Goldilocks and Replacements: Preventive vs. Corrective

Goldilocks and Replacements: Preventive vs. Corrective



The other day I got home from work and noticed a small puddle in my garage. It had been raining all day, so my first reaction was to look for water coming in from the outside. There were no obvious signs of it coming from under the garage doors or leaking in from the ceiling. I noticed there was as small trail from the puddle that lead right to the baseboard at the base of the closet where our water heater is housed. Super. Actually, I consider myself pretty lucky that it was only a small trickle into the garage and not throughout the house. Things could’ve been a lot worse.

I’ll spare you from all the minutiae I’ve learned about water heaters in the past couple of days. However this experience has caused me to reflect on the debate of preventive vs. corrective maintenance and figuring out what is “juuuuuust right” for you and your budget.

When we bought our house a few years ago the inspector noted that our water heater and A/C units were a little long in the tooth. He recommended having them replaced before too long (preventive). The problem is these are expensive!! Being so costly makes us naturally want to eek out every last bit of value and letting them die before cutting that next, big check (corrective).

Not everyone has a house and has to worry about water heaters and A/C units, but there are certainly other items almost all of us have where have to make these preventive/corrective decisions that can greatly affect our budgets. Are you going to use something until it breaks? Or are you going to pay a little more and replace it early?


  • Oil/Fluids – If you wait until it is too late on these, you are likely in for some big repair bills. Then again, if you change oil more often than is required, you are theoretically throwing Jacksons to the wind. Don’t just follow whatever the the quick change dude put on that window sticker the last time you were there. Check your owners manual and follow the manufacturer’s recommendations. Your car’s other fluids don’t get changed nearly as often, but their levels should be checked regularly.
  • Tires – This is one I struggle with because tires are not cheap! Generally speaking the minimum, legal tread depth you can drive passenger cars with is 2/32 of an inch. However, as tread depth decreases the distance required to stop a car in wet conditions increases. Legally you can ride them all the way down to 2/32, but from a safety perspective do you want to? Again, if you replace them before the limit you are paying out more but are potentially protecting your car (the largest asset for many), not to mention yourself and others from potential bodily harm.
  • Buying New/Newer – People often cycle through cars as soon as their warranty runs out because they don’t want to pay for repairs or don’t have the time to deal with them–quintessentially preventive. Please, understand the cost that goes with this buying behavior (depreciation for one). If you are ok with it and your budget can handle it, then good on ya!


  • Yes, we should all be eating more fruits and veggies, exercising more, and cutting out all those butterfingers from our diets. But did you know most health insurance plans allow you an annual checkup with your doctor for free?! Some will even pay you to go (usually in the form of a gift card or credit). Don’t wait; it is free, and it is your body. You can’t just go out and buy a new one like my water heater.


  • How often are you cycling through phones and other electronics? Are you getting as much value out of them as you could/should?

Here are some (broad) things to consider when deciding whether to replace something before it is absolutely necessary:

Replace Early (Preventive) Wait ‘till it dies! (Corrective)
You can schedule a replacement when it is most convenient to you. Timing Not on your side; it needs to get fixed/replaced ASAP!
You’ve got time to do your own research and can wait for promotions. Researching/Deals You have to take what is available right then and there.
You’re going to pay a little (sometimes a lot) more for convenience. Maximizing Value You’re eking out every last penny!
You get to experience the latest and greatest. Perhaps paying more upfront for lower operating costs/energy savings. Technological Advancements Sticking with tried and true. “If it ain’t broke…”
Take advantage of latest innovations. Safety As long as it is still legal, you’re good.
You are keeping up with the Joneses, or maybe you are the Joneses?! Appearances Maybe a little threadbare, but that is what gives you character, right?!
Likely few to none. Additional, Costly Side-Effects? Water heater floods your house. Your car broke and it is hard to get to work. You don’t go to the doctor until that ingrown toenail requires full on surgery. Ew!
Not very. Eco-Friendly Mother Nature thanks you.

I’ve deliberately not given specific advice on when you should pay up and replace early or let it ride because it is different for everyone. We tend to let things ride in our household, but I’m not sure that will always be the case. Part of that is due to my (over?)confidence in my DIY skills, and a lot of it has to do with us accepting the financial risks that go with it.

When our downstairs A/C unit failed, my wife was VERY pregnant, and it was summer in Texas. Getting a replacement installed took multiple days; you can imagine our house was a little grumpy (understandably so!) during those days. Though our water heater leaked only a little into our garage, it could have been much, much worse if it had gone into other parts of our house and done some real damage.

In the end you need to be like Goldilocks and find what is just right for you and your budget: too soon and you’re wasting money; too late and it might cost you more in the end. It won’t be the same for every item.

Too often people ignore these things and only deal with them when they break. In the end I hope that people realize that deciding to ignore is a decision itself with potentially big financial implications. Instead, I hope others will take the time to understand the pros and cons and make an educated decision. That still might be to go till something breaks, but hopefully you will be a little more financially prepared when it does. What do you replace early? What do you let ride?

Previous Post Next Post

You Might Also Like


  • Reply Brooke December 19, 2016 at 3:00 pm

    Water heater – it depends where it’s located. In our old house it was in the garage (inconvenient if it goes out, but not likely to cause much damage). In our current house it’s in an upstairs closet – a lot more potential for damage if it starts leaking.

    Furnace – is it gas or electric? Gas means a cracked furnace could cause carbon monoxide poisoning – I’d be inclined to replace earlier. Electric – wait till it dies. But, all of that depends on how hot/cold it can get in your area, and if you have places to go if it dies on the hottest or coldest day of the year.

  • Reply Centsai December 28, 2016 at 10:42 am

    This was a great article, and when it comes to choosing preventive vs corrective measures, there is no right answer! It all depends on the situation and what you decide as an individual. Both options have pros and cons and I love how you made a reference to the Goldilocks! It may have just been if the porridge was too hot or too cold, or how hard or soft the bed was for Goldilocks, but for us, it may end up costing us a lot of money! So moral of this long message, is to research and figure out what works best for you.

    Wishing you a happy new year from the Centsai team!

  • Reply Stephen January 6, 2017 at 9:28 pm

    Great chart comparing preventative and corrective maintenance. Puts things into a different perspective and stays simple. Well done!

  • Leave a Reply Cancel Reply

    Ashley’s Getting-Out-of-Debt Story

    Ashley’s Getting-Out-of-Debt Story


    Ashley's Getting-Out-of-Debt Story

    When TJ and I met, I could tell right away we came from different financial backgrounds. He had worked hard every summer doing sales in California to pay for his tuition and living expenses, he had thrifty parents who had been able to help him along the way, and he may have had a reputation among his roommates as the one who would do anything for a free meal. I once gave TJ some leftover McDonald’s bucks coupons I got from a babysitting job, and to this day he insists it’s the greatest gift I’ve ever given him. (I’ll try to forget the $200 air compressor I got him a couple Christmases ago…)

    On the other hand, I kind of flew by the seat of my pants when it came to money. I wasn’t a huge spender, but I didn’t like keeping track of things either, which meant going weeks and weeks without checking my bank account balance. I liked eating out, I liked hanging out with my friends, but I didn’t pay attention to how those things added up. I was mostly broke even during my undergraduate and graduate years. I also had about $12,000 in student loan debt lurking in the trenches, patiently waiting for me to graduate with my masters before it pounced.

    TJ knew this but didn’t seem too troubled. He and I believed the debt wouldn’t be due for a while because I was still technically a student, even though I was also working full-time. I took a year leave of absence from my master’s program once we were married to move to San Francisco to be with TJ, which meant leaving my school counseling job and hoping I could somehow finish my graduate degree at a later date. Little did we know student loans don’t really care if you’ve taken a leave of absence and are “hoping” to come back soon. As soon as you’re not taking classes, they come a-knockin’. Quite rude of them, if you ask me.

    Sure enough, six months after we tied the knot, a discreet little letter from my university showed up in our mailbox, politely asking for $12,000 or else I’d wake up in bed next to a severed horse’s head. (Not really, but it felt like that.) I remember feeling so guilty. Here I was, a financial burden on this really responsible guy. I felt like I needed to somehow come up with the total on my own. As I started typing “Which organs can humans live without?” in the Google search bar on our desktop, TJ gently stopped me. “Ash, we’re a team now! Let’s just pay it off and stay out of debt. And in return, just promise you’ll love me forever.” I gave him a big hug and agreed. (He still throws this in my face when I’m mad at him about leaving his socks on the floor or his electric razor on the counter: “Ash, you promised you’d love me forever, remember?!”)

    Luckily, because we had had a pretty frugal honeymoon, no car payments, inexpensive housing (for the Bay Area), and two good jobs, we had saved up enough in just six months of marriage to pay the debt off in full as soon as the letter came in the mail. It took us down to not a lot left in our bank account, but it was definitely worth it to not have the burden of debt weighing on our shoulders. More than anything, though, paying off this debt together was such a bonding experience for us. I wasn’t in this alone anymore, and neither was TJ. We each had each other now, as partners, companions, and teammates.

    I also learned the immense value of our budget. Yes, it was difficult and annoying to follow at first, but all that annoyance and difficulty had an end result — freedom, peace of mind, and security. It was totally worth any and all sacrifice to get there. Most getting out of debt stories are more comp

    How has getting out of debt (or working to get out of debt) changed your partnership? Or, if you’re going solo, how has it changed you?

