Not Always Either/Or. Sometimes It’s Both.

There’s an awful lot of divisiveness on the Internet on a range of topics these days.

And taking a controversial stand on something online often leads to more attention, thus perpetuating the echo chamber.

Is this getting worse?  Why is it so challenging to see the commonality rather than the differences?

The older I get, the more I realize it is possible to acknowledge two seemingly disparate thoughts at the same time.

Here’s a few examples, specifically related to personal finance:

  • While many people can pull themselves up by their bootstraps (or achieve FIRE), not everyone is fortunate enough to be in a situation to move up the socioeconomic ladder (or to retire early).
  • It’s possible to feel empathy for someone who is drowning in debt while at the same time celebrating the hard work and discipline that goes into paying it off.
  • It makes more logical sense to invest in the market rather than pay off a 4% mortgage, but there is a tremendous peace of mind for some people in being mortgage-free.
  • Some people are willing to work 80 hours a week to make more money and get to FI sooner, whereas others recognize that time is a finite resource and choose a slower route.
  • Pretty much everyone agrees an emergency fund is a great idea, but some feel better with a big pile of cash sitting in the bank.  Others might hate to lose out on market returns and choose a smaller e-fund with the option to leverage credit, home equity, or investments in time of need.
  • Work on that side hustle.  Turn it into a business if you want.  Or, spend your time working hard at your 9-to-5 if that’s where you’ll have the biggest payoff.
  • Common canon in the personal finance community says you should buy a used car but sometimes a new car might be the right choice.  (Side note: My first new car lasted me 13 years.  My second one is going strong at almost 5 years and I hope it lasts at least as long as my first one.)
  • Despite much evidence to the contrary, it’s not actually forbidden to have cable, if that’s your thing.
  • The 4% rule works for some while others might feel better with a 3% withdrawal rate.  Guess what?  I bet this depends on your risk tolerance…
  • Just because you haven’t been discriminated against when it comes to pay or promotions, that doesn’t mean that others haven’t.

The bottom line is that personal finance is personal.  It’s great to educate others, and to share your own experiences.  That’s what I love about this community.  But there’s not ONE TRUE WAY to go about being successful at this personal finance thing.

What personal finance canon have you seen that I didn’t include above?

Is Family Support a Part of Your FIRE Plans?

Last week I listened to Sylvia’s story on the FIRE Drill Podcast.  Sylvia is a lawyer who has already hit her financial independence number, but is working for a few more years so that she has the flexibility to provide financial support to family members after she retires.

I’ve seen plenty of discussion in the personal finance world about parents providing economic aid to their grown children. But the opposite scenario – wanting to help parents or siblings – is not something I’ve seen covered much in the FIRE community.  Is Sylvia somewhat unique, or are there others who want to have the flexibility to do the same?

This episode hit home for me.  I do not worry about my husband’s parents’ financial situation; his dad is living comfortably on a railroad retirement pension, and I believe his mom’s husband will have a pension when he retires in the next couple of years as well.  But my family is a different story.

My Family Story

I grew up in a rural area.  My dad was a farmer and my mom stayed at home.  When I was ten my mom, a nurse, went back to work part-time.  There aren’t a lot of job opportunities in the immediate area.  She could have chosen to commute an hour to a larger city where she could work 12-hour shifts and earn more money.  But it was important to her to have the flexibility to be close to home for our after-school activities.

At some point my mom went back to work full time, while my dad continued to farm.  In addition to farming, my dad also took on side jobs, including selling seed and appraising and selling real estate.  My parents always worked hard, but the hard work did not result in lucrative financial gains.

Twelve years ago, my dad died unexpectedly.  He had life insurance and his affairs were kept in good order.  But there was still a financial impact.  My mom sold off some of the farm equipment, but there were loans against the farm from the lean years that needed to be paid down.

I am thankful that my mom had been working for many years by this point so she didn’t have to worry about finding a job.  But despite being at the same employer for coming up on 30 years, she still does not get paid a high wage.  Though she manages her money well, there just isn’t a lot of it to go around.  And maintaining a home and farm occasionally requires significant outlays of cash.

My Philosophy on Family Support

Honestly, I do worry about my mom’s financial situation.  So when I have an opportunity to help in small ways, I do so.  My brother and I both went to college, then moved to large cities and got jobs that pay substantially more than any jobs in the area where we grew up.  So we have the luxury of being able to pay for things that are a small burden to us but a much larger burden for her.  For example, we bought her a new washer and dryer two years ago for Christmas.

