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episode 42. Spherical living

In this episode, we chat about the joys of having no weekend plans, Apple TV, and delicious desserts.

In Money, we offer a snapshot into our bank accounts, giving you all our balances down to the dollar as well as where we're at with our major savings goal (you can see a breakdown of our budget here). And we chat about shrinking our 'sphere of living,' trying to minimize the distance we have to travel to get to the places we need to go day in and day out.

Finally, in One Big Thing, Chris chats about Warren Buffett and his incredible bet with a hedge fund manage proving definitely that passively managed funds are the MAJOR winner against actively managed funds (you can learn more in this Forbes article). And Kelsey talks about how enjoyable it is to let Facebook fade into the background of life.

5 responses to “episode 42. Spherical living”

  1. Shawn Avatar
    Shawn

    Hi!Thanks for sharing your finances – it’s really helpful. I was wondering what your “snapshot” looked like at the time you decided to buy a house. Was it enough? Would you do it differently if you could? How did you know you were at a place where you were ready to buy? Anyway, I know this isn’t the phase of life you are at currently, but it would be a really helpful topic to get perspective on. I’ve been to all the online calculators, etc., but am more interested in how you approached the math of what your total assets should be and the psychology of feeling ready and truly having enough cushion. Thanks!

    Reply
  2. Kelsey Avatar
    Kelsey

    Hi Shawn,
    Thanks for the comment. We do have a snapshot to share as we actually have our budgets all the way back to 2009-2010 (and we bought our house in ’09). Things were quite different for us then: we had no kids (now we have two), we had two cars (now we have one), and we hadn’t taken a lot of the simplification steps that have driven down many of our bills in recent years.
    Even so, we did feel comfortable at the time to buy a house, but there are definitely things I’d change. For instance, we were content having saved up enough for a 10% down payment ($20K on a $200K house). But that meant we were stuck with PMI. If I were to buy a house today, I wouldn’t do it until I had at least 20% to put down to avoid PMI. At the time, we were less concerned because we were buying at the recognized bottom of the market, but today of course that would not be the case.
    Aside from the down payment, the mortgage we had ($1240) represented ~1/3 of my income alone, which was about $3750/mo at the time. Because Kelsey was also working, we knew we could afford it even if we dropped to one income. So for us, it was all about affordability and buying modestly. From that perspective, we didn’t have to worry too much about how the mortgage would financially fit because we had loads of breathing room. (Interestingly, I can remember being approved to buy a house worth well north of $300,000, which at the time would have bought something BIG. I also remember thinking how crazy that was to even consider spending so much money on a whole bunch of house no one needs.)
    I guess the moral of our story is a) we bought the amount of house we felt we needed. Because more house just means a higher mortgage, more upkeep, more open space to fill with stuff, and bigger utility and other bills. b) We took advantage of timing (not always possible but good to do if you have the patience and flexibility). c) If I could do it again, I’d put down 20% or more.
    I hope that helps!
    -Chris

    Reply
  3. Shawn Avatar
    Shawn

    Thanks so much!

    Reply
  4. Asta Avatar
    Asta

    I get and love “spherical” living! I picked our day care and dentists based on proximity to our home. The day care was a big one because we can walk. My mama mantra has been “simplify, simplify, simplify”.

    Reply
  5. Kelsey Avatar
    Kelsey

    Yes, yes, yes! I am right there with you. We’ve been on a simplifying path for a while but lately I find myself craving it even more, especially in things tied to our schedule. Perhaps now that we tackled other areas of life – stuff and budget – I’m moving on to our calendar and wanting to simplify. How great that you’ve been able to find big, important things within a small sphere – keep it up!

    Reply

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