    Previous Post Next Post

    You Might Also Like


  • Reply Financial Panther November 4, 2016 at 11:11 am

    That’s terrific that you were able to pay off your loans so quickly and together. It really helps to strengthen your marriage.

    • Reply Ashley November 5, 2016 at 12:47 am

      Definitely such a great way to strengthen a marriage! Sure, ours wasn’t the most difficult or long-suffering journey that it is for a lot of couples, but it was huge for us to combine our finances – the good, the bad, and the ugly. Such a great way to unite! Thanks for your feedback. :)

  • Reply Melanie November 9, 2016 at 10:04 am

    I paid off all my debt several years ago before I met my now fiance. He has learned a lot from me financially in the past year + we have been together-even came to a Dave Ramsey event with me, haha! So as our wedding approaches next October, I am doing all I can to save as much as possible for wedding costs, while he simultaneously does everything he can to pay off his debt. We are hoping to start our marriage debt free, while having a debt free wedding/honeymoon. It’s great practice sitting down to do our separate budgets together, while working towards a mutual goal. Paves the way for great habits in the future when we join finances. :)

    • Reply Ashley November 17, 2016 at 4:37 pm

      You guys are definitely on the right track! And with such a strong desire to start your marriage without the normal financial baggage, you’re way ahead of the curve. Awesome! Trust me – you won’t regret having a frugal wedding or honeymoon. It’s one day or a week at most, and I just don’t think it’s worth having individual carvings of yourselves in ice or swans carrying appetizers for the years of work you’ll have to do to pay it all off. :) And so great that you’re planning it all before you tie the knot. Then there are no surprises! Good luck with your wedding, and congrats!

  • Reply Money Beagle November 9, 2016 at 11:24 am

    That’s an awesome story and just shows that when you’re supportive of each other, you are both so much stronger.

    • Reply Ashley November 17, 2016 at 4:41 pm

      Thanks! I think you’re exactly right. At the risk of breaking into song, I must agree – two is better than one. (On that note – what the heck happened to BoysLikeGirls anyway?)

  • Reply David @ Thinking Thrifty November 14, 2016 at 2:05 pm

    Last year I sort of stumbled upon my partners debt when I noticed money running out much earlier in the month. We sat down and worked out what was owed and luckily my boss gave me an interest free loan to clear it and took it back out of my wages every month. 1 year later and the debt was paid and we now have close to £10k saved!

  • Reply Centsai November 17, 2016 at 7:59 pm

    Your story is so inspiring to others on their journey to get out of debt! I must agree with you that debt is quite the annoying little rascal you wish you could get rid of more easily, but once it’s gone it sure does feel great!

  • Leave a Reply Cancel Reply

    Does Your Budget Have a Bike Lane?

    Does Your Budget Have a Bike Lane?


    Does Your Budget Have a Bike Lane?

    Budgets help direct our spending, but by nature they constrain us. While that doesn’t sound very fun, these restrictions are for a good cause. By voluntarily limiting short-term spending, we can stay out of financial trouble and work toward achieving longer-term financial goals. Though it sounds contradictory, we achieve financial freedom by choosing to limit ourselves.

    In theory, if we could predict all of our expenses then we could live on the bleeding edge (paycheck to paycheck) of our income and not have to worry. In practice, it ain’t happening — at least not long-term. ‘Life’ happens to us and our budgets.

    If you’ll bear with me, let’s set a scene: Picture driving along a winding, coastal road. Nice, isn’t it? You should probably picture yourself in a convertible if you aren’t already. Better. Are you smelling that salty, sea air? Mmmmm. Now, think about that road. It is made up of asphalt, lane lines, maybe a rumble strip or Bott’s dots, a bike lane, a guardrail, and sits atop a hillside or cliff leading to that beautiful beach below.

    You get to safely enjoy this wonderful scenery while travelling rapidly because someone at some point decided to put some paint on the ground, and for some reason you decided to follow said paint while you drive. Would it be more scenic if the guardrail wasn’t there partially blocking your view? Probably. Would the driving be more fun or exhilarating if the lane went all the way out to the edge of that cliff? Fun for some, scary for others.

    You can probably see where I’m going with this. Let’s think of this scene metaphorically in budgeting terms:

    The road or asphalt is life. Hopefully nice and smooth, but likely winding with ups and downs; potholes and debris, though infrequent, are to be expected from time to time.

    The lane lines, dots/markers, and rumble strips are our budgets. They guide us along the road, keep us headed in the right direction, and help us avoid danger. Sometimes if we drift beyond the line, only a small correction is needed. Sometimes when you hit that rumble strip, things get loud and uncomfortable. The same goes for our budgets.

    The guardrail is your emergency fund. It’s effective at keeping you from going down a cliff, but it’s painful. If you hit it, not only will your car be damaged, but so will the guardrail; both will be in need of repair. Same with our finances. If we need to tap into our emergency funds, it probably means we’ve hit a painful point of life. Once we free ourselves from relying on it, we might have some scrapes and bruises (dinged credit score, perhaps?), and our emergency fund will be low, if not depleted (dipped into that retirement account?), and in need of replenishment. Early in your career you may be young, poor, and driving an econo-box; it won’t take much of a guardrail to keep you from going over. As you progress in a career and get older, maybe you get married and have kids; your guardrail will need to be bigger and beefier to stop that minivan fully-laden with increased financial obligations.

    What is the bike lane? I would suggest that this is a buffer you should create by self-imposing constraints on your spending and generally living below your means. It augments the typical emergency fund and is used more for unexpected expenses that pop up here and there and less for the “I just lost my job” emergencies. It may include ‘savings’ you have earmarked for other goals: vacations, car fund, medical funds, etc. If it is narrow or non-existent, you are rightfully going to be white-knuckling that steering wheel and focusing on avoiding the guardrail above all else — not very fun. The wider it is, the safer you are, the less you’ll stress, and the more you can enjoy the beautiful scenery of life. If you have to swerve to avoid a pothole or boulder here and there, you’ve got extra space — no biggie!

    Some might wonder where to draw the line between bike lane funds and guardrail/emergency funds or how distinct that line should be. J & J have previously given their take on answering “When is something an ’emergency’?” It is going to be different for everyone and their unique circumstances. Regardless, you won’t be able to build that buffer or widen your bike lane if you are spending every penny that comes in. Eventually, your lifestyle and budget need to blend to allow you to live on less than what you earn.

    What’s so special about paint on the ground or reflective, plastic trapezoids? These simple, man-made items when appropriately placed and properly followed, allow us to safely do and see more. Similarly, we need to find man-made or artificial constraints for our budgets that will allow us the freedom to do more. Here are some I use to maintain or grow my financial “bike lane”:

    • 24 vs. 26 – I get paid every two weeks, and that means 26 pay periods in a year, yet I budget as if I get paid twice a month. That means twice a year I get a little extra. Maybe that money helps me catch up if I’ve overspent, replenishes my emergency fund, pays for a vacation, or whatever. I specifically don’t budget for it, so I can use funds where needed when it comes.
    • Frugal Months – tighten those screws every once in awhile and get back to basics. It’s sort of like hitting the reset button mid-year, and hopefully it helps you save a few hundred here or there.
    • Hidden Savings – $200 from every paycheck goes to a separate savings account that isn’t part of my regular budget. Though I know it is there, I’ll go months without thinking about it. It is always nice when I remember it, log in, and see that I’ve got a little extra I haven’t been planning on. Some are against this method, but it works for me.
    • Beef Up Your Tax Refund – Claiming fewer tax exemptions will cause you to take home less each pay period, but it will result in you learning to live off less and getting a bigger tax refund.

    Alone each one might not result in huge savings, but altogether they result in a meaningful amount for our family.

    Thanks for coming along for the ride.

    What do you do to ensure you live on less than you earn? Do you have a bike lane in your finances?

    Previous Post Next Post

    You Might Also Like


  • Reply Financial Panther October 14, 2016 at 1:10 pm

    Really great points by you guys! I’d love to keep my bank account on the bleeding edge, but you never know what might happen. That’s why I always keep around a $500 to $1000 buffer in my checking account. Sure, the money isn’t “working” for me, but it makes me feel safer.

    Living on 24 paychecks and treating the other 2 as extra paychecks is really important. I did the same thing when I was paying off mys student loans. I lived on 24 and sent the extra 2 directly to my student loans.

    • Reply Tyler October 31, 2016 at 4:45 pm

      “the money isn’t “working” for me” Tough to have it working for you at today’s rates. I’ll take peace of mind over tiny bits of interest.

  • Reply Derek @ MoneyAhoy October 20, 2016 at 7:38 pm

    That’s neat to read about your frugal months. I thought I was the only one that enjoyed throwing one of those into the mix every now and then. For some reason, I just love those months where the credit card bill comes with only gas purchases on it and nothing much else. Sigh :-).

    • Reply Tyler October 31, 2016 at 4:46 pm

      “the credit card bill comes with only gas purchases on it” What about food?! 😉 I find those months quite refreshing.

  • Reply Trevor McClintock October 27, 2016 at 8:56 am

    Good post.

    I think most of us at some point in our lives have had to budget due to one constraint or another.

    I’m a firm believer in planning ahead. With careful financial budgeting you stand a much better chance of not getting yourself in any money mishaps.

