Tag Archives: early retirement extreme

Early Retirement Extreme Day 1: Finding a Place to Live

When you go to Las Vegas, do you pay for a nice luxurious suite or a minimalistic room with a bed & a sink? I opt for the latter {because we’re out partying 18 hours of the day ;)}. And it is this type of mentality we are going to use today in looking at options for finding a place to live. We will be discussing the first half of Day 1, up to ‘location’ and complete the rest later in the week.

If you are new here, we are exploring our options for reaching Financial Independence with the Early Extreme Retirement {21} Day Makeover.

I will be using my living situation to reference in this analysis. Thus, we are a family of 4 {pa, ma, & the two inklings}. Please map out your personal living situation to see what scenerios may work for you.

The Basic Necessity

Even thought the song does not have relation to money, the beginning lyrics to Ludacris come to mind, “How low can you go? how can you go? how low can go?”

Jacob recommends $200-$300/month/person for living arrangements. I can see why if you consider the true cost of your living arrangement.

To strive for Financial Independence (FI) at the upper limit of $300 for living arrangements you be required to save:

$300/month = $3600/year in living expenses. This needs $3600/0.04 = $90000.

Family Scenerio

We live in Southern California {cha-ching}, specifically in the Inland Empire. What does that mean? The family is located in the outskirts from major cities like Los Angeles and Orange County. Decreased housing costs.

  • We pay $1100 month for a 4 bedroom 1277 sq. foot home
  • We are bound by a mortgage
  • The husband and I are responsible for our children’s living arrangements
  • We have a boy and a girl {aka: need their own rooms due to gender}

We are living pretty low in costs on the So. Cal totem pole. Pretty dang good deal for us! That is $275/person/month – (but the children are not paying their rent – YET ;)). So, $500/adult/month.

We are required to save (adult/month) :

$500/month = $6000/year in living expenses. This needs $6000/0.04 = $150,000.

If you share your expenses, then double the numbers. With these figures, it may explain why some say to financially prepare for children before having them.

Play Out Different Scenerios

Our mortgage costs are relatively equal, if not below that of an apartment rental in southern California (if you rent an apartment or house, what is your rent?). I was browsing apartment/housing costs on Craigslist and found rent to be $500 higher on the low end of the spectrum. Renting room(s) from someone is out of the question.

Potential Extreme options:

  • Get a bigger house and live with another family or take on roommates only if the cost of living for us equates to less than $500/adult/month.
  • Sell the house and rent a mobile home (I did locate one, but it was still the same price in rent that we pay for mortgage. The lot price alone is $600 per month)
  • Live with our parents (maybe if we were a younger couple)
  • Move to a different state with a lower rate of living (I have legal obligations that keep me in this area until one of my kids turns 18 – maybe in a couple years we can look at this suggestion)
  • Have any suggestions?

Your exercise today, figure out how much you need to save for housing to meet the Financially Independent goal in the living arrangement category. Can you reduce your rent/mortgage rates to meet a $300/person/month? And think about different living arrangement options. Brain storm those crazy ideas. Write them all out. If you’d like to share, please comment below or try out the forum in the works (the latter offers more privacy). I have a category labeled ‘Early Retirement Extreme {21} Day Makeover’.

Early Retirement Extreme 21-Day Makeover

The beginning of my family’s get out of debt journey, it was all about being a frugalite in order to help accelerate payments. We also set up the budget and our snowball schedule.

Definition of a Frugalite: One who is frugal, yet fun. A person who wants to save as much of their hard earned cash as possible – but in creative ways.

But as time goes on,  because our finance payments are automated and in sync with our snowball schedule, I have noticed we don’t practice being frugal as we used to be in the former days. I believe this happened because we freed up some funds for free play and convenience is easier to accept. The bad side of this… our get-out-of-debt-journey is going way toooo slow for my liking.

Early Retirement Extreme 21-Day Makeover

Many of you read Jacob’s blog called, Early Retirement Extreme {if you don’t, you should}. He has what’s called the Early Retirement Extreme {21} Day Makeover: the practical guide to “retiring” in 5 years with a nest egg sufficient to cover all your living expenses. He’s done it and he tells ya how it can be done.

