Sep

17

interviewing fabulously broke

Filed Under Featured, house | 17 Comments

I’ve been interviewing blogger Fabulously Broke …in the City, a married woman who writes about her personal finance experiences, including fashion and her quest to get out of debt. She has a fascinating living arrangement…

You describe yourself and your husband as ‘modern nomads’, can you explain what you mean.

It’s a term I made up when I tried to describe what our living situation was. I remembered reading about these nomads, and how they travelled constantly, never really setting roots down in any place, but the word itself conjured up images of a more traditional lifestyle that definitely did not suit us. I tacked on the word “modern” just before nomad just because we don’t use travelling caravans – we stay in hotels, fly in planes, drive cars, and are very, VERY into technology.

A modern nomad to us, is someone who doesn’t really have any roots in any one city and can pack up and travel at a moment’s notice to anywhere in the world. We literally live out of a suitcase - everything we own and need on a daily basis is packed to fit in a suitcase, and the rest of our stuff is kept in storage for free (our old couch from when we had an apartment, chairs, tables, that sort of thing), and our seasonal clothing (winter coats and boots) are kept in another storage unit in our “home” city.

How long have you been doing this and why did you decide to give up having a permanent residence?

We officially gave up our apartment around the start of this year, so it hasn’t been very long, but we’ve actually been living the modern nomad lifestyle for 2 years now. When we had the apartment, we paid through the nose for it. I had imagined that I would need to go into the office, and do office-y things, but it turned out that my job description as a consultant is true – it really IS 100% travel. As I switched projects and kept on travelling from city to city, It dawned on us halfway through the year-long apartment lease that we weren’t even in our apartment for any more than maybe 2 months out of the year!! So the rent that we were paying of $1600 a month (utilities included), was not really $1600/month, it was $9600/month!! And that was money that could’ve gone towards clearing our debt (I almost cried reading that number…)

I kept on having miniature panic attacks and pangs of regret every month my bank account showed a debit of $1600 – it was my albatross, a constant reminder of an apartment that we had decorated very nicely when we first moved in, but weren’t even using on a daily basis. While we could’ve tried to break the lease early, it was just not possible with my job at the moment – I was swamped with work, and having to try and move all at once on the weekend, was just too much stress for us to bear at the moment.

So we stuck it out, bit the bullet, and left the apartment empty (I suppose we could’ve subletted, but we’ve heard of horror stories and we weren’t particularly keen on others using our things in our absence). When the lease was over, we moved everything into a permanent storage (it was a hard choice trying to decide what we needed to keep and what needed to be stored away!), and shifted our clothes and seasonal things into another more easily accessible storage unit in our ‘home city’.

You still have a ‘home city’, do you find this important?

No we don’t find this significant at all. It’s not out of any emotional attachment to the city and in fact, we’d rather NOT be in our ‘home’ city if we can help it, because that means we’d have to pay for rent month-by-month instead of living for free in another city.

I just call it our ‘home’ city, that way people know what office of the company I’m from, but it doesn’t mean anything to us, other than that we have a storage unit there to access our seasonal things on an as-needed basis.

Which is your favourite city so far and why?

Out of all of the cities I’ve been to, I prefer the smaller, less crowded and congested ones. In fact, my husband and I hope to be on the most secluded, rural, way out in the middle of nowhere little towns because we find it more relaxing than being in a congested city with too much traffic, activity, smog, and stress.

My favourite city so far has been Montreal, Quebec, because I’m beginning to brush up on my rusty French and the city is actually quite clean when there aren’t any University students around :P I also like that Montreal has a very laid back vibe, and there’s a lot to see in terms of history, culture and architecture. Best of all, you can always ‘get away’ to a secluded spot in the mountain, and just chill out for the day. It’s sort of like a small town in terms of the pace of life but with big city flair.

My husband however, will say otherwise: he probably preferred North Bay , Ontario because it was so quiet, there were plenty of opportunities for him to sneak off during the day while I was at work to fish. Plus, everything was much, MUCH cheaper than in a more urban city in terms of food and entertainment.

What is the biggest benefit (aside from being able to do your job) about being nomads?