    • Reply Tyler October 31, 2016 at 4:47 pm

      “I think most of us at some point in our lives have had to budget due to one constraint or another.” I guess my point was that you shouldn’t wait for life to force you into a constraint. Ideally, you should have the discipline to impose your own, so that when “life” happens, it isn’t so painful/stressful–the planning ahead that you referred to.

  • Reply Melanie October 29, 2016 at 7:20 am

    I also do the hidden savings thing where I have $300 diverted from every paycheck into a different account. On expensive months, I’m very aware of that money and sometimes have to transfer it into my checking. Other months, like October, I was able to transfer the entire $600 to our wedding savings fund (yay!). It’s just helpful that it goes somewhere else than my checking account. I also do the larger tax refund thing too. It coming in a larger lump sum makes it more meaningful. I also got a raise in August that amounts to $80 more per paycheck. I told myself that no matter what, that $80 from each paycheck will be transferred directly into the wedding fund. When I do my budget I just use my old paycheck amounts pre-raise and it’s worked every time! Kind of amazing how tricking myself works pretty well :)

    • Reply Tyler October 31, 2016 at 4:49 pm

      “Kind of amazing how tricking myself works pretty well” We too often gloss over the psychological aspects of budgeting. Maybe it isn’t for everyone, but it sure helps me. Just keep putting that $80/paycheck towards something good AFTER the wedding too! 😀

      • Reply Melanie November 1, 2016 at 1:30 pm

        Goals: Debt free wedding & honeymoon
        After that, purchase home
        After that, purchase replacement cars with cash.
        That $80 will be working hard!!! :)

  • Reply Kendal @HassleFreeSaver January 6, 2017 at 5:17 pm

    Excellent metaphor!

    I’m hearing more and more about the benefits of multiple savings accounts. Your “bike lane” fund sounds like the “inconvenience fund” I learned about recently, which covers costs like speeding or parking tickets.

    I haven’t considered the 24 vs. 26 strategy — I may have to try that this year as we try to tackle a pretty big savings goal. Thanks for the tip!

  • Leave a Reply Cancel Reply

    Making Money As a Stay-at-Home Mom

    Making Money As a Stay-at-Home Mom


    Making Money from Home

    When TJ and I started our budget, I had a hard time accounting for every single purchased item. Coming home from a shopping trip started to feel like an interrogation, even though I’m sure TJ didn’t mean it that way. “What did you buy? How much was it? Did you use a coupon? Can I see? Do we really need a Tiffany blue casserole dish?” (Answer: yes, always.) I felt like I was suddenly on an episode of Law & Order every time I bought groceries. After an open and honest discussion about my feelings one day where I definitely didn’t raise my voice or cry hysterically, we created my own small account where a certain amount of money was deposited every month that was not accounted for on the budget. TJ has lovingly dubbed it “Ashley’s special money.”

    My special money was really nice. I could spend a little cash each month on whatever I wanted, and TJ couldn’t say a thing about it. That giant 36-pack of Diet Coke from Costco was all mine at last, no questions asked. The thing is, while I liked having my special money, I didn’t like how quickly it ran out each month. TJ and I had agreed once I became a stay-at-home mom that anything extra I earned on my own could be added to my special money account free and clear. We still had our budgeted amounts for date nights, entertainment, and eating out, but because we were saving for a home at the time, those amounts were pretty much only high enough to warrant some Del Taco and a Redbox. (And even then, we used that “DVDONME” promo code with every credit card we owned, which as you know by now equaled many free movies for the Nicholes fam. TJ never really recovered when that promo code stopped working…) I began scheming for ways to boost my fun money funds.

    I think it’s safe to say most stay-at-home moms wouldn’t say no to some extra cash each month. Maybe it’s out of necessity for your budget, maybe you’re like me and just want a little more freedom with your spending. Personally, in addition to not loving the straitjacketed feeling our budget gave me, I really missed working. I noticed the part of my brain that used to function as an educated adult was shrinking like a prune the more I watched Baby Einstein and jiggled keys in front of my kids’ faces. I love being a mom, but I wanted to find a way to exercise that part of my brain each day as well.

    I had a master’s degree where the coursework had involved a lot of writing, not to mention all my undergraduate years writing term papers and creative essays (I took a course devoted exclusively to science fiction in college — nerd alert). Why not try my hand at writing? I started with and wrote for $0.015 pennies per word. It almost started as a joke between me and TJ. “Hey Ash, wanna write an article real quick so we can order a pizza tonight?” But after just a few months of doing that on the side, I had a not-so-shabby stash of cash to add to my special money account. Then one day I helped my husband write his end-of-year work review, which caught the attention of one of his coworkers. He ended up hiring me as a content writer for his web developing side business. After that, I opened up my own business account and had a decent amount of money coming in each year, all on my own time and from home.

    In addition to writing on the side, I’ve tutored students in every grade in subjects ranging from language arts to algebra. Tutoring is an awesome way to make some extra money, and tutoring can command a high rate when you’re decent at it. I love working with kids anyway, so it’s a total no-brainer to pick up those jobs every now and again. Plus it gives me an excuse to talk about all things teeny-bopper without being mocked. Harry Potter and Divergent and One Direction? Squee!

    Perhaps my favorite way to earn some side cash, though, is by going to garage sales and thrift stores. Why, you may ask, would I publicly wear a fanny pack stuffed with cash and drive around to 20 different neighborhoods on a Saturday morning? Other than to look cool, I find hidden gems and sell them online. There are many different platforms to sell used items, like yard sale Facebook groups, OfferUp, Craigslist, or eBay. Some charge a small fee, but it’s amazing the extra money you could make on an otherwise uneventful Saturday. I’ve picked up things like GPS watches, textbooks, Lego sets, and video games, all for just a buck or two each, and turned around and sold them all online for hundreds of dollars. It’s a pretty awesome way to quickly and easily pad that special money account.

    Extra money gives me the freedom to get special gifts for my family, take friends out to eat, or buy that Sephora makeup I’ve been dying to have, all without any guilt that I’m robbing our kids’ college funds or 401k potential. I have a lot of fun with all my little side endeavors, too. Otherwise, quite frankly, I wouldn’t be doing it.

    If you’re wanting to earn some extra money on the side, whether or not you’re a stay-at-home mom, I’d suggest tapping into the earning potential of your natural talents. What are you good at? What did you study in school? What skills and knowledge do you possess that others don’t and would pay money for? You may be surprised at what comes to mind.

    Do you earn income from home, and if so, how’s it working for your budget?

    Previous Post Next Post

    You Might Also Like


  • Reply Courtney October 6, 2016 at 12:26 pm

    I’m a stay at home mom too, but I’ve done a few little things to earn extra money. Last summer I taught swimming lessons for a couple hours a day for three weeks of the summer, and it earned enough to pay for the pretty, king sized bed we’ve wanted for a few years. It was hard to justify the expense when our other bed was fine, and money needed to be saved for so many other necessary things (401k, 529s, a bigger car, etc. the list never ended!) But “extra money” from swim lessons felt fine to use on this luxury that we really wanted!

    • Reply Ashley October 9, 2016 at 12:06 am

      I love my king-sized bed, too! We just got ours earlier this year and we are now wondering how we ever lived without it. It was a lot more expensive than we had initially anticipated, though. We forgot that a king bed means getting a king frame, duvet, duvet cover, not to mention pillows, shams, and a comfy throw for good measure. It’s nice to know these bigger purchases can be covered by “bonus” money! Teaching swimming lessons sounds like an awesome way to earn extra cash.

  • Reply Mindy October 6, 2016 at 2:49 pm

    Great article! Very helpful (and fun to read 😉 )

    • Reply Ashley October 9, 2016 at 12:07 am

      Thank you! Should I pay you via PayPal or Venmo? :)

  • Reply Financial Panther October 6, 2016 at 2:58 pm

    I love your money making strategy of flipping things you find at garage sales. I’ve been doing the same thing with things I find on the side of the road or in the trash. People moving toss out perfectly good furniture that other people can use. Last year, I made over $1,000 selling furniture I found in the trash of my apartment building. It was crazy. I think people really underestimate how easy it is to sell the stuff you no longer want. (and as an added benefit, I feel better by saving something that is perfectly fine from going to a landfill).

    • Reply Ashley October 9, 2016 at 12:10 am

      It didn’t even occur to me to look for stuff on the side of the road! Genius. And I would consider the trash idea, but I would definitely make TJ do the dumpster diving. I heard about a guy who checked the dumpster behind an elementary school once and found a ton of profitable textbooks in there! So he sold them all for some major cash. I will definitely look into that after hearing about your success, too. Selling stuff shouldn’t be as intimidating to people as they make it out to be!

  • Reply Mrs. Picky Pincher October 6, 2016 at 3:47 pm

    You know, Mr. Picky Pincher wanted his own separate “slush fund” once we first got married, but it didn’t really work for us. I’m not a super judgmental person when it comes to that kind of stuff, so to me it didn’t make sense to have our money separated. I prefer the openness of having all expenses in 1 account. To each his own!

    I’m not a SAHM, but I’ve also found that writing online is a great way to make some extra moolah! I don’t get to do a lot of creative/fun stuff at work, so side gigs are a great way to flex your fun muscles while doing something you love!

