Ama journal - new found stability in Detroit

[Kriegsspiel]

I love these recs so so much, thank you.

You could probably ride your bike to Belle Isle, it's only 11 miles. I'm guessing you already know about it, but it has a cool aquarium, museum, & conservatory, beaches, races, playgrounds, etc. You could stop by Sister Pie to fuel up for the ride back to Dearborn.

The DIA is really cool. I don't think you can get in free if you're not a Detroit resident, but it's still worth it if you like to wander around among some art. There's a lot of good street art around Detroit, now that I think of it.

The Ford House and the Henry Ford Museum are both worth a visit.

The Corktown St. Patrick's Day streetfest is fantastic.

Campus Martius has an ice rink in the winter. They have cool stuff going on all time time there.

Getting some friends and going frowling in Hmtrmck (The Frowling Warehouse) is a lot of fun.

[Ama]

On the subject of moving: my bf and I had a scare with our "landlord" last month (it's since been smoothed over) and started looking at houses a little more seriously than before. Dearborn is not as cheap as Detroit (median cost in Dearborn is 163k vs Detroit's 42k). I've got about 48k total, and my bf has about 65k total, and we both make about 50K/yr and have no debt. When I plug our info into a traditional home affodability calculator I see sky high prices obviously geared towards more traditional notions of "saving" and financial health.

I'll admit I was fooled by these calculators, and even went to see a couple houses in the $240k range (high price even for Dearborn, and definitely NOT in a bordering Detroit neighborhood). I know I just started this blog, but I am already grateful to the reminder it gave me in this situation. I started to write a post a few days ago - "how much house can I afford?" - and realized how far off track the question was. Obviously the ERE recommendation will always be to keep housing expenses as low as possible, buy with cash as often as possible, and continue to save as much as possible. Which brings me to another thing I'm grateful for - my very cheap house, where we can hopefully continue to live and save for a while longer.

[Gilberto de Piento]

I am thankful that I bought less house than I could have, but I am also thankful that I didn't get the absolute cheapest house available. A little more money bought a neighborhood with less crime and a better likelihood of neighbors that take care of their house and don't disturb others. Its great to have a relatively low payment and if one of us lost a job we could still pay for it or even switch from a 15 year mortgage to 30. That said, if I had it to do over again I would spend a little more to get a place that needed less work and had more modern features like a dishwasher.

If you buy a median house with a 100k down payment you could have it paid off in a very short time. What are the long term price trends in the places you are looking at? Over a long haul a more expensive house that is appreciating can win over one that is not but it is hard to predict.

[7Wannabe5]

A huge problem with house shopping in metro Detroit is that you will be compelled to stare in the face of 20th century racism. For instance, in my childhood, the inner ring suburban area where you live was known for excluding black people. The small post WW2 houses were largely occupied by 2nd/3rd generation auto plant immigrants from Italy, Poland and Ireland. My parents were educated/affluent, so I lived even further out from the city center, but my friends and I would sometimes hitch rides towards inner suburbs, so that we could roller skate with cute tough boys who played Zeppelin and had names like Ace and Rex. These half-wild boys became the men who flipped working class party allegiance and voted for Trump in last election.

[Ama]

@7w5

So true... Have you read Middlesex? Your stories about Detroit remind me of that book (without the intersex parts). I read it before moving here and it helped me to understand the different neighborhoods. I've lived in a few big cities, but somehow this one is the most historically and overtly racist of all, it's just everywhere...

[Ama]

I work in the manufacturing industry (like most people in Metro Detroit area) for a company located 1 mile from my home. I started at the literal bottom of this place as a machine operator making $12/hr. The only plus of that position was the active lifestyle - I was constantly running around a warehouse all day which helped me stay active. After a year, they moved me up to a very stressful tech support position. That year brought a new found pleasure in IT Crowd - "Have you tried turning it off and on again?" I absolutely hated that position - I was still undervalued at $16/hour, constantly stressed, constantly dealing with angry customers. This was also the year I found ERE and became obsessed with curbing my spending and paying off my student loans.

