management of our finances serves the dual purpose of scratching my overly-technical itch and allowing us to completely optimize every bit of our spending and saving habits. Tweak a few numbers here, rearrange a few numbers there, and suddenly there’s an extra $50 freed up for whatever we’d like. We simply can’t imagine managing our budget any other way.

In combining YNAB with consistent net worth tracking with Personal Capital, we’ve found a system that truly works for us.

We bank online

As for banking, we recently made the switch to purely online banking. For our checking account, we use Capital One 360, which avoids most of the pesky fees you’d typically see at a brick-and-mortar bank. It even throws in a 0.2% interest rate (it won’t make you rich, but it’s a nice little bonus at the end of the day).

For savings, we go with Ally’s online savings account. It offers a pleasant 1% APY interest rate, and we stuff our emergency fund and short term saving goals into this account. Because the interest rate is fairly low for our taste, we put money into this account that we feel will be needed in a year or less (vacations, big purchases, etc.).

We invest regularly

Mrs. Saver and I are big believers in the importance of investing, so we routinely set aside money for that very purpose.

Our go-to investment service is Betterment. We’ve talked before about how amazing it is, and we’ve been consistent users for around 6 months. We’ll typically deposit anywhere from $500-$2,000 into our account depending on the month (we weren’t able to contribute much during our move).

While Betterment is pretty handy for investing in long term, well-diversified index funds, it doesn’t allow you to buy specific stocks or bonds. If I do get the urge to buy a few stocks here and there, I have an E-Trade brokerage account. While I don’t buy specific stocks very often, and I don’t really recommend it for the novice investor, it can be a great way to dip your toes into learning more about investing (enter at your own risk).

We’re debt free

Getting out of debt was a major financial accomplishment for us, and we’ve been happily debt free for over a year now. When we crushed our debt, our finances took on a new excitement that we didn’t expect. Credit cards became useful tools (travel hacking anyone?), excess money went directly into our pockets, and there was finally a true sense of independence when it came to our finances. As we started exploring freelance side work, the money we made went directly towards our financial goals rather than getting us out of a debt hole. Other than monthly bills, we owed nothing to anyone, and we were free to forge a new path for our lives. This sense of freedom eventually led us here to California, where we continue a debt free lifestyle and pursue a long term goal of complete financial independence.

We’re renters

We’ve been happy renters throughout our marriage, and we intend to stay that way until we’re financially able to afford a home (in other words, cover a 20% down payment). While we’ve been told in the past that renting is throwing away money, my response to that is this — renting makes us incredibly happy. We have an undeniable sense of mobility, freedom, and choice in where we live and move. On top of that, we’re simply not ready to settle down. We may still have some adventure left in us, and we want to ensure that the town in which we buy a house can be our home for several years. We’ve come to understand the huge financial implications of buying a house, so we want to make sure that we do it right.

We’re a one-car couple

Mrs. Saver has discussed this before, and it’s a decision we’ve stuck with for almost 2 years now. When we ditched my old crummy car and made the switch to one ride, we were helped by the fact that my job was only a few miles from our apartment and Mrs. Saver worked from home. As our jobs changed and handling the car became more difficult, we stuck with it (we didn’t really have a choice). Our daily commute was done together, and we’d often take turns dropping each other off at work.

The result? It became totally normal. What started as an inconvenience became standard, and our finances were helped in the process. Gas spending was cut in half, car maintenance dropped significantly, and we had the chance to spend more time together throughout the day. We plan to continue using one vehicle for as long as possible.

We live in a small town that’s frugal-friendly

We recently moved out to a small town on the central coast of California, and we’ve been a bit shocked at the changes it’s made to our money habits. While there’s an undeniably higher cost of living here (our rent is much higher), there are actually many unexpected savings that we’ve encountered that can easily offset this increase. In particular, the town is very small with a vibrant downtown scene, so we find that it’s a blast to get out and walk wherever we need to go rather than burning up gasoline. We’re also surrounded by hiking trails and mountains, giving us plenty of free outdoor entertainment that keeps us healthy and happy.

One of the biggest changes we’ve learned to adapt to is the lack of air conditioning in our apartment. We came from Tennessee where the weather was a consistent hot, wet mess. Here, on the other hand, we’re typically treated to year-round 75 degree afternoons and low 50 degree nights, allowing us to simply keep our windows open and enjoy the fresh air. While there are many environmental benefits to this, the most amazing benefit is the dirt-cheap utility costs. While in Tennessee during the heart of summer or the coldest of winter, we were paying over $100/month on heating and cooling costs. Here, we pay around $10-15 for non-stop electricity flowing to TVs and computers.

The financial life is not merely how much money you have and make. There are numerous decisions that combine to form a complete lifestyle that could either be helping or hurting your finances. For Mrs. Saver and me, we’ve just begun our long term financial journey, and we’ve been pretty pleased with the road thus far. Here’s hoping for the best in the coming years. As always, we’ll keep you posted every step of the way.

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  • https://cdnmoneymatters.wordpress.com/ Jen Collins

    Good summary, and interesting to see how other people live. I am in a slightly different situation, but have also been debt-free for a year, invest monthly, am car-less (but share my partner’s on the weekend), and don’t plan on home ownership for a long time. Good for us!

    • http://savemoneydammit.com Save Money, Dammit!

      Sounds like you’re doing well, and congrats on being debt-free! It’s always great to find people with similar strategies and common goals! Thanks for commenting.

  • http://www.ournextlife.com Our Next Life

    The way you’ve structured things sounds great! Very similar to us (bank with USAA which has free everything, savings at Ally, investments with Vanguard). It’s great that you’ve found it quite possible to live frugally in a small town, even though it’s an expensive place to live overall — same for us, too. Our little mountain town has home prices and grocery prices waaaaayyyy above the national averages, but people aren’t all about the money here, and we have a great trail system that makes it possible to bike just about everywhere. Plus people are much more likely to ask you to go for a (free) hike than to go out to (expensive) dinner.

    • http://www.ournextlife.com Our Next Life

      And on the buy vs rent question, anyone who says that renting is throwing money away has never thought about the prices of owning a home. Owning is also throwing a lot of money away! Stick to your guns until you’re sure of where you want to live for a long time. 🙂

      • http://savemoneydammit.com Save Money, Dammit!

        Great advice! We definitely don’t want to commit our time, energy, or money to a house until we know for sure it’s in a place we want to make a home. We really appreciate the advice and solidarity, guys!

    • http://savemoneydammit.com Save Money, Dammit!

      It’s so great that there’s community that embraces more frugal, outdoorsy activities and de-emphasizes the importance of money. It makes it so much easier to be involved in your community, stay fit, and really enjoy time outdoors with friends and family.

      Thanks for reading and taking the time to comment, Our Next Life.