Minimalism: Honey, I Shrunk Our Life

When my wife and I met in our early twenties, neither of us cared much for "stuff." We were not aggressively pursuing career paths or looking for ways to get rich or own more and better things. In fact, we were quite the opposite. We wanted experiences. We wanted relationships. We wanted freedom and flexibility to explore our hobbies and interests and travel and be together. And, we lived this way for a good chunk of our twenties. We were backpacking instructors and environmental educators, baristas and ski instructors. We worked seasonally for mostly room and board with a stipend that barely covered gas and food for whatever adventure we planned between seasons. I am thankful everyday that we got to have these experiences and to figure out our interests, beliefs, and values, and what kind of life we wanted to build together.

But...

As many in our generation discovered, as our twenties gave way to our thirties, the pull toward stability and community and family became stronger. We couldn't raise kids working the way we were. We couldn't build any long-term relationships when we jumped around state to state, season to season. This was not a sustainable life that we were living; it was just a lot of fun. So, we formed a long-term plan. My wife wanted to be a counselor and I wanted to be a writer, and while we realized that neither of these jobs typically make a lot of money, it was where our talents and passions lied. Without going into the entire history (because I want to get to the present moment), we spent about six years or so working our way into our respective career paths. It was a long and somewhat expensive road that required more schooling and low-paying jobs to gain experience, but, we did it. By age 33, Allison had a private practice providing grief and infertility counseling and I had published a novel and wrote content in various capacities as a freelancer. We started making more money than we imagined possible (not a terribly impressive amount necessarily, but more than we had imagined). Life was good. 

But...

With the extra income came a loosening of our purse-strings and a casualness to our values around money, belongings, and how we spent our time. When both our twenty year old cars finally died, we took on a car payment for a new one. We took a trip to Hawaii and naively bought a vacation exchange while we were there, thinking it would force us to keep traveling as life sucked away more of our time. We used credit cards, under the rationalization that we could get travel points, and on months when money was tight, didn't pay them off in full. We did these things with full confidence that our income would only increase as time went on and all of this would get paid off soon enough. Then, life happened. We had a kid and wracked up a hospital bill for our portion of the delivery. Healthcare costs continued to rise until we were paying around $15,000/ year in premiums and out-of-pocket expenses. We bought a bunch of kid stuff that we probably didn't need and filled up our apartment until we had to move, and then filled the new place too. I stopped working to stay home with our daughter, so we lost an income, all while the cost of living in Seattle (where we had landed post-graduate school) was sky-rocketing. 

So, when we became pregnant with our second child, we decided to move east, closer to family and somewhere with a lower cost of living. After some lobbying from our close friends who were also moving from Seattle for similar reasons, the Hardesty clan moved to Asheville, NC. We moved with a good chunk of savings to live off of while Allison rebuilt her private practice and only one moving Pod full of belongings. We now realize that we missed a prime opportunity to get back to our minimalist roots. However, because the cost of living was lower, we ended up in a rental with twice the square footage as our place in Seattle for $100 less a month. And, as much as we tried to conserve our savings and move-in slowly, we needed things. Like, all our things. We had no furniture except our beds and a family heirloom dresser. We brought our bikes and some of Sloane's toys and books, outdoor gear, clothes, and some kitchenware. That was it. Everything else, we decided, would be cheaper to buy again than to ship cross-country. And, so, we commenced re-buying all our stuff. To be fair, we didn't buy anything extravagant. Our friends in the area had some furniture pieces they were looking to unload, which helped, and I built our dining and coffee tables, and a new "big-girl" bed for our daughter so our newcomer could take her crib. Still, it piled up, the things one uses day to day: a microwave, a coffee maker, a toaster oven, couches, window coverings, shower curtains, garbage cans...the list goes on. Also, because public transportation is not...existent in Asheville, we had to buy another car, which brought another car payment. Within a year, our house was full again and our savings was depleted. Another child was born and another hospital bill was acquired. Also, a new person was added to our healthcare, which meant even higher premiums and out of pocket costs for baby's regular check-ups, immunizations (yes, we get them; you should too!), etc.

