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…

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Except for when he is not…

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He’s got crawling down…

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And standing…

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

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But he’s definitely not scared of Nova…

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

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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.

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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. 

Have you ever actually had an emergency?

What’s the most expensive emergency you’ve ever had?

Good question right? If you’re like me you’re lucky enough to have never really had an emergency. I mean, sure I’ve had to replace my car tires before. Or buy a last minute plane ticket for a family issue. But these things are relatively insignificant in terms of dollars required. Maybe $1,000 tops? Hardly requiring us to have $10,000 on hand.

I think it’s safe to say, in the seven years I’ve now had an emergency fund, I’ve used it exactly ZERO times.

I’m trying to wrap my brain around a situation in which I would have an unexpected and legitimate need for $10,000 cash.

The only thing I can really think of that would require immediate need for a large amount of cash would be a house related issue. Maybe my roof completely caves in? Or my furnace catches on fire and destroys my basement?

Is this the reason I keep $10,000 on me at all times?

Seems a little paranoid, don’t ya think?

Aren’t a lot of these concerns the very reason I pay for homeowners insurance?

I can’t help but wonder how many of you have, at one point, needed access to a significant amount of cash?

How much, and why did you need it?

Today you entertain me, with your emergency fund related stories 😉

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.

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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. 

Is there any reason I should still have a savings account?

Girl Ninja and I are in the process of refinancing our mortgage. We locked in our refi rate at the end of January, which saved us 0.25% compared to today’s rates. Might not seem like much at first, but it works out to about $40 per month, every month, for the next 30 years. So yeah, I’m happy about that.

We should be lined up for closing sometime near the end of this month and as soon as closing wraps up, I plan to head over to a local credit union and take out that HELOC I was telling you about earlier. (I had to put that plan on pause since I didn’t want a line of credit on our home to screw up the chances of us being able to refinance easily.) I imagine the HELOC will provide us between $10,000 and $50,000 in immediately accessible liquidity.

The HELOC will essentially serve as our savings buffer. 

For my entire personal-finance-loving life, I’ve heavily relied on my savings account. I opened up an ING high-yield savings account back in 2007 (back when I was earning around 3% on my cash) and it was the start of a beautiful relationship. I used that savings account to pay off my student loans in 2010, pay cash for a $20,000 new-to-us car in 2012, and drop $80,000 on a down payment in 2013.

I loved my savings account so much I had four of them.

  • An “emergency fund” account
  • A “future car savings” account
  • A “vacation” account
  • An “extra savings” account.

But now that I plan to use my taxable investment account as my primary source of saving, I can’t help but think…

Is there any good reason to keep my savings account? 

I mean, I’ll be sure to keep a minimum of $10,000 cash on hand at all times in the event of an unforeseen issue (medical bill, job loss, home repair, etc), but why can’t I just keep that money in my checking account?

High-yield savings accounts used to be appealing, but for the better part of the last five years, they’ve paid virtually nothing. My current Capital One 360 savings account pays a pathetic 0.75% APY.

Or in other words, my $10,000 savings account only earns 75-ish dollars per year.

“THAT’S AWESOME.”  – said no personal finance blogger ever. 

So yeah, I think it’s about time I close out my last remaining savings account, and move that $10,000 to my one and only checking account with Wells Fargo, where it will reside for many years.

I guess the idea of not having a savings account just feels weird. It is as much a part of my personal finance DNA as this very blog.

  • Will I be able to function without one? 
  • Is there any good reason to keep it around? 
  • Am I committing a PF sin by closing this account? 

Only one way to find out. RIP savings account, you won’t be missed.

 

How much does a Vizsla (or any dog) cost?

***If you don’t care about my dog that’s fine. But you MUST scroll down to the bottom of this post and respond to my question about a dress that is breaking the internet. This debate could very well destroy my marriage.***

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As many of you probably know, we got our dog Nova, about a year and a half ago. Nova is a Hungarian Vizlsa (Vee-Shluh) and pretty much the best dog in the whole world. She came from a breeder out of Montana, and we picked her out (from her seven siblings) when she was six weeks old (we didn’t bring her home until she was 8 weeks however).