My current position of almost two years is as a technical writer. As far as jobs go, this is the best I've ever had. Some pluses:
- I am one of the lucky working people who did not loose their job during the pandemic (knock on wood)
- I am the only tech writer at my office, so no one has any idea what I am actually doing all day (hint: it's usually ERE, editing articles for a socialist newspaper, reading, etc)
- I do actually like the work, and everything I now do (guides, illustrations, online learning, content management) could easily transition into a freelance / work from home gig if I took the leap

Some (huge) negatives of my current workplace:
- Absolutley toxic atmosphere created by the CEO. In the 4 years I've been at this job, I've always strangely been able to avoid the direct line of fire. But the CEO is the most insane maniac I've ever met - cussing out employees, firing and then sueing people who talk back, and just generally yelling all the time. My first year here around 50 people quit or were fired, and there's less than 50 people working here! Luckily he's not in the office too often these days
- CEO won't allow anyone to work from home ever, even during a pandemic. This is a huge negative for me as I am a big homebody. Home is where my cats are!
- Because I was hired into their lowest paying position, I have contantly been undervalued. This got drastically better with my last raise - they bumped me up $10k a few months ago "as a show of appreciation", so maybe this point is now moot
- I don't value "work" or take pleasure in any "status" related to a job, so I really don't care about working anywhere. I just want a paycheck and nice conditions for as long as I have to do this

--

I realize that I have not yet clearly stated why ERE, what this means to me and what my actual goals are. Maybe I'll dive into this more another day, but for now -

I love being home, I love not spending money (except apparently on food but I'm working on that), I love doing and making things at my own pace and schedule. I used to be an artist, and while I have moved away from making art for arts sake (this honestly feels like a selfish act to me now), I am still very interested in knowing what useful thing/s I could make if I was able to actually dedicate all of my time to it. I know how to make jewelry (solder, carve, pierce, cast, CAD design, 3D printing etc), I know some leather working, ceramics. Lately I've focused on fiber arts - weavings, sewing, natural dyes. This past summer I started a dye garden. I've grown a substantial amount of vegatables in the past, although my current home is in the woods so it's hard to find a spot with enough sun. I'm interested in learning carpentry, blacksmithing, beekeeping... you get the picture.

I am a very good and committed "worker" - I may be undervalued financially, but I am seen as an "asset to the company" and all my reviews at this company have been 100% favorable. I wonder what it would be like to devote all of my energy to my own projects. I think I'd like the chance to hire myself

I should start thinking and creating an actual plan for this. How much money could I make on my own? How few hours could I spend working total? What skill would be the most profitable? Could I continue saving at my current rate? How much longer do I need to stay at this office?

[Ama]

Goal update: When I started this journal I set a very open-ended goal to "lower my monthly spending" and when pressed I identified groceries and eating out as two areas to curb. So, historically I spend in those categories:

Groceries - $200 to $350 (I budget $200 each, but lately we always go over this category)
Eating out - $100 to $200 (...same)

October 2020 - $250.52 on groceries and $220.33 eating out... yikes.

November 2020 - $255.13 on groceries and $192.54 eating out. It's nice to see that eating out went down a bit, but I think that has more to do with COVID than with any planning on my part. I take very little credit.

For December, my goals are:
1. Get groceries under $200 - save arond $50
2. Get eating out down to $150 - save around $50 (I know I'm being easy on myself, this shouldnt be hard)
3. Dont spend anything on house stuff to make up for the overspending last month - save $25 (we lost power for a few days in Nov and bought candles and a battery backup)
4. Stick to $100 for friends and family christmas gifts (this means we'll have to make gifts so the money can be spent on supplies / shipping. I'm looking forward to this)

These changes should bring my spending for December down from about $1,000/month to $900, with a 68% savings rate for the month. Baby steps towards a goal of 80% savings rate in 2021

[ertyu]

What are your strategies for getting 1 and 2 done?

[Ama]

@etryu - I always appreciate your goal oriented questions! I made a similar goal last month and thought i could achieve it by buying less meat, choosing recipes with cheaper ingredients, and opening a discussion about eating out cheaper with my partner. I'm tempted to name these same things as the answer for how I will get it done, but knowing they didn't get me to my goal last time obviously doesn't help.

