June Expenses: travel, rest and gearing up

June was just about everything I love about this work optional life. A big part of the reason we still haven’t taken a traditional 9-5 job, is that we love the flexibility. Being able to do exactly what we really need to do when we need it. All our plans for June were turned upside down and it was perfect.

early retirement budget with big family

Impromptu Vacation

We found out we could start a big renovation on one of our rentals the 1st of July. So we made last minute reservations, packed up and headed to the Washington coast for 2 weeks.

steve jobs think week

FIRE in your 30's

 

I love the hard work of renovation and the satisfaction of seeing a space transformed. Especially as a mom of little kids, it’s awesome to do something that stays done (unlike clean floors or never ending piles of laundry!). BUT. I hate taking on a new big project when I feel tired, burned out or overwhelmed.

So we packed up our pop up camper, checked a dozen books out from the library, and put together my “think week” bag. It was an AMAZING two weeks! We played on the beach, hiked in the forest, read books, played board games. Then we spent a few days connecting with old friends.

Now, already in the throws of remodeling, I’m SO glad we took that time! In June’s mentoring question, I explained how to plan out your ideal day/year. My ideal year rotates weeks of rest, adventure, renovations, life planning, blog projects, and celebrations. If I did just one of those all year, I would burn out. Even on rest. After 8 days of staying on the coast, reading, walking, and long conversations, we were ready to get moving again. We thrive on having times of filling up and times of pouring out. Times for thinking, then times for creating. Time for rest, then time for hard work.

The issue I always had with the 9-5 job, is the balance. My ideal balance isn’t 2 weeks of rest/adventure to 50 weeks of grueling work per year.

Our renovation will probably span all of July, and I’ll probably be ready for it to be done by the end. =) Ready for a week of rest. Then maybe a fun blog/creative project for a few weeks.  Something with more typing and less sweating to death while fixing a flat roof (FYI, never buy a rental with a flat roof in Montana!).

Our vacation cost included every purchase we made while traveling: groceries, eating out, gas, campground fees, laundry, etc. Plus $113 to replace one of our camper tires that exploded while we were driving down the highway!

2 week Vacation Cost: $1048

Other expenses:

June is always an affordable month, as none of our bigger bills come due (property tax, home insurance, car insurance). Which is perfect because we can spend a thousand bucks on travel and still come in at budget!

New Sod: $100

We added some sod to create a side yard for our pop-up camper! It’s been serving as a guest room for company. Now our guests have a private sitting area.

Camper/guest room

Kids clothes: $35

I found some super clearance shirts for my boys for next school year. I try to stock up on great deals and add them to their school clothes pile. It makes “school shopping” easy. I just pull out the bin and grab what they need. A friend was also selling a bag of clothes her daughter outgrew. It was a heck of a deal for $10, and now we are set for girl clothes for summer, plus some school clothes.

“Joy” Money

We switched our cell phone plans which is saving us a bit of cash each month. I wanted to be intentional about finding little things to spend that extra money on that add a TON of value for the price. It’s been a fun mental exercise to focus on finding stuff to buy that I might have passed on otherwise.

So I am experimenting with this idea. I call it my “Joy Money.”  One of the awesome things about going frugal on fixed expenses ( like our cell phones) is each month there is all this extra money. You can use it to pay down debt, super charge your investing or in this case….add a little joy.

June‘s Joy Money purchase

This month I used our “joy money” for a surprise for our kids! Admittedly, I’m not much of a party planner. I tend to error on the side of keep it simple. And we have never done a “end of the school party.” But… this year we called parents, arranged times, and had some friends over for the last day of school. We decided to add some extra joy to the event by buying a pinata and 6 bags of candy. All the kids had a blast! Plus they each were able to take home a bag of goodies.

Stuff like this is a hassle. Not the money so much, but just the time, energy, and coordination. But one of the great things about having a flexible schedule, and more freedom, is that we can do the hassle more. Because the hassle is worth it. We do gingerbread house making parties, summer BBQ’s and get togethers with friends. There was a season of life where it felt like we had to say no to EVERYTHING. I’m really loving this new season. =) Saying yes to other people’s get togethers and hosting our own.

Total Joy Money Spent: $19.00 ($13 pinata, $6 bags of candy from the dollar store)

Verdict for June: Win. Money much better spent than on the old cell phone plans! I have a whole new relationship with my cell phone at this point. I look at it once every other day. Just to see if I have missed anything.

Large family FIRE budget

This month:

Oh, the joys of low fixed costs! We traveled half the month and still came in almost exactly at our baseline spending!

Monthly Spending: $2475

Giving this month: $5626 We gave a larger gift this month to help a friend with some moving expenses. Beings our giving comes from it’s own Giving Fund, instead of our passive income, I decided to start showing it here instead of in our pie chart to make that easier to read.

Year to date: $13,331 vs $14,700.  $1369 under our passive income so far!

