The scariest financial decision of all.

I was going to post about something else today, but last night I heard about a friend of mine whose marriage has hit a huge speed bump. They have 2 very young kids and one of the things that’s on her mind is how she’d manage financially on her own.

I remember that feeling so well.

The scariest thing I ever did was to end my marriage with 4 boys under 5. When I was making the decision, I remember sitting on my back step, watching my little boys happily playing in the backyard. I remember hugging myself and whispering, “I can’t do it. It’s too hard. What if I muck them up?”

And then the thought occurred to me. It wasn’t the clincher – A. provided that for me a week or so later when he leaned against the door jamb and said, “In marriage, you always get another chance” and I realised I was pushing s**t uphill – but this back-step thought was hugely important in making me face my situation.

I was watching these beautiful, loving, innocent boys running around and I thought, “What if they grow up thinking that this unhappy marriage is normal and then THEY end up getting divorces because you were too gutless to break the cycle?”

All my worries about finances and the mortgage and ‘how-will-I-support-so-many-kids-on-my-own’ fell away when I confronted their emotional futures. It was 1997. If, in 1997, I was desperately unhappy with how I was being treated, then women in 2020 (say) would DEFINITELY not be happy. My boys would be wrecking relationships left, right and centre and they’d be miserable without knowing what they were doing to cause it. And it would all come down to me being a coward or not.

Up until then, I had told no one how I was feeling about the marriage. I hadn’t mentioned a word of the dynamic that was going on and the things that were happening. I told myself that it was because I didn’t want to worry anyone.

But really, deep down, I knew that if I breathed a word about it, then I’d be forced to act. Once people know what’s going on, it forces you to confront your choices. It was easier to be an ostrich and try and let things go. To focus on being a mother and to ignore that gnawing feeling in the pit of your stomach when you see the husband walking up the driveway – is it a ‘walking on eggshells’ type of day? Or is it not? To visit friends and smile and pretend that this man that I didn’t even respect anymore was truly my heart’s choice.

It was a week after the door jamb remark that I ended our marriage. I talked to A. first, then I rang my sister. We were talking about that phone call a couple of years ago and she said, “At first I thought you were just having a whinge, but then I realised that this was something serious.”

That phone call changed everything. Then, word spread around my family and friends. Finally, the cold hard light of publicity was shining into the dark little fog of that marriage.

It’s amazing how easy it is to rationalise things when you’re within a relationship. Especially when there are small children involved – the amount of white noise and mind-numbing activity when there are toddlers enables so much prioritising of ceaseless activity instead of thoughtful reflection. Things can drift along for years without people dealing with them. I know that’s what happened with us.

But once other people start to get an idea of what’s really going on, you can’t continue to ignore. Not if you want to have a shred of credibility again. Once the words are out, there’s no way to unsay them and it forces you to move forward.

And that’s a very good thing. This is what’s happening to my friend and I’m pretty sure she’s weighing things up very seriously right now.

I understand my friend’s concern about finances. Those children aren’t going to go out and get jobs and support themselves – they’re 3 and 1. Thinking about finances in this situation is the mark of a good, responsible parent. When you have those little lives depending on you, you have to make adult decisions.

I remember thinking about having to sell the house – where would we live? Who would rent to a single mother with 4 kids? Who would rent to this family AND 2 dogs? No one, that’s who. Given this, how could I buy A. out and keep the house? I had no money. How would I support them all adequately? I knew I couldn’t go back to work – the childcare fees for the boys would eat up my entire wage. I knew I’d get the Sole Parents’ payment, as it was called back then. But would it be enough? There were so many financial unknowns I was stepping into. It was truly frightening.

Our financial situation was parlous. We had a mortgage of a little under 100K and $120 in the bank. To say that I was worried about how we’d manage is an understatement. I remember, the morning after my talk with A, I went to the bank and closed down our joint savings account. I gave $60 to A and kept $60 for us.

That’s what the boys and I started our new life with.

And you know what? We made it work.

My first priority was to save 1K as soon as possible. I called it my ‘Buffer Zone’. I wanted that financial cushion between the big bad world and my children. I saved it in 3 months. Talk about extreme frugality! Our protein sources were tinned tuna, sausages and eggs, with the boys getting all the meat. (Well, sometimes I’d sneak the end of a sausage. I’m only human.) I filled them up on bread. We went to bed early to save electricity. I looked at every dollar 3 times before I spent it.

That first success in achieving that goal was hugely important for 2 reasons.

First, it showed me that I COULD DO THIS. I could cut my coat to fit my cloth and my boys were safer.

The second reason? This was a HUGE lesson in why having an emergency account is so very important. After I saved the 1K and mentally patted myself on the back, I decided to call the bank to check on the mortgage. A. and I had agreed that, in lieu of child support, he’d continue to pay it.

