I’ve always been a car guy. It’s not that I’m mechanically inclined or that I get into the latest makes and models — neither of these is anywhere close to the truth — but that a car has always been my primary mode of transportation.
When I was a boy, my family lived in rural Oregon, six miles from the nearest town. Automobiles were our only real option for getting around. Even when I went away to college, I relied on a car for most of my mobility. And so it’s been for forty years. As I say, I’ve always been a car guy.
This summer, though, I’ve had a sort of epiphany, one prompted by your comments and suggestions. I’ve learned that I can save money and improve my fitness by leaving my car at home — by exploring alternate modes of transportation.
The Bus
After my small adventure riding the bus in April, I’ve begun to view it as a valid means for getting around town. I think it helps that our friends Chris and Jolie are huge bus advocates, and use it to travel to and from our house. If they can use the bus, so can I — right? Now, instead of seeing the bus as something other people use, I know it’s something that I can use as well.
For example, I’m hoping to take a French class at a local college when the fall term starts. (Kris and I are teaching ourselves French in preparation for our planned vacation to Paris next autumn.) If I do this, I intend to take the bus to school three mornings a week.
I still don’t use the bus often, but it’s now in my pool of options, especially if I don’t want to hassle with a car. Portland’s transit system has an awesome website, so it’s easy to find a route that works for me.
The Bike
I love cycling, but I rarely hop on a bike anymore. For a couple of years during the late 1990s, I regularly rode my bike 5.8 miles to-and-from the box factory during the summer. I was biking over 1000 miles a year. I’ve biked occasionally here at our new house, but I’m older and fatter than I used to be, and my bike no longer really fits me.
I spent the better part of this summer avoiding a bike purchase — I just bought a car, for goodness sake — but two weeks ago, I finally realized that I was being foolish. I bought a city bike, one that actually fits, one that I actually use. Even though I could afford it, I felt apprehensive spending the money. (Still haven’t shaken all of the old mindsets.) But after a fortnight using my new vehicle, I’m pleased with the purchase.
A bicycle is handy not only for exercise, but also for handling middle-distance errands. If a destination is within 10-15 miles and it’s not raining (an important consideration here in Oregon), a bike is a viable option. Biking to my friend Andrew’s house takes about 25 minutes, for example; that’s only 10 minutes longer than it takes by car. And biking to the nearest grocery store barely takes any time at all.
Now that I have a bike that fits me — and one specifically designed for city cycling — I’m eager to make frequent use of it. It’s been over a decade since I had a 1000-mile year. It’d be great to ride that far again in 2010!
My Feet
The bus and the bike are great, but the real revelation in alternate transportation this summer has come from my own two feet. I’ve been walking all over the place.
Kris and I don’t live in a very walkable neighborhood. Despite a “somewhat walkable” Walk Score of 68, there’s nothing much close by. (In calculating walkability for us, the Walk Score counts two minimarts as grocery stores and two bars as restaurants — including one with the dubious distinction of being named “the best dive bar in Portland”.)
After I developed another running injury in June, I decided that I’d have to get my exercise by walking. That meant jaunting five or six miles each day to get the same time on my feet that I’d spent running. It also meant learning to see the surrounding communities in new ways.
For example, I’ve always felt that the nearest city was too far to walk to. It’s 2-1/2 miles to the near side of town and three miles to the far side. But I recently made a deal with myself: Once per week, I allow myself to go to the comic book store and to eat at the cheap taco place — but only if I walk. Walking creates a barrier. By setting this requirement, I can’t just indulge myself on a whim.
It’s not just the comic book store and the taco stand, though. I walk three miles to the credit union. I walk a mile-and-a-half to the public library. I walk a mile to the grocery store. And once, I even walked two miles to the lawnmower repair shop, and then pushed my mower home.
I never thought I could make the time to walk five miles per day, but I was wrong.
And here’s something I’ve learned: Once you start walking five miles a day, your world gets bigger. I know this seems counter-intuitive — a car takes you further faster — but it’s true. You begin to realize that things are closer than you thought they were. Walking is a great way to save money, see your neighborhood, and have fun.
Other Options
Although I may be new convert to alternate modes of transportation, many GRS readers have been working to reduce their car use for a long time, and for a variety of reasons. On Twitter last week, I asked people to share their stories:
Here are some of the replies:
@apricotrabbit wrote: “Between the bus & Zipcar, I don’t need a car in the city & I save tons of money. Plus, I can read while someone drives me around.”
@mrawdon wrote: “I’ve been biking to work twice a week this summer, for the exercise. Cuts down on gas consumption significantly, too.”
@grouchyladybug wrote: “i take the train & bus to work b/c it’s cheaper & more relaxing than driving”
@sarahperiwinkle wrote: “I take the commuter rail b/c its free with employer transit pass, w/in walking distance of home and work, and as fast as car.”
@jessemecham wrote: “is a sweet scooter alternate transportation? 70 mpg and I look good. (Yes, it was partially to save gas).”
It’s important to note that not everyone likes biking or taking the bus. I heard from some people who wish they could use a car more often, or who opt not to use other methods because they’re inconvenient.
Conclusion
Not all Americans have the luxury of being able to explore alternate means of transportation. For good or ill, we’re a car-centric nation that has built car-centric cities that encourage us to stay in our automobiles. But I suspect that there are a large number of people who could travel by bus, bike, or feet — if they only realized how easy it is. (That was certainly true in my case, anyhow.)
For some people, time is an issue, but I have intentionally created a lifestyle that allows me an opportunity to explore more leisurely modes of transportation.
All of this is well and good during the warm, dry months. But what happens when the Oregon rain returns in mid-October? I’m not sure. I suspect my bicycle will go into hibernation, I’ll only walk a couple of times each week, and I’ll really get to learn how Portland’s bus system works. And my spending on gas and car maintenance will continue to drop.
Walking photo by The Giant Vermin. Bus photo by Jason McHuff, who appears to be something of a bus fanatic.
My mom has a sixth sense when it comes to bargain hunting. Where I’m thrilled to get 25 percent off and free shipping, she’s finding deals of 70 percent off and getting inside scoop from the salespeople, who probably have her on speed dial should a ginormous everything-must-go-or-we-torch-it clearance sale come along.
