Why Investing in a Home Garage May Save Money in the Long Run

Investing in a home garage may sound like an enormous expense and not an ideal way to save money, but you will be amazed at just how much money you could save in the long run. The majority of motorists will take their car to a mechanic whenever there is the tiniest of problems, but the cost of this can add up very quickly.

Easy Fixes

There are actually all kinds of repairs and work that you can complete yourself in your garage provided that you have the right tools for the job and you are able to follow a simple set of instructions. There are many websites and YouTube videos that show you step by step instructions for simple car maintenance. Changing brake pads, changing the battery, changing spark plugs, replacing headlights, fixing chipped windshield and replacing air filters are all repairs that you can easily do yourself, but most pay somebody else to do.

When to Use Professionals

In addition to the tidy savings that you make by completing the work yourself, it can also provide a great sense of pride and satisfaction knowing that you have accomplished the task. Of course, not every bit of maintenance can be completed and you should always visit a mechanic for the larger issues. Examples of work that is best left to the professionals include body work, electrical work, fuel system fixes, transmission work and a blown gasket. If you are ever unsure, look online and never start work that you are not confident doing.

Tools

In order to carry out this work successfully and safely, you will need to spend some money on tools and equipment. You should always invest in high-quality tools, as this can make the work easier, safer and quicker. There are all kinds of tools and equipment to consider, but it is always worth obtaining these from specialists like SGS.

Other Uses

Of course, it is not just car repairs that you can use a garage workshop for. There are all kinds of DIY projects that you could take on in your garage which could save you money in the long run. Building your own bookcase, fixing furniture, working on your bicycle and all kinds of other projects can be completed in this space. Thanks to so many resources online, more people than ever are able to save money by completing projects themselves instead of using a professional service.

 

It may cost a little to set up initially, but in the long run, having your own workshop could save you a huge amount.

Can I buy that?

The beautiful thing about having money in the bank is you can afford to buy things. The ugly thing about having money in the bank is, well, you can afford to buy things.

Although I’m grateful to be in the financial position we are currently in, sometimes I miss the days of paying down debt.

That does not mean I miss debt. 

But I do miss the clear and simple objective one has when working their way out of debt.

Overtime income?

Pay off debt.

Tax return?

Pay off debt.

Side Hustle?

Pay off debt.

Birthday money?

Pay off debt.

No matter the situation, the solution was always the same. 

199950_264746610313596_1010358779_n

Within the last month or so, there have been a handful of relatively expensive items I’ve wanted to purchase, but haven’t managed to pull the trigger yet because I feel like it would be irresponsible. Here are a few of the items on my list.

Upgrade my iPhone 5 to a 6+: 

It’s kind of disgusting that we operate in a world where we believe our ridiculously expensive cell phones are essentially garbage after two years, simply because a newer model of the same phone exists. I’m a victim of the “ohhh, pretty-shiny-thing” cult as well. In a week I will be out of my ATT contract. I can upgrade my iPhone 5 to the new 6+ for $299. I’d get a better screen. A better battery. And a better camera.

That said, the primary purpose of my cell phone is to make/receive phone calls, make/receive text messages, make/receive emails. The iPhone 6 doesn’t do this any better than my current phone. Why would I pay to upgrade to a phone that has negligibly better features? Or a better question I suppose is, why do I WANT to do that?

Buy a Weber Grill: 

Five years ago, I got a relatively cheap ($199) Home Depot grill for my birthday. It has lived a long and glorious life, but after two moves, and years of use, the lack of quality is apparent. The burners no longer self-ignite. The thing is ginormous and eats up an excessive area of my patio. But most importantly, it doesn’t burn hot enough.

A burger should take 8 minutes to cook (about four minutes on each side). My grill has declined so much that it takes about 25 minutes for me to grill three burger patties. It’s a waste of propane and a terribly frustrating experience.

A Weber Grill would solve all of my problems. Just as Nordstrom is known for it’s superior customer service, Weber is known for manufacturing stellar grills. They aren’t cheap (base model is $399), but they are unmatched in value.

I love to grill and have been scouring craigslist like crazy trying to find a lightly used Weber. So far I’ve had no luck finding one that I feel is priced fair. The frugal part of me says I should wait until September to buy a new grill as that is typically when the big sales are to be had due to the end of the summer season, but the other part of me says that is stupid as I’d have to endure another grilling season with my barely functioning BBQ.

I’ve made a deal with myself that if I haven’t found one on craigslist by Memorial Weekend, I’m going to Home Depot and buying a brand spanking new one.

