On November 30th, 2010 Girl Ninja and I had exactly $2,824.65 in our savings account (this does not include our Emergency Fund). Between November 2010 and September 2011, this account became very hungry and ate just about every dollar of discretionary income we had. By Sept. 2011, only ten months later, our savings had increased from less than $3,000 to an astonishing $45,017.92.

Our savings account was, and for the most part still is, a one way account. Money goes in, but it doesn’t go out. This is both good and bad. Good because we’ve been able to stock pile a lot of cash over the last twelve months. Bad because cash in and of itself is worthless, its value is only realized when utilized to purchase a good or service.

I leave this Friday for a six-week work trip to Korea. Whenever I go abroad for work, I have the potential to make some serious extra money. This trip should net me about $4,000 in addition to my standard base salary.

Every other time I have traveled (this is my third international trip), I’ve thrown the extra cash I’ve made in to our savings account and called it a day. Doesn’t that just scream….

This time, things are different. I know myself too well. If Girl Ninja let me put that $4,000 in to our “extra” savings fund, I wouldn’t want to ever take it out. I’m obsessed with watching the value of that savings account rise, and I seriously might suffer a mild heart attack (or have at least have really bad gas) if I saw the balance decrease.

So how do we reconcile this silly predicament?

It’s quite easy actually. I’ve created a new savings account with ING and labeled it the “New To Us Car Fund”. As you know, the wife and I plan to sell one of our two vehicles on Craigslist in the coming months (or years) and use the cash from the sale to purchase a gently used SUV from a private party. Since neither of our vehicles will fully cover the cost of a decent SUV, we will have to front the cash to cover the difference. Car loans are definitely not sexy.

If I put the $4,000 I make in to our extra savings fund, there is no way I’d be willing to pull the money out for an SUV. It would be too emotionally difficult for me. I’d feel like we were taking a step backward. The New Car Fund, however, is not a savings account. Instead it’s a spending account that I know we will tap in the near future.

I feel like a crazy person for even blogging about this. I don’t know why I can’t just suck it up and throw the $4K in our normal savings account, leaving a mental note that at some point down the road we will pull that same $4K out. My brain just doesn’t work that way I guess.

Maybe one day I’ll be financially mature enough to keep all of our savings in one main account, but today is definitely not that day.

Do you have a hard time spending money that’s in your savings account? Do you keep separate savings accounts (like I do) so that you don’t feel guilty about tapping your funds?

As you are already aware, Girl Ninja and I made the move to Seattle this last summer (We miss all you beautiful peeps in San Diego). We found a great little mother-in-law apartment above a beautiful home in a suburb north of Seattle. It’s the perfect place for us right now; clean, cute, and cheap.

A few months ago, I got a phone call from my aunt who recently bought an incredible four bedroom house. only fifteen minutes away from where Girl Ninja and I currently live.

Here are a few pictures of her new place (click any one to make larger)…

As you can see the house is freakin’ sick and has insane views of the Puget Sound.

Now here comes the interesting part…

My aunt lives in Southern California and bought this house for when she retires…in a few years. Since the 2,600 sqft abode will be pretty much vacant until that time, she proposed an incredibly generous offer to us. She said Girl Ninja and I could move in to her house and live there for free (of course we’d pay utilities).

Our current rent runs $1,1175/month, or for the math-nerds $14,100 a year. Wow never really thought about my rent as an annual expense. It’s kinda depressing. If we moved in to my aunt’s place we’d essentially be saving most, if not all, of that $14,000. We’d be stupid to not accept such an amazing gift right?

Well, Girl Ninja and I apparently hate saving money because we did just that. Yup, we turned down the beautiful waterfront home and decided to stay in our small little apartment.

Why you ask? Well, hopefully my “pros and cons” list will help make that clear…

Pros of Aunts Place: 

Almost 2,000 square feet bigger than our current place.

We’d have a garage for our cars, and plenty of room for storage.

Three extra bedrooms.

Super sick panoramic water views.

