1st Milestone on FI – Become Worthless

Ms. Happy just got her second Master’s degree this May! Hooray! This is not just a moment to celebrate her academic achievement, but also an important milestone on the financial independence path: become worthless!

FI Milestone 0: Get Worthless

1. Milestones on Your Financial Independence (FI) Road

There are several milestones along the way to achieve FI and milestone #0 is to become worthless (Yes, as a Computer Scientist we always count from zero).  Here is a rough breakdown of Ms. Happy’s finance and she will keep updating every quarter along the way. Being as transparent as possible means that she is fully committed to the FI goal. And it is fun to see your progress by sharing it with like-minded people.

  • Student Loan: $107,621
  • Investment: $22,621
  • Saving: $17,879

Personal Net Worth: $-67,121 (As for June, 2018)

2. Achieving Financial Independence is All About Your Saving Rate

There is a misunderstanding about FI for newbies in this area, which is you have to earn a lot of money in order to achieve it. This is not necessarily true. I see people with 5-figure income achieve their goal with relentless saving effort. The game is all about how much is left in your account each month. It is great if you have a 6-figure income, but if you have to spend $12 on a cocktail on weekend to match up your life-style, I am not sure where you are heading to.

Before Ms. Happy graduated, she has a relatively steady cost of living. She uses the Mad Fientist to track her spending together with income and investment stuff. Each moth, her living expenses are normally within the range of $700 and $1200. Some month, the cost can jump really high(e.g: earlier this year I did a tooth surgery) but it is mostly due to some one-time event (and later I will write a post about how much you should set your emergency fund).

For now, before she settles her first full-time job, Ms. Happy works 3 days/week and earn $3200 as a programmer. Even though this is not a high income, she can still save $3200 – $950 (average of $700 and $1200) = $2250. In other word, her saving rate is $2250 / $3200 = 70.3%

To be fair, she gets big family support from Mr. Frugal for postponing family responsibility for now (house renting, electricity fee, etc). Her saving rate will drop to 26% if 50% of the family responsibility is taken into consideration. The point is if you earn less, you need to figure out a way to save more. Ideally, you want to save 2/3 of your income so that you can achieve FI faster.

3. Be creative to Generate Passive Income

Having a full-time job does not necessarily mean that you should stop thinking of ways to generate passive income. There are so many ways that you can utilize your free time and resources.

  • Start a blog or podcast
  • Start an on-line store, e.g: Etsy, Ebay, etc.
  • Start hosting Airbnb if you have a free room

Recently, I started to host a class on Airbnb about how to make sourdough bread, and that was a lot of fun! I will write another post about my Airbnb host experience in the future. If you have any idea about how to generate passive income, I am excited to learn too!

How to travel frugally (and have fun)

Mr. Frugal and Ms. Happy have just come back from a long vacation from Asia and Europe and we had so much fun learning how to travel frugally. We want to share these tips we learnt with you and hope it will be useful for you too.

Tip 1: Always Plan Ahead

The biggest money-saving strategy is to always plan ahead! You will get a much cheaper flight and hotel if you reserve it ahead of time. Plan ahead not only means you can save money, but time as well. Always book a ticket online before you go to the museums, attractions, etc. For example, when we were in France, we booked the ticket to the Louvre the day before so that we avoided being stuck in line for more than one hour.

You should really book the ticket online and visit a popular site before the crowds

Tip 2: Find a Travel Reward Credit Card

There are so many options there if you want to find a travel reward credit card and you definitely should take advantage of them. These benefits include:

  • More points paying back
  • Free access to airport lounge
  • Hotel credits, etc

Usually, you either pay some annual fee or spend certain amount of money for the first 3 months of registration. You should decide the card based on your situation. In our situation, Mr. Frugal used the points generated from his credit card to buy Ms. Happy’s flight tickets (Thank you, Mr. Frugal!). And we also enjoyed the free access to most airport and hotel lounges, which means we saved a lot on food.

Tips 3: Live and Eat – Go Local! 

We used Airbnb most of the time (except if we have local friends who are willing to welcome us to their home). For us, it not only saves a lot of money (compared to living in a hotel), you can also learn how to save money from the locals. A lot of Airbnb hosts would love to share their favorite cheap (but delicious) eats with the guests and we have never been disappointed with their recommendations.

