For our marketing business, I have backup plans for our backup plans. I believe there is a path to success, no matter what.
But let’s say something happens. Let’s say Garrett and I have been out of the traditional workforce for a year or two and we fail or we have a personal crisis that forces major change. What do we do to weather the storm so that we can continue to travel?
Get our household budget spreadsheet that we use to track our spending. (You'll also get our 7 steps to financial freedom and monthly updates!)
How do we ensure we can continue to live life on our terms? Since we’re personal finance nerds, we’d start by taking a look at the finances.
1. What do we need to do to trim our spending?
While we’ll start our new life in 2019 spending only the necessities, I imagine we’ll experience some degree of lifestyle inflation relative to the frequency at which we travel. Since we’re in favor of slow travel, I don’t imagine we’ll be hopping on planes every couple of months to head to Europe.
|Automotive Expenses / Repairs||$2,200||oil changes|
|Automotive Expenses / PennDOT||$72.50||vehicle renewals|
|Automotive Expenses / EZ Pass||$210||tolls|
|Automotive Expenses / Fuel||$2,400||gas|
|Personal/Family / Clothing||$0||still have too much clothing|
|Personal Family / Supplies||$1,200||varies sundries, like soap, toothpaste|
|Personal Family / Personal Care||$240||(4) haircuts|
|Utilities / Electricity||$1,200.50||small house is 100% electric|
|Utilities / Water||$695.79||small house water and sewer bills|
|Utilities / Garbage||$212||small house curb-side service|
|Utilities / Phone||$0||billed to business, deducted later|
|Insurance / Home||$426||small house|
|Insurance / Automotive||$956||Dennis insurance|
|Insurance / Life||$500||life insurance x2|
|Health / Medical||$6,000||healthshare (details in a future post)|
|Health / Fitness||$0||life is fitness|
|Rent / Storage Unit||$0||taking the teardrop camper with us|
|Pets / Supplies||$1,200||cat food, litter|
|Pets / Vet||$500||vaccines, flea & tick prevention, vet visit|
|Taxes / School Property||$1,457.53||school & property taxes|
|Taxes / Federal||$0||TBD|
|Taxes / State||$0||TBD|
|Taxes / Local||$0||TBD|
|Entertainment / Restaurants||$0||already spent plenty on this for one lifetime|
|Entertainment / Makerspace||$660||Make717 membership|
|Entertainment / Travel||$2,400||camping|
(Though we’re traveling, we’ll have house sitters occupying the house and taking care of our cats until we return in the spring, so we pay all the usual bills.)
If our life falls apart, we’ll look at the initial travel budget and strip away any excess while we figure out what’s next.
2. How much do we have invested?
Since we will NOT be withdrawing from our retirement accounts until our late 60s, the question about how much we have invested is a question of how much money we have in our taxable brokerage account for financial independence and a series of savings and checking accounts.
If we had to liquidate everything except our SEP IRAs, how far could we make it on the streamlined budget? Knowing how much runway we have to start anew will be helpful, which is why we focused on our fully-funded lifestyle change first.
3. How much revenue are we generating?
At this stage, we’ll figure out how much money is coming in and how much of a gap we have (if any) between our income and our budget. If we don’t have to liquidate our brokerage account, we won’t.
4. How many hours do we need to work to cover the gap?
If there is a gap between our passive income and our travel budget, we’ll work. Here are some of the encore careers we could consider: consulting, contract work, part-time jobs, getting commercial driver’s licenses,* or temporary full-time work.
*Can you tell me another job that exists everywhere that I could get after six weeks of schooling?!
5. Could we return to Lancaster?
If we can’t travel any longer for whatever reason, like injury or illness, it might be time to return to our “tiny” house in Lancaster. Our small house is affordable to manage on one part-time income. South central PA is actually pretty awesome.
We’re so fortunate to have so much farm-fresh food in south central PA. Thank you to the Horn Farm Center for offering a CSA that makes it easy for us to enjoy fresh veggies and herbs. 😊 . . . #hornfarmcenter #farmfresh #farmfreshveggies #communitysupportedagriculture #csa #yorkpa #lancasterpa #frugalliving #frugalmeals
In a situation where one of us is ill, the other can work to cover the gap between dividends and our household’s Bare Bones Budget for stationary living.
Failure isn’t the end of the world.
If we fail, we fail. We’ll have learned something in the process so that whatever we do next, we’ll be better informed.
If we have a personal emergency or illness, that’s a different story. I don’t know that there is much to do beyond maintaining health coverage, life insurance, and self-insuring by way of eating well and exercising. A lot of stuff is out of our control, so I don’t know that worrying about what might happen in the future is a healthy way to live.
What would you consider doing to prevent or mitigate failure?
P.S. Close to paying off a mortgage? Wondering what to next after you paid off your mortgage?
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