(People who’ve been through a divorce know what’s going to happen next… )

“I’m sorry, Ms Jones, but this account is in arrears.”

I wanted to throttle him. How dare he play with our kids’ security just to get back at me?

“How much is owed?” I asked. I spoke through visions of the bank reclaiming the house and selling it, the kids and dogs and I being forced onto the streets, apocalypse and flame and destruction raining down…

There was some clicking on a keyboard.

“963 dollars,” she said.

I paid it within the hour. I never trusted A. again with finances – which stood me in good stead in the future – and I learned the solid gold value of having some savings to fall back on. It’s a lesson that’s burned deep into my psyche. I gritted my teeth and built that ‘Buffer Zone’ back up again.

My advice to my friend, if she ever asks for it, would be to make decisions based on what’s best for the family’s future. Don’t let short-term fears derail reflection on what’s best for the long-term health and happiness of everyone concerned, particularly the kids. It’s funny how we parents won’t do things for ourselves, but once we view it through the lens of what’s best for our children, we’ll make the hard decisions.

I’d advise her to scrape together at least 1K as soon as possible. Keep it in an online bank that is a different one to the one she uses for her everyday banking, so she isn’t looking at that tempting pile of money slowly growing.

I’ve always been extremely debt-averse, so I didn’t have any debt owing on my credit card etc. If there’s debt in my friend’s situation, I’d be advising a scorched-earth policy – sell stuff, stop subscriptions, get rid of as much debt as possible asap. Be careful of joint accounts and joint loans – if he walks away from them, guess who is liable for the whole amount?

A week after I had The Talk with A, the bank rang. He’d applied for a 40K business loan and had put my name on it as well. The bank (thank God!) was calling to confirm that I was ok with that. When I said that no I was definitely NOT ok with that because we had recently separated, they denied him the loan. I knew he’d be angry. (For the record, he was.) But imagine if my name was on that? He’d walked away from the mortgage – he would’ve walked away from this too and I would’ve been on the hook for it. I never would have been able to carry that loan and be able to keep the house.

I would tell her not to be scared, even though this is the scariest decision she’ll make. She has a degree and a career path open to her in the future. I’d tell her that this is exactly what I had and it saved our financial bacon.

I’d tell her that being frugal is probably the biggest weapon she has at her disposal. Whether she stays or goes, her situation will always be better if she spends less than she makes.

I’d tell her to never let finances and the fears of “what if” lock her into an unhappy situation. She’s a smart woman. She knows the value of a dollar. She loves her kids and (probably) her husband. She’s more than capable of taking the time to look at the relationship clearly and with her priorities in place and to work out where to go from here.

Is this crunch time for this marriage? I have no idea. I know that it took me a long time to weigh up everything, battle my fears and then make my decision. You know, I think that because I took so long to clearly weigh up everything, this was a huge part of why, when I chose to take action and leave, I’ve never felt even a pang of regret. In my case, leaving was the correct thing to do.

I know that this is a very difficult time for my friend. The cold hard light of day is now shining in on her marriage. She’s not alone. Around 50% of marriages end in divorce.

My heart goes out to her. When I think of her, I go back to that scared young woman back in 1997, sitting on the back doorstep and hugging herself while watching her children play. Embarking on a new life as the sole provider for your children is taking a huge leap of faith. Whether she chooses to take that path is not my call to make.

But I know that whatever she decides to do, she has enough grit, brains and backbone to make it a success. Her children are very lucky to have her.

 

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How did I go on the ‘No Spend’ days this year?

One of the first posts I wrote on this blog was one about how I make my spending more intentional by using a simple chart I keep in the cloud.

Simply put:

1. Detail every dollar spent – easy because I spend almost exclusively through my credit card. It’s the little cash things that I have to be careful to put down straight away!

2. Every week that has 3 or less ‘no spend’ days gets to be a Silver Week. This is my first full year of tracking my spending like this, so the 2018 total is the benchmark that I’ll measure future years from.

That’s it. Can’t get more simple than that.

This chart works on pretty basic psychology. If I want to earn a silver square, I have to be very intentional about which days I choose to spend money on. This means that on most weeks I bunch up my spending, instead of lazily spreading it out throughout the week. I might do a shopping trip on the way home from work, where I’ll stop in at Costco to buy fuel and then pop in for some dog food, a roast chook and some veggies; then I’ll swing by the chicken warehouse to buy chicken necks for the dogs and some other meat for us; and then if we need a top-up from the supermarket I’ll stop by Aldi. Everything’s done on the one day!