Okay, so I’m exaggerating, but not by much. The point, however, is that the key to finding bargains is timing—off-season, end-of-season, new models bringing down prices on the old models. There’s a pattern and a perfect time to buy just about anything.
When possible, plan your purchases by using the following list to score the best deals and to keep more of your money in your high interest savings account:
House and Home
Real estate—March through August are active months for buying and selling, so a buyer looking for a deal will have better luck negotiating on an offer in autumn and winter.
Flooring—Carpet and flooring goes on sale near the end of the year due to slow sales, though discounts are possible throughout the year from independent retailers.
Furniture—January and July, when stores need to make room for new inventory.
Gas grill—Like air conditioners, the best time to buy is during winter months, when demand for outdoor grills is low.
Cookware—April and May (think graduation and wedding prime time) and October and November (holidays approaching).
Linens—January “white sales” and the end of each season (i.e. as spring approaches, winter-colored linens will go on sale). It’s common to see linens (in all colors, not just white!) on sale for up to 60 percent off retail.
Mattress—New mattresses arrive in stores in May, when you’ll find a good deal on the previous year’s models.
Vacuum cleaner—June, when new models hit the floors, and end of winter.
Hardware—Big sales occur around Father’s Day and between Thanksgiving and Christmas.
Home appliances—New models arrive in September and October, when you’ll find good deals on last year’s models. Holiday weekends—Fourth of July, Labor Day, Columbus Day, Presidents Day—also are good bets for deals. If you’re willing to buy an appliance with a ding or a scratch, you can save hundreds.
Air conditioner—Winter months, when demand is low.
Flora
Flowers—Tulips are less expensive in February, peonies in May. Flowers are at their best when in season.
Shrubs, trees, etc.—Autumn is a good time to buy bulbs (store them according to directions on the packaging) and trees and shrubs (nurseries are trying to clear out inventory).
Recreation
Outdoor (general)—Swings, beach and pool toys, swimming gear, and other outdoor items go on sale in August, when retailers are trying to make room for fall and winter items.
Outdoor gear (bicycles, for example)—February and March, when new models replace last year’s models.
Boat—Boat shows, held from January through March, generally offer the best prices.
Gym membership—Membership sales soar in January as everyone resolves to lose weight, but lag in spring and summer. You’ll find lower fees and waived enrollment fees to lure you to their treadmills.
Movie tickets—Matinees are an established way to spend less at the theater (as is smuggling in your own M&Ms, not that I’d condone such behavior or ever do so myself…). A.M. Cinema (AMC Theaters) sells discounted tickets before noon from Friday to Sunday and on holidays.
Broadway tickets—Find bargains hours before the show, or try the well-known TKTS booth in Times Square.
Electronics
Blu-ray player—Black Friday sales and after-Christmas sales offer some of the best deals.
TV—Sales can be found throughout the year. Times to note include Black Friday, between Thanksgiving and Christmas, right after New Year’s Day, before the Super Bowl, and in May and June. New models hit stores in August and September, when you’ll find sales on new models and discounts on the previous year models.
Cell phone—New customers get the best deals. For new phones, wait six months if you can. Search online for coupon codes, as well.
Digital camera—The Consumer Electronics Show and Photo Marketing Association convention mean new models will arrive in stores. Shop in January and February for deals on last year’s models.
Computer—Back-to-school season yields a few sales, but the best deals can be found when a technology is outdated and retailers want to get rid of the older models. Look for a few extras (free shipping, bundled accessories, etc.) around the holidays.
Tip: In general, you’ll find a good deal when an electronic item is outdated. Wait until after technology shows like MacWorld and the International Consumer Electronics Show to see if your iWhatever will be discounted to make way for the next big thing.
Auto
New car—New models roll into the lot in fall, so shop in September for last year’s model. Shop on a weekday at the end of the month to get the undivided attention of a salesperson trying to make their monthly quota.
Used car—Dealers increase their inventory in April to start the spring selling season. You’ll find a good selection and willing negotiators.
Recreational vehicle—Dealers sometimes offer specials in winter, but generally buying an RV works like buying a car (see new cars).
Gasoline—Fuel up on a weekday, early in the morning if gas prices are rising or in the evening if gas prices are going down (prices are usually changed between 10 a.m. and noon).
Oil change—Look for early bird specials in your area.
Tires and auto parts—During April (National Car Care Month) and October (Fall Car Care Month), you are likely to find buy-three-get-one-free deals on tires, free oil changes, and other checkups.
Car wash—Early birds (before 8 or 9 a.m.) can often find deals at full-service car washes.
Travel
Airline tickets—For domestic nonholiday travel, look for the lowest fares 21 days from your departure. Fares are updated at 10 a.m., 12:30 p.m., and 8 p.m. on weekdays, and airlines file one update on Saturday and Sunday. Lowest fares are filed on Tuesdays, Wednesdays, and occasionally on Saturdays. Wednesday is generally the cheapest day to fly and Sunday the most expensive. (Exception: the Wednesday before Thanksgiving—the busiest travel day of the year.) For holiday travel, start looking in September to get a good price. Fares can change quickly, and much depends on the carrier and the market.
Travel (general)—The off-season or shoulder-season for your destination will offer the most savings on lodging, recreation, transportation, etc.
Food
Groceries (supermarket)—On Sunday evenings, you’ll save money through store sales (typically run Wednesday through Thursday), and by shopping in the evening, you can save even more on items that must be sold by day’s end. If you clip coupons from the Sunday newspaper, you’ll enjoy additional savings.
Coupons—While coupons are available throughout the year, the most coupons appear in the Sunday paper during November and December. The best deals on turkeys can be found two weeks before Thanksgiving to Christmas. In spring, you’ll find coupons on seasonal produce, ham, and frozen food (apparently March is National Frozen Food Month—who knew?). Summer coupons offer discounts on grilling items and ice cream. Autumn brings coupons on soup and other canned items.
Groceries (farmers market)—Vendors often lower prices near closing to avoid having to pack up perishables and take them back to the farm.