    • Reply Ashley October 9, 2016 at 12:15 am

      I totally agree about the writing! It’s so fun for me, it’s a creative outlet, it’s all on my own time, and I love it. A win for sure. And I can definitely see how mine and TJ’s method isn’t for everyone. He usually sees or knows what I spend my “special money” on anyway, since it’s Chick-fil-A 90% of the time. :) But if everything is smooth sailing without small separate accounts, awesome. Like you said, to each his own!

  • Reply Ashli @ The Million Dollar Mama October 31, 2016 at 12:52 pm

    I worked full-time up until I had my son 6 months ago – I knew I wanted to stay home with him, but I also knew I wanted to keep contributing to the family income. I make extra money by freelance writing, using apps and websites like Ibotta and American Consumer Opinion, and some freelance social media work.

    • Reply Ashley November 8, 2016 at 1:27 pm

      I’ve heard great things about Ibotta! I need to get going on that for sure. And what a great way to use your skills and knowledge to contribute financially without needing to be on someone else’s schedule. That’s one thing I really love about doing things from home.

    Leave a Reply Cancel Reply

    Boosting My Tax Refund… On Purpose

    Boosting My Tax Refund… On Purpose


    Maximizing My Tax Return

    Back in May 2012, I quit my first ‘real’ job, and I started working at my current company on the last day of July. During those two summer months at home, we were blessed with the delivery of our first child. Once I returned to work, I was greeted with endless forms that generally accompany the first day at any new job. One of those forms took on some new significance now that we were a family of three: the W-4.

    Hopefully any of you who have had a job are familiar with a W-4 form. In a nutshell, employees use the form as a means of telling their employers how much money should be set aside from each paycheck for Uncle Sam (and maybe your state gov, too) by selecting a number of allowances. I’m not going to get into the nitty gritty of IRS tables and allowances, but you can think of it like this: more allowances = more money in your paycheck and less set aside for taxes.

    Most financial advice and the form itself (it is usually set up as an IFTTT exercise) aim to have the amount withheld equal your eventual, annual tax obligation, or just a little more to to avoid owing anything. By this convention, I should have increased my exemption by one at the new employer because I now had another dependent and would be able to claim an additional dependent exemption come tax time (search for ‘dependent exemptions’ and ‘child tax credits’ to learn the difference). Instead, I chose to keep my exemptions the same as before.

    What does all this mean? Every paycheck I let my employer set aside a little bit more than necessary for Uncle Sam. I don’t lose that money forever; instead it comes back to me each year as an increase to my tax refund. Why would I do this? I look at it as an artificial constraint that forces me to save and live below my means. I give up a little flexibility in the short-term for a nice little payout later.

    I already know what many are thinking as they read this: “Whoa, whoa, whoa, hold up. You’re just giving the IRS an interest-free loan?! You should take that money during the year, invest it, and you’d come out ahead.”

    I get it. This is going to go against the grain for a lot of people. From a purely mathematical/financial perspective, yes, it probably isn’t the most efficient use of my money. Then again, personal finance isn’t a purely mathematical exercise. As much as I’d like to be a perfectly rational, emotionless robot when it comes to spending, I just don’t work that way. Life doesn’t work that way.

    Here are parts of my rationale:

    Splurge Risk. It might sound counter-intuitive to some, but I am generally more judicious when dealing with larger chunks of money all at once rather than an increased trickle along the way. If we’re talking a difference of $100 in each paycheck, then I’m sure life will find a way to suck that $100 out of my account every few weeks (dang Amazon!). Then again, if I’m getting an additional $2,600 ($100 x 26 bi-weekly pay periods) in my tax refund, then I’ll more carefully plan out how/where to use it. Some might argue that I should be able to budget that extra $100 appropriately. Should I? Yes. Do I? Not always.

    Investing. Going with the example above, if I had the discipline to invest that extra $100/pay period at 8% (optimistic?) over the course of the year, then I would be coming out ahead by only $102.51 at the end of the year (and that is before any capital gains taxes). What if my return is less? Or what if the market goes down? This just isn’t enough upside to rationalize subjecting myself to not only investment risk, but also my own spending risk.

    Fort Knox. This is the ultimate set-it-and forget-it savings strategy. By having Uncle Sam hold my money, there is no way I can get it back until I file my annual tax return. Yes, you can amend your W-4 mid-year to alter your exemptions, but it isn’t something you are going to be doing on a regular basis. Having this money outside my control is the ultimate protection from myself.

    If you are living paycheck to paycheck or don’t even have a small emergency fund built up, then I would not suggest this savings strategy for you, as it purposefully limits your financial flexibility. If you feel you are doing at least OK but looking for additional ways to save or prevent overspending, then this could work for you. It is a psychological play more than a mathematical one.

    Ok, but how do I do this? First of all, this is savings advice, not tax advice. If you just want to give this a try right away, you can amend your W-4 at any time. I like to save these kinds of adjustments for the new year, but that’s just a preference. If you are looking for less shock to the system, you could wait until you get a raise. By decreasing your exemptions around the time of a raise you could keep your take-home pay similar and still end up with an increased refund. My experience of adding a dependent is probably the easiest. Some companies will automatically adjust your payroll when you add a newborn to your health insurance plan, so you may have to be proactive and check your status at work.

    But what if I don’t have kids or if I’m single? Again, not tax advice here, but generally speaking, the average single worker is taking at least one exemption, and a married, childless couple will probably have at least one or two between them, so there is probably room for you to make some changes.

    Anyone else trying to maximize their tax refund?

    Previous Post Next Post

    You Might Also Like


  • Reply Millennial Moola September 21, 2016 at 12:36 pm

    I’d much prefer to have my tax refund be $0. After all you’re basically giving the IRS an interest free loan. That’s at least worth 1% of whatever your refund is. So I would just opt for setting up a smaller withholding number because I’m able to handle my finances myself better than they will

    • Reply Tyler September 21, 2016 at 2:33 pm

      I get it. The interest-free-loan part is a hard sell for some. If you are saving as much as you’d like and are never tempted to mis-use those savings, then keep on keeping on.

  • Reply San September 21, 2016 at 2:00 pm

    We do the same thing! I know I could save this money elsewhere, but I totally stand behind your reasoning. If the money never makes it to your bank account in the first place, you’re not tempted to spend it.

    • Reply Tyler September 21, 2016 at 2:23 pm

      Exactly. As much as I would like to execute my financial plans exactly as I plan them, it just doesn’t happen that way.

  • Reply MarkAW September 21, 2016 at 3:05 pm

    I understand that it is more of a psychological hack to “prevent” you from spending the money, and if it works for you, great.
    Other hacks would be to put it into your 401k (assuming you haven’t maxed that out yet, but if you have, you are probably beyond this type of hack) if your plan for the money is long term savings. It would accelerate your long term savings while also reducing your current year taxes, double hack!
    Or deposit the money into a separate savings account that you have for your emergency fund/mid term savings/other fund. If you need the mental barrier of not seeing the money in your spendable account, then open separate accounts for day to day spendable money, and another account for your “don’t touch” money.
    The biggest area I think you are short changing is the investing rationale. You should not be putting money you plan to use in the near future in stocks, so looking at one year gains is too near-sighted. Money you invest in stocks should not be touched for 15 plus years, so present the example as what you are earning over a longer time period. $1000 @ 8% after 15 years will give you $3,172. Otherwise, your “splurge risk” and “fort knox” rationale are good reasons to hide money from yourself.
    As you said, it’s “personal” finance for a reason, so choose the best hack that works for you.

    • Reply Tyler September 23, 2016 at 8:56 pm

      We max out our retirement accounts and our HSA. Additionally we do have some funds being funnelled to a savings account that we try not to touch. Unfortunately, even those funds end up getting hijacked all too often. Hence the additional step to restrict additional funds.

      I definitely wouldn’t recommend this kind of strategy for long term savings. Just one more way to save a little each year and sort of force us to live below our means. Definitely a psychological play that many may not need/like. Thanks for your thoughts.

  • Reply Money Beagle September 22, 2016 at 10:23 am

    Back in the day when savings accounts would pay 3-5% or more (you know, like 10 years ago), then it made perfect sense to aggressively pursue a strategy to get little or no money back. Now that the Fed has destroyed the concept of saving money for the average household, there really is very little incentive unless you plan to take the money and invest in riskier assets.

    • Reply Tyler September 22, 2016 at 4:52 pm

      I agree the incentive to stash in savings accounts has been almost wiped out. But even more aggressive assets wouldn’t be that exciting for such a small amount of money and for such a short amount of time. It would obviously depend on how much extra is being withheld, but if you look at my example of $100 every two weeks even at 8% the notional return isn’t very exciting. This is only a single year savings strategy, and then at the end of the year you HAVE to do something with it. Interest can have a powerful effect, but at 3-5% it’d take quite a while to see big gains.

  • Reply Chadnudj September 22, 2016 at 3:11 pm

    This is my plan, as well. When I started my current job, I put myself down as single on all the tax forms, despite being married with one kid. The tax rebate as forced savings ends up going directly toward a major financial goal — otherwise, it’d be far easier to fritter it away every 2 weeks on extra dinners out or small splurges.

    • Reply Tyler September 22, 2016 at 4:55 pm

      Bingo. Another way I look at it beyond forced savings is an additional protection against lifestyle inflation–it forces me to live on less. That’s partly why I suggest people make a change when a raise comes, to help prevent them from succumbing to spending that new found extra moolah. Sounds like you’re ahead of the curve. Very nice.