There has never been an expectation that we provide things for my mom.  And my mom is not the kind of person who would ever take advantage of us for financial gain, either.  But she has always been a great mom, and a role model for hard work and sacrifice.  Why wouldn’t we share our financial abundance when it makes sense to do so?

While providing family support is not an explicit part of our FI journey, having extra money to help my mom whenever it’s needed is definitely a consideration in our long-term financial decision making.

Caveats

I do think there are some rules to abide by when it comes to sharing your financial resources with family, whether it is a child or a parent or another family member:

  • Take care of yourself first.  Sylvia referred to this as the airplane method: you can’t help someone else if you don’t take care of yourself first.  Make sure your own financial house is in order before you offer to help family.
  • Only provide money or resources willingly, not out of forced obligation.  My mom would never have an expectation that we “give” her things, but others may have a different family dynamic.  Providing money without creating a cycle of dependence can be tricky.
  • Be cautious in loaning money.  I have never loaned money, but if I were in that situation, I would treat it as a gift so as not to create resentment should the money not be paid back.
  • Consider non-monetary gifts.  Sylvia mentioned that she shares frequent flier miles with her family.  I think this is a great idea!  My mom said Hawaii is the one place she really wants to visit, so in the next few years we are planning to do a trip there – and I plan for us to pay for most, if not all, of the trip on her behalf.

I’m really curious to get feedback from others on this topic.  Do you have family support as part of your FIRE plan?  If so, how do you plan to do so?  

Liebster Awards!

What is a Liebster Award, you may ask?  It is a way to recognize and discover new bloggers.  I want to give a shout out to Sarah at Ditching Your Desk for nominating FIREDup for a Liebster Award recently!  From one new blogger to another, it means a lot to know there are others out there who are on a similar journey.

To get to know the Leibster nominees a little more, Ditching Your Desk put together a list of questions for us to answer…

Why did you start your blog? 

I’ve gotten more interested in the FIRE/personal finance community in the past couple of years and wanted a way to get more involved in it.  Also, I love finance and writing, so it made sense to finally have a space of my own where I could share my family’s journey.  It also keeps me accountable to my goals.

What gets you up in the morning?

Coffee!! 🙂  Seriously though, in addition to the thought of breakfast and coffee (I’m always thinking about food), I get excited to spend time with my daughter and husband (and my pug dog).

Describe your perfect day.

My perfect day would involve most (or all) of the following:  a good night’s sleep, coffee, delicious food, quality time with my family (and friends), outdoor time/exercise, and some time to read.  Bonus points if the day involves an adventure, whether locally (like a visit to the zoo) or on a vacation.  If the evening involved a date with my husband and a glass of wine or a cocktail, that’d be pretty great, too.

What have you found to be the best thing about starting a blog?

The personal finance community in general is very positive and welcoming.  I feel like a bigger part of it now that I have my own blog.  It has also been a great way to get more writing under my belt, which is something I enjoy doing.

What have you found to be the worst thing?

Despite the fact that I created the blog as a creative outlet and not a business venture, I sometimes feel guilty that I don’t spend enough time on it.  That kind of takes the fun out of it.

What is one thing most people don’t know about you?

I am late to being a mom and for many years actually didn’t think motherhood was in my life plan.  In fact, I was a little scared that I would be one of those moms you read about on the Internet who says she hates being a parent.

I’ve actually found the opposite to be true.  I am so crazy about my daughter!  I was pretty satisfied with my pre-kid life.  But now that I’ve experienced being a mom, I can’t imagine not having her in my life.

Where is the best place you’ve visited?

In the summer of 2013 I went on an epic trip with my best friend, who at the time was in the Air Force and stationed in Germany.  I flew to Germany to meet up with her, then we traveled to Istanbul, Turkey and a few different cities in Italy.  It was fantastic!

Where do you dream of traveling?

It might be easier to list where I don’t want to travel!  I imagine there are more places I’d like to see than I’ll ever get a chance to visit in my lifetime.  Australia/New Zealand, an African safari, Thailand, and Bora Bora are just a few fun ideas.  There are also many amazing places within the United States to explore.  I would like to visit some of the best National Parks when my daughter is a little older.

What is your favorite book?

I enjoy reading.  I don’t have a specific favorite book, but I’ve read some good ones this year, including The Bear and the Nightingale, What Alice Forgot, Heartburn, and At Home in the World.  They are all very different books but I enjoyed each of them.

What do you want to be in your next life (figuratively speaking)?