Champagne—With steep competition to be your New Year’s Eve bubbly, Champagne houses drop prices during the holidays.
Clothing and Accessories
Clothing (general)—Got your heart set on something in particular? Shop on a Thursday evening six to eight weeks after the item arrived in the store. By Thursday, the weekend sales have started and the selection will still be good. Season-end clearance sales also offer up savings.
Baby clothes—Shop during your pregnancy for end-of-season clearance items. If it’s springtime and you are due in winter, look for winter closeout sales now for infant clothing.
Jewelry—Avoid the holidays, when you are most likely to pay full price.
Weddings
Wedding (general)—The off-season can mean big discounts. If you live in a cooler climate, you’ll find savings during the winter months. Hotter climates mean likely deals in summer months.
Wedding dresses—After Thanksgiving and before Christmas. Boutiques are stocked with gowns for Christmas engagements, but it’s a slow sales period.
Other
Toys—October and November offer good bargains as retailers gear up for the holiday season.
Wrapping paper—January, of course!
I might not ever be as good as my mom at bargain hunting, but knowing when to shop might make me almost as good. If you’re one to make resolutions every new year, resolve to save money and correcting your small errors by including a check on your free credit report to make a huge difference in your purchases in 2010 by timing your purchases.
If you found this helpful, don’t forget to follow Get Rich Slowly on Facebook and Twitter.
There is an important difference to the mini-budget aftermath. The moves are being seen mainly in short-term rates. The real problem last autumn was for longer term 10- and 30-year borrowing, which saw significant moves in yields, the result of a loss of market confidence in the then government’s tax and spend plans. Current rates for such long-term borrowing are still well below that market panic.
I am sick. For the past ten days, I’ve been wrestling with a high fever, a cough, a persistent sore throat, and a general malaise that’s kicking my ass. Basically, I’m the sickest I’ve been in over a decade. (The last time I was this sick? The evening that The Fellowship of the Ring premiered. I went to see it with friends, but don’t remember a thing about that night because I was sick with a high fever. High fevers suck!)
Normally, I don’t go to the doctor. My family has a funny thing about doctors, and usually prefer to let an illness run its course rather than to pay a doctor to tell us to “let the illness run its course”. Last Tuesday, though, I decided that sometimes discretion is the better part of valor. After four days with a high fever, and after sensing that something wasn’t quite right with my lungs, I drove myself to urgent care.
“You have the flu,” the nurse practitioner told me. “And it’d be even worse if you hadn’t had your flu shot. As it is, you may have pneumonia. It’s been going around.”
She prescribed an inhaler, steroids, and an antibiotic, but she seemed skeptical that they’d help. “Make sure you call us if things don’t improve,” she said. “In the meantime, you need to spend 72 hours in quarantine. You don’t want to give this to anyone else, and you don’t want to catch anything else that might be going around.”
So, for three days last week, I confined myself to my apartment.
Hunting for Health Insurance
But this article isn’t about how sick I’ve been. This article is about my quest for health insurance. Earlier this year, I promised to share my experience as I looked for an individual policy.
As background, I’ve always had insurance through Kris. Because we were married, my insurance was covered by the policy she had through her employer. And before that — long before that — I was on my parents’ health insurance. For 43 years, health insurance has been a non-issue for me.
That changed, though, when I asked for a divorce last autumn. I knew that I’d have to find my own coverage. In fact, Kris wouldn’t allow the papers to be filed until I could demonstrate I had replacement coverage.
“No problem,” I thought. “How hard can it be to find health insurance? I’m the healthiest I’ve been in my life!” Haha. Turns out, it’s not as easy as it sounds.
A Wild Goose Chase
My first stop was eHealthInsurance.com. Many people (including several GRS readers) had recommended this site as a great way to compare health insurance and to apply online without much hassle. It sounded perfect. Before Kris and I left for our trip to South America in February, I filled out an application. It seemed simple, and I had no doubt I’d be approved.
I wasn’t.
Some of my options at eHealthInsurance
While we were in Argentina, I got an e-mail that said my application for health insurance had been rejected, but didn’t offer any explanation. When I got home, there was a letter waiting for me in the mail that gave more detail. Turns out, I had a pre-existing condition that caused my application to be rejected. Five years ago, when I was fifty pounds heavier, I suffered from sleep apnea. Sleep apnea is a risk factor for other diseases, and insurers don’t like it. Never mind that I no longer have sleep apnea, that I’m fifty pounds lighter than when I had it, and that my health has never been better. There’s no way to convey that info on an application. Instead, I was turned down for health insurance.
Fine.
I went back to eHealthInsurance.com to apply for a different policy, but there’s a question on every application: “Has any other carrier turned you down for health insurance during the past 90 days?” It turns out that once one carrier turns you down, all carriers will turn you down. (This isn’t strictly true, but it’s mostly true.)
Fine.
I decided that my best bet was to just just continue receiving coverage through my same carrier. My logic was impeccable: I’d been with them for years already and they knew my medical history, so surely it would be a piece of cake to carry things forward. Again, this didn’t turn out to be true.
I called my carrier to ask about porting my policy from Kris’ work account to individual insurance. “We can’t do that,” they told me. “You have to call the employer that has the policy.” So I did. But Kris’ employer told me they couldn’t port it forward either. “Your only option is COBRA,” they told me. (COBRA is ongoing medical insurance available when your existing policy ends. It’s expensive.)
I’m telling this story in a calm, even-handed fashion, but I wasn’t feeling calm and even-handed during the process. I was feeling frustrated. I couldn’t figure out where to turn.
Finally, I started talking about my health insurance dilemma with everyone I met. I asked my self-employed friends what they do for health insurance. (Shocking but true answer: Most of them don’t have health insurance. No joke.) When I met other folks who’ve been through a divorce, I asked how they handled the health insurance question.
In the end, it was my colleague Mark Silver from Heart of Business who provided the answer. “I used an insurance broker to find health insurance,” he told me. “Here. I’ll give you his contact info.”
Taking Matters Into My Own Hands
Because I hate e-mail conversations and because I hate getting the run-around by phone, I tend to prefer face-to-face business transactions. Yes, they take more time, but I find them easier. It’s possible to discuss shades of grey and to explore multiple possibilities in person. For this reason, I drove across Portland to visit Ron Tate at Tate Insurance Services. I explained my situation.