I can’t just pick one! For me, I love being in a different city, slowly acclimatizing to be a pseudo-local, seeing all the local sights and attractions, and especially eating all of the local food. But the best part is that I don’t have to keep travelling back and forth every weekend to see my husband.

I don’t have to:

  • Pack up all of my junk in the hotel room
  • Try and coordinate my flight schedules with calling a cab to arrive on time, and making sure I can leave the client site on time to catch my cab AND my flight
  • Getting to the airport, go through the insane security checks, and then trying and find my terminal
  • Waiting for 3 hours to get on a flight that only takes an hour, and wandering around the airport tourist duty-free traps
  • Getting on a flight with screaming babies/children/annoying/snoring seat passengers, lamenting the lack of any decent food to snack on, and being too tired and exhausted to care about trying to be productive on the plane
  • Getting off the flight, battling my way through traffic half sleeping-sitting in a cab, and arriving home late on a Friday night, too cranky and tired to do anything but veg
  • Taking most of Saturday to unwind and do errands around the apartment, then get all of my things ready again on Sunday to fly off at night
  • Then when I get back to the city I just left a day or two ago, I check into hotel room, hope I got a good room this time, unpack, force myself to sleep, wake up early for work, and do it all over again.

The lack of a commute is the best, plus most clients LOVE that I love staying in the city while the project is ongoing because I’m not rushing to leave on Thursday or Friday night to fly back, and I’m not coming in late on Mondays, and I tend to be less stressed and more laid back - plus I’m able to work longer if needed.

As for my husband, he loves that he doesn’t have to work (just wouldn’t be feasible), so he just travels with me, handles the driving, mapping and trip there and back while I sleep in the car, stays with me in the hotel the entire time, relaxes, works out in the gym, prepares my lunches for when I leave in the morning, and basically handle the little things that I don’t get a chance to – doing the dishes, laundry, etc. It really takes the stress off me, and I love having him around – especially if I get sick and I can’t take care of myself, he really helps take care of me when no one else can or will.

What annoys you the most about not having a permanent base?

Getting my mail and trying to make plans with friends.

I can get things sent (when I order online) to the hotel, but it’s whether or not my project will get cut short, or be extended, and I may miss my package if it doesn’t arrive in time, or gets lost. I also don’t have my regular mail – I’m so far behind in receiving wedding invitations, announcements, special packages that get sent to my family so I can pick it up when the project is over (in the next 6-8 months!!). And as for making plans with friends, I can make plans to be there for a birthday bash, but if I get on a project, I have to cancel and send my regrets, as I won’t fly back or be there for the next 8 months. It gets pretty tough, and I always feel like my friends and connections are slowly slipping away because I’m not there in person to connect with them.

Also, if you get a bad hotel (this is why I do thorough research before I book with them for the next 6 months), then you get stuck with no kitchen to cook in, no decent gym to work out in, and shoddy and/or rude service. For us, the best hotel so far has been the Marriott Residence Inn because they give you a full-sized kitchen, and a hearty breakfast! We still bring our own utensils, Tupperware dishes and kitchen stuff just in case.

How has this impacted on your financial situation?

It has impacted in ways I never thought possible at first, since I’ve essentially eliminated the two biggest budget drainers: Rent and Food.

This is what is covered when I’m on a project:

  • Shelter (hotel rooms)
  • Laundry (drycleaning and regular)
  • Food (I get a food allowance per day)
  • Travel up there (they pay for the flights, train tickets and/or car rentals)
  • My cellphone bill and long distance calling costs (as a mobile employee, this is only business calls and the actual plan cost is reimbursed – anything personal, above and beyond is not)

Our only permanent, fixed, recurring bills every month (not including debt or savings) is:

  • My husband’s car insurance
  • Our life insurance plans (automatically deducted from my paycheck, I don’t even notice it)
  • My husband’s cellphone plan

Our variable recurring bills are usually the basic things families need.