  • Reply Tarynkay September 22, 2016 at 8:13 pm

    But why can’t you just set up an automatic transfer to savings of that money with each paycheck? That way it would go straight to savings and you wouldn’t fritter it away.

    Or you even increase your retirement savings with that. Or add it to an HSA if you have one. That way you would be decreasing your tax exposure as well.

    • Reply Tyler September 23, 2016 at 6:50 pm

      I also do as you suggest with a savings account, but the extra in my tax refund is better protected (fort Knox ‘ish) from my own splurge risk as noted in the post. In the past I’ve ended up raiding that savings account earlier than I had initially wanted.

      Retirement accounts are currently maxed out as well as our HSA, so this is trying to save in addition to those.

  • Reply Danny September 22, 2016 at 11:05 pm

    Totally agree with TARYNKAY. If you’re afraid of spending it now, then you’re only delaying that spending until you get the refund. Rather, you could work toward maxing out your 401k, HSA, IRA(s) and watch compounding growth work for you. That would be a real savings strategy.

    • Reply Tyler September 23, 2016 at 6:53 pm

      I disagree on the eventual delay of sub-optimal spending. If I have an extra hundred here or there each month then I’m more susceptible to spending it than if I get that lump sum at tax time. Obviously this is my own issue, and it may be different for others.

      We currently max out retirement accounts and our HSA in addition to this.

  • Reply Manisha September 23, 2016 at 4:14 pm

    We do this too. The one year we didn’t do it was the year we had to pay in. Never again! It is much easier for me to save when we get that big chunk of money in the spring. Or else we use it for necessary big spends like replacing an appliance or other house stuff. So many people say that I am foolish yet I never feel a money crunch when emergency spending strikes.

    • Reply Tyler September 23, 2016 at 6:58 pm

      Oooh, the thought of having to pay up at tax time makes me cringe. I would much rather play it safe than risk having to pony up at the very least.

  • Reply jennifer Anne September 23, 2016 at 4:50 pm

    I think the idea of being taxed is taken too seriously, because like you say, you’re getting the money back eventually, and it is like a nice little gift that you’re being forced to give yourself. Great ideas here, and glad things worked out.

    • Reply Tyler September 23, 2016 at 6:59 pm

      Glad you like the idea. I really like getting that little extra each year; it certainly puts a smile on my face.

  • Reply Melanie October 6, 2016 at 11:13 am

    I do the same thing! I love that big chunk during tax season. I realize I could get it monthly but I really like that “bonus” even though logically I know it was mine all along. :)

    • Reply Tyler October 11, 2016 at 1:40 pm

      So much focus is put on the math behind personal finance decisions, which is a good thing. Unfortunately, psychological benefits often get undervalued because they are hard to quantify.

  • Reply Robin October 24, 2016 at 3:26 pm

    We are in the opposite situation where we try to pay our taxes early vs lump sum at year end. We have a nanny – which means I pay her taxes plus my share of her employment taxes when I file my federal taxes. Yes, I could put this money aside every week (and earn interest) but it is much easier to buff my deductions so that I owe less at year end. I have peace of mind that I am not going to get a huge bill at the end of year. It just “hurts” less mentally . In addition to this we have variable income (due to a rental property) which has made us get some nice returns and some not so nice returns/bills. Again, I would much rather pay to much through out the year than receive an unexpected bill at year end.

  • Leave a Reply Cancel Reply

    Filing Your Taxes: The Ultimate DIY Project

    Filing Your Taxes: The Ultimate DIY Project



    Just a heads up, this post is sponsored by the folks at TurboTax. This should go without saying, but all content and opinions are our own and came straight from our own noggins.

    When I was a freshman in college, I took one of those personality tests that would analyze your characteristics and spit out some careers that you might be well suited for. I had pretty lofty expectations for what they might suggest. A CEO? Maybe even a US Senator? Nope. Not even close. Ready for their top recommendation? A librarian. I was Dewey decima-ted. (I’m surprised they didn’t say comedian, am I right?) After analyzing the results, it actually wasn’t all that off-base. I like order, I like organization, and I like systems. And while I didn’t pursue the study of librarianship, it’s no wonder why I’m one of those weirdos who actually enjoys doing taxes.

    But whether or not you’re part of the cool club of tax-filing enthusiasts, I’m going to share a likely unpopular opinion: everyone should be required to “do it yourself” and file your own taxes. No, not forever. But everyone should go through the process at least for a few years. Why? This shouldn’t come as a surprise, but we’re major proponents of being in the driver’s seat of one’s finances. If you’ve committed to starting a budget this year and you’re tracking your spending, one of the best ways to close out the year and reconcile all of your hard work is by doing your own taxes. You should know and understand what affects your taxes, where your money is going, and how to prevent more of your hard-earned money from leaving your pocket next year. And thanks to TurboTax, it’s totally possible to DIY your taxes this year without messing it up.


    I’ve done our taxes all 9 years of our marriage except last year when we started our small business. Here’s how our tax filing usually goes. I’ll collect every scrap of financial paperwork that I’ve hoarded over the last 12 months, divide them into appropriate piles (W-2s, 1099s, business expense receipts, health insurance paperwork and bills, etc.), pull up TurboTax, and crank up some Rage Against the Machine (just because I like doing taxes doesn’t mean I like paying taxes). An hour or so later, we’re staring at our projected refund amount (because we don’t claim exemptions) and our taxes are on their electronic journey to the IRS.

    A common misconception is that doing your own taxes means doing your taxes all by yourself. TurboTax lets you do your own taxes, while also offering step-by-step guides and on-demand help from actual, credentialed CPAs and enrolled agents. The software walks you through income, possible deductions, etc. in a super easy format while ensuring that you’re getting the maximum refund possible. A new feature we’re digging is the TurboTax ExplainWhy, which does exactly what you’d think — explains the “why” behind deductions, credits, and refunds as you go. For folks like us who like to know the nitty gritty of every little cent, this is an excellent “teach a man to fish” tool so that we’re all more informed taxpayers.


    Early in our marriage, our taxes were pretty basic. (And psst, if you’re in that boat and file simple returns like a 1040A or 1040EZ, you can file completely free right here.) Admittedly, each year, our taxes have gotten more and more involved, especially now that we’re self-employed. With running a business, we’re now getting up close and personal with our taxes year-round. And TurboTax Self-Employed is a year-round tax prep and expense tracking solution for self-employed since it also includes a year of QuickBooks Self-Employed. So if you’ve got a side hustle or 2017 is the year you’re breaking out on your own (fist bump), make sure you’ve got your financial ducks in a row. Even better, right now TurboTax is offering OFB readers 10% off TurboTax Self Employed.

    Here’s a final thought with taxes — you’re going to be doing them for a long time. The rest of your life in fact. So best to learn it sooner than later with software that will virtually hold your hand the entire way. Taxes might not be a DIY project you’d pin on Pinterest, but you’ll be more informed, self-sufficient, and prepared for your financial future.

    Previous Post

    You Might Also Like


  • Reply Lee Chilvers February 16, 2017 at 5:40 am

    Ugh I used to hate having to file my own taxes. I’m so glad that we have people like you who actually enjoy it! (Even if perhaps not as much as being a librarian lol!)

  • Reply Katy February 16, 2017 at 1:42 pm

    We love TurboTax! Our taxes are slightly more complicated than most, we own a rental property, both have W-2 jobs and also contract jobs with 1099’s. It’s been a breeze every year with TurboTax.

    They also have great customer service over the phone for any questions you might have!. We used this more times than we’d like to admit the tax season after our son was born!

  • Reply Alexis @FITnancials February 24, 2017 at 4:59 pm

    I actually enjoy filing my taxes. I’ve been using Turbotax for a few years and they make it incredibly easy for the self-employeed!

  • Reply Jordan Packer March 1, 2017 at 1:29 am

    Taxes are mandatory and there is no escape to settling your own. With this system, the complexities of tax payment becomes simple. Good info on this post indeed.

  • Reply Adriana @MoneyJourney March 9, 2017 at 1:24 am

    I have never filed my own taxes. It’s not because I hate doing it, but because I’m a scaredy-cat . What if I make a mistake or forget to sign something important? Apparently we have Turbotax available in Italy too, I had no idea!

    By the way, I would have loved to be a librarian! Too bad I only discovered I love books later in life, as a kid I was more into anything else but reading 😀

  • Reply [email protected] March 9, 2017 at 8:15 pm

    I have always done my own taxes. It’s embarrassing to admit how exciting it is to get a little bit of my own money back!

  • Reply Schambs Property Management April 1, 2017 at 7:11 pm

    This is a great article. Very informative for all eyes. Just the knowledge of the entire process of filing taxes yourself can save you hundred of dollars. Extra cash could easily be reinvested so this is perfect for getting started. Thanks again!

  • Reply Ms. Frugal Asian Finance April 2, 2017 at 2:19 pm

    We also used Turbo Tax to file our taxes. It saved us a ton of time and preempted many heated arguments 😉

  • Reply Christopher Steadman April 6, 2017 at 8:57 am

    Hello Joanna and Johnny,

    This is my first time here. You have such a cool blog. I have bookmarked it and going to read in my spare time.

    Keep up the good work!