As you can see, in 2018 I had 28 weeks where I restricted my spending to fall into the category of a Silver Week. I don’t think that’s too bad… it’s a little more than half. December was a very spendy month. I was pretty well exhausted by the end of the year and I think I spent more on lunches this month than I did for the last 2 years combined!

The next job is to go through the chart and fill out my yearly spreadsheet of all my expenses. Considering I spent 50K on all of the garden renovations that I did this year, 2018 hasn’t exactly been cheap! (And there’ll be more to come in 2019… yikes!) But these are expenses which only have to be borne once and will reap dividends in the future.

I won’t lie – it’s tedious to run through the chart and add up all the figures. But it’s essential to know where my money is going as I head ever closer to retirement. I need to know precisely how much money I need before I give up work. The 4% Rule will only take me so far…

 

BOOKing myself in for next year.

How I hate to miss a goal.

I set a goal to read 80 books this year. Actually, in my first flush of enthusiasm, I set it at 100, but then when my mad maths skillz kicked in and I realised that was 2 books a week, I brought it down. Once I’m retired I could do that no worries, but nowadays with the job and the commute and life itself, I thought 80 might be more manageable.

But clearly not.

Ryan24 said to me, “Why don’t you just read some Dr Suess books? You’d reach 80 by lunchtime!”

I have 2 books on the go, but I think I’ll leave them to start off 2019’s reading target with a (slight) headstart.

I read mainly novels, with the bulk of the non-fiction books being about North Korea. I did my research both before and after I went there earlier this year. (Links to my posts about North Korea are at the end, for those who are interested in peeking inside the bubble.)

But seeing as this is the FI/RE blog and not the personal blog, which ‘Money’ books did I read this year and what did I think of them?

  • The Quest of the Simple Life – Dawson

I heard about this one from The Simple Dollar. This book was written over a century ago and is the autobiography of a man who was living, working and raising a family in the middle of London and his realisation that he wants something more out of life – something simpler. It’s not a ‘personal finance’ book as such, but it’s interesting to peek back into the past. All those tiny house/homesteading/frugal living blogs being written at the moment aren’t coming up with new ideas! Here’s a link to Project Gutenberg for a free pdf. Never say that Frogdancer Jones hasn’t given you anything!

  • First-Time Investor: Grow and Protect Your Money – Merriman

Honestly, I don’t even remember this one. I gave it a one-star rating on Goodreads so there’s clearly a reason why it’s slipped from my mind. No linky-love for this one.

I’m sure I wasn’t the only person to preorder this one! I love the original ‘Millionaire Next Door’, so I was very keen to read the update. I liked that the FIRE movement was mentioned quite a bit and it was pleasing to see that the tried-and-true ideas fleshed out in the original still hold true today. Seiko watches rule!

This was one of the books I bought to research which book I was going to give my sons and nieces for Christmas this year. These guys have a podcast on property investing, but this book is primarily about budgeting and keeping track of your money.

It wasn’t really what I was looking for. Their tracking system was great if that’s what you’re looking for, but it was so involved to set up that I knew that it would turn the kids off ever getting a plan for their money. This book is more for people who are already self-motivated to do something about their finances, not someone who’s just dipping their big toe into the water.

I’d recommend this book to someone who doesn’t mind the initial slog of setting up a system that will clearly be very beneficial as time goes on. Will I do it? Nah. Too many numerals for me…

  • The Beginner’s Guide to Wealth – Whittacker and Whittacker

This is the book I ended up buying for the 19 – 26-year-old sons and nieces. I wrote a review here.

Many people are familiar with the blog Freedom is Groovy, written by Mr and Mrs Groovy. I love this blog, as they’re people in the same age bracket as myself, who also started late and who have really made things move and shake as they’ve gone along the path to FI.

This is a good book to read, particularly if you live in the US. The writing style is clear and conversational, so the information gets absorbed easily.

  • The Mandibles : A Family 2029 – 2047 – Shriver

I read this novel when I was in North Korea. This is a fascinating look at the breakdown of society when the US has borrowed so much money that it defaults on its loans. If you know even a smattering of how the financial system works, this is a gripping read. Even though I read it back in April, I still think about incidents and characters. It’s worth the time to read this.

I wrote a review here. It’s rare for a novel to have this much financial information in it.

Oh, how I loved this book! After I read it I bought another one to give to my brother-in-law for Christmas. It’s all about growing up in Australia in the 1960s and ’70s. I’ll be writing a ‘Lessons from Literature’ post about it soon, because there are so many observations he makes about money, finances and how things were different back then.

It’s his memoir. It brought back so many wonderful memories, but also brought up things I had never heard before. I had no idea, for example, that Australian women had to get their husbands’ written permission to get a passport right up until 1982…

Yikes!

