October 28, 2013

Our Goals and Plans (The Grand Dream, part 2)

The recap from The Grand Dream, Part I:

We have a dream, and we are working to make it a reality. The goal is to save enough money to buy a small piece of land, build a house, and eventually live a simple life taking care of our family, the land and our community… mortgage free and with very little outside income. Here is how we plan to make it happen!

 
Some day...a nice piece of land for sale near Hayden, ID.

First, a disclaimer

I know that in the US there is a prevalent taboo about discussing any issues pertaining to money, especially in regards to talking about salaries and wages. While I understand that there may be many good reasons for this custom (such as the intention to avoid causing resentment and/or embarrassment), I also believe that it can also cause unintended harm. When people feel unable to discuss money, they are unable to learn from each other. We would never try to teach someone how to cook without telling them the amounts of each of the ingredients that you use, yet we often expect people to learn how to save, or invest, or to make important financial decisions without giving them specifics about how other people have made these decisions in the past.

For the story we are trying to tell, I believe that it is necessary for us to talk frankly about our finances. Otherwise talking about how we are are saving to buy a homestead and to live mortgage free would be vague and less than instructive.

So consider yourself warned...discussions of salaries and savings ahead!

 

Our timeline and benchmarks

Now that Nathan and I have a dream that we are working towards we have also laid out a timeline to reach that goal. It includes both financial benchmarks and concrete steps that we need to take to stay on track. Below are our mini-goals to help us get there!

 

2011

Kristy's Salary: Reed College Science Outreach Coordinator, $30,000
Nathan's Salary: Part-time Natural Resources Technician at Tualatin Hills Parks & Rec, $12,000

I am including our salary information, so that you can get an idea of how much of our income we are saving. (Up to 60% at times. We aren't exactly investment bankers... the education and resource management fields aren't for those looking to get rich... so we have to save a pretty high percentage to make any progress on our goals. If you had a higher income, you might not need to put such a large percentage away). Our method might be a little more extreme than most people are willing to take on...but we have quite a few trick these days that allow us to save without feeling like we have to sacrifice too much. In future posts I will discuss just how we are able to save so much of our income.

Accomplishments:
  • Paid off student loans!
Next Steps:
  • Started Emergency Fund, (Goal $15,000)

Even though we hadn't formally started to work towards the homestead in 2011, I am grateful that we made some sound financial decisions that made it much easier for us to start. I had my student loans paid off almost within a year of graduating (due in large part because I only had $10K in debt and I was able to pay about $5K with an education award I earned after my AmeriCorps service). I am also glad that we started contributing to an emergency fund early!

(Note: both Nathan and I were also regularly contributing about 10% of our income to an IRA at this point, and I soon had a 401K through my employer as well; however, I don't plan to spend much time discussing these investments...but I am sure that I will be glad of them when I am older. I imagine even homesteaders want to slow down eventually!)

 

2012

Kristy's Salary: Reed College Science Outreach Coordinator, $30,300
Nathan's Salary: Restoration Crew Member at Ashcreek Forest Management, $28,000
Accomplishments:
  • Opened up an online high-yield savings account for the emergency fund..
Completed Steps:
  • We started to make list of possible new home communities and visited Sequim, WA

This was mostly a year of gardening and learning. We kept putting away money in our emergency fund, and I put together a more detailed budget for us, but we didn't have a specific financial plan beyond that. I read Mortgage Free! in the fall of 2012...which is when we started to crunch the numbers and to lay out a plan.

 

2013

Kristy's Salary: Reed College Science Outreach Coordinator, $30,300
Nathan's Salary: Field Representative Trainee at Ashcreek Forest Management (until Sept), $20,000 then a Botanic Technician at Portland Parks & Recreation (from mid-Sept), $13,500
Accomplishments:
  • $15,000 Emergency Fund Completed
Next Steps: Started a Land Fund, (Goal $45,000)
Completed Steps: 
  • Set-up a budget, timeline & goals to realize our dreams! Started cutting expenses.
  • Narrowed the list of potential home communities and visited Bonners Ferry, ID.
  • Started this blog to document the journey!
This year we started getting serious about the homestead. We have started to break down what we need to do into tiny steps (including breaking down how much we need to save into smaller, & slightly less intimidating funds) and started to follow through on those steps!