Pay for Electrical work:

This one isn’t so much a purchase, but more a “should we pay to have this work done.” We have an outlet in our pantry that we plugged our microwave in to a few months ago. Within one second of turning the microwave on, the outlet went out and our exterior security lights went off. It’s not the breaker. It’s not the outlet. It’s not the fuse. I’ve exhausted my electrical skills and can’t troubleshoot the problem on my own.

I had two electricians come by last week to get quotes. Since they aren’t yet sure what the problem is they could only give me estimates on how long they think it might take to identify the problem. Essentially, it’s going to cost about $300 for them to simply diagnose the problem, and potentially a lot more depending on what the issue is.

I hate having lights and outlets that don’t work. That said, these are probably the least important lights and outlets in my entire house so I don’t feel a rush to necessarily get them fixed. Why spend $300-$500 when we don’t need to? But when the time comes to sell our house, we are probably going to have to pay for this service anyways since a home inspector would surely note the issue.

I’ve never understood why people wait on upgrading their home. People will live 20 years with their builder grade laminate counter tops, only to replace them with granite when they decide they are ready to sell their house. Why not pay for the upgrade earlier and actually enjoy your counters? This is how I feel about my outlets. If I’m going to spend the money now, or down the road, why not have the electrical work done today?

I guess my issue is that I never want our financial privilege (money in the bank) to cloud my judgement and distort my perception of being a good steward of God’s resources (the money he has put in our bank).

Do I believe it’s okay to enjoy nice things? Absolutely.

Do I believe it can also be crippling? Absolutely.

 

How much does child care cost?

Girl Ninja and I just got back from a glorious 10 day San Diego / Palm Desert vacation. I ate many a California Burritos (9 total), Baby Ninja ate a gratuitous amount of sand at the beach, and Girl Ninja consumed her body weight in Starbucks. We spent time with old friends, visited our Alma Mater’s campus, and reminisced on all the memories Girl Ninja and I have from our time living there.

While Girl Ninja and I made the 2.5 hour car trip from San Diego to Palm Desert we talked about a whole slew of things, one of which was her role as a stay at home mom.

We’re fortunate to be in a position where Girl Ninja can stay at home with Baby Ninja full-time and even more-so because my job allows me to spend about half of my work day at home (I’m out in the field the other half). Baby Ninja is kind of growing up with two stay-at-home parents.

Leaving teaching was hard for Girl Ninja. She loved her job and loved the school she worked at. About twice a month, Girl Ninja’s mom will babysit and GN will take a substitute job at a local school. It’s a win-win for everyone involved.

  • Girl Ninja’s mom gets quality time with her grandson.
  • Girl Ninja gets to relieve herself of her motherly duties for a day
  • She still gets to dabble in the profession that she loves
  • She makes $150 each day she subs.
  • The school she teaches at gets a Substitute that legitimately loves teaching.

Next fall year, Baby Ninja will be 15 months old. Which also means he will be significantly less dependent on “mom”. If GN isn’t pregnant by summer (we aren’t trying, but we’re not preventing… was that too much information?), we started toying with the idea of her working more consistently next school year.

I doubt that would mean her taking a full-time teaching position, but she could start subbing two to four days per week instead of once every two weeks like she has been. If she substitute taught three days per week next school year, she would make $16,200 in additional income for our family. It’s nowhere near the $45,000 she would make if she took a full-time job, but every little bit helps.

The only problem with this idea is we have no clue how much child care costs. Sure Girl Ninja might make $16,000 more next year, but if it costs us $10,000 to put Baby Ninja in to child care during the school year is it really worth it?

No way. 

From what I’ve learned from friends is it seems full-time childcare runs about $1,200-ish per month. If we used child care three days per week, I’m guesstimating it would cost about $600 to $800 per month. She would be earning about $2,000/mo subbing at this rate.

The way I see it there are two ways to look at this…

Extra money is extra money

Sweet! We net a little over $1,000/mo in additional income. This could be used to further advance our taxable investment account. Perhaps open a college savings plan for Baby Ninja. Or allow us the freedom to spend a little more frivolously (meaning travel a bit more, or do some work on the house. not meaning buy a new tv just for the sake of buying a new tv). It would be a welcome addition in deed.

Extra money is extra money, but at what cost

Sure we would bring home $1,000 a month more than we do now, but Girl Ninja would also be away from Baby Ninja much more than she is now. Is $1,000 really worth missing out on some significant milestones or entrusting a large chunk of our child’s development to a stranger? I’m not too sure.