Again, it’s not a finance book as such, but there’s a lot about money woven in.

********

That’s it for 2018 ‘Finance’ books.

I’m looking forward to reading ‘Atomic Habits’ by Clear early next year. I got the school library to order it in, so with a bit of luck, it should be available when I get back. There are a few bloggers releasing books next year too, so I look forward to reading them. Of course, I’ll be reading with an eye towards which book should be the next one I purchase for the kids’ Christmas presents.

I’m setting my next Goodreads target at 80 books again. Why not? Though seriously, if I stopped reading blogs, Facebook and Twitter I’d probably be able to get 150 books under my belt!

Oh! Nearly forgot. Here are the links to the North Korea posts I did, with all the photos and info of what we did when we were away.

Dancing With Frogs. This is my personal blog, where I write about anything and everything, including travel. I wrote exclusively about my China and North Korea trip in the entries from April 2018 – September 2018. Just look at the drop-down menu at the side and you’ll be able to find them. Lots of photos and stories.

On this blog, I wrote 4 pieces, summarising the more ‘finance/advertising’ type of things that I saw.

#1: Where Leaders Are Larger Than Life.

#2: Where A Picture Says A Thousand Words.

#3: Teach The Children Well.

#4: The Bigger, The Better!

Happy New Year everyone! Let’s all make 2019 a year to remember, for all the right reasons!

 

 

In defence of Santa – from a Value-ist.

I read a tweet from Angela an hour ago about how her family doesn’t “do” Santa at Christmas and as a Santa enthusiast, it got me thinking and remembering. Angela and her family have thought about this and haven’t made their decision lightly, but I have a differing point of view. Christmases here are very different now, but when the boys were kids and money was tight, it was a challenge to make Christmas morning magical. And, as I’ll tell you in a second, yesterday I discovered that it paid off big time.

As a single parent, when the boys were small, money was tight. I went back to full-time work when the boys were Tom10, David8, Ryan6 and Evan5. When I was on the sole parents’ pension as it was called then, I was paying a mortgage and the bills and we were living pretty much hand-to-mouth. We were on roughly 18K/year, of which nearly half was going to the mortgage, so there was little room for fripperies in the budget.

But… I’m a Value-ist. I was a Value-ist before the term was coined. I’ll scrimp and scrape to save money for my family to survive, but if there is something that I see adds huge value to our lives, I’ll spend the money to achieve it.

Santa was definitely one of those things.

When Tom26 was Tom9, he came home from school in the middle of the year and said to me, “Joe Lunchbucket said to me that Santa wasn’t real.” Now, Tom is a communicative boy, so I hastily got him away from his brothers by suggesting we go into the backyard for a chat.

We walked down to the fig tree, where I asked him whether he really wanted to know. He said yes. I looked him right in the eye, smiled and said, “That’s right. I’m Santa.”

Tom9 gasped and said, “NO WAY!” To be frank, I wasn’t expecting this reaction.

I laughed and said, “What do you mean?”

“YOU can’t be Santa! You couldn’t afford it!!!”

After convincing him that yes, I was indeed Santa, he became struck with guilt.

“Oh no. I’ve been telling all the boys to ask for the expensive things for Christmas so you wouldn’t have to get them.”

Oh, my baby. That’s real love right there. And fiscal responsibility. No wonder he became an accountant! That remark went straight to my heart. I laughed, hugged him and we had The Talk. The Talk about how knowing about Santa means that you’re now with the grown-ups and we NEVER spoil Santa for little kids by blabbing it out just to make ourselves feel important. We keep the secret so they get to enjoy it just as we did.

Having all of your children caught up in the magic of Santa is special. But it’s also special when your older ones start joining in with keeping the magic alive for the little ones.  When they help the little ones with the spelling on their Santa lists, when they distract them when we’re shopping so I can smuggle a present past them, and when they all yell out, “Thank you Santa Claus!!” and the older one/s turn and smile with you, or give you a secret hug and whisper, “Thanks Mum.”

To be honest, I had an advantage on my side, in that the boys were little when money was ultra-tight. This meant that I was able to get away with quantity over quality. I knew that little kids have no idea what things cost. They just get excited by piles of things. So every year each boy would get one “big” present. Something that they wanted that was ultra-fun or ultra-pricey that they needed AND wanted. Then there’d be a present or two that was medium exciting, like computer games (often bought second-hand) or smaller toys. The rest required ingenuity.

I created traditions.