  • Toiletries (shampoo, conditioner) – I’ve really tried to cut down on this, I’ve grown an aversion to packing/carrying a lot of things, and I don’t need a lot of maintenance.
  • Food – if we go over our given food allowance which is rare, because I’m quite strict with how much we spend. Whatever is left over, is either put into savings or debt.
  • Needed Clothing & Shoes – Usually only underwear, or the odd sweater, or pair of shoes here and there. I am extremely careful about what I buy now. I don’t want to buy something and end up having to tote it around in our suitcase for the entire year and not use it. I really try and keep my clothing to the bare minimum because not only does it cost money to buy it, it’s a headache to keep having to pack something you don’t use, and it’s just more laundry to do on the weekends. This is also why I prefer thrift stores - it’s cheap and if it gets ruined, I can throw it away.
  • Entertainment/Electronics/Personal money – This is spent on attractions around the city we’re in, a new gadget (MP3 player for example if mine were to break), or anything we want but cannot justify as a “need”.
  • Retirement plans – I have one with my company and a personal investment account as well. This is about 21% of my take-home pay.
  • Savings plans – Bare minimum 15%, but sometimes I sneak this into debt repayment, if our emergency fund is healthy enough, and I just get the itch to clear our debt some more.
  • Debt repayment – Minimum of 37.5% of my take-home pay, but I generally put in 54% on average, since my expenses are so low when I’m on a project.

My original goal was to clear our $57k in education debt (I don’t have any consumer debt at all), in at least 5 years. So far, we’re down to $41k left right now, which I plan on reducing to $15k by the end of Dec 2008, if everything stays on track.

I know things will happen, situations may change, so I’m allowing until mid-2009 to get it down to $15k. I also keep a decent emergency fund (nothing extravagant, just a couple thousand), to handle things like having to buy a new car when ours finally bites the dust, or whatever else may arise.

What we’ve really managed to save on is not buying any of the following:

  • Home supplies (toilet paper, paper towels, dishcloths, towels, soap, etc – most hotel rooms have this available)
  • Furniture and home decoration (we don’t have a home, so there’s no point in picking up a gorgeous vase when there’s no where to put it)
  • Cleaning supplies (Windex, dish soap, cleaning solutions – the hotel cleans our rooms)
  • Home appliances (toasters, dishwashers, vacuum cleaners – everything is provided by the hotel)
  • Large electronics or toys (such as a plasma screen TV, or anything that cannot travel easily with us
  • Anything that doesn’t or cannot easily travel with us

Other notes

But if I’m off a project and I have to be in my ‘home city’ (where my main corporate office is located), then I have to pay for rent, laundry, food, etc, and go into the office daily. This is why I’m always so anxious to find the next project out of my ‘home city’, and be able to travel and live there – it also helps the company because they have a very eager consultant who always wants to be making money for the company by being utilized 100%, without any of what we call “bench time” (which is time we are not on a project).

Lastly, I should clarify that even if I’m not on a project and not being utilized by the company to work as a consultant, I still get paid bi-weekly; being on a project doesn’t mean I get paid any more, I get paid whether or I am on a project or not. When I’m not on a project, I make sure I do internal projects to help out the company, such as bids & proposals, and constantly scour the project listings to see what’s coming up so I can be on my next assignment ASAP.

Have you heard from anyone else whose done the same thing?

No. I think we’re the only couple so far (on the blogosphere anyway), that are doing this as an actual lifestyle. Most people have mentioned that they’re amazed, but for them, they (understandably) cannot handle not having all of their clothes and things with them when they travel, and/or need a permanent home to be at every day and don’t like to travel.

So far, it has been a fairly easy transition for us. We just see the hotel room as our home (not hard, most of the ones we try to stay in, are the size of small apartments), and we try and make it more homey like bringing along a gaming system and hooking it up to the TV and playing each other at night. We also do the basic chores like washing our own dishes, tidying, dusting, and the maids maybe visit our room once a week, if that – we don’t see the point in them coming every day because we are such long-term hotel guests.

I don’t know if we’ll do this for longer than maybe 5 years, but it’s sure a heck of a way to save a ton of money with as little expenses as possible, and still be able to live comfortably. It’s not for everyone but if anyone else out there does this, please let me know! I’d love to trade experiences.

Aug

21

investing in your own home?

Filed Under Featured, house, investment | 6 Comments

What is it about property that makes everyone think that its the ideal investment?