I guess what I’m really getting at is I would love to hear from a few of you who have dealt with a similar decision.

  • Did you pay for childcare (if so, how often and how much)?
  • Did you forfeit an income so one parent could stay at home (if so how much did you give up)?
  • How does one have their cake and eat it too (get to be with their child while make a ton of money) 🙂 ?

How to accidentally save money.

Girl Ninja and I have made multiple intentional decisions on how we can best reign in our spending and control our monthly expenses. There are numerous ways in which we intentionally cut costs to save money.

Last night, however, I started thinking about all the ways I unintentionally have saved my family a bunch of money. Here are a few of the things I came up with…

Alcohol:

I’m one of those rare human beings that actually hates alcohol. This is not a religious thing or moral thing, but more a I-hate-the-way-it-tastes kind of thing. It amazes me how much some people wish I drank. I swear every time I go out someone is begging me to try their glass of wine (Girl Ninja always asks me to try her wine), their beer, or their rum and coke, as though, my taste buds will suddenly do a 180 and be in alcohol heaven.

I’ve done a lot of taste tasting over the years and the scale in which I use to describe alcoholic beverages ranges from “extremely disgusting to moderately disgusting”. I’m yet to find a drink I legitimately enjoy. Actually, I did have a Mike’s Hard Lemonade once and that was actually tasty. Only problem is, I would never be caught dead ordering such a drink at a bar. Haha.

Since alcohol has never really been a part of my life, I don’t really know how much I’m saving by not drinking it. I’m assuming most other 20-somethings probably drop between $30 and $200 a month on alcohol. Is that reasonable? How much do you spend? 

Haircuts:

From age 18 to 28, I kept my head shaved. I probably saved $2,000 in haircuts over those ten years. But in 2013 I decided to join the “hair having” club and grow out my luscious locks a bit.  I kept my hair around for a year, but after spending $20 per haircut I was sick of the expense. I shaved my head again.

Girl Ninja got pissed because she liked my hair so I made her a deal I would grow it back out if she learned to cut my hair. She’s given me two haircuts so far and while she is no Picasso, she is showing potential.

The only thing I miss about going to get my haircut is the way the hairstylist would run her fingers through my hair during the shampoo process.

Coffee:

I must have some extremely jacked up taste buds, cause not only do I hate the taste of alcohol, but also the taste of coffee. In fact, just about anything with coffee in it makes me want to projectile vomit all over the place. Mostly on to a cat because I hate cats.

Girl Ninja, however, loves her some Starbucks.

It’s a good thing I don’t, otherwise we’d probably be there every day. She does her best to minimize her “Tall non-fat vanilla latte” purchases, but probably averages two or three a month. If I was joining her each trip we’d be out a couple hundred more dollars each year. Extrapolate that over the next few decades and we are talking TENS OF THOUSANDS of dollars saved by not liking the flavor of coffee. Booya for sensitive taste buds. 

Video Games:

I may get beat up for mentioning this one, but I don’t really get the point of video games. I played them in elementary and middle school, but by the time I got to high school I cared more about my outfit, girls, and sports then I did about what type of gun Lara Croft used. While video game consoles are reasonably priced (most around $200), the video games are a budget killer. At $40 to $80 a pop, I don’t know how gamers sustain themselves.

Oh that’s right, they all live in their mother’s basements.

Kidding….kind of. Thank goodness World Of Warcraft and NCAA Football ain’t my thing.

Okay now that I’ve pissed a bunch of video-gamers off, it’s time I step down and give you an opportunity to share some ways you’ve unintentionally saved some money.

Do you hate desert? Or Flying? Never shave your armpits? Or do use public transportation? It might take a minute to think something up, but when you do drop a comment below.

Some free things aren’t free when you have money.

Girl Ninja and I were hanging out with a bunch of high school kids the other night at Young Life, when I started talking with one of the Junior guys about some of his photography shots I’ve seen him share on social media.

As we talked about our mutual love for nice lenses and photography, he said something to the effect of “I would love to take pictures of Baby Ninja and your family to help build my portfolio”.

Whoa, whoa, whoa. 

Say what? 

– You are offering to take free pictures of my family. 

– With your $3,000 camera and $1,500 lens? 

– And this will finally keep Girl Ninja from nagging me about getting family photos? 

– And you are actually good at photography? 

HECK to the YES I’m interested.

So last Monday, this high school kid came to our adorable little city on the Puget Sound and took a bunch of pics for us. Here are a few of those shots.