We’d be living in a house and, for the first time in our marriage, wouldn’t have any shared walls with neighbors

It’s an 80,000sqft lot.

We save almost $14,000 each year we live there.

We get a good idea of the maintenance and upkeep of a house before we actually buy one.

Did you see those views from the Master bedroom?!

Cons of Aunt’s Place:

Although it’s LITERALLY only four miles away from our current place, it can take two hours (or longer) to get there.

Bet ya didn’t see that one coming, did ya? My aunt’s new house is located on one of the many islands in the Puget Sound. The only way to get from our place to hers is by taking a short 15 minute ferry ride (you can walk or drive on). No big deal right? Hop on the ferry, and fifteen minutes later you are on the mainland. Not so fast.

If it were really that simple, we’d be fools not to accept my aunt’s offer. In reality, we would both have to commute via the ferry to get to and from work each day and, although the ferry rides last no longer than 15 minutes, it is not uncommon to have to wait one or two hours to actually get on the ferry. The backups are insane during normal commuting hours and are impossible on holiday weekends. I would never accept a job that’s two hours away from where I currently live, and living on the island could be asking me to do just that.

Lastly, ferry rides aren’t necessarily cheap ($7/vehicle plus $4.50/passenger). We knew this would severely limit the number of visits we got from friends. We didn’t really like the idea of asking our friends to fork out $15 each time they wanted to come visit us. We just couldn’t get over the idea of isolating ourselves on the island (no malls, friends, family, large grocery stores, etc over there).

You know me. I LOVE SAVING MONEY. It was really generous of my aunt to offer up her place, and it absolutely kills me to turn it down. I’d love living rent free, but at the end of the day, an easy/predictable commute and proximity to friends, family, and entertainment is more important to us than an extra $14,000 in our bank account.

AHHHH, grown up decisions suck!

Are you setting yourself up for self-sufficiency? Who do you rely on for survival? Do you know what you need to do today, to have ‘enough’ 20, 30, or 40 years from now?

If you’re planning on social security providing for you, like a mother’s milk provides for her baby, it’s time to start “feeding” yourself. Here’s the steps we have already taken, are currently taking, and will take, to ensure we aren’t dependent on the government to pay our bills…

No stupid debt:

I’m not as intense as Dave Ramsey. If you want to take out a 0% car loan, fine by me. But if you are up to your eyes in credit card (or other high interest debt), then you need to get your crap together and start working your way out. The path to financial success starts with paying yourself (not Sallie Mae) first.

A reasonable mortgage:

Do you know how long a 30 year mortgage takes to pay off? THIRTY FREAKIN’ YEARS! That’s insane. I’m not even 30 years old! I couldn’t imagine making a payment for three full decades. Girl Ninja and I have no clue what the terms of our mortgage will be, but I can promise you this, we aren’t going to buy more house than we can afford. Home ownership is still a year or more away, but our goal would be to keep our mortgage payment under 30ish% of our net income. I like the flexibility of a 30yr mortgage, especially since you can pay it down in 20, 15, or 5 years if you want.

Investing/Saving:

This is where true government independence comes in. If you want to retire (aka not work anymore) you better start doing something about it. The Roth IRA and 401K are my investment vehicles of choice. By putting a few bucks away today, I plan to have a couple million waiting for me during my golden years. I don’t care how old you are, the time to start investing was yesterday. Get to it!

There are a few other things that consist of our financial commandments like living within our means or shopping around before we make a purchase, but I figured it’s best to bore you any longer. Moral of the story is this: If you are 50+, you will probably receive at least some social security benefits. If you are 50 (or younger) you may still receive some benefits, but it’s time to wean off the government teet and start feeding your bank accounts.

To those of you that are 50+, did you plan some of your retirement income around social security when you were younger?

To those that are 50 or under, are you banking on the fed financing your years in adult diapers?

Do you think there will be any social security programs when us 20-somethings retire?

What do you think the social security age will be 40 years from now?

p.s. I wrote this article one year ago and moved it to the front of the blog for relevant discussion today.