  1. Every year Santa brought bubble mix. Part of Christmas morning was that we’d all go out into the backyard and blow bubbles and see who could blow the biggest ones. We’d laugh as the dogs tried to catch them. It was fun and cost about $1/child.
  2. Every year Santa brought those mini packets of Kellogs cereals. The kids LOVED these, as normally it was just home-brand wheat bix and cornflakes in the pantry.
  3. You know those packets of chocolate gold coins that you can get from $2 shops? My kids were in the money every Christmas.
  4. Santa was also a bit of a fashionista. If the kids needed new bathers, t-shirts or the like, they’d go into the pile. Usually, each child had their Christmas Day outfit given to them, so they’d be all dressed up in their best for the day. I was going to buy them anyway, so why not add it to the mix? It all looks impressive.

But the biggest savings hack was shopping at garage sales. The little presents, and to be honest, some of the really big ones too, were bought here. The boys were away with their father every second weekend, so from about September onwards I’d drive around and visit garage sales when the kids weren’t with me. People just want to get rid of things their kids have outgrown, so I’d pick up toys and other things for absolute pennies on the dollar that they would have been when new.  My kids never had any idea that a huge percentage of their Santa gifts were pre-loved.

All that mattered to them was the magic.

Yesterday I listened to a podcast that Tom26 was on. He and a friend were talking about all things Christmas – the carols, the commercialism, the memories and, of course, Santa. Tom26 brought up the Santa reveal story I’ve already shared with you, but he also said this:

“As a young kid, Christmas is everything. And the one thing I’ll say about my mother who, I think, will end up hearing this episode…”

“Tread carefully!!!” said his friend. (Made me laugh.)

“… My family did not grow up with any sort of money. We were really, like, dirt poor. But Christmas – Mum went above and beyond. At the time, you’re young, you don’t know, but you look back and you realise what she did. And that’s something that I cherish, looking back on.”

He went on:

“Then as you get older, as you get busier, it’s about taking a break, saying, “I’m going to put all my problems away for a second, put them in a box, and go and see friends and family. The people that matter most. And they don’t have to believe, either, (they’d touched on religion in the conversation earlier). We can just say thanks for one another on one day. The gifts really are a symbol of thanks, really, for just putting up with me (laughs), well, maybe not entirely! But also thanks for being YOU, through the thick and thin.”

The good thing about podcasts is that you can go through and get it down, word for word. I really wanted to be accurate in putting down what he said because I was so blown away with how perfectly he’s internalised the true meaning of Christmas. Family and friends – the people closest to you. The gifts you buy are only there as a symbol of how much you value those people in your life. Taking time out to be with them and acknowledging them and their importance to you.

I believe Santa lays the groundwork for this.

First, kids learn to receive.

Then they learn how to give.

Merry Christmas everyone! May your holiday season be happy and mirthful and your dinner plate always be full.  🙂

 

 

 

 

 

The FU Fund gets brought to the table.

I had the weirdest experience two days ago.

It was the second-last day of school. In Australia, our school year runs from January – December, so we were looking at 5 glorious weeks of summer holidays galloping towards us. First thing in the morning I walked into our staffroom and the principal was there trying to allocate extra jobs for people. The expectation is that if you’re on the highest pay grade, (like I am), you’re expected to take on another task above your teaching ones to add more value to the school.

Our principal looked at me and her eyes lit up.

“YOU can do debating!” she said.

My reaction was immediate and completely visceral. And may have been a little bit shouty.

“NOOOOO!”

She looked shocked. Understandable, because my reaction probably looked a bit over-the-top.

“But why?” she asked.

My heart was beating fast. I was suddenly in a cold sweat. All I could come up with was, “I hate debating with a passion. I’d be really shit at it. You need to find someone else.”

I reminded her of what I’d already put myself down for – Junior English help – and the conversation moved on.  Then we went into the staff end-of-year luncheon.

This function is bigger than Ben Hur. We have around 200 staff at the school and every year we have a full sit-down lunch, with speeches from staff who are leaving, the ‘Pineapple Awards’ for staff who have done stupid things over the year and a Christmas giveaway, where names are drawn out of a hat and you get some chocolates. This year Kevin Sheedy, a famous Aussie Rules footballer/coach, came and gave a short speech. He looked a little familiar but I don’t do sport. I had to be told who he was. Plus Essendon is my ex-husband’s team… yuck.

I was one of the lucky ones who had my name pulled out of the hat for the chocolates. Not being one to avoid the spotlight, I leapt out of my seat, punching the air and shouting, “YES! YES!”

Our principal laughed and said, “You’re paying for those chocolates by doing debating next year.”

“I quit!” I said and went back to my seat and the function moved on.

I was really upset. I felt like the rug had just been pulled out from under me. I sat back down and the people next to me laughed and said, “Did you put your hand up for debating next year?”

“No.”

“When did you find out about it?”

