About ME
Short Bio:1976: Born in Colorado
1977: Parents moved to Bay Area, CA
Grew up in San Jose, a la "expensive land"
1993: Worked First W-2 Job
Bought first car
*Age 16*
1994: Graduated High School
*Age 17*
1995: Moved out on my own
Met husband
Lived on $10k/year (includes college costs)
*Age 18*
1999: Graduated Public College/ Accounting Degree
Worked at large int'l CPA firm for licensing
First big job: $30k/year
Saved $20k/year (difference)
*Age 22*
2000: Bought first home (condo) with fiance
20% cash down/ $260k home
$210k mortgage/ $1500 monthly payment
Passed CPA Exam
Married
Both pulled $40k/saved most of dh's wage
*Age 23*
2001: Licensed CPA
Moved to Sacramento (cheaper lands)
Bought dream home for less than condo sold
$260k home+40k improvements/upgrades = $300k
$230k mortgage/ $1500 monthly payment
(Original plan was to sell condo for $100k profit and take a $100k mortgage on new home. Instead we broke even on sale of condo and kept approx. $200k mortgage. Our original plan was much grander, but we learned early on equity comes and goes...)
*Lost solid $10k in stock market - tech stocks* (Not our year!)
Both pulled $50k/saved much of dh's wage
*Age 24*
2002: Owned 2 home for a few months (Thanks to 9/11)
Worked for small mom/pop firm (more my speed)
Became pregnant with first child
Dh laid off from Bay Area job
Jumped to one-income living on $50k/year
*Age 25*
2003: Had First Child
Took 12 week maternity leave
Refied mortgage to $1300/monthly
*Age 26*
2004: Pregnant with second child
*Age 27*
2005: Had Second Child
Took 5 months maternity leave
Worked part-time for 3 months
Had $400k Home Equity for a time
Talked much of moving somewhere cheaper again
*Age 28*
2006: Joined Saving Advice Blogs
Grew Net Worth by $16k
Returned to Full-Time Employment
Grossed $70k/steadily rising wage
*Age 29*
2007: Grew Net Worth by $30k
*Age 30*
2008: Grossed $75k
Home Equity sat at a mere $115k, at 12/31
Refied mortgage to $1100/monthly
Re-started savings fund for first time since
DINKS. (In addition to short-term slush
fund, retirement, medical, and Efund)
*Age 31*
2009: Will gross $77k
Contributing to retirement at DINK level(15%)
*Age 32*
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Family/Background
My paternal grandparents grew up in poverty. Neither of them finished elementary school (making my dad first generation high school AND college). My grandfather had about 20 siblings and school came behind work on the farm and supporting the family.
Both my paternal grandparents passed on recently and left almost $500k to their children. It was very humbling as my father and his sisters always assumed they would have to support them in old age. IT is from this that strengthened my conviction that it really is what you keep, not what you make. They probably had a few inheritances (so many relatives) and social security was a bit of a windfall to them.
My dad does still help support some of his sisters and probably always will in some form. Some have done quite well; some are still quite impoverished. Seeing poverty so first hand has always made me extremely grateful for what I have - no matter how much or how little it was over the years.
My dad is also amazing and my role model/hero. He started with nothing and his net worth is well over $1 million today. He had no choice but to do it on his own. Likewise, I have a pretty "can do" attitude - I truly believe anything is possible.
My maternal grandparents weren't necessarily that much better off, growing up in the Depression Era, but they did much better for themselves. My maternal grandfather was a CPA and made some pretty savvy investments over the years. They did quite well for themselves, but still pushed my mom to take care of herself, and talked much about the Depression.
So the frugal genes run pretty deep from both sides. IT mostly arose in past generation as a sheer means of survival. We have it much easier, but still try to hold on to as much as we can, with the strong feeling that you never know when a rainy day (or decade) can happen.
My spouse and I both see pretty eye-to-eye on money. We were both raised pretty similarly. His family is probably more middle of the road - neither of his grandparents are so poor or well off as mine. Just very middle middle class. But in the grand scheme of things our parents taught us both well how to take care of ourselves and be frugal, so this is where our similarities lie. We have found the easiest path to wealth is just to never live up to our income. We make a brief exception in our one-income years (not saving as much as I would like) but we know we will have a second income again someday and try to save most of every raise, to slowly get back to where we were.