Another trick to save money on food is to eat like a local. There is nothing wrong to go to a fancy restaurant for the unique experience (and we occasionally do that), however, most of the time we are just happy to live like a local. That means when you are in Iceland, eat a lot of seafood. And when you are in Paris, sit by the Siren and enjoy a baguette sandwich with less than 5 euro.

My $2 noodle in Taiwan
We also like to try a little more fancier, occasionally









Tip 4: Use Free Apps as Your Local Guide 

It is amazing to see how many apps are there to be your local guide. what’s really impressive about these apps is that they have offline GPS navigation which will save data (and money) on roaming. For each site, they also have a description about its history, highlight, etc.

Ms. Happy has chosen GPSmyCity on this trip. It has more than 1000 cities  walking tours in this app, and you can just pay $12.99/year to access all of them. Also, if you can just pay $3.99 to access one city.

Tip 5: Try Free and Discounts

When we were in Taiwan, we found that most local bakeries start to sell at a 50% discount after 6pm.  We got a lot of snacks by taking advantage of it and had a lot of great and cheap pastries. We also like to research on restaurants that we’d like to eat at and schedule our visits based on their happy hour. When you are on vacation and don’t have to be bound with your work schedule, why not take advantage of your freedom? 🙂

Having beers at Happy Hour in Iceland

Final Tip: Be Creative  (and it’s fun!)

Want to see a beautiful view of Paris? You don’t have to pay a $50 ticket to get on top of the Eiffel tower. Try to find other options. This is another good way to learn more about the city (instead of picking up the most obvious one). For Ms. Happy, her choice is paying 10 euro to get on the ferris wheel and 6 euro to the dome of Sacre-Coeur.

The view from a 10 euro ferris wheel

That’s the point of the whole frugal traveling thing, right? This is a game and you will have a lot of fun by being creative of your own trip designer.



Make new candles with leftover wax

Since Mr. Frugal and I eat almost every dinner at home, we try to use candles to make our meal more interesting and romantic. Also, we like to light up several candles during our dinner party to make the place more cozy. After a while, we wind up having a lot of “leftover” wax. Of course I can dump them and make new ones, however, I feel bad when I do not utilize things to its full value. Thus, I decided to melt these “leftover” wax and make new candles out of them.

Two used candles with center almost hollow

First, clean the leftover wax and remove any sticker, dust and/or wick. Usually, there is a metal piece on the other end of the wick, use a knife to remove it.

Remove the sticker at the bottom of the leftover wax

Next, heat up a pot of water. Place your candle heater inside the heated water. The 1 gallon heater I use only costs ~$5. Put your leftover wax into the candle heater.

Put the candle heater inside a pot of hot water

If you have leftover candle jars, feel free to reuse them. If not, I use the milk cardboard container instead (I steal this idea from Mr. Frugal).

Cut a milk cardboard container

Next, use two wicks to make a cross. Put the horizontal one on the edge of the container. Adjust the position so that the wick is at the center bottom of the container. Without the help of the horizontal wick, it is very easy for the other wick to float with the liquid pouring in. You really want the wick to be all the way to the bottom of the candle.

Make a cross with two wicks

Finally, pour the liquid wax in. Keep it slow and make sure the wick is in the middle of the candle.

Pour the liquid wax in

Finally, be patient and wait for the wax to get solid again. You will be able to see how the color changes and that is pretty fun.

Nice color change
From leftover to final product.

Reduce eat-out by making eat-at-home more fun

For a while, Mr. Frugal and Ms. Happy get into a habit of eating out every weekend. We are both beer lovers, and it is tempting to go to different breweries and try out new beers on the tap. Also, it is more or less a social norm to meet friends at restaurants. However, when we add up the money we spent on eat-out, we are surprised about the number. What’s worse, you don’t feel anything when it becomes a habit. Research shows it takes roughly 66 days to build a habit and after that it becomes a routine.