 

Baby Ninja is always so stoic…

Screen Shot 2015-03-12 at Mar 12, 2015, 9.46.13 PM

 

Except for when he is not…

Screen Shot 2015-03-12 at Mar 12, 2015, 9.46.22 PM

 

He’s got crawling down…

Screen Shot 2015-03-12 at Mar 12, 2015, 9.46.07 PM

 

And standing…

Screen Shot 2015-03-12 at Mar 12, 2015, 9.47.10 PM

But he’s still a little cautious of shoulder rides…

Screen Shot 2015-03-12 at Mar 12, 2015, 9.46.59 PM

 

But he’s definitely not scared of Nova…

Screen Shot 2015-03-12 at Mar 12, 2015, 9.47.39 PM

And just for kicks, here is an action shot of Nova…

Screen Shot 2015-03-12 at Mar 12, 2015, 9.47.50 PM

He gave us about 50 shots in all and we couldn’t be more thrilled, but we do feel a little bad.

In his mind we helped him out by giving him some shots to add to his portfolio which is cool and all. But it doesn’t take a rocket surgeon to figure out why he wants to build his portfolio.

Screen Shot 2015-03-12 at Mar 12, 2015, 10.27.51 PM

So he can start charging people to take pictures of them.

Isn’t that exactly what he did for us? Why shouldn’t WE pay him then?

Can you imagine how excited he will be to get a nice “Thank You” card containing two crisp $50 bills?

I can’t wait to see him at Young Life this next Monday and surprise him.

It’s things like this that make me SOOOOOO thankful we have our financial crap together. Without thinking twice, Girl Ninja and I can give what seems like a relatively insignificant amount to us, $100, to a high school kid and he is going to be so pumped he just got paid ONE HUNDRED FREAKING DOLLARS for doing something he loves. How is that not a win-win situation?

Moral of the story: Get your financial crap together so you can joyfully give people some of your money. 

You NEED to know your expense ratios.

throw money in toiletNow that I’ve given our savings account the cold shoulder in hopes of building long-term wealth via our taxable and retirement accounts, basic investment strategies just wont cut it any more.

The need to go deeper.

In 2007, when I landed my current job with the Feds, I was handed a fat stack of HR paperwork as part of my new hire packet. One of the pieces of paper in this stack asked if I wanted to begin contributing to the government’s version of a 401k, known as the Thrift Savings Plan (TSP).

The paper told me that if I contributed 5% of my salary, the government would match that contribution and throw in an additional 5% on my behalf.

I didn’t have to be a savvy investor to know that a 100% return on investment was an incredible opportunity.

The TSP is nice in that it only has five funds that one can choose to invest in. They are…

  • C Fund: Essentially an S&P 500 index fund
  • S Fund: A total US stock market index (so companies the S&P doesn’t cover)
  • I Fund: An international fund that mimics a Morgan Stanley International fund
  • F Fund: A broad index representing the US bond market.
  • G Fund: A guranteed return fund. Currently about 2% ROI. 

For all of the bureaucratic red tape and politics that comes with the government, you sure can’t beat the simplicity of the TSP.

But the thing that puts the TSP miles ahead of the competition, likely even your 401k plan, is the expense ratios.

If you’re a super passive contributor to your retirement accounts you might not even know what expense ratios are.

Without boring you to death, expense ratios are a fee that you pay the organization that manages your investment account. You may not have known these expenses existed because you don’t pay them out of pocket, instead your organization just debits them from your account.

Know your expense ratios. 

It could literally mean the difference of tens (or hundreds) of thousands of dollars over the course of your accounts life.

For example, the TSP charges expense ratios of 0.029%. Or in other words, for every $1,000 you have in your TSP, they will deduct 29 cents, annually.

Whereas, if you have an actively managed account, it isn’t uncommon to have expense ratios of 1%, or in other words $10 is deducted for every $1,000 invested, annually.

Ten dollars a year might not seem like a lot, but OH BOY does it add up quick.

Impact of Expense Ratios over the long term

For the sake of making everything easy, let’s say you have $100,000 in your 401k right now. You add $10,000 to your account each year. You are planning on earning an 8% return on investment over the next 30 years.

Take a look at how an account with a 0.030% expense ratio absolutely DESTROYS an account with a 1.0% expense ratio.

Screen Shot 2015-03-04 at Mar 4, 2015, 10.30.57 PM

So while a 1% expense ratio may not seem like a lot up front, man-oh-man does it cost ya big bucks in the long run, $419,181.44 to be exact.