On top of all this, I grew up in the Bay Area which is really an amazing place to grow up. Quite a melting pot and the land of opportunity. I find the story of how my dad moved there from small time Kansas to make a better life was very similar to a lot of the immigrants moving to the area. It's quite a juxtaposition that for all the land of plenty I always found that most of my peers were quite content with little and grateful for whatever they had. Most of their parents had similar stories - they came here with nothing to make their riches. Thus, at face value it is a sea of riches and wealth. But digging deeper there is a really interesting story there, and very frugal people. Likewise, there is quite an optimism there, that anyone can make it if they just try.
Likewise, I found it to be an extreme culture shock moving a mere couple of hours away to Sacramento. HEre it has always been taken for granted (until the last few years) anyway, that you could afford a nice house. No college degree and little ambition meant a comfortable lifestyle. Likewise, as home prices started to spiral out of control, that sense of entitlement really started to show through. It is just so different to me. I honestly feel like people back home are both less flashy AND have way more money. So I just find it very odd here.
Also, back home we lived in a 3-bedroom condo with no laundry, garage, or yard. IT was the most we could afford. Here we live in a 5-bedroom house, complete with garage and yard. We actually live in a rather upscale community (As opposed to the so-so neighborhoods we grew up in and lived in before). All this for the same dollar output, so it has been rather strange. When we moved I worried if we'd have anything in common with our neighbors (we were quite young at the time too) but in the end, we find most our either in the same boat (from the Bay Area) or are quite frugal and manage their money well (in order to have gotten here). So surprisingly, we identify more with our neighbors than most of the other people we have met in the area. I have not met anyone outside our neighborhood who would admit to thrift store shopping, for example. I realize too many people are blowing their money on crap and not getting anywhere, and it is kind of refreshing to be around people who know what it takes to be successful. (Back home we all had to shop the thrift shops so we could afford our insane rents and mortgages, no matter what the income really). Not much a feeling of entitlement around here. So I admit I was rather wary of our "rich" neighbors when we first moved here, and now I just find them refreshing. But the whole experience has just been odd in a sense. We make less money now, and our mortgage is the same as it ever was, but we have considerably more buying power here. Appearance-wise we have moved way up the financial ladder, though really nothing else has changed but our geography.
I just wanted to touch on another few things briefly. But I think my background shows the most where I have gotten my attitudes/feelings about money.
Both dh and I learned young not to care what other people think. Which is probably one of our biggest financial strengths. We find it easy to work towards what is important to us. We could care less about the Joneses.
Sometimes I find it amazing how much dh and I see eye to eye. His parents have handed him MUCH in his life, but while the same time teaching him self sufficiency. I find it very interesting. They come from an angle of wanting to care for him. They recently told him they want to leave him $1/2 mil when they pass on.
My parents are VERY different. They have always taught me to be very self sufficient, and have given me little of a free ride in life. I appreciate this greatly. What people don't understand is the support and knowledge there (& the occassional 0% loan and hand-me-downs) are completely invaluable. These are all things they didn't necessarily have. & I never worry about having to take care of them in old age. I have friends to this day who are appalled that my parents didn't just pay for my college, or that my parents haven't helped me more financially. At the same time they are worrying how to pay their parents bills. Hello? I am not worried about it. I am proud to have been self efficient for so long, and appreciate the lessons I learned from parents who didn't want to care for me forever or hand me everything my heart desires. That wouldn't have served me well in life, at all.
BTW, my parents tell me they want to spend all their money before they pass on, and I say yay for them. I think they are appalled at how much my grandparents passed on when they lived such a meager lifestyle their whole lives.
Which reminds me, my parents were very much of that mentality while they were young (hoarde that cash) but an aunt of mine died very suddenly, quite young, when they were in their late 30s/early 40s. From that day they did a complete 180. I think it became clear to them that you only live once, and there is a balance there. So if nothing else, I am extremely grateful for the balance I grew up with. I find balance between the 2 rather easy to achieve. I want to save for a rainy day. I want to enjoy life now. I do both.