I was talking to some friends of mine the other day who said that they were thinking of moving to a bigger house nearby before house prices got too expensive. At the moment they live in a nice 3 bedroom house in a small town about 10 miles from the city that I live in. I asked why they wanted a bigger house, because I know full well that there are only the two of them, and that’s the way its likely to stay. The answer was, that a bigger house will be worth more money in a few years time (we’re supposed to be thinking about 10-20 years here) and so that will make them richer.

What are the problems with this? Well, essentially, the money is tied up in the house. To release it in 10-20 years time will need them to then move to either a smaller property, or one in a cheaper area. Once they’ve spent 10-20 years in large nice house, I think that psychologically, it would become a problem to downsize. They’re proposing a very large lifestyle inflation and I can’t see them wanting to move back down the ladder.

I suggested staying where they are and investing the excess money. I wouldn’t say that this was so much an unpopular suggestion, as that I may as well have said would you like to emigrate to Mars. I think that the concept of investing in anything other than property (they already have an existing rental property) is completely alien to them.

In the end, if financially and psychologically speaking trading up their house really is a good idea compared to investing the money, they should go for it. If they are just wanting a bigger house because they think it will be a good investment, and they haven’t considered any alternatives, I think that’s plain dumb.

Aug

20

eight ideas for saving money on books

Filed Under Featured, frugal | 16 Comments

My name is plonkee and I am a bibliophile.

I currently own quite a few books, including a large collection of children’s books (yes I am child-free). I am an absolute sucker for blurbs on the back of books, especially novels - to me many books sound a lot better than they actually are. If I could, I would have an entire room dedicated as my library (with one of those little ladders on wheels), I’m lucky to be a quick reader and so I could take full advantage of this.

Here are eight strategies that I use to save money on books and the order in which I use them:

Not Buying Books

1. Reading before I buy - whilst browsing in a bookshop, I pick up many books whose blurbs take my fancy and read the opening, the ending (assuming its not some kind of whodunnit) and a bit in the middle. This allows me to decide whether I’m really going to like the style of the book in question and stops me acquiring books that are rubbish. It also has the side-effect of generating for me a list of books that I do want to read.

2. Using the library - if I just want something to read, and I don’t fancy any of the books in front of me, I just go to the library and pick up a few there. This has the advantage of being pretty much free (as long as you return them on time), however there isn’t a great selection of non-fiction (my preferred random reading style) that can be taken out.

3. Acquiring other people’s books - people are often willing to lend me books. Some of my friends who read books more slowly lend me books to read so that I can see if they are worth bothering with. As I am known as an avid reader, people often offer me their unwanted books as well as lending me books that I have stated an interest in. I have also been known to win books in competitions.

4. Asking for books as gifts - I’m lucky enough that I get gifts for my birthday and for Christmas. I often use this to channel people into buying me books that I have had my eye on for a while.

Buying Books

5. Second hand books - if you like books apart from the most recent of best sellers, they can often be found cheaply second hand. Car boot sales and jumble sales are an excellent location for genre fiction, like sci-fi, crime or romance novels. Second-hand bookshops are great places to pick classic novels and quirky retro pieces (such as domestic science from the 1950s).

6. Discount bookshops - in my town there is an excellent discount bookshop that has a particularly large selection of science fiction, I can satisfy my craving at a third off regular book prices. These may not be the best books in the world, so I combine this tactic with no.1 above to make sure I’m taking home a book I will read. Discount bookshops are also a good choice for books as gifts, the ones near me have excellent selections of coffee table and recipe books for example.

7. Special offers - Waterstones, Borders and WH Smith quite often have special offers on books, like two for �10 or three for two. This works out in my favour if two or three of the books that I’m interested in are in the special offer, or there are books in the special offer that would make good gifts for someone else.

8. Comparison shopping - I use the internet and the high street to comparison shop books that I am interested in. I did this for the latest Harry Potter, which I wound up ordering from Amazon. In this particular case, I wanted to get it on the day of publishing and I didn’t want to have to buy something else to get it cheaper e.g. in some shops you could get it for �1-�2 less than I paid, but you had to spend �10-�15 on something else.

What else could I be doing to reduce the cost of my books?

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