Today’s Roth IRA Challenge comes all the way from South Africa! Ang and Sporty live in Cape Town with their stuffed tortoise, Terence, and not much else. They spend their days drinking coffee, eating Thai food and blogging about their urban hippie adventures and everyday, not-so-hardcore minimalism on a blog they call Mostly Mindful.
In July 2008, when Sporty and I set out on this minimalist journey, our finances were in horrible shape. We were in debt to the tune of $95 000, we had no investments, no rainy day savings account and no plan to dig ourselves out of the deep, dark hole we were in.
Fast forward eight and a half years and things are looking pretty sweet.
Yes, given our ages (I’m very nearly almost 49 and Sporty is 51) we could be closer to ‘retirement’ than we are, but hey, it is what it is. We’d rather focus on the positives than dwell on what could have been.
Pre-minimalism, we lived paycheck to paycheck and even though it was super stressful, it didn’t stop us from spending money we didn’t have on stuff we didn’t need. We only ever paid the minimum on our debt each month (and even that hurt). Those were stressful times.
Post-minimalism, payday comes and goes without us even noticing. We always have money available for whatever life throws at us, be that day-to-day living expenses or an unexpected visit to the dentist to have a crown replaced. Nowadays, I’m hard-pressed to imagine a less stressful existence than the one we’re currently enjoying.
So what changed? In a nutshell: our mindset. We stopped looking at stuff as a way to make us happy and turned our attention to the things that matter: experiences, relationships and peace of mind.
With the help of a savvy financial advisor we paid off our debt, invested the inheritance we received from my folks’ estate (instead of blowing it on a trip to Bali) and opened a rainy day saving account.
In the beginning it was tough to break our old spending habits and stick to the budget Sporty had laid out for us, but as the months and years went by, it became easier and easier to save instead of spend.
Our financial goal for 2016
With Sporty’s family living Down Under, we need to dip into our savings so that she can visit them every couple of years. After her last trip (April ‘16) our nest egg was down to R50,000 ($3,700).
When she came back we set a lofty (or so we thought) goal to increase our savings to R120,000+ ($8,900) by the end of the year.
Despite a rather nice rebate from the taxman, we fell short by R3000 ($223). We’re not unhappy with our results though, and here’s why:
Firstly, we still saved a whopping R67 000 ($4 970)! Thanks to the (über annoying) exchange rate, it’s just shy of $5000. However, in South African terms that’s still an impressive amount of moola to have squirreled away in under a year.
Secondly, we didn’t even miss the large chunks of cash we were funneling into our savings account each month. Life carried on as normal. We still had our personal spending money, we still enjoyed meals out, we still went out for coffee, and we still grocery shopped as we pleased. Life was definitely not hard.
When we saw how easy it was, we set an even loftier goal for 2017. But then the opportunity to transition to a three-day work week presented itself. First for me and then, more recently, for Sporty.
We’ve adjusted our budget accordingly and while it means less savings and a more compact budget in the short-term, it’s freed us up to focus on our side hustle. Having the extra two days a week to work on Mostly Mindful means our long-term prospects have improved significantly.
By the end of the year our goal is to be earning enough money from Mostly Mindful for at least one of us (but more likely, both) to un-cubicle ourselves and work only on the things that matter and bring us the most joy and happiness.