From last year, we started to change this habit by reducing eat-out during the weekend. It was quite challenging at first, and I have to say I still miss to go to a brewery and have a glass of beer after a long bike ride. However, if you make some smart design of your new habit, it will make the change much easier. Here are what we did:

Change 1: Buy more candles to make the home setting more romantic

Our romantic dinner setting

We learnt this trick from Mr. Money Mustache. When he and his wife decided to reduce eat-out, he bought a lot of candles for weekend dinners. Compared to the money you poured to the restaurants, the cost of the candles is almost negletable. Especially, if you are determined to do this for a long time, you can buy a lot of candles with even lower price.

Change 2: Invite friends to our dinner party

Before we consciously made this decision, we always say “yes” to friends’ request to eat out. We did think about how to deal with friends’ request because we do not want to sacrifice friendship for frugality (remember our goal is to be frugal and happy!). Here are our two solutions:

  • We invite them to our dinner party. We host monthly dinner party for a few years now, and we think it’s a good idea to combine eat-out with the dinner party. Usually friends bring wine to our party and we prepare food. In this way, we don’t need to buy alcohol, which saves a big budget. Also, it is much cheaper to buy raw materials from the supermarket to cook for a batch of people, thus it is a win-win solution. I will post another article in the future about all the creative ideas for parties at home, but the point is if you try to be creative, party at home is much more fun than eating out.
  • Mr. Frugal’s company has a kitchen/club that we can get free dinner with very limited membership fee, and we can invite 2 guests. Thus, we also take advantage of this to save some labor work when we are tired of dinner party.

Change 3: We buy craft beers from a local market

A lot of plans fail because we do not give ourselves alternatives. As you can see, I still miss my beer and you probably know how important craft beer plays a role in whether this new change will succeed or not. Remember the “I will do A if B ” strategy”? We found a local market that sells great craft beer. Thus, now when we want beer, we go and get one and the cost is much lower than having one in the brewery. I think it is a pretty powerful mindset: when you want to change a habit, try to find alternatives instead of thinking of it as a sacrifice.




I’d like to do A with the cost of B

As a woman, Ms. Happy has learnt early on that women don’t usually negotiate. That applies to almost everything: salary at workplace, housework at home, etc. I was taught that women should always ask for something when someone makes a request to you. And a useful trick to learn is that you always say “I’d like to do A if B”. For example, when someone asked whether you can give a talk at an event, the most intuitive thing to do is “Sure, why not?”. But a good negotiator would always say: Yes, I’d like to give a talk if you can get me connected with xx at the event.

I have been using the same technique to negotiate with myself for every penny I take out of my pocket. For example, when I really want to buy a nice pair of shoe, instead of asking my friend whether this looks nice on me, I ask myself “do you want to own this if it costs you three hours family time”.

I strongly recommend you break down your salary based on both working hours and work-related hours. If you actually do that, you will see you probably earn much less than you thought. For example, if one has to spend 1 hour commute to work, and you spend 8 hours in the office, your daily working/work-related hours is actually 10 hours. Or if you have to go to a few work events each week, you need to add these hours to your calculation too. In the end, you may find that you work more than 8 hours per day. In other words, you earn less than you thought. Keep that number in mind and let’s continue our self-negotiation practice.

Now, when you see a nice pair of shoes (or the newest iphone), do the following:

  1. How much (in terms of my time) does it cost? 3 hours? 50 hours?
  2. Think about all the things that you want to do with this amount of time and ask yourself again whether you still want to buy it.
  3. If the answer is yes, think about the scenario that what if you put this amount of money in your investment account to compound for 20 years. Use the most conservative strategy (with 7% annual return), calculate how much would this money generate by then. Think about how much would this pair of shoes (or iphone) worth at that time.
  4. If you still want to buy it, buy it.

This is the practice that you should do for every penny you take out of your pocket. It doesn’t matter how small the amount is, it trains you to be mindful about your money. More importantly, your energy! Most of us exchange our time and energy for money, and these resources are limited!

That is how we cut our grocery cost into half

In the past 4 years, our family grocery have evolved through several stages. For now, we are happily settled on a plan that balanced well on convenience and cost.

Stage 1: Goodeggs

Even though we want to be frugal on most aspects of our living, we agreed to choose organic food for our weekly grocery to lower any health-related risk. Since neither of us own vehicle nor enjoy grocery shopping, we first chose goodggs for our weekly grocery delivery. There are two advantages in using this service:

  • We can get all we need in one place. There are a variety of options: vegetables, fruits, seafood, etc. We just need to create a frequent list to iterate each week and do addiction/subtraction based on each week’s actual consumption.
  • Same-day delivery. Well, we do plan ahead most of the time since the same-day delivery fee is higher, but sometimes it is great if you need something urgent.