I want to get out of debt, now. I am tired of waiting. There is plenty more I want to do with my life than sit around handing over my hard earned money to my bills. I am toying with the idea of taking part in this 21-Day Makeover and analyzing it from a family’s perspective.

I know there was a comment on Jacob’s blog about how to retire early when you have 2 kids. This got me thinking. How does a person/people with children meet their goal of becoming debt free? I know I struggle with paying down debt while raising teenagers because they seem to be uber expensive. And I struggle more in paying our debt down with gazelle intensity.

But Jacob hit the nail on the head with this Q & A:

Q: How can someone with children retire early?
A: The same way as people without children. By themselves, children actually spend very little money. The problem is parents spending money on their children without limits. If you adopt the same basic guidelines for your children as you do for yourself, the cost will be low. The fiscal or frugal problem happens when parents are willing to spend less on themselves but still create a consumer lifestyle for their children. I believe this is doing the children a disfavor.

{*raises hand* Yes, I am guilty of this !}

The Difference in Scenarios

Jacob was a student, single {now married} and had more freedom to make these extreme choices. And those choices were able to continue to the near degree even when he married, because DW knew the situation before hand {she did, right Jacob? ;)}

I have a family {me, hubby, tween and teen, 2 cats, and fish}. The family did not come into extreme circumstances and it is my obligation to care for these children {meaning, income will not be brought in from my kids or pets}.

The Project, The Reason

I don’t know that I want to live ‘extreme’ forever. But I do know that I want to retake the steps, obtain the lifestyle, that will help me get rid of debt with gazelle intensity. Here are the plans:

  • Take each day’s makeover steps {prolong each step in 1 -3 week increments} and apply it to my family.
  • Update you via vlogs {video blogs} and posts with our progress, our gripes, why I think this could or could not work in a family setting or if I am just doing the makeover steps myself. Oh ya, I’ll add the frugal recipes on here, too! {I may divide these updates between vlogs/posts and a newsletter – Haven’t decided yet}
  • Add ‘how-to’ post sprinkled in between {how-to mend a sock, plant an herb garden, batch cook & freeze, how-to sell your stuff, ect…} . If you’re a blogger with a keen knowledge of a how-to {frugal} and would like to Guest Post, I would love to hear from you!

Like this vlog, above. My daughter and I made the conscious choice to walk to school instead of drive. In fact, we had a great talk  and she had fun recording the short video. By walking, I would like to keep track of how much I am saving in terms of gas and oil changes {and hopefully I can tell you of some weight loss, too}.

Other conscious frugalite choices I did yesterday: drove home without the AC {it was hot yesterday, too}, packed my lunch for work, and made home fries for dinner instead of running out to the store.

Conclusion

Anyone will be able to benefit from project {or perhaps you’ll find cheap entertainment in watching/reading these posts}. Whether you have kids or no kids, getting yourself out of debt needs motivation. Isn’t that why we are all blogging?

But, this project will definitely help those who do have children and struggle with paying down debt. I hope that I can bring forth guidance, that you & I can learn what may or may not work, find some helpful recipes {share yours, too}.

And this will hopefully help me and my family speed up this get out of debt drama I’ve been hanging on for so long!

So go print out Day 1: Finding a Place to live and we’ll bring it up for discussion in a few days! In fact, go read the whole 21 days and get those thoughts brewing!

Single Mom, Rich Mom, want to chime in any thoughts or tips?

Posts I enjoyed this week

Check out the Yakezie Carnival on Beating Broke. He did quite an awesome job creating a huge list of recent blog posts written by Yakezie members {What is Yakezie?}

Hear of the Catfight of the Personal Finance Blogger Chicks? It’s a challenge of “who can spend the least in the month of June” and I’ve signed up for it {and am deemed to win, too}. ;)

Personal Finance Blogger Chicks:
Single Mom, Rich Mom {Host}
Barbara Friedberg Personal Finance
Move to Portugal
and myself…

Let the brawl begin!

My New Hopefully Passive Affiliate Site: DIYThemesGallery.com I still have a bit more to tweek or add, but I am pretty much done with the site. Plus, many of you personal finance bloggers using Thesis as your theme choice are profiled on the site.