Finally, last month, we said, "Enough!" We started researching ways to simplify our life and reduce our expenses. This is when we came across Mr. Money Mustache, our new minimalist cult leader. I'll let you explore his story and unique perspective on your own; what I will say is that his tips have allowed us to grab this nebulous, unsustainable, and unrewarding American nightmare by the horns and make some tough, rational choices concerning our relationship with money, stuff, and time. In just a few weeks, we have reduced our monthly budget by $1500.

Minimizing Healthcare 

Our first move? We changed our health insurance to a high deductible, low premium plan, and now that we have, I'm left wondering why in the world we didn't do this years ago. My wife and I are healthy 37 year olds who exercise regularly, eat a pescatarian diet, and rarely go to the doctor. Our children are 10 months and 3 years old and have certain mandatory coverage that comes with all healthcare plans under the Affordable Care Act (Thanks, Obama!). As we learned with the birth of our children, when one wracks up a bill at a hospital, the hospital puts you on a payment plan (given the dismal state of the American healthcare system, they're just happy to get their money). There's no interest attached to these plans; they tell what the lowest monthly payment is that they'll accept and you send them a check. Point being, it's ridiculous to shell out thousands of dollars a year to a health insurance company for a low deductible, high premium plan because you are afraid of getting hurt or sick and needing that safety net, when you could be socking that money away in an index fund to grow at 7% per year as an emergency fund for the same purpose. This way, if you don't get hurt or sick, that money is still yours, growing and accumulating in a way that will allow you to buy an even cheaper plan with an even higher deductible down the road (or until the U.S. shifts to a cheaper, more functional single-payer system like the rest of the world). A $10,000 deductible is a low enough deductible to save our family from financial ruin and this new plan is saving us thousands a year on premiums versus the $1000 deductible plan we've been on for years.

Minimizing Monthly Payments and Interest Accumulation 

After rethinking our healthcare, we renegotiated the terms of our credit cards and student loans, paid a company to get rid of our vacation exchange (seriously the stupidest thing anyone can buy; don't judge; and believe me, the fee to get rid of it was WAY less than paying the maintenance fees on this scam for the rest of our lives), changed to a cheaper cable plan (They get you with the bundles. It was only going to save us $10 a month to get rid of it and just buy wifi, which was our intention), and in an almost cosmic occurrence of serendipity (given its timing) were offered a colleague's broken (but free; they were going to donate it) 2005 Honda Odyssey. We fixed it for $1000 and sold our second car (making $1000), which still had $6500 left on its loan, and got rid of a $250 a month car payment.

Minimizing Grocery Costs (Without Sacrificing Quality) 

Groceries was another area where we found savings. We used to shop at Costco regularly when living in Seattle, but since Asheville doesn't have one and the closet is an hour away in Greenville, SC, we didn't know if the savings was worth the drive. So, we decided to find out. We saved our receipts from Ingles, our Asheville grocery store, and started putting our regularly purchased items into a Google spreadsheet. We broke each item down to the price per ounce, pound, or item (depending on what made the most sense) so there could be an apples-to-apples comparison, then looked at this site of 900+ Costco items and their prices broken down similarly and found out exactly how much a trip to Costco would save us. The total was a staggering $371 in one trip! And, since we drive a Prius and can get to Greenville and back on less than 3 gallons of gas, it was more than worth the trip.