If you are like 99% of people out there who don’t know what a Vizsla is, allow me to inform you:

  • Vizslas self-clean. Like a cat.
  • They are an odor free dog. No dog smell.
  • They produce no natural body oil, so no greasy hands after petting.
  • They are completely brown (eyes, nose, paws, belly, toenails).
  • They are a “pointing” dog, bread to hunt birds.
  • They have insane stamina and are considered extremely high energy.
  • Their average adult weight is between 45lbs and 60lbs.
  • They are extremely trainable (goes with the hunting breed).
  • Rub em down with a dry towel weekly and they are clean as a whistle. They only need to be bathed once a quarter.
  • They cost between $1,000 and $1,800 as a pup.
  • They are super sensitive. You yell, they cower in fear.
  • They are known as the Velcro Vizsla because they attach to you like glue.

We paid $1,000 for Nova and couldn’t be more in love with her.

We will never own any other breed. And I’m not just saying that to be dramatic. We’re totally convinced Vizslas are the best kept doggy secret.

How much does a dog cost after the purchase? 

Being new puppy parents, Girl Ninja and I had a lot of learning to do and Nova had a lot of vet appointments to attend.

As soon as you get your pup you should schedule a vet visit. The vet will check the overall health of the dog and probably give them some shots. This will happen every couple months for the first year of their life. Kind of like a baby, puppies have a weak immune system.

Our vet charges $50 for each visit, plus the cost of any medications/supplements/etc provided.

Thankfully, Nova has only been to the vet for routine appointments. We had her spayed at about 6 months old which cost us $437. That was definitely the most painful of the vet bills, but they took good care of her.

With all the shots and vaccinations young dogs require, we’ve spent a total of $950 on veterinary visits (this includes the $437 spay) over the course of her life.

Since we did not have a dog before getting Nova, we had a handful of purchases to make prior to getting her. A leash, collar, kennel, dog bed, some toys, doggy shampoo, dog food, etc.

We buy her a good quality, grain-free, dog food called Taste of The Wild off Amazon. It is the only food she’s ever been fed outside of the occasional treat, and she seems to do great with it. It’s a little pricey at $45 a bag, but it’s a heck of a lot better than that Purina crap. A 30lb bag lasts us about 6 weeks.

Nova’s costs break down as follows:

– Purchase price: $1,000

– Flight to get her from Montana to Seattle: $250

– Vet bills, including spay: $950

– Food, toys, supplies: $500

– Total cost in first 16 months of life: $2,700. 

If you are thinking about getting a puppy, your costs will likely be pretty close to ours. We don’t spoil her rotten by any means, but when it comes to her health we make sure she’s provided for. If you’re not willing to buy a quality dog food, or make all your vet appointments, I’m not sure you should get a dog.

Similarly, if you don’t have $1,500 to spend for all of these things, I’m not sure you should get a dog.

Things should taper off a good bit from this point forward, and I expect her annual cost to us to run about $500/year between shots, vaccines, and dog food.

We love her to death and she’s seriously been the sweetest dog to Baby Ninja. He tugs on her big floppy ears. Rolls around on the ground with her. And has even taken a dog toy right out of her mouth. She totally gets that he is fragile and when she is around him she treads very carefully.

We were a little concerned that her energy might be an issue and that she would bulldoze him, but that’s not how it is at all. While there is no denying she is a fireball with endless energy, she knows that outside is the place to get that energy out. When she’s indoors she is pretty much just following us around or sleeping.

She’s the best.