“I need health insurance,” I said. “But I only want catastrophic insurance. I’m willing to self-insure almost everything.” Because I have substantial savings, I’m willing to pay more for routine coverage if that means my monthly insurance premiums are low. In the long-term, this should save me tons of money.
“No problem,” Mr. Tate told me. “We have several options.” He walked me through them. I chose the option that seemed to offer the best balance of cost and coverage, filled out the application. And waited. And waited. And waited.
After a week of waiting, I got word that my application had been rejected. Again. And again because of sleep apnea. “We have a couple of options,” Mr. Tate told me. “Because you’ve been rejected, you qualify for the Oregon Medical Insurance Pool, which is for high-risk customers like you. It’s nto cheap though. Or you can apply elsewhere. Or we can ask for an exclusion for the sleep apnea. That means you won’t have coverage for that condition, but everything else will be normal.”
“To be honest,” I said, “I just want to get this finished. I feel like I’ve been working on this for weeks, and I’m tired of it. It shouldn’t be this hard to get health insurance.”
My plan options at my insurance provider
In fact, I was so frustrated that I went home from Mr. Tate’s office and took matters into my own hands. I did what I should have done from the start. I went to the website for my current carrier and filled out an application for personal health insurance. I chose the cheapest policy (which still costs $128 a month!) and indicated I was a current customer. And then I waited. Within a couple of days, I’d heard back that my application was approved.
An Unhealthy System
That’s a long, boring story, I know, but I’m certain it’s typical of what everyone goes through when attempting to find health insurance on their own. It’s not easy. In fact, it seems a little crazy that it takes that much work to get coverage.
During the process, I spoke with dozens of people about their own experience getting insurance, or about their experience with family members who’ve had to use health insurance lately. I’ll be honest: I came away jaded. I’m far from being a socialist, but there’s no question in my mind that the current health insurance system in the U.S. is broken. It’s tough to find coverage, that coverage is expensive, and once you have it, it’s like a game for the insurance companies to get out of paying. This is dumb. I’d be happy to try some sort of socialized medicine as an alternative, and so would every single person I spoke to during this process. (But, of course, I live in Portland where even moderates like me would be considered liberal in other parts of the country.)
And, of course, the conclusion of this story is that I had to put my insurance to use last week. I have no idea how much my doctor’s appointment, x-ray, and prescriptions would have cost without insurance (and neither do the doctors, actually), but I do know that my total out-of-pocket cost was $29.26. (This may go up after the insurance company decides whether I owe more, but that’s the current total.)
I’m still not healthy. There’s still gunk in my lungs. I’m still running a mild fever. I still feel like sleeping all day. But it’s good to know that if I do need medical help, I have the insurance situation sorted out.
My monthly Extraordinary Lives series is something that I really enjoying doing. First up was JP Livingston, who retired with a net worth over $2,000,000 at the age of 28. Today’s interview is with Jeremy, Winnie, and Julian, also known as the family behind Go Curry Cracker.
With the goal of traveling around the world, Jeremy and Winnie were in their 30s when they retired around six years ago. Their 3-year-old son travels with them and has already been to 29 countries as well!
They were able to do this by saving intensively – over 70% of their after-tax income.
In this interview, you’ll learn:
How they retired in their 30s.
What made them want to retire early.
How they live comfortably, rent houses with private pools, fly business class, and travel a ton – as opposed to the myth that early retirees are boring and just eat beans and rice to survive.
How they decided on the amount they needed to retire.
What they do about health insurance in early retirement.
And more! This interview is jam packed full of great information!
I asked you, my readers, what questions I should ask them, so below are your questions (and some of mine) about their story and how they accomplished so much. Make sure you’re following me on Facebook so you have the opportunity to submit your own questions for the next interview.
Related content:
1. Tell me your story. When did you retire and HOW?!
We are Jeremy, Winnie, and Julian, also known as the family behind Go Curry Cracker!
Winnie and I retired about six years ago with the goal of traveling the world. Traveling more in retirement is a pretty common goal, so I suppose the interesting bits are that we were still in our 30s and our 3-year-old son has now been to 29 countries.
What made our location and financially independent lifestyle possible was a decade of intensive saving – we were literally saving 70%+ of our after-tax income. Instead of buying stuff or experiences, we were investing in our future freedom.
Alas, we had already succumbed to some lifestyle inflation so we sold the house and moved into a small apartment, sold the car and started walking and riding bicycles, and turned our home kitchen into the best restaurant in town.
Unwinding lifestyle inflation is a huge mental challenge, but we both grew up on the edge of poverty so we had some experience with prioritizing purchases and finding solutions that didn’t require money. Nowadays, our investments pay all of our bills, and we could buy a house, buy a car, live a typical life… we just happen to not want those things.
Instead, for the past many years, we’ve basically spent the summer in Europe, autumn in the US, and winter in Asia. It’s not quite a perpetual summer vacation, but close.
2. Was early retirement always something you were striving for? What made you want to retire early?
Prior to 2002, we were both essentially following the normal life script – go to school, get good grades, get a job, etc… Maybe the only unconventional thing is I had student loan payoff as the #1 priority. Every story I heard about debt while growing up had a tragic ending, so I wanted to be debt free ASAP. I even cashed out all of my vacation time for five years or so to get extra pay. We also did crazy things like using 0% interest credit card offers to accelerate student loan payoff. Literally every extra penny went to the student loans.
When I finally got my head above water, I took a vacation, my first as an adult. After three weeks of scuba diving, fresh seafood, and tropical drinks, I looked back at where life in the real world was headed and thought, “This is it? This is the American Dream?”
Within six months the house and car were gone and the early retirement plan was underway.
3. Would you say that you live comfortably?
If by comfortably you mean do we rent houses with private pools, fly business class, and enjoy an occasional Michelin Star restaurant, then yeah, that sounds about right. Combined with 52 weeks of vacation per year and full autonomy, we are probably at an above average comfort level.