Year to date giving: $6934

Work Optional Status

I started a new category in our monthly expenses to see how we are doing on our “work optional” life.

  • Can we really just do a bit of work that we love, instead of going back to the 9-5 grind?
  • Can we focus on things we find interesting and best leverages our skills or passion instead of just things that pay the most?
  • Can we work/volunteer and actually still have space for the rest of our life, like family time, travel and long days at the lake?
  • If people don’t have 1 million + net worth, how do average folks piece this thing together to create their most meaningful life?

$3 fushia plant going strong!

5 Bucket Method

If you are just tuning in around here, here is the lay out of our financial land. We use a 5 bucket system that is extremely useful for anyone trying to custom design their life. It’s perfect if you want to take a year off to travel, try to launch a side hustle into a full business, go part time at work for a few years, or retire early. It’s a great method for  any financial transition where you are trying to create a life more in line with your goals and values.

Depending on your situation and goals, you would customize these buckets to meet your needs.

 

Bucket 1: Fixed Passive Income

Rentals: $1000 a month after all expenses

Military Retirement Pension: $1450 a month

Total: $2450 

We use bucket 1 to cover all our basic living expenses. It provides 90-110% of these costs. I don’t include investments into this bucket, but instead just things that pay out a specific amount each month. Rentals, pensions, loan repayments, royalties or anything you have little choice if you “pull” from it or not.

Bucket 2: Cash Buffer

Cash buffer: About $55,000 (this includes our Giving Fund, which funds our charitable giving each month and includes our rental fund.)

We use this bucket to fill the gap in our basic expenses, if needed. We give donations from this bucket. We also use it for one time big purchases or emergencies.

Bucket 3: Investments

Our investments don’t go into our passive income bucket because when you are creating a flexible lifestyle early on, these buckets might function very differently.

Investments: $190,000

Because we don’t need to tap this bucket yet, we will continue to let compound interest to do it’s thing. We will also fill it with some extra money from bucket 4 (side hustle).

Right now at 4% withdrawal we could pull $633 a month.

Untouched for another 6 years it would provide about $1,000 a month income, growing at 8% to $295,000 with a 4% withdrawal.

That isn’t to say that we will use it in that way. Investments provides a host of options because it’s one of many buckets. We might pull a lump sum to purchase other rentals. We might use 2% in 6 years as our expenses grow. If we use it for “extras” instead of basic living expense, we might pull 5-6%, knowing that in low market years we wouldn’t pull any money from it or only 1-2%. For example, when it grows to $300,000, we might pull $15,000 (5%) one year to take a 3 month trip to Europe. If the next year, a big market drop happens, we might pull $3,000 (1%) to take a 6 week US camping trip.

$1000 2 week camping vacation. Sunsets so pink, it seemed I could bottle it and take the pink home.

Bucket 4: Side Hustle/Extra Income

This bucket would include any extra income you produce. If you are growing a business, that income would go here. As would a profitable hobby, income producing passion project, or side hustle.

Because the first 3 buckets cover all our needs and wants, we currently use this bucket as “extra.” Extra money for investments to help those grow faster (bucket 3). Extra money for giving. Extra money to fill bucket 2 (Cash buffer) that we spend on one time expenses.

Because ours is just ear marked for extras, we get to be really picky about what kinds of projects we take on and how much we do. (Just stuff we love, 3 hours a day.)

Our tax returns also go into this bucket earmarked to fill our giving fund.

2016 Tax return: $5,500

Extra Income (year to date) : $5,948

Bucket 5: Future Passive Income

Rental Mortgage 1 payoff: + $189 a month

$38,000 balance on rental house 1. There is 25 years left on this mortgage. The interest rate is 2.85%.

Rental Mortgage 2 payoff: +$512 monthly payment 

$97,000 balance on rental house 2. There is 27 years left on this mortgage. The interest rate is 4.35%.

We might pay these off earlier to increase our monthly passive income.

Social Security: Who knows?

My current assumption is that there will be a small amount of money that will start around age 70. I’ll start more carefully considering this in about 20 years. Right now I have it earmarked as extra money for healthcare costs or vacations with grandkids.

Conclusion: Work Optional still going strong!

Our moving target: doing exactly the right amount of all the stuff we love and is important to us. No matter if it’s family time, traveling, writing, mentoring, gardening, renovations, hiking, volunteering or hanging out with friends. It’s all just stuff we love. =)

Another week and we will have a 1,000 ripe raspberries!

Hope you all had a great June!

Any travel or projects planned this summer?

Are you planning to use a multiple bucket approach to create more financial freedom?

Anyone who says “Money can’t buy happiness” has never owned raspberry bushes. True or false?

 

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19 thoughts on “June Expenses: travel, rest and gearing up

  1. I’m glad you had a peaceful vacation before coming back to the renovation! It sounds dreamy (the vacation not the reno). We may do a few weekend getaways – or a midweek one when our cousin plays baseball in Winston-Salem this summer. We’ve never been there and I hear it’s a nice city. Plus it’s near many wineries. Our big plans are in the fall!

