Welcome back to another installment of Financially Audacious! I’ve got an amazing interview to present to you with my friend Maggie from Northern Expenditure. An incredible theme is intertwined in this interview that she inspired me with: financial freedom and savings leads to possibilities. What if all of your hard work at saving could allow you to create possibilities that you’ve always wanted to discover in life? You’ll learn below how Maggie & her family work together to reach their goals and uncover what possibilities lie before them in doing so (which are amazing if I do say so myself). Maggie would like to consider herself financially ‘aspirational’ – but to me, I think she defines audacious just as well! Find out why below. 🙂
Tell us about where you’re from! What’s it like, do you want to stay there, how does where you live affect your personal finances?
I’m originally from Oregon (go Ducks!) and my husband, Mr. T is from Seattle (go Cougars!), but we’ve lived in Anchorage, Alaska for six years now. Alaska is a crazy, magical place and I am constantly floored by the beauty that surrounds us up here. It’s hard to sum it all up in a few lines, but here’s a list of a few of my favorite things:
- Northern Lights – You’ve probably seen pictures or videos of the Northern Lights, but they are such a strange and beautiful phenomenon in person. During my first big Aurora experience, I told Mr. T that if I didn’t know what was happening, I would be nervous. It’s haunting. The lights pulse, they dance, and they disappear. And they’re unpredictable. It’s so exciting to look out the window before bed and see that they’re out. I wish I could guarantee that coming up in the winter will mean you see them, but that’s not possible. Living here allows me to see them periodically and I love that.
- Moose – About once a year, we get a moose that hangs out in our yard for a while. But in the winter especially, we see moose all over town. They cross highways and stop traffic. I love it. They’re giant. They can run super fast. And you don’t want to get too close or they’ll charge. Because of that, “moose in the yard” is a legitimate excuse for being late for school or work.
- Scenery – Within 45 minutes of our house, we can watch the belugas migrate through the inlet, see Dall sheep hiking up rocky cliffs, spot several glaciers, waterfalls, mountains, forests, streams, and rivers.
- Salmon – Each year, as an Alaskan resident, we are allowed to put a giant net in the water and catch 65 salmon for our family for the year. It’s hard work, but sometimes we can catch two salmon at a time, and usually we can catch enough salmon in two days to feed our family weekly for a year (we really only need 25-35 salmon). I can’t take delicious fresh-caught Alaskan salmon for granted. The kids love it and every single week as I’m eating my fillet, I think: “food does not get better than this.”
Living in Alaska impacts our finances drastically. On the plus side, we get the PFD (permanent fund dividend) every year. The permanent fund is an investment fund set up by the State of Alaska from oil and other revenues. The dividends of the fund are paid out to every Alaskan each fall. This year, our family of 5 received over $10,000. Anchorage also has no income or sales tax. The downside of living in Alaska is that things cost more money up here. And there are no predictable sales cycles on food. On top of paying more for food and gas, leaving the state costs a lot of money. Since we have no family in Alaska, traveling out of state is important for us. We are able to use the PFD to throw large amounts of money at our mortgage and our Roth-IRAs each fall, but we also have to save up money throughout the year for travel. Our plans involve staying here for at least the next five years because we love the adventure living here provides our family. Beyond that, we’re open. Maybe a year in Europe with the kiddos? Maybe abroad? If we settle, we’re happy to stay in Alaska.
Give us a little run down – have you always been a saver? What’s been the progression of your money past, present & future?
Mr. T and I were raised by successful small business owners. From our fathers, we learned the possibilities saving money provided. In middle school, my dad would give me $3.00 for lunch every day and I would bring home $0.80 and put it in a jar. By the end of the year, I had over $100 just from saving lunch money change. That year really gave me the itch to save. I saw how much even a tiny amount saved could become (without even investing it!) and I wanted to do it more! Mr. T and I were able to graduate from college debt-free and survive 10 months of unemployment during the Great Recession without using up our savings by living in my parents’ beach house and selling things on eBay. We didn’t make a lot of money (far fewer people were buying things on eBay during that time), but it became a game to see if we could make enough money for the next bill due. Car insurance in 2 months? Lets get selling! It was a great exercise for us and when Mr. T got a job in Alaska, we were able to use our maintained savings as a down payment on our house. After that, we stagnated. We saved. We didn’t do dumb things with our money. But all of a sudden, we made way more than we ever made before and we let some lifestyle inflation set in. We were saving, so what was the problem? After a couple years of this, I would look at our end of year statements and think: “Where did all that money go?” We had a “budget” before, but that basically meant that we stopped recording things once we hit our “limit.” We just stopped tracking it. The first thing I did was start actually tracking every penny. I couldn’t set a good budget if I didn’t know what we were actually spending in each category. And I opened Roth-IRAs for Mr. T and myself. This started the ball rolling to the possibilities of what harnessing real savings could do for us.