And now is the time where I get to show her off to you…

First time meeting her…

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Her first time meeting Baby Ninja…

 

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Looking like they expect me to entertain them…

 

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She stood like this for five minutes…no joke…

 

 

 

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Getting out her energy…


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I’m going to explode from all the cuteness…

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She loves to do tricks…

 

But hates her doggy conditioner…

 

 

p.s. People that think I’m terrible for buying a dog from a breeder instead of a shelter; save your breath. I don’t really feel like I need to justify why I wanted a dog from a breeder. Much like I don’t feel a need to justify my love of meat to vegetarians. To each their own.

 

 

MANDATORY READER RESPONSE.

This dress is causing a tizzy all over the Internet. When you look at it do you see a white and gold dress, or a black and blue one? I see the former, Girl Ninja sees the latter. It blows my mind.

 

I’ll still be so pissed if student loans are forgiven.

Back in the Occupy Wall Street hayday, Circa 2011, I wrote my 8th most popular post ever. It was simply titled “I’ll be so pissed if Student loans are forgiven“.

Yesterday I read an article by the New Yorker titled “A Student-Debt Revolt Begins“. Here’s a snippet from the article, but make sure to click through and read the whole piece.

On Monday, Heiney and fourteen other people who took out loans to attend Corinthian announced that they are going on a “debt strike,” and will stop repaying their loans. They believe that they have both ethical and legal grounds for what appears to be an unprecedented collective action against the debt charged to students who attended Corinthian schools, and they are also making a broader statement about the trillion dollars of student debt owed throughout the country.

If you took the time to read the whole piece, you’ll learn that it’s pretty clear Corinthian was likely not putting the students’ needs first. But then again, what would one expect from a for-profit entity? Of course the executives primary concerns are going to be how much money they will make, and how much money they can make for their investors.

It’s also abundantly clear Corinthian was taking advantage of the government’s generosity just as much, if not more, than they were taking advantage of their students.

Does this sound familiar? How about just a few years ago when all the financial institutions utilized predatory lending practices, knowing the fed was there to bail the bank out in the event the crap hit the fan.

Tons of upside. Virtually no downside. 

But to be honest, I actually feel for Heiney and think she should pursue legal recourse. If the college operated unethically, and the Dept of Education, requires that colleges do operate ethically, then I don’t know if the blame can necessarily be placed on her decision to enroll.

If she was deceived and lied to, how can I demand she pay back her loans. Lord knows if I was unknowingly ripped off, I’d like a chance to plead my case and get some type of relief.

BUT

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If she is successful in getting her student loans forgiven, then I would demand she forfeit any degree or credential she earned from her student-loan subsidized education.

I mean, her whole case is predicated on the fact that the school she attended sucked, wasn’t actually worth a single penny, and she feels her degree is useless.

Fine.

Give up the degree and I’m cool with you being able to explore student loan forgiveness.

Treat student loan forgiveness the same way that we treat foreclosures and bankruptcy.

I don’t get to revolt against my mortgage AND keep my house. No. The bank will kick my butt out, take back the house, and essentially forgive my loan (and damage my credit a good bit).

I don’t get to file bankruptcy, but keep my vacation properties, fishing boat, two dirtbikes, and $40,000 in personal savings. If I go to Bankruptcy court and convince the judge I can’t afford to pay back my creditors, the court takes whatever I do have, and distributes it amongst my creditors. My loan is forgiven, but I have to forfeit most of the things that debt allowed me to acquire.

So yes, even in Ms Heiney’s situation, as sad as it is. I will still be SOOOOOOOOOOOOOO pissed if her student loans are forgiven.

You can not have your cake and eat it too. 

Where do you see the student loan forgiveness issue going?

I think it’s inevitable and within 10 years student loan forgiveness will be a thing. And I’m sure it will be abused just like bankruptcy and foreclosure often are.

Heck, I’d take a damaged credit score for a couple years if it means I can swoop a free degree in the process.

*** keep in mind I graduated college with $28,000 of student loan debt, which was above the national average for my graduation year, so I’m intimately familiar with the “Frick, what did I do” feelings that come with a student loan obligation***