The Frugal Siblings

The topic of stay at home moms is one that is not discussed enough. In current times it is just assumed that both parents will work. In the “olden” days both parents would work but in different ways. Pa would go out on the farm and do farm stuff and Ma would stay home and sew cloths and cook and clean. It is not until recent times that we have found enough time savings that it has even become possible for the mom to even be able to leave the house to get a paying job. Just because something is possible does not mean that it should be done. My wife is a stay at home mom. As I have said to her many times she has the harder job. Taking care of a child is a ton of work. Through some kind of crazy math taking care of 2 kids is like caring for a whole army. I really do appreciate all that my wife does for our household. My wife is more than the sum of her parts but because I am a numbers nerd let's break down what her value as a SAHM (Stay At Home Mom) is. (Side note: Honey I am rea...

        My husband is an IT recruiter. He is very good at his job. After college he got a job with a private recruiting firm. He worked there for a about year . Then we decided to move to Colorado and he got a corporate job. Two years into that he got recruited for a 20k increase to work a contracting job. After we got married and were starting a family I pressured him to find a non- contract job for the benefits. He got a dream job as a trainer for new recruiters. His first day was when I was 6 months pregnant with our son. Exactly 6 days before my scheduled c-section and around 3 months with the company my husband got laid off.     We did not have an emergency fund.    I would not change the time my husband and I got to spend with my son and how he was able to help. It took 4 months for my husband to find a job that was right for our new family. We had 12k in our bank account. By the time he got his new jo...

In the first post I discussed how much money you need in your emergency fund. In the second post I discussed the standard places to put your emergency fund money. In this post I will discuss some alternatives to the traditional emergency fund. A Roth IRA is a type of account that allows you to invest after-tax dollars and not pay tax on your earnings. They can be a great deal if you are starting from a lower tax base (IE just starting your career) because it can save you lots of money in taxes. One of the things that makes Roth IRAs so powerful is you are allowed to withdraw the principal (the money you invested but not the earnings) at any time. This comes in handy for an emergency fund because you can fund a retirement account and have some money set aside in case of an emergency. It is the classic two birds with one stone. The money should be invested conservatively. This could be bonds or index funds. The best place to open an investing account is Vanguard . They have a gre...

Note: No links in this article are referral links. These are exclusively for information. I don't make any money if you click a link. I truly believe that these are the best options at the time of writing. Once you know how much you need in your emergency fund the next question is where to put it. The way to think about how an emergency fund should be laid out is to place money depending on how quickly you might need it. All emergency money should be immediately accessible but some places are a bit harder to get to than others. This can be a good thing because it can create a speedbump to prevent unnecessary access. The first place to put your money is in your day to day checking account. I always have an extra 1 month's expenses in my checking account. This gives you an initial bit of cushion that can cover small emergencies and give you a bit of a buffer in case you don't quite do the math right when paying your bills. When selecting a checking account I look fo...

The purpose of an emergency fund is to have some cash available in case something unexpected happens. Something unexpected could be losing a job, having a car break, or losing your phone. An emergency fund should not be touched for things that are not emergencies. Things that are not emergencies are christmas, routine auto maintenance, or any other bill that can be anticipated. With this in mind we can now think about how much we need for our emergency fund. When measuring the size of an emergency fund instead of thinking in dollars needed, I think about how many months of expenses I need. For example if I need $3,000 a month to keep the lights on and pay the mortgage (if you have one) then 6 months of emergency savings would equal $18,000. The best way to approach the idea of an emergency fund is to honestly think about what emergencies are likely to come up, how hard they will hit you in the wallet, and how likely can you just pay for it out of your day to day cash flow. Losing ...

Listen, I don’t do numbers. As you may have read by now, my brother and I are a good balance, like yin and yang. I like colors and flowers. He likes numbers and metrics.  So when it  comes to tools to help benchmark your journey to FI, I don’t tend to get them fully. But what keeps me motivated on my journey? There has to be little wins because the road can be long and it is very easy to fall off the bandwagon of freedom. My husband and I opened a Vanguard account a few months ago. We sold our first home and had a lump sum of money we were not sure what to do with. This is when I asked my brother his suggestions and the rest is history. They say to pretend you don’t have the money in the account and to just “forget” about it. I am not good at forgetting. I like to look at the account every few days and watch it grow. It’s like raising a child and its name is Van. Van is small at first and needs lots of attention, but does not contribute a whole lot. You research scho...

   The Journey to FI is a very long one. Depending on your savings rate it could take many many years. My target savings rate is 40-50%. At that savings rate I have about 17-22 years until I am FI according to the math. With that in mind the goal of being FI is to have your money work instead of you. Instead of just stumbling along I have a trick to try and encourage myself to save. I call it the 2080 method.    The origin of 2080  starts at a work day of 8 hours, a work week of 5 days, and a work year  of 52 weeks. If you do the math it works out to 2080 work hours a year. Multiplying your hourly wage by 2080 will give you approximately your yearly wage or if you take your annual salary and divide it by 2080 you get your approximate hourly wage. For example if you make $15 an hour working full time your yearly wage is about $31,200 (2080*15). If your salary is $40,000 per year then your hourly wage is about $19.23 per hour ($40,000/2080). ...