That may sound a little smug, for which I apologize, but I think it is important to truly understand the power of deferred consumption. We can only live as we do today because we didn’t live like this yesterday.
By living well beneath our means for just a small part of our total lifetimes (10 years +/-), something many would consider “uncomfortable”, we are now able to live well above the standards of even high-income households – just without the need to consume all of our waking hours with a high-income job.
In summary – yeah, life is good.
4. What career did you have before you retired? Did that career help you to retire earlier?
Winnie was a Program Manager for a large PC company, and I was an Engineer at a large software company.
I do wish we had those insane technology salaries that I sometimes hear about in the news, but our average combined income over our hardcore saving years was only about $135k. I guess I should have studied harder.
I think more than the job, my degree helped us retire early. I basically applied engineering principles to our finances and our lifestyle, trying to optimize for quality of life and low expenses. I then used that same mentality in designing our investment portfolio (100% index funds) and minimizing our taxes ($100k income with $0 income tax.) If I had studied art history or interior design, I probably would have thought about these things from an entirely different perspective, perhaps one that required more expensive furnishings.
5. What advice do you have for the average person that doesn’t make six figures a year who wants to retire early?
The core principle to follow is living well beneath your means, aiming for at least 50% savings rates. Or in 1950s parlance, live off one income and save the other. This recipe for financial success has worked for much of recorded history.
Of course, this is easier when making $100k than it is when making $10k, all else being equal.
For many average income households, it helps to change perspective: It isn’t that we can’t afford to save 50%, it is that we can’t afford our current lifestyle.
This is where we were when we got started, and some tough choices are ahead… it is necessary to either earn more, spend less, or wait (much) longer. Or all 3.
For households with incomes well below average, such as our families when we were growing up, it is absolutely necessary to grow income. Public assistance can help for a while (I’ve eaten a fair amount of government cheese), but ultimately skill development and probably even relocation to a job center are necessary.
6. Do you still earn an income in retirement?
We do. With all of this free time, it is fairly difficult to NOT do something that brings in some extra cash.
Last year Winnie published her first book (in Mandarin / Chinese) which was on the bestseller list in Taiwan for a while. About three years ago, Go Curry Cracker accidentally started to earn some affiliate income. I now actually try to run the site as a business, but limit myself to just a few hours per week.
I also employ a pretty aggressive long-term tax minimization strategy, which saves us thousands of dollars every year in taxes. I suppose that can also be thought of as extra income. We’ve actually reported about $100k annual income each of the last five years with income tax bills of $0.
For anybody who is interested, I do publish our full income statements and tax returns (business and personal) every year (linked to above). A lot of people have found those helpful to optimize their own finances.
7. How did you decide how much you needed to retire?
We set a target to have an investment portfolio worth 25x our desired cost of living in Seattle, where we were living at the time, although we were spending much less to turbocharge our savings.
25x is just the standard 4% Rule, which (in oversimplified terms) says you can annually spend an inflation adjusted 4% of your portfolio, probably forever. So, say if you wanted to spend $40k/year, you would need $1 million. That was our minimum.
When we hit that target, Winnie stopped working, and I continued on for about three more years, during which we were just living off dividends, so we were essentially investing 100% of my paycheck.
We also wanted the portfolio to continue to grow so we could leave a bit of a legacy, so even after we stopped working, we wanted to continue living beneath our means. We did this by living large in Mexico and Guatemala rather than Paris or Tokyo. And as luck would have it, the stock market performance over the past five years has been pretty good, so our portfolio just continues to grow, and we can’t spend it fast enough.
8. What sacrifices or hard decisions did you have to make?
This may sound cliché, but I don’t think of anything we did as a sacrifice – we just employed a suggestion my grandmother used to make all the time, “Hey there, you hold onto your britches now young man!” Roughly translated from the original Minnesotan, I think that means “slow down.” In other words, hold off on the lifestyle inflation for a while.
When people rush out to buy their dream house (with rented money) or a new car or a big vacation, they are sacrificing their future for immediate consumption. We just waited a little longer, and along the way we discovered that none of those trappings of success have any real meaning to us.
But of course, when society and advertisers are screaming at you that you need to consume and upgrade, it can be difficult to pause and reconsider. We avoided a lot of that by not owning a television and using the great outdoors for entertainment.
9. What do you do about health insurance in early retirement?
For many years, we were self-insured and just paid cash for any medical needs. We paid $3 for a doctor visit in Mexico, $20 for some dental care in Thailand, $50 for a chest X-ray in Taiwan, and $90 for a visit to the emergency room in Portugal. Medical tourism is your friend. What we weren’t spending on health insurance, we invested in more index funds, building our own healthcare fund.
If we were in the US, we would buy health insurance on the State or Federal Health Exchanges. The US health system is all kinds of messed up, so without insurance you are only one minor incident from total financial devastation.
As of about six months ago, we are now all covered by the Taiwan national health system, which is a single payer universal healthcare provider. We pay about $25/person/month for great coverage, which includes dental. (Hot tip: marry somebody from a country with a good health system.)
10. Will you be planning a place for your child to make long term friendships and connections? Do you plan to continue travel when your child is school age?
We like the idea of homeschooling up to age 10 or 12 or so, but we are still figuring it out. Even so, it probably won’t be all or nothing (Julian is enrolled part time in a Montessori pre-school now.)
The pros/cons of life-in-place vs nomadic living is such an interesting discussion for us, because we are inherently a global family (our nuclear families are spread across 2 countries, 3 States, and 6 cities) and despite our very different backgrounds, we independently concluded that the idea of “home” for us isn’t really a place.
Our thinking comes from our existing communities – Winnie grew up in a big city (Taipei), and she has friends from back in the 3rd grade who all have kids around the same age as Julian. When we are in Taiwan, we all get together and it is like they never missed a beat. It’s a beautiful thing.
I grew up in a small town in Minnesota, and 99% of my childhood / high-school friends and family moved away for college and career. There is literally no one place I can go where all long-term friendships and connections exist, and yet I have them, just spread around the world. It’s also a beautiful thing.