I've also been thinking alot about the way I track my finances. I started using YNAB when I was paying off my student loans- at that time i was so frugal and so obsessed with paying off my debt that i felt extremely uncomfortable spending money on anything else. YNAB helped me to see that I could cover my expenses, buy food etc, and still put a large amount towards my loans each month. But it's been a year and a half since those days ended and I'm still tracking every penny at the micro level. ERE blog posts recommend against this - there's more a focus on the macro - what am I spending and saving each month?

All that to say - I'm testing a new spreadsheet vs Personal Capital, and I'd like to replace YNAB before it renews in March. And other than the methods I mentioned before to lower the cost of groceries and dining out, my "plan" is to wish really really hard that I meet my goals this month. lol

Oh and my bf's dad made me a coldframe!!
---> https://drive.google.com/file/d/1epU459 ... sp=sharing <---
So I wont need to buy any greens this winter. I'm going to work on winterizing it better this weekend in the hopes that the ground in the frame will stay warm all winter.

[Western Red Cedar]

When I started getting more serious about limiting expenses a few years ago I wanted to make sure the lifestyle shift wasn't too much of a shock for my wife. She said eating out and travel were a high priority.

After talking we realized she really liked the experience of going out and trying different foods. We started focusing on happy hours with cheap appetizers, as well as interesting, lower-cost ethnic restaurants. We also agreed not to buy food from restaurants on our own, and go out once on a Friday or Saturday as a fun date. It met her needs for new experiences and it made it feel more like a luxury when we'd actually go out.

Compromise is important when implementing lifestyle changes with a partner. Good luck! There should be lots of options in Detroit for delicious cheap eats.

[ertyu]

ERE blog posts recommend against this - there's more a focus on the macro - what am I spending and saving each month?

It depends on the personality type imo. There are people here who swear by detailed tracking, e.g. @horsewoman. I, on the other hand, am a bit (a lot) of a space-out and my attention to detail is crap. I do better with internalizing general principles and letting the savings take care of themselves. Tracking, to me, would be just another thing that would last 3 days and that I can then feel bad about not sticking to.

There is also, imo, a lot to be said about the structure of one's environment shaping one's daily choices. When I lived close to a starbucks, i used to spend a lot of money there because i enjoyed it. now that my closest starbucks is 35 miles away in the next country over, I'm spending way less money on coffeeshops. Etcetera.

Also, your cold box is dope. Greens inside look really healthy.

[Gilberto de Piento]

What are you growing in the cold frame? So far mine is working, with spinach, lettuce, etc. looking much better inside than out. I'd like to do more next year.

[Ama]

What are you growing in the cold frame? So far mine is working, with spinach, lettuce, etc. looking much better inside than out. I'd like to do more next year.

@gilberto I am growing arugula and prize choy (asian greens similar to bok choy), and I stuck some pots of parsley and peppermint in there as well in the fall. I'm amazed at how well the cold frame has done this winter - it's still going strong depsite snow for most of January and February, and 5F weather for weeks! In December I bought some gutter heat tape to line the inner perimeter. Other than that, I just keep it closed most of the time, water occasionally, and always dust off the glass after a snow fall. It's such a pleasure gardening without bugs and slugs!

[Ama]

In December, I started to notice that my budgeting app, YNAB, was no longer serving me. The apps focus on the minutiae / category balancing had lead to a lifestyle creep that I hadn't noticed before. When I overspent in one category, I would simple move money around to cover for it. There were no consequences. When I started this journal, I estimated I spent $853 - $1,103 / m based on the total budgeted amount in my categories. In actuality, I spent over $2k / m in Oct, Nov, and Dec 2020! I didn't even realize it because the view in YNBA (or at least the way I was using the app) was so focused on daily spending.