  • Leave a Reply Cancel Reply

    Home Shopping: Comparing Properties – Apples to Oranges

    Home Shopping: Comparing Properties – Apples to Oranges


    Home Shopping: Comparing Prices

    In 2013 my company moved our entire office from Santa Monica to Austin. This post is part of a series about things we learned while being first-time home buyers.

    In 2013 we were moving cities (compliments of Mr. Employer), and we decided we should explore buying a place of our own. Because the move came about rather abruptly, we didn’t a have pre-determined idea of what we wanted for a starter home. I was open to almost anything: single family homes, apartments/condos, townhomes, duplexes, etc. What I soon found out was that it was hard to compare them with each other. The industry standard seems to go by dollars per square foot and leave it at that, but it became clear that this metric was an oversimplification. Here are two real examples from our search:

    • Home A is 1,359 sq. ft. and was listed at $186,000 = $137/sq.ft.
    • Home B is 2,668 sq. ft. and was listed at $400,000 = $150/sq.ft.

    These two homes are pretty different from one another in both size and price. At first blush, Home A seems to be the better value even though it is smaller. I saw this and the sub-200k price, and that got me excited. Sure it was smaller, but we were coming from an even smaller apartment. We’d be fine.

    What I didn’t tell you, and what this initial analysis failed to reflect was that Home A was a townhome that required a substantial monthly HOA fee to maintain the buildings, grounds, and amenities to the tune of $240/month. When I added up the mortgage, taxes, and HOA fees the realistic monthly payment came out to $1,511.25.

    On the other hand, Home B was a single family home whose HOA was only $33/month, and it still included a community pool, parks, and vast walking trails. Its realistic monthly outlay would be $2,591.77. Yeah, the house was twice the size, but it was one-thousand more a month. House A is still the better bet, right?

    Instead of looking at the purchase price divided by the square feet, let’s look at the monthly cost vs. the square feet:

    • Home A: $1,511.25 / 1,359 = 1.11
    • Home B: $2,591.77 / 2,668 = 0.97

    By this metric Home B comes out as a better value on a per square foot basis.

    We didn’t buy either home, but instead settled for something in the middle. I specifically chose two examples that were pretty far apart to show that it isn’t as black and white as real estate listing sites sometimes portray things. One could argue that you’d have $1k more to invest or allocate elsewhere with the smaller home, which is fair. On the flip side, if you are expecting your family to grow, maybe you don’t want to have to move again in a few years.

    The point is that when looking at purchasing a property, don’t look at the purchase price alone or only the $/sq.ft. and think you’re getting an accurate picture of value. You also need to consider other, regular costs that come with any property. This could be property taxes, HOA fees, utility costs, deferred maintenance costs, ongoing landscaping, and much more. This monthly dollars/square feet metric aims to do that, but it only helps if you realistically understand the costs of homeownership.

    Once I saw how much I would be paying the HOA of Home A, I calculated that it would result in equivalent monthly payments for a home that cost ~$53,000 more if it had no HOA. That was extremely eye-opening!

    Anyone out there get fooled by only a $/sq. ft. comparison before? Have any monthly payments snuck up on you?

    **Bonus: Because HOA fees are not tax deductible, you might want to calculate your after-tax monthly payment and then divide it by the square feet of the home for an even more realistic value.

    Previous Post Next Post

    You Might Also Like


  • Reply Megyn February 10, 2017 at 10:14 am

    We moved to Austin around the same time you all did, but didn’t purchase until August 2014. Our biggest issue is the extreme rise in cost and subsequent rise in property taxes. We went from paying less than $900/year in the Phoenix, AZ area to paying over $5k/yr on our home in Round Rock. Property taxes alone are over 1/3 of our monthly payment! We also bought a larger home than desired because we got beat out in this ridiculous market (we were beat out on at least 5 homes due to cash offers). Nearly 3 years later, and we could easily make a $50-75K profit on our house, but then we would have nowhere close to move to. We now plan to stay in our too big house until our boys are out of high school and then downsize. It’s hard when you don’t have much choice because the market is so high and competitive.

  • Reply Tyler February 10, 2017 at 1:49 pm

    Howdy. Yes, the tax burden in TX is a bit higher than other places for similarly priced homes; the trade-off being no state income tax. This is EXACTLY why we all should consider our monthly costs associated with a home, and not just the purchase price (I equate taxes and insurance as one of those monthly costs since we utilize an escrow account–I think it is easier/safer) when trying to figure out value/what we are willing to afford. Especially for out of state moves it is dangerous to slip into the mentality of, “we have been affording a home worth $XYZ, so we can look for a new home at the same price.”

  • Leave a Reply Cancel Reply

    A Chunk of Change: Generational Money Shifts

    A Chunk of Change: Generational Money Shifts


    Generational Money Shifts

    Just a heads up, this post is sponsored by the fine folks at Chase. This should go without saying, but all opinions are our own and came straight from our own noggins.

    Just recently, Johnny and I were driving through our college stomping grounds when we passed the abandoned building that once housed the local Blockbuster Video. We got to talking about how our daughters will never have the joy of combing the movie rental aisles, searching for the last copy of the hot new release, and leaving with a physical rental to watch at home. They’ll never know about misplacing their Blockbuster card, remembering to rewind the tape before returning it, or dropping the video off minutes before the store closed to avoid a late fee. And so the circle of life goes. Our parents don’t understand smartphones, our kids don’t know what Blockbuster is, and we won’t understand how to program our children’s future robots.

    While Blockbuster stores have gone the way of the dinosaurs, family finance and money aren’t immune from generational trends and evolution. What was normal 20 or thirty 30 ago no longer applies to many households. Growing up, Johnny and I only had our parents’ financial habits to look to. Some good, some not so good. We took the lessons we felt were valuable, coupled with some ideas and rules that we set as a couple and cobbled together a cohesive financial plan based on what was right for our circumstances. And many of those circumstances (rising college costs, access to credit, technological tools, etc.) are shared among the ͞I used to watch TGIF!͟ generation (aka millennials).

    Chase recently released the “Chase Generational Money Talks Study,” which showed just how much money habits have changed over the last few generations, particularly among women. One key stat found that 78% of Millennial women feel that they’re able to make good financial decisions that are new to them, compared to just 71% of Gen X and 67% of Boomer women. In addition, 71% of Millennial women say they’re able to recognize a good financial investment, compared to 59% of Gen X and 55% of Boomer women. Who runs the [financial] world? GIRLS! Well, at least millennial ones.

    One of the things that has clearly changed the most from generation to generation is the number of women killing it in the workforce and starting their own businesses. Whether fresh out of college and climbing the corporate ladder or a stay-at-home mom running her own business from her garage, women are more financially savvy and empowered than ever. Because of this transition, more women than any previous generation are confident in their knowledge of the financial world.

    In our parents’ and grandparents’ households, roles were clearly defined in black and white. Dad took care of the working and the finances, and mom took care of the house and the kids. In our own house, it’s always been more of a mix. We each contribute in various ways to all aspects of our home — our
    children, the cleaning, financial planning, and income-earning. It seems, as Chase’s study shows, we’re not alone in the shifting household trends, a sign that Millennials like us are treading their own paths. And when it comes to more women taking control of their financial futures than ever, I’m all about it.

    On a more gender-neutral point, the study also found that 71% of all Millennials claim to be the person responsible for financial decisions vs. 53% of Boomers. There are probably a lot of factors that have contributed to an increased sense of personal financial responsibility and decision-making, but in our marriage, we credit a lot of this to technology. We both feel equally responsible and capable of making financial decisions and knowing our financial standing because we’re armed with smartphones and apps that keep us in the know. At any given moment, we can pull out our phone and know our net worth, our credit score, how much money we have left in our grocery budget, and who’s winning Online Scrabble (usually Johnny). The point being that we both have access to our financial data in real-time which makes us both equally capable of making decisions.

    You can read more about the “Chase Generational Money Talks Study” here. How have financial matters changed from generation to generation in your family?

    Previous Post Next Post

    You Might Also Like


  • Reply Katy February 9, 2017 at 11:39 am

    I think this is so interesting! I definitely notice differences in my financial “preferences” compared to my parents and my in-laws. One of the biggest things is, my husband and I prefer to put everything on a credit or debit card, so we can easily track spending; whereas our parents prefer to use cash for everything. I am curious if we also feel more responsible or capable to make financial decisions than our parents.

  • Reply Melanie March 12, 2017 at 9:10 am

    I have embraced personal finance and am really interested in it, and my parents weren’t and aren’t interested like I am. Also, they are 70 now, and when they were younger, more people had pensions, and they didn’t have “saving for retirement” on their radar as much as our generation does. I’m very thankful we are constantly reminded to save for later, because I know my parents weren’t reminded with such a frequency. I ask my parents if they saved a lot and saved for purchases and such, but they say not really, so I know generationally in our family a lot has changed!

  • Reply Francis @myBreadmoney March 12, 2017 at 10:40 am

    I love this study!

    Most studies out there tends to revel challenges awaiting Millennials, but this one is actually encouraging. And it definitely reflects our household.

    We make financial decisions together. Cleaning, cooking and watching the kids are not assigned to wife either — we both do it . As far as budgeting, we’re both capable making it. We just try to carry our share, and we’re teaching our kids to do the same.

    There is hope for our generation. Thanks for sharing!