I was talking with a friend the other day about common everyday topics ( things like: sports, money, unicorns, etc), when we transitioned in to talking about home ownership. I told my friend Girl Ninja and I were planning to save pretty aggressively so we could have up to $100,000 to use for a down payment. I then said something like “Once we buy a house, I will finally relax be more free-spirited.” Haha, yea right!

While I was punching Sallie Mae in the face, I thought becoming debt free would release me from frugality. But then came a wedding and a honeymoon, and a move so I focused on saving up for those expenses. In this season of life, I’m all about saving for a huge down payment.

But, and this is a big but, I’m officially coming to terms with the fact that there will always be something. Once Girl Ninja and I finally do buy our first place, I’m sure we will find something else to save for. A remodel, a new car, or that spaceship I’ve always wanted….

Although this epiphany could be depressing, it was a much welcome reminder that I will never have it all together.  A reminder that I shouldn’t put off having fun today, so that I can have fun tomorrow. A reminder, that I sometimes lose sight of what’s important.

I obsess over a stupid goal (in this case saving up to buy a house), and allow that goal to distract me from a huge part of the personal finance puzzle…. Enjoying our money. Life would suck if all we ever did was save and spend, save and spend. Every now and again, living outside the budget is exactly what the doctor ordered.

Last time I checked, GN and I both like to have fun. So, while we will continue to work towards our goal of home ownership, we will also make a point to enjoy our journey through that process. I’ve currently promised her a “big” vacation every year we don’t have a kid. We are looking in to Mexico, Hawaii, and Brazil this summer

What is your current top financial goal? Do you allow it to distract you from contentment, like I do, sometimes? Where is the balance between healthy focus and super awkward awkwardness?

The following is a guest post (stick figure art and all). Like it, love it, enjoy it….

Crouching shrouded in darkness, patiently waiting for the right moment to strike. The ninja is focused, patient and deadly… and that’s why they would make excellent savers!

I’m not saying that the best way to invest money in savings is to sit in the dark with a handful of cash waiting to spring out at the bank manager as he opens up shop first thing in the morning – that’d probably get you into trouble.

What I am saying (I think) is that the skills required to join the ranks of Ninja and his brotherhood of ninjutsu warriors are also great transferable skills for when it comes to investing money in savings.

I’m going to labor this metaphor for a little longer, if you don’t mind, to show you just what skills and qualities I mean, so that you too can be a savings ninja.

Patience:

The ninja knows that the price of success is patience. The ninja does not rush in, but instead waits until the best possible moment to strike. When it comes to savings, patience is certainly a virtue.

Depending on the savings account you choose to invest in, you’ll be rewarded for your patience in terms of earning more interest on your cash. Moreover, some accounts penalize you for withdrawing cash from the account within the agreed term, making patience even more important.

Tactical Prowess:

The ninja is a tactical and strategical master, planning for every conceivable outcome. If you want to save like a ninja then you must have the foresight to know if you are the sort of person who will need to withdraw cash from their savings – and to choose an account which does not penalize you for it.

Idealism:

The ninja fights for a greater goal, follows a moral code and a set of ideals which governs the way he or she lives his or her life. When it comes to savings, this means having faith and discipline in your goals. Willing yourself to leave your savings alone in order to reap greater rewards later down the line shows great discipline, just like that of the ninjutsu. The ninja is a master of self-control, and if you want to make the most of your savings, you need to be too.

Master Escapist:

The ninja knows how to make a quick, clean exit, leaving no trace. As a saver, if you find that you are unable to maintain the account, and that you keep dipping into it to fund your day-to-day living costs, then you need to be able to concede defeat and make an exit.

First you must know what the rules of your savings account are. The ninja is a master planner, and will have already done reconnaissance to gather this intelligence. If you are able to, withdraw what is left and cancel the account, leaving no trace.

The ninja knows that personal finance is a war fought in individual battles, and must keep and eye on the bigger financial picture. You may lose the battle, but if you are willing to concede defeat you will better equipped to fight the rest of the war.