As a supplement of goodeggs, we have an Amazon quarterly subscription list that we get wholesale stuff. For example, tomato sauce, olive oil, toilet paper, etc. Yes, goodeggs does have these things but it is much cheaper if we buy a bunch of them all at once. However, we do not go to Cosco everyweek since we are only a 2-person family.

Stage 2: Planet Organic (permanently closed)

We later found planet organic offers “juice box”, which is a box of in-season vegetables/fruits. This box is sold at a lower price (relative to selecting each individual one on your will), however, we love to eat in-season food so that is perfect for us. Although sometimes it is possible to get 10 lemons in two consecutive weeks, we just need to be more creative to use them (when life gives you lemons, make lemonade)!  We kept using it until it shuts down its business.

I am trying to make several cocktails with these lemons. 🙂

Stage 3: Imperfect Produce 

We managed to lower our weekly grocery cost to 50% by switching from goodeggs to planet organics, so we were determined to find a similar service. And we were surprised to find a even better option: imperfect produce. Surprisingly, vegetables and fruits have to pass several tests before being put on the shelf of a supermarket: if they are too big or their shape doesn’t look like “normal”, they are not able to make it through (life is not easy for them either). That’s how the imperfect produce comes from. There are quite amount of studies showing that these ugly produce are totally healthy and help to solve the world hunger problem, not to mention they are 30-50% less expensive than the beautiful vegetables. We also like the note the staff put in our box each week, sharing why these vegetables are rejected by the supermarket (most of the time it is because they are too big) and tips/recipes of how to use them.

Get free (and great) resources online

We love to buy second-hand stuff! If you happen to live close enough to a neighborhood with a lot of rich people (e.g: the bay area, like us), you will be surprised at the nice quality of second-hand stuff people put on craigslist. We first learnt this trick two years ago when we were looking for a recliner. We first bought a new Hancock & Moore (H &M) with ~$1600 and loved it.  However, one day we saw someone listed a similar second-hand  H&M recliner on craigslist and asked for only 20% of the price we paid. We drove there and checked it and bought it immediately. The person told us he has been using it for the past 4 years and now he is ready to upgrade it. There is some “bruise” on it, but that doesn’t bother us. We are more than happy to buy some leather care kit and extend its life for another 5-10 years.

Second-hand leather recliner we found on Craiglist

Two weeks ago, I learnt another website that is even more amazing. If you have not checked rooster, check it now. It is a community-based website where people share stuff. You can give, borrow, and lend, but there is no money involved in this community. I was looking for a scanner to digitalize old family pictures recently, so I posted a message in my neighborhood asking if someone can lend me a scanner for a few days. Within 24 hours of my post, I received three replies: one person told me he saw a free scanner on freecycle and left me the contact info. The other two not only told me they would like to give me their idle scanner but also the detailed information of their scanners in order to help me decide whether it is a good fit for my own purpose. I was a little skeptical whether this is going to work, so I kept my original ebay order just in case. I took the scanner that is closest to me and it worked great (the person wants to give it away just because he needs more space at home). I feel so excited that I saved $129 and make something be useful again.

Free scanner acquired from freecycle

Of course, you cannot get everything from these sites, but it is a great resource for things like:

  • kids’ stuff
  • experimental interest (you don’t need to buy a roller skate to see whether you like it or not)
  • digital equipments

These are the websites I like to use:

Pro: the most friendly community in my personal opinion. Beautiful website design and user-friendly as well.

Con: relatively small community. Sometimes it takes a few more time to find what you need.

Pro: Larger community with a lot of options.

Con: you need time to filter out stuff.

Pro: same as freeCycle. Even if it’s not for free, you will find some really good quality stuff with very limited budget.

Con: you need time to filter out stuff.

I registered next door a few years back but have never actively used it. However, I have heard good things about it. I think 2-3 sites are probably enough if you don’t want to flood your email box.

Share your story with me about how you saved money by using these sites.