And so I copied https://docs.google.com/spreadsheets/d/ ... 1086245783 and started adjusting it for my purposes (after a short failed stint with NOT tracking spending, which led me to just overspend like crazy). I changed the micellaneous spending section to track each grocery and takeout purchase, so that I can keep a closer eye on that spending throughout the month. I've been using and adjusting this sheet since Jan 1st, so far so good! I think I will take the leap and cancel YNAB today. Savings of $83/y

I posted extensively before about looking for a house, so I'll give some update on that. The cost of homes in my area is still too high, and my bf is still against moving to the much more affordable Detroit, so we are at a stand still here. We saw a couple homes all around $200-$250k, and I am just not comfortable taking on that amount of dept, esp after how hard I worked to eliminate my student debt. I also didnt love the houses, which helps to not get carried away with dreams. There's a trend in my area to replace wood floors with tile, cover up fireplaces, build extravagent basement kitchens, and remove all interior charm in general. My dream is to move into my grandma's old house - 1920s kitchen with standalone cabinets, pink bathroom, wood floors etc etc. Im not interested in over paying for a house gutted by a contractor just to redo all the damage myself. In the meantime, I'm thinking of taking a carpentry class at a local community college in the summer (COVID willing) so I can learn some basic skills for home repair.

And last related thought: I also realized I was being too flexible in my thoughts around my savings, but my new excel sheet has helped me fix this. When I was thinking about buying a house, I would think of my savings as my house budget. When I was dreaming of ER, I would think of my savings as my path to FI. And I would frequently include my monthly spending in my networth totals, even though that money will be gone in a few months. My new excel sheet has helped me to diffrentiate this. (I am obv not a math person, and was not raised in household that talked money )

TOTALS
Checking (~6 months spending) $5725
House Savings $43,000
ER Savings $12,524 (31% of 2021 Savings Goal $40,000, 3.91% of FI Goal 320K by 2029)

[Alphaville]

In December, I started to notice that my budgeting app, YNAB, was no longer serving me. The apps focus on the minutiae / category balancing had lead to a lifestyle creep that I hadn't noticed before. When I overspent in one category, I would simple move money around to cover for it. There were no consequences. When I started this journal, I estimated I spent $853 - $1,103 / m based on the total budgeted amount in my categories. In actuality, I spent over $2k / m in Oct, Nov, and Dec 2020! I didn't even realize it because the view in YNBA (or at least the way I was using the app) was so focused on daily spending.

the ability to move money between budget lines is a feature not a bug. e.g. i can decide that instead of a bottle of wine i'm going to buy myself a book today. i don't have to buy wine today because six months ago i set money aside for it.

what ynab will not let me do is budget more money than what i have. so i can shift money around as priorities change, but i can't budget what i don't have. that there is key.

in ynab, each budget line is a sub-account of your larger savings. so you can move between sub-accounts as long as your total savings grow.

so.... ynab asks you to pay attention to your age of money, which is an estimate of how long you can to spend your current cash into the future. so if that's not growing... you're not following the program. some people have ageof money of a year or more, meaning they're living today with last year's money,ie. a "one year emergency fund"

the other thing if you don't want to keep money in checking due to inflation, you can create a category to save/invest, from which you can fund retirement accounts, brokerage, etc.

these accounts , if tracked on ynab, are counted as part of your net worth, but not as budget accounts. so moving money to investment accounts will reduce your age of money, but will still increase your net worth as they grow (you might need to do monthly updates manually or something).

and if you budget those funds for that purpose, that is money you simple can't budget elsewhere. so you can actually set up a fixed savings rate that way. it's an expense out of budget accounts but your net worth remains.

so anyway, you're supposed to keep an eye on both age of money and net worth. that there are your consequences.

but if you have something better than ynab thar works for free, that's ok too. i'm just trying to say it's not the app's fault

(i love ynab, and hate spreadsheets, lol)

[Ama]

but if you have something better than ynab thar works for free, that's ok too. i'm just trying to say it's not the app's fault

(i love ynab, hate spreadsheets, lol)

Lol that's fair!! I've used and loved YNAB for years and years, and honestly would keep recommending it to others, esp all my friends who dont budget at all (or worse yet, use one of those dumb apps that steals money from you to squirrel away savings)

But at this point, the way I am using it isn't working for me anymore so I'm looking forward to trying my new spreadsheet. Hopefully I dont mess it up too bad. And if needed, I'll go back to YNAB and try out your save/invest category tip. Onwards and upwards!