I’ve worked long enough in cubicle land to say it would probably not involve staring at beige walls all day while hunched over a computer.  Writer?  Teacher or professor?  Librarian?  Financial planner?  Personal trainer? Yoga guru?  Entrepreneur?  Who knows.  But in my next life I’d also like to be a wife and mom and daughter and friend.

Who is your favorite musician or band?

The Avett Brothers!

A Few Suggestions…

Go check out Ditching Your Desk if you’re looking for new blogs to follow!

A few other newer blogs I suggest checking out as well:

Lean Fire ATL – LeanfireATL is a GenX early 50’s chick’s blog about the journey to FIRE through spending, saving and investing.

Women Who MoneyWomen who Money is a collaborative blog created to provide trustworthy personal finance information for women.

Birds of a FIREOlivia is a 25 year old FIRE blogger living in New York City.

Financial Pilgrimage – A St. Louis family who is on a journey to pay off nearly $200,000 in debt since 2011.

Readers – any suggestions of other new blogs everyone should check out?

Don’t Wish it Away

This time last year I was on maternity leave with my newborn.  I am so happy I took the full twelve weeks off to be at home with my baby, but I’d be lying if I said the time was pure joyful bliss.  Adjusting to a tiny human who needs constant care and attention was not easy for me.  I would ask my friend Google:  “When do babies get easier?”  Sometimes I found myself wishing the time to move a little faster, to jump ahead to a time where this parenting thing got easier.

Then I went back to work.  Time began moving rapidly.  My daughter started rolling over.  I thought, “This is fun! I like this stage.”  Then she began sitting up.  That was fun, too.  She started eating solid foods and sitting in her high chair with us at mealtime.  The first time she crawled was so exciting.  Now she is a toddler and working on walking and talking and so many other awesome things.

That “hurry it up” mentality from the newborn days?  It diminishes more and more with each passing month.  Each developmental stage is passing so quickly and my husband and I are trying to truly experience and enjoy each moment while we are in it.

“Life is a journey, not a destination.”

― Ralph Waldo Emerson

What does this have to do with Financial Independence?

It’s easy to have a “hurry it up” mentality about financial independence, too.  For many (including us), it’s a goal that is several years away – if not a decade or more.  Sometimes it’s a struggle for me not to wish away today, anticipating some “magical” future time when we will reach our financial freedom goal.

But each of us only gets one life to live, and we don’t know how long it will last, or what detours our path will take.  The thing I’m working on is how to enjoy TODAY, while still making conscious financial decisions that benefit our tomorrow, too.

How do you enjoy the present when FIRE is such a long-term goal?

Are you an Upholder, Questioner, Obliger, or Rebel? Take the quiz to find out!

I’m currently reading Gretchen Rubin’s Better Than Before: What I Learned About Making and Breaking Habits–to Sleep More, Quit Sugar, Procrastinate Less, and Generally Build a Happier Life.  Many of the principles in her book can translate to the world of personal finance.  Today I’m writing specifically about her Four Tendencies framework.

The idea behind this framework (which is also the subject of her latest book) is that we all face two sets of expectations:  outer and inner.  Outer expectations are those placed on us by others, such as family, friends, bosses, and society in general.  An example would be a due date for a big work project.  Inner expectations are those we place on ourselves, such as setting a New Year’s resolution.

How she describes the framework in her own words:

Depending on a person’s response to outer and inner expectations, that person falls into one of four distinct types:

Upholders respond readily to both outer expectations and inner expectations

Questioners question all expectations; they meet an expectation only if they believe it’s justified, so in effect they respond only to inner expectations

Obligers respond readily to outer expectations but struggle to meet inner expectations

Rebels resist all expectations, outer and inner alike

If you want to know your tendency, she has a quick quiz you can take on her site.

I am an Upholder with Questioner tendencies.  If I commit to something, I don’t have problems sticking to it.  Most of the time I’m a rule follower, but sometimes I question external expectations if they don’t make sense.

Some observations on this framework and it’s intersection with personal financial habits:

  • FIRE folks are impressively goal oriented; I would guess that most do not have a hard time meeting inner expectations, or if they do, they have figured this out about themselves and created hacks to make themselves accountable.
  • I envision the most hardy FIRE people – the Mustachians – as Questioners.  They challenge societal expectations.  You don’t have to work until you’re 65 (or even 55!)!  Of course you can save 70% of your income!  (or maybe they are Rebels?)
  • According to Gretchen’s survey results, Obliger is the most frequent tendency.  External accountability helps obligers meet goals.  Just as an obliger might benefit from hiring a personal trainer to form an exercise habit or joining Weight Watchers to lose weight, an obliger seems like a good candidate to work with a financial planner who will help keep him/her accountable to financial goals.  Alternatively, sharing goals publicly (such as on a blog) or with a trusted friend could also serve as a way to provide accountability.  Or perhaps the Frugalwoods Uber Frugal Month Challenge might create the sense of community that would inspire an obliger?