“Just now,” I replied, and my eyes started filling up with tears.

I was the teacher in charge of debating in my first year of teaching. Admittedly, the school was in the country and I was just out of teachers college, but the experience was horrendous. The first challenge is getting enough kids to fill the teams. Then you have to organise practice runs either at lunchtime or after school. When the actual debate dates are announced, there’s always kids that can’t or won’t make it, so you have to scramble around trying to fill up the spots in the team so that the good kids who are keen to do it won’t be forced to forfeit. You are always trying to pull in favours, people start to avoid eye contact when they see you coming and there’s always someone having a tantrum or making things difficult at the last minute. I vowed and dclared I would NEVER do it again.

The debates nowadays are always at night – in the opposite direction to the school than where I live. I already live a 50-minute drive from school. So I’d have really late nights and be expected to leap joyfully up and go and teach the next day.

The debates finish at around 9 or 10. But you can’t leave right away – oh no. There are always children whose parents either can’t or won’t go to the actual debate, so you have to hang around until someone comes to pick them up. (I already have this when we do our Theatre Studies rehearsals and performances, but at least that’s at school.) It’d be quicker to drop them off home, but of course you can’t drive a child anywhere without permission and honestly, perception is everything and no one wants to be letting a teenage child in their car late at night…

So after every debate, you’re hanging around for at least 30 extra minutes waiting for parents. You can’t leave kids alone to wait. Imagine if something went wrong?

This would all be ok if, as a person, you enjoy the cut and thrust of debating and you enjoy teaching these skills to students. That’s not me. A debating mentor needs to have the thrill of the debate in their blood and pass on their enthusiasm to the kids. That’s effective teaching. I know that I’d be faking it. Kids can always tell.So I was floored that I was assigned to do it.

I understood our principal’s position. The guy who’d been running it for 3 years wanted to step down from the job and it had to be filled. Fair enough. I’m the Theatre Studies teacher. It would seem to her like a perfect fit.

I sat at the table and the tears welled up. People were laughing, then when they saw I was upset they became concerned.

“What do you mean, you only heard just now? That’s terrible.”

“Go and see her after the lunch is over and sit down with her.”

“Are you ok? Surely you can do something else…?”

I got my sh*t together and sat there as the function rolled on. For the first few minutes I wallowed in self-pity, but then, for the first time, I seriously thought about FU money.

For those who’ve never heard this term before, the ‘FU’ stands for exactly what you think it does. It’s a sum of money that you save, enough so that if a boss or a job is making your life hell, you can simply say “FU” (hopefully just to yourself!) and walk away, without having to suck it up and stay in a horrible situation because you’re dependent on the pay packet to survive week-to-week.  It’s a financial cushion which isn’t big enough to actually retire on, but it’s enough to give you some breathing space while you look around for other opportunities. I first saw it coined in James Clavell’s ‘Tai Pan’ and then later I saw it on JL Collins’ blog and although I thought I’d never need it, I liked the concept.

You see, I have my FU money in a bank account. I have 3 years of expenses put away. I kept it back after I did the whole geoarbitrage thing a year ago, but I earmarked it for a buffer fund in case the sharemarket tanked after I retired. I figured I’d have that money to live off so I wouldn’t have to sell my shares while they were under valued.

But now…? I sat there, my brain whirling. I knew I hated the thought of running debating, but did I hate it so much that I’d be prepared to threaten to leave my job? You can’t threaten anything unless you’re prepared to follow through…

My gut was telling me to leave. I knew it would make my life hell. But then other thoughts intruded.

My Theatre Studies class are doing my favourite play next year – ‘The Importance of Being Earnest.’ We just did the casting this week and I’m excited to be doing it. The people I work with – I love them. I’ll miss the banter every day. The rest of my allotment is English classes down in the junior school, which is fun and entertaining. I want to keep renovating the house, so I need cash flow to keep doing that. I really don’t want to dip into my savings for that, even though I could.

BUT… with my FU money and my teaching experience, I’m not tied to this job. The school I’m at was just ranked 2nd in the state for non-selective government schools. I’ve been there for nearly 2 decades. I could pick up a job anywhere with (insert name of school) on my resume. Heck, there’s a school at the end of my street! I could walk to work!

AND, with my FU money as a buffer, I could go part-time, or pick up short-term contracts or simply do CRT. (Casual/Relief teaching for when teachers are away. ) Doing CRT is a cool $330/day and you don’t have to attend meetings or do correction etc. Hmmm…

As I sat there, listening to the speeches and then a bit later on having lunch, behind all the conversation and joking, my mind was ticking over.

