New Road Map to Financial Integrity

Frequently Asked OF FI'ers

created by Ann Haebig; please feel free to add your own!

 

There’s a variety of techniques. We eat a snack before meeting friends for dinner and just order appetizers. We drink sodas instead of mixed drinks. We pass up expensive gatherings and offer low-cost alternatives, inviting our friends over for potlucks instead of dinners out. We may go for walks or play backyard games instead of taking skiing trips or attending sporting events. We also find ways to attend things at a discount – you can see many events for free by volunteering. And if we can’t find what we’re looking for, we have the time and energy to create it!

 

Some of us are still working and are covered under our employers’ plans. Others have found individual or state-sponsored plans and pay the premiums for those themselves. Some do go without insurance, though we can’t recommend this. If you’re amassing a large amount of capital to produce an income with, not carrying insurance puts your capital at risk. One mishap could wipe out years of saving.

 

The answers to this question vary whether or not you’re following the program. If you’re supporting a family (through outside employment or providing child care) then you should probably carry life insurance. If you’re providing a service such as a rental home then you should probably carry liability. Car owners may also want to carry an umbrella policy or high liability coverage to protect their capital.

 

Monday morning. Or the threat of returning to it for those of us who’ve left paid employment. The freedom that we gain by not needing things and thus being able to work in lower paid positions or part-time. The knowledge that by simply spending less, we’re helping the environment. The ability to give back to the community some of the time and money we’ve saved. That golden ring of leaving paid employment.

 

In a word, no. That’s not the point of the program.

The more complex answer is that some of us may take advantage of programs for low-income people. Not everyone thinks this is ethical. Some feel they have paid enough tax in their years of high-income work to make up for their using these programs – and the numbers may support them. Compare 28% tax on $100,000 for 15 years to 15% tax on $37,500 for 40 years and you see the higher income paid almost twice as much tax, despite earning the same amount. Note also that some programs pay no matter what the recipient’s income or assets – such as social security. YMOYLers come in all stripes, however, the book does not promote use of public assistance.

 

We live in smaller spaces, we share spaces, and we don’t rent in the most expensive parts of town. We take advantage of the plethora of free and cheap things to do in a city – discount museum days, free concerts, lots of people to get together with, and just being able to enjoy people watching.

 

Some of us do. There are many ways to live cheaply. Some may grow food, others purchase their food in bulk. Many have found it’s cheaper to buy clothes in thrift stores than sew their own.

 

The same way those who can’t afford a car do: we walk, we ride bikes, we take the bus. We may rent cars for weekend trips or belong to a car-sharing program.

 

Often by living in smaller spaces. Another way is to live in a less expensive area or share a larger dwelling. Some of us even live on boats or in RVs, having gained the freedom to travel by not needing a job to provide income anymore.

 

Not enough to spend time working for it!

 

Most folks find themselves so busy after “retiring” that they can’t imagine how they ever found time for work. Some folks find there is an adjustment period, but who would choose to spend more time at an unfulfilling job simply because they couldn’t think of anything better to do? And if you like your work, why quit? The program’s about creating the opportunity to choose what you do, not about retiring early.

 

Many of us find that skimping on food leads to poorer health and more medical expenses, and thus doesn’t save money. Many of us do enjoy low-cost food we prepare ourselves such as beans and rice. Others get enough enjoyment from more expensive foods that they spend more on food than the average person. It all depends on what’s important to you!

 

Some don’t find the time. YMOYL doesn’t require complete self-sufficiency. 

Every task takes a certain amount of skill and time. Some tasks we enjoy, some we find neutral, and others we find unpleasant. Given a fixed number of hours in the day, the trick is to weigh which tasks are worth doing oneself, and which are worth hiring out. The more expensive it is, the more sense it makes to do it yourself. The more often the task must be done, the more sense it makes to learn to do it yourself. Training is an expense as well – it probably doesn’t make sense for many of us to take the required classes to become one’s own realtor. However, if you can learn enough to do your own taxes, that’s money saved every year. And for heaven’s sake, if you find a particular task unpleasant enough that you’d rather spend the time working to pay someone else to do it, then hire it out! 

Some in high-paying professions find that their real hourly wage is high enough that the numbers usually show it would make more sense for them to work and hire everything out. The problem is we aren’t built to do one task and one task only. If you’re tired of sitting at a desk, cooking a good meal or fixing a leaky faucet can be a nice change.

As to making the time, we have no secret formula. Cutting back on TV increases available time and decreases exposure to ads that create false desires for unnecessary things. Some YMOYLers cook large batches of food and freeze it so there’s always something ready at home. Wearing clothes more than once before washing reduces the amount of laundry to be done and extends clothing life, as well as saving water and energy. One big step that can be taken is bring work and home closer together, to reduce commute time. More tips are available at flylady.com.

 

Those that ask this question are usually looking for confirmation that they don’t make “enough” to make the program work. Done correctly, the progarm will decrease spending and increase savings for all income levels – unless you are already spending exactly in alignment with your goals and values. If you calculate that FI3 would be as far off as normal retirement for you, the question is, can you afford not to work the program?

 

Of what? Many parents take an interest in YMOYL because they want to find a way to stay home with their children. Children, when asked, usually answer they’d rather have more time with their parents than another toy.

 

One survey found the average time spent by those who regularly review their finances is about an hour a month. Those who didn’t review finances regularly actually spent more time on them. In any case, the increased peace of mind is worth every second spent with a spreadsheet or bank statement.

 

Again, the answers are as varied as those who choose to follow the program. Those with children usually observe the holidays in some form, because they find it enjoyable and worth it. The vast majority of us spend less than average on gifts. Many others forgo gifts entirely and simply spend the time with friends and relatives. Holidays are about community and people, not spending and things, and that’s where we focus our efforts.

 

Different people come to different compromises in this area. There are many “triple-win” scenarios where one’s finances, the environment, and one’s health all benefit; for example, if you choose to walk instead of driving a car, your health benefits, you save money, and you reduce your environmental impact. Other areas find us spending more, but getting more benefit from our spending – for example, by using organically grown food we improve our health and save money on doctor’s bills in the long run, as well as eliminating our share of pesticide use.