Why pay an organization $420,000, when you could keep all that money for yourself? 

I’m fortunate that the TSP has insanely low expense ratios. It would be stupid of me to not contribute as much as I can each year to take advantage of the low fees (hence the reason I’m hoping to max my contributions this year).

And the good news is, even if I quit working for the Feds, I still get to keep my TSP. This will be one account I will probably never get rid of.

“But Ninja I don’t work for the Feds.”

You ever heard of Vanguard? Of course you have! It’s universally known as being one of the most legit investing institutions in the universe (think the Costco of investing).

Vanguards expense ratios are really cheap compared to most of their competitors (although still two to five times that of the TSP).

The more money you have, the better rates you will get.

From 2007 to 2014, I was contributing to VTSMX, which is Vanguards version of a broad based stock market fund. The expense ratio was 0.17%. Not too shabby.

But now that I’m committed to not being such an investing dummy, I’ve sold all $30,000 of that fund and bought VTSAX, which is EXACTLY the same fund, but has an expense ratio of 0.05% (1/3 of VTSMX). The catch with VTSAX is that you have to have a minimum of $10,000 to invest in this account to qualify for the cheaper fee.

Had I left my money in the more expensive VTSMX, I would have paid $22,000 more in fees over the next thirty years.

THAT IS SOOOOOOOOOOOOOOO STUPID. 

So, seriously, if you haven’t thought twice about your investment (taxable and retirement) accounts’ expense ratios; you need to get off my web site and start doing some research (especially because your employer might have some really sucky options).

Not doing so could LITERALLY cost you a fortune.

*make sure you consider tax implications on realized gains if you sell investments from a taxable account. 

You wish you could be like me.

At the end of each calendar year I review our financials, update my Excel spreadsheet, and calculate just how much Girl Ninja and I were able to increase our net worth (NW) by.

We started 2014 with a NW of $234,000, and ended with a NW of $288,000.

In other words, we improved our financial position by $54,000 last year, an average of $4,500 per month.

You wish you could be like me.

DON’T YOU!!! 

I mean, we managed to increase our NW by more than the 2014 national median household income ($53,000). That means half of the households in the United States couldn’t save as much as we did, even if they paid no taxes and saved 100% of their GROSS income.

Like the title of this post says; You Wish You Could Be Like Me

…or do you? 

I hope for your sake, you were nothing like me in 2014.

While increasing our net worth by $50,000 in a single year might be impressive, it becomes significantly less so when you consider we made about $110,000 in 2014.

Girl Ninja and I were fortunate to have a healthy income, so it only makes sense that were are able to save and invest more than many other American families could.

An increasing net worth on a $110,000 per year household income shouldn’t be something to brag about.

It should be expected. 

You see, our big financial gains in 2014 are only really half of the story.

…The better half.

…The prettier half.

…The half that I like blogging about.

But there is another side to this personal finance tale and it is ugly.

How ugly you ask?

Try $45,000 ugly. 

That amount represents exactly how much money Girl Ninja and I spent on our credit card last year.

We use our credit card for virtually everything we can and pay the balance in full at the end of each month.

I’m used to seeing a couple thousand dollar balance each month, but I had never taken the time to figure out just how much we were charging over the course of a full calendar year.

$45,000 makes me sick to my stomach. Especially when you consider that doesn’t count any of the money that came out of our checking account, which would be another $30,000 or so for mortgage payments, utilities, and the occasional check or ATM withdrawal.

Sure, Girl Ninja and I improved our financial situation by $50,000 last year, but we spent nearly $75,000 along the way.

I’m disgusted. 

I write about the “Joneses” as though they are some family that Girl Ninja and I are nothing like, but numbers don’t lie.

When you spend $75,000 per year, you are a Jones.

At the time I was justifying purchases with thoughts like…

…”We’ve worked hard, it’s time to upgrade to a more sophisticated couch” ($1,700 in July)

…”Our kitchen isn’t how we want it, we have the money, let’s improve it” ($4,000 in August)

…”Baby Ninja’s upstairs is the worst part of our house, let’s demo it” ($5,000 March)

…”We deserve a vacation. Let’s go somewhere.” ($4,500 in April)

While I believe an occasional splurge is appropriate every now and again, Girl Ninja and I could hardly argue that our splurges were limited or appropriate.

To put it bluntly I’m embarrassed by my failed leadership. 

I have a responsibility to ensure Girl Ninja and I are being good stewards of the finances we have been granted. Somehow, I lost sight of that.

And that really makes me sad.