  1. Was I ready to fully retire? On paper, possibly YES. But being the security-valuing person that I am, probably NO.
  2. Am I tied to the job at (insert name of school here)? NO. I am ongoing/fully tenured, but I can get that anywhere else.
  3. Could I work somewhere else? YES.
  4. Could I support myself and the boys by working part-time or CRT if necessary? YES. (It’d probably add to my quality of life, to be honest!)
  5. If for some reason I couldn’t find any work, could I support myself until I could access my superannuation? YES.
  6. Am I prepared to go into a meeting with the principal over this debating issue and ultimately be prepared to follow through on a threat to resign?… I guess the answer is… YES. (Yikes!)

By the end of lunch, I had an empty feeling in my stomach which had nothing to do with the food. I’d realised that the only thing standing between me and being free of the spectre of debating was being fearless enough to walk away from my (up-till-now) lovely job if I had to.

The money wasn’t the issue. Security wasn’t an issue. I had those pretty well covered.

It was the fear of the unknown. The fear that, even if she turned down my offer of resignation, I’d have damaged that working relationship. Which, on the other hand, was already damaged by the debating debacle in the first place…

But as lunch came to a close and we were getting up from the table to clear our plates and go over to the gelato bar for dessert, I knew that I was going to stick to my guns and have a meeting with her. My FU money was there for a reason, after all, and I knew without a doubt that the debating assignment was a deal-breaker for me.

As I was walking back to the table, my principal walked over to me and said, “I can always rely on you to give a good reaction when you win something!”

I smiled and said, “Hey, tell me you were joking when you said that thing about me getting debating.” I crossed my fingers.

“She laughed. “Of course I was! I only said it because of what you said before!!”

I said, “Oh God I love you!!” and hugged her.

FU Fund emergency averted! I have no idea which job I’ll be allocated next year but I know it’s not the one from which clearly I carry scars from my first year of teaching.

But how interesting that whole episode was. I’m really happy where I work and I assumed that I’d be working there until I chose to leave the workforce. I hadn’t given that chunk of money in the bank a second thought once I put it in there. It was for Old Lady Frogdancer to be safe from bear markets, not for me.

But when the situation changed, having that chunk of money/FU Fund seriously changed the whole dynamic of how I thought about my quality of life. I was free to make a stand, if I needed to, about my job.

If that money wasn’t there and my principal wasn’t joking, I would have had to suck it up and be the debating organiser. I wouldn’t have much of a choice. It’s the end of the year and schools have filled their positions for next year. Either way, I couldn’t move seamlessly from one job to another. I’d have to stay and be miserable. I’d need that pay packet every fortnight.

Having an FU Fund gives the courage to be able to sidestep and walk away into a world with new pathways.

I can’t tell you how happy I am that I don’t have to have that ‘courageous conversation’ with my boss. I’m relieved that the status quo will continue. I love my school and my students and ‘The Importance of Being Earnest.’

But how liberating is it to know that, should the situation at work ever change to a point where I find it untenable, I’m financially free enough to walk away?

It was a half-hour misunderstanding. Absolutely nothing in the big scheme of things. But in that half an hour I was free to evaluate my life and to weigh up what was important to me. I realised that I am finally free to draw a line in the sand and say, “This far and no more.”

That’s a very precious position for a person to be in. It makes me think about my job in a whole new light. It makes me think about my LIFE in a whole new light.

The possibilities are bigger than I thought.

 

 

 

 

 

Frugal Friday: Short-term (hip pocket) pain for long-term gain.

Anyone who hops onto this blog for more than 3 seconds will realise very quickly that my dogs are very important to me. In the picture here are Scout and Poppy, lurking behind the oregano. Jeffrey looks almost the same as his twin sister, so just imagine 2 Cavaliers and you’ll have the family group.

It’s also no secret that I’m a long-term thinker. Around the dogs is all the reclaimed brick paving I put in, so Old Lady Frogdancer won’t have to mow lawns and weed in her golden years. I like to do a job properly once, then walk away and never have to do it again. The side-hustle that I did for 6 years exemplifies this. You buy a thermomix and it’ll last at least 20 years. I love that!

I also have an eye on retirement. A group of us were talking about it at work during the end-of-year luncheon yesterday. Most of us are looking at another 4 or 5 years of work before pulling the pin. We’re starting to seriously think about how our days will look like, what we’ll do and what’s important to us. I’ve started to put some preparatory plans in place while I’m still working and part of that is visualising what an average day would look like and how Present Me can make things easier/cheaper for Future Me.

My life in retirement will be pretty simple. Once (or twice) a year I’ll be spending up big on international holidays, but for the rest of the year, I’ll be living very simply and frugally. It’s in my nature. I’ll be reading, sewing, knitting and living with the dogs, socialising every now and then and having the ‘Sunday Roast’ lunches every week to see my boys.