 

2014

Financial Goal:
  • Complete Land Fund ($45,000) by December for Nathan's 30th birthday.
  • Start the House & Homestead Infrastructure Fund, (Goal $65,000)
Next Steps:
  • Decide which new community to call home.
  • Begin investigating possible home business ventures.
  • Begin land search for Nathan's 30th birthday.
  • My parents retire...convince them that the homestead would be a nice place to retire! (We are also working to convince Nathan's parents by the time they retire).
I based the idea of splitting up our funds from the book Mortgage Free! Before reading this book, I just planned to continue saving money until we felt we had enough to buy some land, build a house and move. However, as the author pointed out, your money is not nearly as vulnerable to inflation and low interest rates if you put it into land or other assets. So now the plan is to buy/build things in tiny steps as we save the money.

 

2015

Next Steps:
  • Continue saving...
  • Buy land (if we find the right place!)

 

2016

Next Steps:
  • Make frequent trips to observe the land in each season.
  • Design a homestead plan (including plans for a tiny starter house project)
  • Begin small homestead projects (building up soil fertility, adding/repairing fences etc.)
We are intrigued by the principles of permaculture. We especially like the idea of taking the time to plan and design the homestead and all of it's elements based on the land's characteristics.

 

2017

Financial Goals:
  • Complete House & Infrastructure Fund ($65,000)
  • Start First Year Cushion Fund ($15,000)... a fund to live on until income streams become more reliable
Next Steps:
  • Build a tiny practice starter house
  • Start small infrastructure projects.
The idea of building a small starter house is another one from Mortgage Free! It will basically be a scaled down version of the house that we hope to build someday... largely so that we can learn from our mistakes before we scale up. Also, by starting with a small house we can hopefully build the structure in a shorter amount of time before we are able to live full time on the land. Once we move to the homestead, we will live in the small house for a year (or two) while be build up the homestead and build the permanent house. Once we move out of the starter house, we hope that it can be rented out as an additional income source (perhaps as a vacation cottage).

 

2018

Financial Goals:
  • Complete First Year Cushion Fund ($15,000)
Next Steps:
  • Quit our jobs and move to the homestead!*

 

2018 and beyond

Next steps:
  • Build up homestead (the adventure begins!)
  • Begin building permanent house
  • Build additional home businesses and income streams

*P.S.

But wait you say, the only reason any of this is even maybe possible is because you don't have kids. Yes, it is true that it will help that we don't have children. I know that we could not save as quickly if we started a family before we moved to the homestead, but assuming we have any say in the timing of these things, we hope to begin to grow our family in the Spring of 2018...shortly before moving to the homestead...as if one big life change wasn't enough in a year right? Not only will we be trying to live off of a drastically reduced salary, but we might be trying to do so with a new member in the family...we are quite possibly insane, but at least we won't have to pay for child care!

4 comments:

  1. Hi Christi - great blog, I 've already read parts 1 & 3 ....I like your & Nathans plan and your insight - my thoughts exactly as I read your *PS about how children change the picture .... your acknowledgement of your say over "timing" and your abtility to adapt to the unexpected will serve you well . Having an emergency fund is impressive. Loved all of the picts too - I've missed you & the Shultes'. You are much better at planning than I was at your stage of life .....as our own family story continues to unfold I'm often reminded of the humorous reflection "do you know how to make God laugh?" P.S. I think you are right on in showing the financials to make this all "real " and helpful to those on a similar path.

    ReplyDelete
  2. Delightful blog. I doubt it will all go according to plan, life usually doesn't. I don't know if you read how we moved to our place. http://freegreenliving.blogspot.ca/2007_10_01_archive.html

    ReplyDelete
    Replies
    1. Glad that you checked us out. What is the saying... life is what happens while you are buys making plans. This current vision of the plan is just one in a series of ever changing plans for us... and I imagine that things will turn out very differently from what I now imagine. But I find that it is easier for me to work towards my goals when I have a plan, so I keep making them... even if I inevitably have to change them later. Thanks for sharing your story of moving to the Kooteneys. I hadn't made it back quite that far yet...

      Delete

Note: Only a member of this blog may post a comment.

Related Posts Plugin for WordPress, Blogger...