  • Leave a Reply Cancel Reply

    The Right Time to Buy a New Car

    The Right Time to Buy a New Car


    The Right Time to Buy a Car

    The kids and I love it when TJ gets home from work. First, it usually means a much-needed break for me while TJ builds Legos with our boys. It also means I get to speak with a human being about topics other than going potty or not using mommy’s Anastasia Brow Pen as a $30 brown marker. The best part is, I don’t even have to get a phone call or text to know he is heading home. All I have to do is listen for the deafening sounds of TJ’s car struggling down the freeway.

    TJ has had his 2000 Chevy Prism since his early years on a college campus. Now, eleven years later, though his situation in life has changed considerably, the car remains. I’ve thought it would die on us for so many years, I can’t believe it’s actually stayed around this long in (semi) working condition. The emergency brake light is always on. The driver’s side door doesn’t open without rolling down the window and opening it from the outside. The “check engine” light has been on and off for eight years. The “door ajar” light also flickers on and off as you travel, playing Russian roulette with our lives as we wonder if the door will suddenly fly open and eject us both. It burns through oil so fast, TJ has to keep several spare quarts in his trunk for trips over 20 miles. If you turn the car off and on in succession by making several quick errands around town, it will likely die on you and need a hit of starter fluid to come back to life. In short, this car is ready to move to Florida and settle down for retirement.

    The thing is, TJ has always insisted he loves his car and doesn’t mind driving it to work every day. He still believes it has a few years left in it (he’s been saying this since we were married). It took a full-on intervention from me to convince him it was finally time to get a new car, not only because his car was dying, but also because we could afford it. He has earned the right to drive to work without worrying about an engine exploding in his face.

    The discussion about which kind of car to buy diverted into other pertinent conversations about our future. Would we have more than two kids? How much car could we afford? Would we be living in a snowy climate for the next foreseeable future? Should we eat crow and get a minivan? (Never!) These discussions have been ongoing for the last year or so as we became more serious about buying a car. We came up with some ground rules for ourselves in terms of what to buy:

    • We will only pay cash for a car. We could put half the money down and take a loan on the rest, or we could lease, there are many options out there. But we feel best about paying cash up-front for a car. To us, buying a car that requires payments just means we’re buying a car we can’t really afford.
    • We eventually need to replace both our cars. So for now, we will be buying a reliable sedan to replace TJ’s car and save up again for the next year to replace my car with a mid-size SUV. And because I’m continuing to grow my small business ventures, I will be able to contribute my side-hustle money to make this happen faster. Go, me!
    • We want something newer, but not new. We don’t mind driving a car that’s five years old since most cars these days were built to last a really long time. But we also don’t want anything much older than five years, only because we’re not eager to revisit all the problems we’ve had with TJ’s hunk-o’-junk. And we will probably get the most bang for our buck by buying a five-year-old car because it’s already lost half its value while remaining highly reliable.

    What strikes me as so funny about all this is how TJ has never really cared what people may think when they see him puttering down the road in his little beater. He almost wears his crappy car as a badge of honor, a testament to his dedication to being thrifty and debt-free. Sure, we could make payments on a beautiful, brand new car, but we would be driving around in a lie. As Dave Ramsey always says, why buy something you can’t afford with money you don’t have to impress people you don’t like? Still, there comes a time to retire the old car and buy something reasonable, and I’m glad we’ve been financially prepared enough to make that leap without going into debt.

    What are your car-buying stories? Do you pay cash, or do you take out a loan?

    Previous Post Next Post

    You Might Also Like


  • Reply Aili January 18, 2017 at 8:10 am

    We currently own 2 cars. One outright and one on loan. Unfortunately, when buying the newer one we didn’t have an option of paying for cash for it, but we chose to be selective in our purchase by picking a car under a certain pricepoint and over paying on the monthly loan payments… there was no need for the 50k SUV we could afford payments on when the used 19k one would do!

    • Reply Ashley January 29, 2017 at 3:26 am

      You’re totally smart to be thoughtful about the kind of loan you chose! It’s easy to be tempted to go into more debt when the monthly payments may seem almost the same, but it doesn’t pay off in the long run. :)

  • Reply Andy January 18, 2017 at 10:09 am

    I don’t normally contribute to blog discussions so I’m breaking out of my comfort zone here. That and this post also arrived when I was procrastinating about work so typing this buys me another few minutes of hiding from the truth of deadlines.

    Now that’s out of the way, can I applaud your husband for sticking with that car through thick and thin but that rather than buy a nearly new one, he gets a bike instead. I don’t want to come across all evangelical about bikes but they’re awesome – you can beat the traffic, it costs almost zero in maintenance and you keep fit at the same time. Sweet! You also have one less car to service, insure, clean, lose its keys (or is that just me?!) etc. I appreciate that I don’t know your circumstances and there may be a gazillion reasons why this wouldn’t work for him. However, if these could be overcome I say do it – biking to work rocks and once you start you get all endorphined up and want more. Stick to one good sized family car and bike to work if you can – its awesome.

    • Reply Ashley January 29, 2017 at 3:30 am

      A bike would be totally awesome! In fact, a good road bike would most certainly be worth more than his current car. :) I rode a bike to work every day throughout high school to the library (I was a nerd) five miles away, and I loved it. Every second. I’ll have to ask him how he feels about bikes! He isn’t much of a cardio enthusiast, but who knows? If Jim from The Office can do it, so can he, right? :) Thanks for the input!

  • Reply TJ January 18, 2017 at 2:21 pm

    As the proud owner of the car spoken of in this article, I feel it important to add that I have to drive around in the summer blasting my heat so that it doesn’t overheat….I’m almost at my breaking point.

  • Reply Gabe January 19, 2017 at 3:31 am

    Fun car story! My first car was a 2002 Dodge Stratus I purchased in 2010 for $4200. I took out a loan as I just started my first job where I couldn’t easily bike to work (Provo to Salt lake). A few years later I got married, and my wife hated that car! AC went out, engine trouble and the like. We decided to get me a new car, so in 2013 I bought a 2010 Toyota Corolla XLE for $19200, and a loan of about $16k. We paid it off in about 15 months because we hated the debt as it was our only kind. Then we moved overseas and didn’t need any car for a while, so we sold it for $16k. Now that we’re settled back in the US, we bought a 2015 Toyota Corolla for all cash for less than our previous sale and feel great about it!! Paying cash really helped us make a different choice than we would have otherwise! If you can’t afford it in cash, you can’t afford it!

  • Reply Cassie January 19, 2017 at 10:48 am

    I bought a “new” car (it was a year old) when I relocated to a snowy climate (my two door pick up truck wasn’t going to cut it here). I could have bought it in cash (and almost did) but I was worried about my cushion. I put more than half down, and took a small loan for the rest. Probably should have paid in cash, but at the time, I was in a bind. I paid it off early (In under 3 years), and am SO grateful to not have a payment anymore. I am now putting double monthly payments aside for my next car, whenever that is. I want to pay for my next one in cash!

  • Reply Wade January 19, 2017 at 4:53 pm

    You could “upgrade” to a 2001 Toyota Echo. That is my “drive to work and let sit outside all day” car.

    142k miles and still going strong. Cars take your money quickly.

    I think you could upgrade to a 2008-2010 Honda Civic or Toyota Corolla and feel like you made a significant step up in car.

    • Reply Ashley January 29, 2017 at 3:31 am

      You’re totally right, pretty much ANY car newer than his and slightly better-functioning would be a huge step up! Love that you still have that car for work, cars really do eat up a lot of money quickly if you’re not careful. :)

    • Reply Mel March 17, 2017 at 12:31 am

      The Toyota Echo 2001 will always be my most beloved car. Excellent on gas… and mine was standard. So much fun to drive! Even in the snow up in Canada.

  • Reply Stephen January 20, 2017 at 2:56 pm

    I was given a car on my graduation from university…A 11 year old grand am with 250k on it. It lasted a trip across the country in the middle of summer with no AC. Then I drove it another 2 years and the heater died. It was several thousand to fix both so I donated it to charity and bought used again. Now my new one is all paid off and I’ll drive it for probably close to ten years before I need a new one….Then I’m splurging for a luxury label!(but probably not)

    • Reply Ashley January 29, 2017 at 3:33 am

      We’re all about driving our cars into the ground, quite literally in my husband’s case. :) We should all be forced to drive crappy cars just for the sake of the amazing anecdotes we’ll be able to tell people later on.

  • Reply MissGiina January 21, 2017 at 9:52 am

    I had a 98 Camry with 235k miles on it until 6 months ago (owned for 11 years). I wrote a check for $19k and left Carmax with a 2011 Lexus ES350 with 72k miles and Navigation. Started saving $250 a month because in 5 years I should be able to sell this Lexus for at least $6-9k and will have $15k saved and get another Lex if I choose. No car payments ever, but always save and just pay cash. I hate banks.

  • Reply TT January 22, 2017 at 2:09 pm

    Last year we paid cash for an 8yr old minivan (just give in, they’re the best!) with 135k miles on it. It has felt like an upgrade in every way and has been totally reliable. We pay cash and buy well used cars. The problem that I run into is that cars are more than transportation to me; they are a hobby as well. I’m no expert, but I consider myself an automotive and driving enthusiast. I’ve been driving the same econo-box for 10 years now. At this point I feel like a little part of me dies every time I get in the thing and drive something so un-fun to drive. I specifically got a manual to try and keep it more engaging to drive, but so little power can only keep your interest for so long. On the other-hand, I haven’t been able to pull the trigger on something else, because it works perfectly fine and never breaks down. So I’m perpetually unhappy with it, but I’m unwilling to buy something else; I need to work on it.