[Alphaville]

Onwards and upwards!

[Ama]

TOTALS
Checking (~6 months spending) $5725
House Savings $43,000
ER Savings $12,524 (31% of 2021 Savings Goal $40,000, 3.91% of FI Goal 320K by 2029)

Been thinking about these totals. I'm still very uncomfortable with allocating 78% of my NW in a house, esp after looking at these threads - viewtopic.php?f=3&t=11215 and viewtopic.php?f=7&t=10337. And that 78% isnt even actually covering the whole house, this was just for down payment and potential repairs....

My current housing situation is 4.36 of my NW per year. I'm in less and less of a hurry to buy a house the longer I think about it.

On another note, I just found out today that I will get a $10k bonus in my next paycheck bc the company I work for was sold (and apparently everything will be business as usual). Now more than ever I really need to figure out what baby steps I need to become a knowledgeable investor. All my NW (except 12k in 401k) is sitting in my savings account. Planning to start by reading this post again https://earlyretirementextreme.com/the- ... estor.html which recommends mutal funds as the next step up from a savings account.

[Ama]

Considering marrying for healthcare. My bf works as a part time contrator at several diff places and so he does not have health insurance through any of his employers. His premiums are around $250 / m now bc he makes too much /yr. The company I work for was bought by another company 6 months ago, and apparently our benefits are about to improve, so we have started talking about getting married so I can give him healthcare. God I hate the US healthcare sytem. Bernie bro alert !

For some background, we have lived together for 5 years. We've been in an open relationship this entire time (although I have not pursued another partner for a few years) so the normal reasons for breakup (like cheating, falling in love with someone else, etc) are negated. Since day one, we have been very serious, very committed to building a life together, and adamently against marriage. On a deep internal search, my only pleasant thoughts around marriage are imagining us in Vegas getting ordained by Elvis, or telling my grandma I got married bc that would make her smile. So basically, a fun vacation and I love my grandma. It's not that I hate marriage, it's more that I don't care at all.

I was surprised when my bf mentioned the idea to get married for healthcare. I'm doing some research to see what else this would effect. Taxes obv, but so far it seems those would be easier.

Savings something @johnsmith84730 said in this thread viewtopic.php?f=3&t=11863&p=238069&hili ... re#p238069

Move to Canada (not hard to qualify for Express Entry even without a job offer, and get immediate healthcare and permanent residency on arrival. Buy some land - perhaps near whichever coast you have family (in our case we'd want to live in Ontario and be able to fly/drive across to our friends/family on the East Coast). Build up a bit of a homestead (not full-time work, just some light resiliency-type stuff. Apply for citizenship after 3 years to lock in Canadian citizenship for your descendants.

^Something to aspire to...

TOTALS
Checking (~2 months spending) $854
House Savings (Moved $15k of this to a Vanguard Mutual Fund my Dad recommended) $43,000
ER Savings $18,835 (47% of 2021 Savings Goal $40,000, 5.89% of FI Goal 320K by 2029)
401k - $16,200

[Chris]

The company I work for was bought by another company 6 months ago, and apparently our benefits are about to improve, so we have started talking about getting married so I can give him healthcare.

Something similar happened to me, with my employer being bought-out while also having a partner in need of health insurance. Upon perusing the benefit documents, I found that they new company not only had better coverage, but also makes coverage available to domestic partners. This struck me as odd, as I thought that domestic partners were a thing of the past now that same-sex marriage is legal. Turns out that "domestic partner" is a designation assigned by the company, and can apply to any person (of their sex): employees can identify their partner to the company, and thereby add their partner as a covered person for health insurance purposes. They do require some proof of actually being in a committed relationship (living together, etc.), but no legal paperwork is required.

You should investigate if your employer offers domestic partner coverage; you may be surprised.