Financial freedom and saving leads to possibilities. What does this mean to you & your family?
This is the key to finances for me. If you don’t realize that you can do anything you want if you save enough money to do so, you never start saving. You can literally do anything you want. For us, that means doing our own thing. Mr. T is an artist/craftsmen of sorts. While he loves the flexibility his job provides (and the six weeks of vacation!), he doesn’t love the daily minutia it involves. He would love to be able to do his own thing during all of his hours. But we’re also not real risk-takers, so saving enough money will allow him to explore, create, and experiment with projects without worrying about making money. I work part-time from home as a researcher in behavioral economics, but I’m primarily a stay-at-home-mom to my three kids. I want my kids to have an international mindset. I want them to experience other places, make friends in other countries, and realize that people everywhere are lots the same and lots different and that’s what’s awesome. No one is “right.” Having money and freedom to travel allows us to decide what is important to our family and be able to do it!
For some people, saving for major financial goals can be difficult to stick to. How do you maintain the momentum to keep working towards your financial goals?
The key is knowing what you want. It’s visualizing it in detail and realizing you can get there. When I want to buy something, I think “would I rather have this in my current life or not have this and get to my future life faster?”
Have your financial goals changed over time?
When I first tried to visualize our financial goals, I took a picture of a nicer, bigger house that is pretty close to ours and taped it to my bedroom door so that I saw it every day. It didn’t work. I thought about that house a lot because I saw it all the time, but it didn’t motivate me. I eventually realized I didn’t want that house. It meant we would be tied down. It took Mr. T and I awhile to realize what we really wanted… freedom to do what we wanted to do and show our children the world. We were stuck thinking about our goals in terms of what was “next” in the usual progression. We get a bigger house. But we don’t want the usual progression. When we realized we didn’t have to follow anyone else’s rules for our goals, we were finally able to set ones that motivated us because we wanted them!
Give us some tips! What works best for you to reach financial freedom (saving, budgeting, investing, etc.)?
- Define Goals Clearly – If you can’t picture yourself doing that thing you want to do (ie: living in a big house, traveling the world with your kids, etc.) very clearly, you won’t be able to save for it. Visualize it. Dream about it. Plan for it.
- Automate Savings – If you never have money in your account, you’ll never miss it.
- Track Every Penny – If you don’t know where you spend every penny, you won’t have a good sense of where it goes and how to stop it from going there.
- Money Tells a Story – I’ve realized in tracking all my expenses that money tells a story. I want my story to be more than stupid stuff. I want it to tell a story of someone that cares about family, experiences, and others.
- Index Funds – Investing can be scary but Alyssa is great about breaking it down. The key is to just jump in and do it. And index funds are an easy way to do that.
Have you introduced your kids to money management? If so, what are some of the main themes you’ve taught?
I don’t give my kids allowance. I don’t want to teach them they earn money by being alive. Instead, they have jobs they are required to do without pay as a part of this family and this house. If they are able to do those without whining, they can be hired for extra chores on Saturday for money. I treat it like a job interview. If they can’t do their jobs during the week without complaint or if they didn’t do them well (reasonably, based on age), they cannot be hired. They also have specific goals for which they are learning to save. They have pictures hung in their rooms to remind them.
Do you think anyone can be financially audacious?
I absolutely do. I just don’t think I’m there yet. I prefer “financially aspirational!” 🙂
Give us one quote/song lyric/anecdote that you like to live by!
I remember in middle school, I first heard the Carole King song “Beautiful” and I thought it was amazing. I still like it. The whole song is great, but the first line goes: “You’ve got to get up every morning with a smile on your face and show the world all the love in your heart.” Life gets hard and things are complicated. The point is that we can’t be someone else. We can only be us, in our current situation, and we can make the most of that. And if we try to get up each day and remember what’s really important, we’ll keep the right perspective.