Which brings me back to the dogs. And the dog beach 5 minutes walk away.

I was reading a post by a Way Famous blogger where he talked about the “Buy it for Life” concept and he mentioned buying a dog walking bag. Intrigued, I clicked across and had a look. For 4 years I’ve been using a plain canvas bag to hold things like leashes, balls and my phone as we walk and it’s been a constant irritation. Sand gets into it and the straps aren’t long enough to sling over my shoulder to keep it from flopping around. It’s hard to locate things in it while on the move, which is annoying. But I got it for free and it does the job… barely.

This new bag seems to solve a lot of problems.

We get fined if we don’t pick up after our dogs, especially on the beach. This little dispenser makes it easy to carry them with us all the time.

The material it’s made from is sturdy and doesn’t flop open, so any bits and pieces I carry won’t get sand on them. This compartment is big enough for balls and treats and is very easy to open.

A zippable pocket for my phone. Yes, please! No more sand getting onto it and I don’t have to worry about it falling out of my pants pocket and getting lost.

I had a door key cut for my dog walking bag. This clip means that it isn’t swinging around on the handle of my canvas bag and it’ll be securely in place.

Was it cheap?

Hell no, especially when you take the exchange rate between Aussie and American dollars into consideration. It took just over half a day’s take-home wage to pay for this bag. That’s a lot of money for what’s essentially a luxury item.

But look at it. It’s incredibly sturdy, functional and will last me for YEARS. I’ll never have to ‘make do’ with a bag that irks me every time I use it. It will make my life just that tiniest bit easier every time I grab the leads and we walk sprint out the door. Every day for years. That’s a pretty good bargain when you think of it like this.

There have been times in my life where, with all the best will in the world, I had to ‘make do’ because I simply didn’t have the income to spend on buying the more expensive, better-made alternative. A low income limits your choices.

However, if you have the coin to be able to weigh up the available choices on a particular item, I’ll make the spending choice based on long-term value rather than purely looking at the price tag. If it’s not of huge, or only occasional value to me in the way I live my life, I’ll be frugal all the way.

But if the purchase dovetails neatly into enhancing my quality of life with the things I feel are important, and it will last for a very long period of time so I don’t have to think of buying it again, I’ll spend the extra coin.

Money well spent.

The book I bought the boys for Christmas.

best finance book for young adults

I’ve decided that every year, at least for the next few years while the kids are mostly in their early 20’s, I’ll be buying my sons and nieces a finance book for Christmas.

As written about in this post, Iast year I gave them ‘The Richest Man in Babylon.” Hey, it’s a classic and it’s short. I wanted to start them off easy. Ryan23 read it but wasn’t a fan. He asked for something a bit meatier to read on the train on his commute to uni, so I bought him ‘The Millionaire Next Door’, which he loved. He’s now tackling ‘Your Money or Your Life’, but I don’t think that’s grabbed him as much.

I also bought them ‘The Barefoot Investor’, which is a Dave Ramsey-esque layout of how to organise finances and stay out of debt.

In the middle of October, my mighty intellect realised that Christmas was coming, so I began to think about which book I was going to buy for the kids this year. I put up a few enquires on FB and twitter, bought and downloaded a few to my ipad to test-drive them, but none of them seemed quite right.

I wanted something that had a bit more of a nuts-and-bolts approach about finances and investing, which could teach them about how to deploy the money they’ve (presumably) been accumulating if they’ve taken the Babylon lessons to heart.

I remembered a book I’d read years ago by Noel Whittaker, called ‘Making Money Made Simple’, which has chapters on banking, insurance, investing, the property market, the share market etc. I jumped onto his website to see if it had been updated, (it had), so I sent him an email to ask if the books he was selling on his website were the latest editions.

He wrote back saying yes they were, but then recommended another book he and his son had written, which was aimed at the demographic the kids are from. ‘The Beginner’s Guide to Wealth.’

I bought the kindle version and settled down for a read.

At first, I was a bit ‘ho-hum’ about it. The first part of the book talks about the mindset and attitudes needed to succeed, not just with finances but with life in general. I was thinking, “Yeah yeah, I’ve heard this all before…” when it suddenly struck me. The kids probably haven’t come across this information before, so it would be invaluable.

I kept reading with renewed enthusiasm.

At the end of the day I ordered 6 copies. It’s a well-balanced book, with the first part about positive thinking, being a lifelong learner and basically getting off your behind and getting out there; while the second part is a little like ‘Making Money Made Simple’ with basic information about finances and such.

I think it’s a good ‘next step’ book for them, with the logical next buy being the original book. However, with all of the FI books being released lately, who knows what next year’s book will be?