We try to get quality time with all of our family every year, which is much easier now that we don’t have jobs. 2 years ago, we had 4 generations together for a week on a lake, with Grandma, my parents, my sister and 2 brothers and spouses, and their 9 kids. This year we took my Mom and Grandma on an Alaska Cruise, and also spent a couple weeks with all of Julian’s cousins. Next year will be something special again, and we all stay in touch via Skype. We also plan on having more kids, which means sibling connections.
What we do will change and evolve as we learn more and figure things out, but overall, we’ll listen to our kids, make sure we have regular quality time with family, and stay connected with friends and family via Skype. And everywhere we go, we build community with friends, family, and other adventurers. I think it will be the same for the next generation.
11. What hardships come up when traveling with a child and what do you do about it?
The hardships of traveling with a child are largely the same as the hardships of parenting. Kids have needs and wants, and if they aren’t addressed in a timely fashion then chaos ensues. As with most things, an ounce of prevention is worth a pound of cure – and even then, things go awry.
Where most families have to balance child rearing with a career and fixed schedules, we have a great deal of flexibility. Seldom are we schedule driven, and when we are (e.g. a flight departure time) we avoid other commitments. We also aren’t doing the quick 1 week vacation thing, with a lot of time getting from A to B and a whirlwind of tours and activities; that’s much too intense and exhausting. We are more so living our normal lives, just in different locations. We play at the park daily, take naps, explore by foot, and enjoy the local delicacies. If we are having too much fun at the park, we can always see the museum tomorrow. Somehow, we usually manage to see the highlights.
Since we aren’t always in one location with a regular schedule, we focus on having routine in the absence of routine. We have regular toys, regular nap time, and a bedtime ritual which involves a bath, songs, and books. Plus we all co-sleep, so we are together 24/7. It’s hard to provide a stronger sense of security than parental presence.
It all seems to be going well; Julian is a happy, healthy, normal kid. He loves being outside exploring, enjoys meeting new people, and is always ready for the next plane, train, or automobile.
12. If you were starting back in the beginning, what would you do differently from the beginning?
We made a lot of mistakes… buying a house, buying a car, spending money without a long-term plan, but I don’t know if I would change any of them. Those mistakes helped us grow and appreciate where we are today. For example, we are Renters for Life, but we probably wouldn’t really appreciate the total joy and financial advantages that come with not owning a deteriorating wooden box.
If I could go back in time and tell my younger self, “Hey, read this Go Curry Cracker blog, you’ll learn a lot!” we could probably have become Financially Independent 3 to 5 years earlier. That’s a lot, considering my entire career was only 16 years, but it’s not that that much in an 80 – 100 year life span.
But, what I would do differently:
invest only in index funds from the beginning
not waste my time dabbling in rental properties
always live within biking distance of work and prioritize biking and walking
always rent
learn to cook well sooner
start travel hacking sooner instead of paying for vacations
13. Lastly, what is your very best tip (or two) that you have for someone who wants to reach the same success as you?
Design your life so that saving a high percentage of income is the natural and ordinary outcome.
Aim for saving 50%+ of after-tax income, and minimize taxes
Autumn is here and the leaves are just starting to turn. Believe it or not, that means it’s time to start thinking about the holiday season. Holiday expenses can pile up quickly. Planning ahead saves you sticker shock and can spare you a steep credit card bill in the new year.
Careful planners have laid out their holiday budget well in advance and saved for it all year long. It’s not like the holiday season is a surprise, after all! A generation ago, it was common for housewives to be part of a “Christmas club” at their local bank, which was just a targeted savings account where you saved a little cash each week and got it back in a lump sum before the holidays.
But what if you haven’t laid aside a nice nest egg for holiday shopping, travel and entertaining? Well, it’s never too late to start. Getting on the holiday savings bandwagon now will help you create a buffer between you and all those extra bills.
How can you do it?
Begin with a budget Start with a budget of expected expenses. You probably know at least roughly what you spend year to year. If you’ve been tracking your spending, you can even look back at the past few Decembers and get a more detailed feel for what your expenses have been.
Don’t just look at what you spend at the mall. Gifts are probably a big chunk of your holiday budget, but they’re not everything. You also need to consider added costs for food and drink if you entertain during the holidays. Travel costs are a factor if you visit relatives, whether it’s a road trip to Grandma’s or an international flight.
Then there are all the little expenses:
The gifts for your child’s classroom teacher, and the secretary at your office.
Yankee swap (or white elephant) items.
A bottle of wine for the hostess at each of the four holiday parties you attend.
A dress for New Year’s Eve — and new shoes to go with it.
Once you’ve looked over your expense records for last year (or wracked your memory if you’ve just gotten on the personal finance bandwagon and don’t have last year’s records), it’s time to sketch out a budget. I like to be specific in my holiday budgeting. I make a “Santa’s list” of gifts I expect to buy. I jot down rough expenses for the annual holiday party I host: how much I expect to spend on booze, food and sundry party supplies. I budget out any trips we’re going to take, like visiting my father for Thanksgiving.
This may sound tedious, but I find it really fun. In general I use more detailed budgeting than J.D. does, so I may be predisposed to finely tuning things. If you prefer a looser method, you need only figure out how much your total spending from, say, mid-November through New Year’s exceeded your regular monthly spending. That’s how much extra cash you’ll need to cover your holiday expenses.
If you’re like me, you probably want to take a more detailed approach. In the case of my holiday budget, it’s not a chore at all. It’s sort of an anticipatory activity. I sit down with my husband and plan out what we want to do for the kids this year. I get to imagine how my party will be, and think about what kinds of food and drink I’ll serve. Checking on airfares to Tucson is a chance to think about the Thanksgiving meal I’ll share with my father, and how happy he’ll be playing with my kids. I’m looking ahead to the things I enjoy about the holiday season, while I’m figuring out what each one will cost me. It helps me keep my expectations realistic, and gives me a chance to savor the time with friends and family that I’m looking forward to.
Starting to save Once you’ve figured out your budget, in whatever level of detail is comfortable for you, it’s time to save that money.
Money doesn’t come from nowhere. To save up a chunk of cash over a few months, you’ll probably want to employ several strategies.