What is your tendency?  How does it impact your financial habits?

FIREd up about the Flexibility of Financial Freedom

I was comforted to recently read this post on Adventure Rich where Ms. Adventure Rich admits that they don’t have a set FI target date or amount.  I felt some imposter syndrome setting up a FIRE blog when we don’t have an FI date or number, either.

But in reality, this isn’t a blog about me retiring early.  Ideally I am done “working” before 65, but I’m not going to be bowing out of the workforce decades early.  What really interested me in the FIRE community is the Financial Independence facet.  Money = Financial Freedom.  So rather than having a FIRE goal, it is really a Financial Freedom goal, similar to the FFLC (Fully funded lifestyle change) espoused by Slowly Sipping Coffee.

So what does Financial Freedom mean to me?

Career Flexibility

Most days, I actually don’t mind working; I enjoy the mental challenge and the social interaction.  I have worked for my company for a long time and have some great benefits, generous PTO, and a manager that respects me and doesn’t micromanage.

But I also don’t want to be tied to a job because it pays a lot, or have to work on someone else’s schedule for the next 25 years.  Companies get acquired, managers move on, job responsibilities shift, and sometimes great jobs become stifling or downright horrific.  Financial freedom means that either I or my husband can choose to quit a job if one of us lands in a bad work situation; or that we can weather the storm if one of us gets laid off.  Working towards a financial freedom goal also means that we will have the flexibility to shift careers, work part-time, take a sabbatical from paid work, or start a business.

Time

Maggie at Northern Expenditure wrote:

“…it is so unfair that the most important working years coincide with the most important years for our children. Why did parents have to spend so much time trying to build careers at the same time their children were trying to figure out how to walk and talk and learn?”

We had our daughter at the beginning of this year.  I don’t want to sacrifice these early years we have with her just to retire a few years before she leaves the nest. For me, saving and investing means we have the financial flexibility to make lifestyle changes that align with our values – spending time with our daughter.

Overcoming Uncertainty

My dad died unexpectedly at 52.  My mom is a cancer survivor.  I’m 39 now, and even though I work to maintain my health, there are things outside my control that could lead to physical limitations as I age.

On a trip to Italy a few years ago, my friend and I stayed at the property featured in the photo at the top of this post, in one of the towns in the Cinque Terre region.

Our room was at the VERY TOP.  So.many.stairs. There is often a level of physical fitness that is required for the type of travel I enjoy, such as sightseeing or hiking through the wilderness.  If I postpone all this traveling until I retire, my physical body may not be quite as willing to cooperate.

Meaning

Do you find meaning in the work you do every day?  I’ve spent my career in the corporate world.  I care about the overall mission of my company, and believe we are doing good work.  But it’s usually hard to find meaning in the day-to-day of the actual job.   I think quite a lot of people in large organizations feel this way, especially those who are seeking FIRE.  Financial freedom means the option to pursue ‘work’ that provides meaning and fulfillment, rather than just focusing on a paycheck and benefits.

What are your reasons for pursuing Financial Freedom?

What is FIRE, anyway?

 

I sent a friend of mine a link to my new, shiny blog and she asked if FIRE is an acronym.  Why yes, yes it is!

For the uninitiated, the acronym FIRE stands for Financially Independent, Retired Early.

Kristin Wong has a new post over on Lifehacker that provides an overview of the FIRE movement.  In essence, by optimizing finances, a lot of bloggers in this community have been able to save upwards of 70+% of their income which has allowed them to retire in their 30s or 40s.  (Mr Money Mustache’s post on the math of early retirement is a mind-blowing must-read.)

Why has this movement been so appealing to me?  This quote explains it well:

“Financial independence ultimately means that you can shape your life without taking money into consideration,” said Tanja Hester, a recent FIRE graduate and founder of the website Our Next Life. “Most of us have to consider our finances in nearly every decision we make, or maybe even make decisions solely based on money. But once we reach financial independence, we get the freedom not to be bossed around by what we earn or what we have saved.”

 

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