Credit
My parents tried their best to teach me about credit when I was young. They pretty much told me it was stupid and not to do it.
"Credit is never an option!"
That was what was beat into my head.
Car loans, student loans, consumer debt. None of it should ever be an option.
On the flip side, I got my first credit card at 16 (per their suggestion) to build credit. It had a $500 limit and I paid it off monthly.
Sometimes I am appalled at just how afraid of credit that parents are. I think it was invaluable to learn how to manage a credit card while young. Likewise, I was never tempted to max it out or carry a balance. The consequences were clear to me, quite young.
I admit my parents were a bit extreme in their feelings on credit, but I will never fault them on that. It was extreme in the direction that most protected me.
Besides a few very short, & small, low-interest car loans, dh and I have never borrowed money. With the exception of our mortgage. That was always the one exception, growing up in expensive land.
Cars
If you ask me how dh and I have done so well for ourselves, I have one answer: CARS
When we were teens our friends were getting into car payment up to our eyeballs, and even bigger ones once they graduated college.
When we graduated college, we kept the cars we had driven since high school.
The world didn't end.
I figure this is quite simply how we saved up for a down payment on a home so quickly. We didn't waste $40k on a couple of cars.
To this day we find we can live a much larger lifestyle on less money, without the big car purchases.
I learned how to buy cars from my dad, who learned how to buy cheap cars out of necessity. We still buy cheap cars to this day as a means to a better lifestyle otherwise.
Homes
I will always be rather pro-home-ownership.
Dh's family bought a home for $50k in the 70s and my parents bought a similar home (slightly nicer) for $150k in the 80s. Both homes have appreciated in the realm of 1000% over the years.
I think the pendulum swings. While people who have seen those gains will obviously always see the plus of home ownership, the pendulum has swung much in the opposite direction in recent times. Particularly for those who bought (or chose not to buy) at the peak.
I still personally believe home ownership is much more profitable than renting in the long run. Likewise, we REALLY value stability, and so from that angle I could never imagine renting for the long-term.
I assume we will pay off our mortgage in our 40s and will live "rent-free" for many decades.
On the flip side, I have no desire to invest in real estate. Between our house and our parents cash cow houses (which we will probably inherit - hopefully in many many decades and not sooner), I think we got real estate covered. We are much better off to invest in other "buckets" so to speak.
Savings
If I have any advice, it is work hard and save those raises.
My spouse had college covered and lived at home. BUT he worked just about as much as I did all those years and saved a pretty penny in the bank.
I didn't save much in college, but I was used to living on a shoestring so when my wage tripled out of school, I found it quite easy to save the difference.
So we were able to save quite a lot before kids and homes and responsibilities.
My hopes with this blog is mostly to encourage young people to think to the future and take advantage of their youth. I admit I would not have near as much advice how to turn your finances around otherwise. But it is rather simple if you have things figured out from day 1.
Anyway, when we both worked and lived together, and then were married, we pretty much saved dh's entire salary.
Thus we were able to save up a large cash cushion rather fast, even after buying a home. This allowed us TREMENDOUS freedom in our 20s, when we had our kids.
I CRINGE when I read people complain how hard it is to give up stuff in youth. How hard is it to give up stuff you never had? Is it really that bad to save 75% of your income for a few years and then enjoy tremendous financial freedom? It was very notable to me how much our peers worried about money when they had kids. We didn't worry about money at all. We were only 25 when we had out first child. But with so much money in the bank, and never having lived up to that second income, that transition was simple and seamless. I found we were much more carefree and financially free than our older counterparts.
It really takes very few years of sacrifice to reach a tremendous amount of financial freedom. I feel like the things we did in our teens and young 20s will have a VERY positive financial impact on the rest of our life. We start out one step ahead instead of one step behind. It makes ALL the difference in the world.
For now we value family and a spouse that is home with the kids. We have also grown into a more luxurious lifestyle over the years. We find it much harder to reach that savings pace we attained early on, as a result.
For now we have little plan but to save every raise and to save any income dh may bring in. It's a simple plan. But it works.