The first thing you can do is cut back on your discretionary spending. Stop eating out, scale back on entertainment. Stay in with Netflix and a good homemade meal a few times, and you’ll save a decent chunk of cash. Taking a close look at your spending habits will probably highlight some other things you can cut back on: shopping, subscriptions, travel. The usual suspects. If you’ve been managing your finances closely for even a little while, you probably have a good idea of what your personal money sinks are. You know what can be cut for a short period of belt-tightening. Now is the time to do it if you want to splurge over the holiday season.
Once you’ve cut back your discretionary spending, look at ways to bring in more cash. Some people pick up part-time jobs around this time of year: plenty of places need seasonal workers, from stores at the mall to apple orchards. You can easily pick up a short-term gig doing something that may not thrill your soul, but will put extra cash in your pocket.
Alternately, you can look at earning money from a hobby or talent. Maybe you can schedule some portrait sessions, or make some money busking in the subway. You might be able to hang out your shingle doing some bike repair or odd jobs around people’s homes. Craft fairs and shops offer opportunities for knitters and crafters to sell their creations. Putting in some extra hours and effort with your creative work this season might well pay off in extra fun money right when you need it.
Finally, you can sell stuff. Possibly even some of last year’s Christmas presents. You surely have old DVDs, sports equipment or other useful things in good condition that you are never going to use again. Selling your unwanted goodies is a bit of an art. Some people, like J.D., are great at it. Others find it’s more of a hassle than a lucrative hobby.
However you decide to approach saving for the holidays, have fun with it. Not only is it a good idea to put by some extra money for the upcoming season, but it’ll give you good practice at setting a financial goal and meeting it.
Note: Another way to help your Christmas budget? Don’t forget to explore homemade gifts. These can save you money and be fun to make.
I started the Best Interest on December 16, 2018. It’s been two years! And this also marks two years since I’ve been tracking every single expense in my budget. E-v-e-r-y-t-h-i-n-g. Today’s post will be a year-in-review for both the blog and for my personal finances. There will be lots of fun numbers. And I’ll show you how my preaching works in practice.
To get your bearings, here’s the Year 1 Review.
Thank you!
Thank you. Yes, you. Thank you for reading, and thank you to my generous patrons.
I don’t write here because of financial gain (see the Sankey diagram in the Budgeting section). I write here because you’re reading. And because it’s incredibly fun and you readers make it rewarding.
I was recently asked about my mission statement. It’s just in draft, but:
I value helping and teaching. At my core, I want to help people improve their lives by teaching them valuable skills & knowledge. I think personal finance is a tangible, vital, and universal skill set.
Improving personal finance == improving lives.
Sharing with you is my mission. And you sharing your attention with me is a privilege that I don’t take for granted.
Every small compliment you’ve given me is extremely meaningful. I love answering your questions, your Tweets, and your Reddit comments. So again, thank you for being here.
Some Stats
Who doesn’t like statistics? Here’s what 2020 looked like on the Best Interest.
Back in 2019, about 19,000 people visited the blog. I was ecstatic.
In 2020, over 160,000 readers visited. I’m over the moon. In 2021, I’d like to hit 500,000.
As of this publication, about 210,000 words over 82 articles have been published in 2020. About 70% of those are my own, and the other 30% I can attribute to the wonderful bloggers I work with at the Money Mix.
The Money Mix is a group of like-minded writers, bloggers, and internet nerds. We share lessons learned, tips & tricks, and even share one another’s best written work. I’ve learned a ton since joining in April and attribute much of the Best Interest’s growth to learning from TMM.
The blog’s subscriber base grew by about 400% this year. If you haven’t joined, I send out a quick newsletter every week and include all new Best Interest articles.
Never miss another Best Interest post—subscribe here.
And lastly, the blog cost ~$2800 to operate and improve (notice the sweet logo?!), plus the hundreds of hours of writing and site maintenance. The mission makes it worthwhile. But if you’d like to support the cause, please join the patronage. I truly appreciate it. The more this site pays for itself, the more time I can devote to the mission.
Budgeting
Another year, another streak of tracking every single dollar using YNAB. If you’re looking for a smart Christmas present, YNAB is a great idea.
Note: you and I both get a free month of YNAB if you end up signing yourself (or someone else) up with the link above. No extra cost to anyone involved. You get a 34-day trial, and then an additional free month. That’s two months to figure out if you like it!
Below, you can see a snapshot of my YNAB journey from November 2018 until now. During this 2+ year period, I’ve used YNAB to budget and track every dollar that I earn and spend.
Is it overkill? Yes, tracking every dollar is overkill for most people. But I highly recommend that you run a budget, and I even interviewed some other experts for alternative budgeting ideas. Find the right budget for you.
Where the Money Goes
As for where my money actually goes, the Sankey diagram below is a terrific visualization.
I’ve normalized this diagram against 100% of my salary. Why? Because it helps visualize what percentage of my income goes where.
For example, 23.4% of my income went to taxes before I ever saw it. Only 59.42% of my income ever came to my bank account via paychecks and, therefore, was budgeted. Of that 59.4%, I spent about half and saved/invested the other half.
The bottom of the Sankey diagram shows how previous years’ investments grew, and shows the free money that comes from my employer’s 401(k) matching. If the stock market had gone down, the “Investment Interest” section could have been negative.
But as it sits, 2020 stock market returns added the equivalent of 25.44% of my salary to my portfolio. And my employer’s 401(k) match was equivalent to 6% of my salary (that’s free money, by the way). The Investments section below has more detail on those individual investments.
Between budgeted savings (Roth IRA, taxable brokerage account, emergency fund) and pre-tax savings (401k, HSA), about 45% of my salary went towards savings and investments. Add in the “extra” savings (investment returns, 401k match), and the equivalent of 76% of my salary went towards savings and investments.
Your results may vary. But this is how my preaching looks in practice.
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Investing
After plenty of questioning, I wrote an article in October that provided every detail of how I invest.