  2. I was following your vacation on Twitter–it looks like you had a wonderful time. I love the “Think Week” bag. Not sure when I could carve out a week this summer, but a day is doable. 🙂

    You’re right about happiness buying perennial fruit. We’re HUGE blueberry fans here and spent time picking blueberries these last few days at Blueberry Hill. On our way home from the farm yesterday, I took a long look at the farm and commented that this is my little slice of heaven. Must have blueberries on future homestead.

    • Oh, we have a few blueberry bushes too! They are hard to grow here because of the soil ph but I buy 50lb bags of sulfur. =) There is something about the taste of raspberries on a cool summer morning that is just magic.

  3. Our raspberry bushes look like Charlie Brown’s Christmas tree. But we planted them at the end of May, so I’m actually shocked they are growing and making new shoots. It’s so fun to see what could be (in probably five years!).

    I think if I did a better job of not burning myself out during the school year, our lives could actually be a lot like what you described. Unfortunately, I don’t ever take my two personal days, and I tend to fill up spring break, winter break, and summer break with more ways to make money. Ditto for my evenings. This post is a helpful reminder that balance and breaks comes in all forms, and we might be closer to it than we think! Glad June was so good to you and your family. Best of luck on the projects!

    • Those raspberries will grow like weeds. I planted two little sticks a few years ago in front of our house and they are 9 feet right now! I need to thin them out because they are taking over the whole front of our house. =) I think once that sweet baby arrives, it will be easier to take your time off. It’s awesome that you made hay while the sun shinned, so you can enjoy this new season of life as well. =)

      Even now work stuff is easy to over commit to, and I have to be really intentional about taking times of rest. But so much good stuff comes from it! Don’t wait till it gets easy, because it might never happen, even if you leave your jobs!

  4. This post really hit home for me, as a teacher. Summer is always 8 weeks of thinking, implementing systems to make the work grind better come fall, and getting a chance to take my 3 children to a few new places they’ve never been plus reconnect w family overseas. Thank you for writing about your life “seasons.” Using the cycles of life to create a balance of reflection, family and work/career/personal project fulfillment are things I’m still struggling to build and maintain in my own life. Reading your story gives me hope and inspiration! Thank you, Ms. Montana!

    • Oh, it’s always a work in progress! =) It was somewhat of an unpleasant surprise that leaving the 9-5 didn’t magically make creating the balance easy or automatic. It’s still takes thought and effort, but we are slowly figuring this thing out and taking ground. =)

  5. Your vacation sounds (and looks) amazing – and restful. I understand the need to fill up and pour out. After 3 weeks solid on cleaning out the new rental, we decided a short road trip was in order. It’s definitely time to rest and fill up. And spend quality time together.

    I tried growing raspberries, but they never did much. I think it was partially placement – the fact that they kept getting accidentally mowed off didn’t help. We did have a ton of strawberries in June though. And now we’re getting lots of zucchini and the tomatoes are already ripening. LOVE the fresh produce. Enjoy those berries! 🙂

    • Restful vacations before renovations are a huge win. Not only the rest, but the connection time with the family. We are week into the reno here, and I feel like I already miss my babies. (And we at most do 6 hours a day!) But it throws our life into a bit of chaos for a while. Which is why we are keeping this reno to 4 weeks. There is SO much more we could do, but we are doing the stuff that HAS to be done before people move in. Everything else will need to wait 6 months. =)

  6. What a lovely vacation!
    In response to your newsletter/email about your accidental “perfect” house find, it’s a struggle I share too. When I’m researching a purchase, I look and look and read and read some more and ask around all over, but after making the purchase, or if I’m not really in the market for something anymore, I have to Shut Down The Search. It can be really hard. But continuing to look just eats into my current happiness because it’ll give me buyer’s remorse for what I already bought or envy for what could have been, even if it wasn’t really the right choice for my family.
    I’ll unsubscribe from websites and ads and use PaperKarma to unsubscribe from catalogs so I don’t have to see (and spend mental energy and time on) things that aren’t on my to-do list anymore.

    It sounds like you and your family have a lovely home and a life-plan that suits you, so congrats and good for you for knowing your priorities.

  7. How do you get health care costs for a family of seven to $137.00 per month. In my neck of the woods, a policy that covers little to nothing for a single person is $137.00 per month. What type of insurance do you have? Can you use it to see the doctor, or do you have to pay a massive co-pay?

    • We have health insurance from my husbands military retirement. It’s an 80/20 split, with a $150 co pay per person per year, and $3500 family cap. But what is great is that there aren’t any monthly fees. We pay when we use it. So if no one needs to see the doctor that month, there are no out of pocket costs. I pay $60 for dental insurance and $55 is for both of our life insurances. The rest was probably medication (prescription and over the counter) and supplements.

      It’s an amazing benefit to have, and one that I gave zero thought to when he joined. =)