The Year of Living Frugally

(surfing is frugal)

Over the the month of January, I’ve had time to think about and refine my original idea. The premise is still the same – I can not continue along my present path.

Something needs to change.

I am currently finishing the task of paying off credit card debt, and working paycheck to paycheck with very little savings. My job takes most of my time and energy. I am renting too much house for just myself and my dog.

I am only one unfortunate event away from poverty.

Actually, most of us are only one unfortunate event away from complete poverty. We are not as safe as we try to make ourselves feel. This statement is not meant to make us live in fear. Quite the opposite – we should not let fear keep us from living the lives we want to lead.

In the face of all this uncertainty, I find it very difficult to work 40+ hours a week just to attempt to stay afloat. I can not buy into the system that says I should trade the next 20-25 years of my life working like a dog (and putting off the things I feel are important) – just so I have a chance of having a pension when I’m too old to do the things I find enjoyable anymore.

I’m in no position to walk away from it all today… and maybe walking away from it all is not the answer I’m looking for. That is what this year – this project – is all about. One year from now, I should be in a position to take a year to travel – or perhaps keep my job (for now) and buy a rustic piece of land and set up a homestead. These may seem like two completely unrelated outcomes, but they are similar in a way. Both options are about gaining more autonomy over the way I live my life.

I currently spend most of my time working for other people – who pay me a fraction of the value I create – so I can pay someone else’s mortgage on the place I live in and try to maintain the debt that I’ve incurred. This cycle started when I paid my way through college and grad school, and escaping this debt cycle is not a simple process.

After much thinking, there seems to be five categories I want to explore over the next year. these are:

Personal Finance

Enthusiastic frugalism. I need to pay off my debt and get my personal finances under control. I also need to put myself into a position where I do not need to be a slave to others. Over the next year I will chronicle my debt payoff and ways to achieve a state of happy frugalism. Is it possible to save enough money in one year to pay off debt and have a down payment or a year of travel? How much does my stuff really cost me?

Travel

What is the financial realty of a year of travel? I have quite a bit of research ahead of me on what it would really take to spend a year driving the coast to Chile and back. This section is the most enjoyable – researching and planning a trip brings me much happiness. What is the cost of the year-long drive? How much cheaper is it to not have a vehicle? Just in case, how much would an around-the-world year of travel cost?

The Economy and Real Estate

The value of money and employment, debt and real estate is largely determined by forces outside of our control. However, if we study and follow the money (or is it “follow the moneyed“), we have a reasonable chance of predicting what will happen next. Does anyone think it would be a good idea to purchase a Humboldt County, California house that is only priced 5% off its bubble price? What about buying a year from now? Is there a reasonable way to invest and/or save right now – or would it make more sense to pay off low-interest student loans first? What will be more valuable over the next five years – cash or assets? How about – dollars or Euros?

Employment

The golden handcuffs. I have a state job with great benefits and a pension – but not the greatest pay (compared to the work I am doing). Is it worth it in the long run? Will the pension even be there in 20 years since a good chunk of their assets are tied up in mortgage-backed SIV’s? Is self-employment a better option? How about overseas work? Are there ways that a year of travel could actually make you more employable?

Health and Fitness

Just the process of the “traditional” job and work-week is unhealthy. I’ve hardly surfed during the last 2 months – because there is not enough light before or after my work day. Besides that, wintertime brings serious surf here. It is not a good idea to paddle out into bigger surf if one is out of shape. Weekend warriors take beatings in the winter surf here. The 40-hour traditional schedule is not very compatible with a serious pursuit of surfing. Is it possible to avoid “old man disease” and continue to surf actively?

It has begun.

I have just submitted my 30-day notice to leave the house I’m renting. For my first step in Personal Finance – I now have one month to downsize.

(continue on to Baseline Budget)