To Rent or To Buy

Now that we have some extra money to work with, we've created a plan to be completely out of debt in 4 years. From here on in, we're committing to being a cash-only family. The one lingering question for us is whether buying a house is a worthy investment once we owe no one money. We've found mixed opinions from the experts. According to Mr. Money Mustache (and others we've been reading), an investment in an index fund that follows the entire stock market will consistently return 7% per year. The average return on a residential property over 20 years is 10.6%, not counting repairs, upgrades, remodels, etc (not to mention whatever your time is worth doing these things). We would like our own place. We do get tired of having to ask permission for every tiny alteration we want to do in our rental space, but we also enjoy being able to call the landlord with any tiny maintenance issue and spend zero time or money getting it fixed. I tell you all of this because I think there is a huge social pressure to own a house, especially once you have a family, and for many of Americans, as national statistics suggest, it's not the best move, especially if it's only going to pay marginally better than putting your down-payment, annual property taxes, repair savings, etc. in an index fund. Plus, with renting you have more control over where you live, which may be significantly closer to things you use day-to-day than where you can afford to live when buying. More on this in a minute.

Minimizing Clutter

Our minimalist transition isn't just about money. We also wanted to declutter our house and commit to not filling it back up with stuff we don't need. One minimalist blog claimed that the average person wears only 20% of the clothes they own. We wanted to see how true this was for us, so we started digging through piles of clothes, both in the closet and in storage, and managed to compile five garbage bags of adult clothes and four diaper boxes full of kids clothes to donate (along with a couple small piles of "Let's see if this gets worn in the next year or it's going too" clothes). We went through every closet, drawer, and cubby in the house (including the kids' books and toys) and organized it, tossing more stuff as we went. Our new rule: Everything must have a home. If we pick something up and can't think of where it belongs, we don't need it. This does several things: 1) It frees up mental space stressing out about clutter, 2) It makes the house easier to keep clean (freeing up time to be spent on more worthwhile endeavors), and 3) Allows us to know where things are when we're looking for them. Something else we discovered, after driving an entire car (packed to the gills) to Goodwill full of junk we don't need, is that if we do buy a house down the road, we could probably go smaller than the place we're renting and be just fine. A smaller place in an area close to everything we do on a regular basis would be ideal. We are in fact hoping to find such a place to rent when our current lease is up next June.

Minimizing Driving

Why move? Moving is, after all, also time consuming and costly. Well, for one we live in "the county." Meaning we are just outside the city limits of Asheville, off a very narrow, very busy country road. There are no sidewalks from our house to anywhere and no bike lanes (we haven't been on our bikes since moving here a year and a half ago. We biked frequently in Seattle). We literally cannot leave our house without getting in a car. While it's nice that we no longer have a car payment, cars still cost money, not to mention the environmental impact of driving everywhere, and the wasted opportunity for exercise. Thus, we would like to get within walking or biking distance of places we frequent. Mr. Money Mustache was nice enough to break down the costs of commuting for us. Here is what he says: For each mile you drive across two times on your round trip to work daily, it multiplies to 500 miles per year, which creates a $170 annual fee (read his article for details on this number). For each of these miles, you waste about 6 minutes in the round trip, adding to 25 hours per year per mile. For us this equals $1530 per year and 225 hours of driving! That's over nine full days a year (sixteen if you only count waking hours) just sitting in a car. And, that's just the back and forth to work that my wife does five days a week. I'd hate to see what this number is after adding my driving with the kids and our weekend trips around town. Mr. Mustache goes on to assume the average suburban commuter makes an average of $25/ hour making the financial loss of this time $625 a year per mile you live from your work (this is assuming of course you can turn that time into money). So, a grand total of $795 per year per mile you live from work. Then, he makes this point: $795 per year will pay the interest on $15,900 of house borrowed at a 5% interest rate. In other words, a logical person should be willing to pay about $15,900 more for a house that is one mile closer to work. We personally don't have a way of making $25/ hour with every free hour we have returned to us, but I think everyone in the family would certainly appreciate having two weeks worth of time returned to us to do something more worthwhile than drive. Hence, we hope to get closer to parks, school, work, restaurants, etc so we can get back to using our bikes and our legs.  

There will be more simplifying as we go along, but this is the question that will guide our future decisions: How efficient can we make our life and how can we use the extra time and money this affords us in a positive way? I'll update this blog as we go along and let you know how things are working out. For now, we are invigorated to feel like we're getting back to a philosophy from which we've strayed and one we feel is vital to our family, our finances, and the betterment of the world in general.