    • Reply Ashley January 29, 2017 at 3:35 am

      That’s cool that you know cars so well and consider yourself an “enthusiast!” I am only enthusiastic about not driving in my husband’s current car. But I hear you with the conflict of not wanting to get something new when the current thing is working just fine. But also give yourself permission to splurge just a little when your finances warrant it! :)

  • Reply Lisa January 23, 2017 at 4:29 pm

    We still owe on our current car, but we plan on driving this car into the ground and hopefully paying cash for the next one. I bent to the pressure of buying a brand new car this time around and have found that it wasn’t the best decision for me. Next time, like you, I would aim for a newer car but not a BRAND new car.

    • Reply Ashley January 29, 2017 at 3:36 am

      Yes, we all go through something like that, so you’re not alone! A brand new car really isn’t that different from an almost new car. :)

  • Reply Katy January 25, 2017 at 12:34 pm

    Thanks for this post and information! Buying a “new” car has always been stress for my husband and me. We both grew up with very different car views. His family bought brand new cars every few years. My family would by used and run them to the ground!

  • Reply Melanie January 26, 2017 at 12:11 pm

    Hmm, when I got my first full time job out of grad school, I bought a brand new 2010 Honda Civic (cuz thats what you do when you get a full time job right–go into debt for a car, right?!?). Mom helped me put money down and I had a car loan. Luckily paid back Mom and Wells Fargo several years ago in my debt free journey. This March my car turns 7 years old and is about to hit 100K and runs wonderfully. I love driving my paid off car.
    The general game plan is for my next car to be a newer but not brand new Honda Cr-V to work with future kiddos better. We plan to save and pay cash for the CRV. Then my fiance will sell his 2007 Nissan Sentra and take my Honda Civic. Then use the money from the Sentra to begin to save for his newer but not brand new car-model TBD. That’s our car plan in the next few years! :)

    • Reply Ashley January 29, 2017 at 3:39 am

      Driving a paid-for car just FEELS better, doesn’t it? I love it. And I love that you have a car plan like us – I think it’s just necessary to really plan ahead for those kinds of bigger purchases! You’re playing it really smart. :)

  • Reply Centsai January 26, 2017 at 7:23 pm

    I definitely agree with you that you should only buy a car that you can afford! Shopping for a car takes a lot of research! My first two cars were a 1990 and 2002 Honda Accords that were handed down to me from my family members! I now am leasing a 2015 Honda Civic that is very reasonably priced! You don’t need to buy a brand new car, buying an older model is cheaper and are very close in style!

    • Reply Ashley January 29, 2017 at 3:41 am

      I only wish we could hang on to this car for our kids when they’re older! I really can’t think of anything that would build more character. :) I’m glad you agree about buying a newer-but-not-new car!

  • Reply Jamie January 28, 2017 at 8:23 pm

    Great article Ashley!!

    I wasn’t thrilled about a minivan either, but it sure beats having to open the doors myself for a whole bunch of little kids to crawl in and out of. But with a small number of kids, yes, get an SUV! Either open the door for them every time, or teach them how to open doors properly so it doesn’t knock into and dent other people’s cars.

    And yay for buying cars with cash! It’s the only way to go!

  • Reply Ninja Budgeter March 21, 2017 at 10:18 pm

    I have been down the financing path a few times now and I’ve got to say, I agree whole-heartedly, cash money is the only way to go. I drive a $500 car and I’d rather do that for a decade than get back into a car loan.

  • Leave a Reply Cancel Reply

    2017 Financial Priorities

    2017 Financial Priorities


    2017 Financial Priorities

    It’s 2017! And even crazier, we’re already a week and a half into January. It’s that time of year for new goals, new plans, new beginnings, and yup — new budgets. There’s no better time to prioritize (or reprioritize) your finances than now. Johnny and I have a few things we’d like to reprioritize this year, the first of which is OFB. We’re just as passionate and nerdy over personal finance as ever, but we haven’t had the time to write about it very much these past few months. 2016 was our first full year of self-employment, and running a small business was a round-the-clock job. Truth be told, it’s still a round-the-clock job. But we’re trying to put processes in place so that 2017 is a year of working smarter, not harder, so we can spend more time on some of our other passion projects, like OFB. But before we dive headfirst into our 2017 editorial calendar, here are the deets on a few of our 2017 New Year’s financial resolutions:

    Stop renting, start buying: We’re hoping 2017 will be the year we become homeowners (fingers crossed!). We’ve been waiting a long time to pull the trigger on home buying, but since we’ve set up shop with our business in SLC, we feel like we can finally put down roots somewhere. We understand that house hunting is a process, and we’re in no rush to make a decision. If we can’t find a house that fits our needs, we’re planning to rent another year. Part of me wants to just keep renting because the idea of buying stresses me out!

    Grow our business: We’re hoping 2017 will be another year of growth for our business. Growth means spending more money upfront, but we’re hoping it will also mean we’re able to save more money down the road. In a lot of ways, being self-employed is more stressful, and it’s definitely 100x more complicated. But there’s also more opportunity for growth. We have goals and plans, and only time will tell how it all pans out.

    Invest: Johnny is hoping to spend more time this year making sure our money is invested appropriately. He geeks out over that stuff, so I just let him run with it. He spent hours one day over Christmas break switching my old 403b to an IRA. He’s also been trying to consolidate some of our banking accounts so we can track our spending as easily as possible. Having a business has really complicated our finances, so we’re doing whatever we can to keep our personal finances as simple and separate from our business as possible.

    Save, save, save: As always, we’re hoping to save as much as possible. It’s harder to project our savings since our income isn’t as cut-and-dry anymore, but we’re hoping to spend as little as possible (aside from maybe buying a house!), save as much as possible, and focus on growing our business.

    What are some of your financial resolutions for 2017, and how are you planning to make them happen? And what would you like to see on OFB this year?

    Previous Post Next Post

    You Might Also Like


  • Reply Rebecca Williams January 10, 2017 at 8:56 am

    Well this year is a big change for my family- we will be switching to just one income and becoming parents! Like I said big changes.

    We are going to pay some stuff off before I stop working, but since our recent military move took us someplace with limited job opportunities my current job just doesn’t pay enough to go back to after LR joins us this Spring.

    Any suggestions on figuring out switching from two incomes to one income?

  • Reply Shawn L. January 10, 2017 at 9:47 am

    Long time no commenting, hope you all are well!

    I think our family goals are very similar to yours – I think we’re behind the curve in comparison to your state, but I think these are the goals we’ve outlined:

    1. Find an Effective Budget Methodology – when we were DINKs or even SINKs it is easy and even fun to budget. But once you throw a human larvae into the mix, the budgeting went out the window. It’s a lot of budgeting on the fly which is not easy nor fun.

    2. Save for a House – We’d love to continue renting a house but with our little donut hole getting bigger, we don’t want to get stuck in the endless cycle of rent increasing and then having to find a cheaper place. We want some stability for him.

    3. Save for Retirement – In addition to the 401K, would love to contribute to my Roth, which has been stagnant as of late.

  • Reply Amanda S January 11, 2017 at 6:16 am

    Can’t wait to hear more from you guys this year!

    For us our goals are:
    1. Lots of savings.
    2.Keep our grocery budget low.
    3. Try and pay for most of our wedding in cash!

    Let’s see how we do!

  • Reply Centsai January 11, 2017 at 10:20 pm

    These were all great goals for 2017! I hope that all of them come true! A goal I have is to travel more but on an affordable budget!

  • Reply Lisa January 13, 2017 at 1:01 pm

    These sound like great goals! Buying a home is such a long and stressful process, so taking your time with the decision is a great idea. For us, our big goal this year was to move out of our hometwon house and into an apartment closer to our jobs and we’re in the process of moving right now!

  • Reply Stephen January 14, 2017 at 3:03 pm

    Good luck on the home ownership goal! It’s a big step!

  • Reply Mike January 17, 2017 at 7:52 pm

    We’re trying to save for a major purchase as well as just general savings. We also want to cut it grocery spending significantly.

  • Reply Melanie January 26, 2017 at 12:01 pm

    Well, 2017 should be a big year for me and my fiance.
    We are in the home search now and hoping to buy a house this Spring/Summer/when we find the right house and hopefully win a bid, haha (apparently it’s quite competitive out there!)
    As if that’s not enough, our wedding is in October, so our goal there is to pay 100% cash for wedding and honeymoon. Everything looks on track for that.
    My fiance is simultaneously working on becoming debt-free before the wedding so we can begin our marriage debt free.
    I think those are quite enough goals for one year. :)

  • Reply MomJonz February 7, 2017 at 12:13 am

    Save, save, save. We just moved to Hawaii this year. We will enjoy and love the island life, but cutting out the waste in our grocery bill for sure.

  • Reply McGuire Property management April 1, 2017 at 7:19 pm

    Great content here! I love savings and will do anything to step up my game. Thanks for the refreshing information to help me maintain a strong 2017.

  • Leave a Reply Cancel Reply