The time is well overdue for an OFB update. Don’t give me that look. I know you’re giving me that look. Okay, okay, yes, we deserve the eye roll. And you’re right. This update is way, way, way overdue. Like WAY. Now that we’re square, let’s get back to the business of updating. Unlike a phone update that you ignore for six months, this one won’t take much time. And you hopefully won’t regret it afterwards.

Remember the post from October 26th, 2015, almost exactly four years ago? The one titled “So We Started a Business”? Well, this post could probably be called “And We’re Still Working on That Business.” Because that’s what takes up a very large portion of our time. We’re still super passionate about other things (like personal finance), but we also have to sleep (even if we’re only averaging 5 hours/night). But forget the chit-chat, let’s tell you what’s new.

We Added Another Tiny Human

It’s true. We are now a family of five! Our son, Jack, is almost a year-and-a-half, and we have felt every moment of that year and a half. Three kids tipped the scales into absolute chaos. On top of adjusting to three kids, we spent several months last year worrying about Jack’s health, which caused me to step away from our business while we focused on him. Long story short-enough-you-could-tweet it: he was born with his stomach in his chest (which isn’t good) so he needed to have surgery to move it back into his belly (which is good). He had a very rocky recovery post-surgery, but he’s doing really well now and thriving, which we are very grateful for.

We Bought a House

Remember all the times we talked about buying a house? Here and here, for example? Well, we finally did it. And since we can never do anything without a little bit of flair, we closed on our house three days before Jack was born. In some ways, it feels like we’re still getting settled in, but it is definitely starting to feel like home. We of course can’t wait to share what finally made us decide to buy, whether we stuck to our guns in putting at least 20% down, and a few other financial considerations we had when we bought our home. Like, even thinking about those posts makes me weirdly excited. Also, because of sentences like the former, we still have no friends.

We’ve Changed

That sounds ominous, but I promise it’s not. Because running a small business is such a large part of our lives now, we feel like it wouldn’t be completely transparent for us to just talk about personal finance anymore. Yes, we still live and breathe personal finance with a fierce passion that would probably scare most folks. BUT we’re also just as passionate about being your own boss and using that to take control of your financial life. We used to spend an inordinate amount of our focus on saving money. And we’re still all about saving (sup, Taco Tuesdays). But we’re also all about finding new avenues to earn extra money and going after those. In other words, becoming the boss of your own life. That will look different for everyone, but we’re excited to expand on that topic more in the future.

It feels good to get those updates off our chests. We shared the biggest, most important updates, but we’ve got oodles (read: lots) of little topics we’re looking forward to discussing in the near future. We’re not sure if it will all live here on OFB or if it will land in a new virtual home since some of it will be completely unrelated to budgets (or “freaking budgets”). But the important thing is that right now we’re here. And you’re here. And we’ve got some good times ahead, promise.

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.

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.

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?

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?

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?

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?

Cars

• 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!

Health

• 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.

Electronics

• 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:

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?

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?

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?

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 textbroker.com 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?