One of the nice things—for both you and I—is that it’s fairly easy to track my portfolio over time. There are four assets:
Large U.S. stock index fund (ex: Fidelity’s S&P 500 index fund, FXIAX)
Mid and small U.S. stock index fund (ex: Fidelity’s Russell 2000 index fund, FSSNX)
Bond index fund (ex: Fidelity’s Total Bond Fund, FTBFX)
International stocks fund (ex: Fidelity’s Total International Stock Fund, FTIHX)
As of 12/16/20, these assets have performed as follows in 2020:
S&P 500 Index = +13.3%
Russell 2000 Index = +17.6%
Bond Index = +3.6%
International Stock Index = +6.2%
For the 2019 year, these indices’ performances were:
S&P 500 Index = +28.9%
Russell 2000 Index = +23.72%
Bond Index = +9.9%
International Stock Index = +21.5%
What are the takeaways? 2019 performance was blistering, and 2020 performance feels oddly optimistic given current events. I don’t expect every year to be as “good” as the past two.
Nevertheless, I’m trying to leave my emotion at the door and stick with my plan. Specifically, I invest the same dollar amount every month, whether the market is up or down. If you want to learn why I’m confident in that plan (despite current events), I wrote all about it this past autumn:
Even if the markets are at all-time highs and it feels like a crash is coming, my outlook is long-term. I have faith the the long-term (10, 20, 30+ years) economic outlook is good.
Favorite Blogs Posts
I’m proud that my writing is highly regarded. I was featured this year on MSN, Grow/CNBC, the Ladders, the Good Men Project, SoFi, Budgets are $exy, the Plutus Awards Showcase, and elsewhere. Woohoo!
If you think my writing is worthy of someone else’s attention, I’d love for you to share it with them. Post a link on Facebook, Reddit, Twitter, etc. Send your Uncle Dave the article I wrote about him. If you found a post particularly useful, let your tribe know about it. Simple grassroots sharing.
Here are some of the best posts from 2020:
January—The 2010’s Will Happen Again—If you’re worried that the 2010’s were a “once in a lifetime” investing decade, this article will show you how that’s not quite true.
February—Index Fund Bubble: Arguments For and Against—I invest solely in index funds. So when well-known investors warned of a bubble, I wanted to understand for myself.
March—Viral Stock Market Strategies—Lots of Twitter experts discussed their personal investing techniques during the early days of COVID-19. So I wrote a MATLAB script to back-test all their best laid plans. Spoiler—the simplest approaches always fare best.
April—The Biggest Lesson from COVID-19—Slack. Safety net. Margin. Out of the many lessons from COVID-19, this article discusses the biggest one: how building slack in our systems—personal finance, business, hospitals, even hiking—is a life-and-death issue.
May—Jeff Bezos and the Meritocracy Kings—Jeff Bezos, resource allocation, Vonnegut, meritocracy, survivorship bias, systemic flaws, and quarantine kings.
June—Simple Financial Goals—a two-minute punch-list to start you down the path to better personal finances.
July—Do you know Dave?—a funny story about a man you know, and the perilous personal finance circumstances he finds himself in.
August—Long Term Investing Takes Faith—I returned from a camping trip rejuvenated. But memories of the rolling waves reminded me of slow, steady, long-term investing.
September—Amazing People Everywhere—inspired by Tim Ferriss’s Tools of Titans, I interviewed some amazing people in my own life, and asked them what lessons they’ve learned in their unique journeys.
October—The True Cost of Car Ownership—a detailed analysis of car costs, answering the important questions like:
How should I compare time owned vs. miles driven?
What’s the full-life true cost of owning a car?
How much does a car’s value depreciate over time?
How do I place value on the utility of my car (e.g. a work truck vs. a compact sedan)?
When is a used car purchase smarter than a new car?
How does leasing compare to owning?
Should I sink more money into an old beater? Or just get a new car?
November—Your Retirement Savings Goal for 2021—my first dabble into coding my own calculators. If you’re looking for an easy 2021 resolution, start by calculating your 2021 savings goal.
December—Curses, Miracles, and the Best Interest Student Loan Solution—The status quo is a haunting curse. The proposed solution is a divine miracle. I propose a middle-ground solution. And the math backs me up.
2020: Year of the Dog
We fostered nine sweet dogs in 2020. No dog goals for 2021, other than to keep fostering. There are lots of great dogs that just need a home. If you’re looking for a dog, consider adopting through a shelter or foster organization.
But because it’s fun and funny, here are the 2020 dog power rankings.
Starting at #9: Josie. She was one of Sadie’s puppies. And man, was she mean. Clearly, Josie learned that the meanest puppy always gets fed, and she would absolutely torment poor Oscar. If you’ve ever seen Tasmanian devils fighting on the National Geographic channel, that’s how Josie was at feeding time. Bad girl! But she’s a sweetheart now as a young adult 🙂
Next at #8, Ranger. While Ranger was a good boy, he chewed on too many things. Most dogs are athletes. Not Ranger. He was a happy, dopey, skittish, and unathletic dog.
Louis a.k.a. Mr. Bones a.k.a. Louie Long Legs comes in at #7. Not the cutest pup, and one of the only dogs that legitimately drew blood from his playful bites and claws. But he was just a pup, so you can’t hold it against him!
Jules is our current foster, and she comes in at #6. She’s a little whiny and took a poop behind the Christmas tree. Is she super cute? Sure. But a cute face only gets you so far on the Best Interest.
#5 is Raven, a solid puppy. The most athletic of Sadie’s puppies, there was nothing to dislike about Raven. If she has stayed around longer, she could have competed for the top 3. But she got adopted quickly and didn’t have much time to rise to the top of the heap.
Esther—coming in at #4—was one of two recent moms to come through our home. And poor Esther definitely missed her puppies, making multiple escape attempts over our fence. She was a sweetie. Not much is cuter than hearing a 25-pound part-Huskie give out a “big” wolf howl.
Sadie’s third-and-final puppy, Oscar, comes in at #3. This little guy was everyone’s favorite of Sadie’s three puppies. While we figured, “Ahh. Dad must have been a Blue Heeler,” we actually found out that Sadie is 55% Blue Heeler. Her recessive traits are expressed in her more slender physique and black color. Oscar’s phenotype, however, is very much the stocky, mottled grey Blue Heeler.
Scooby, the cutest bloodhound puppy around, is #2. Not only did Scooby have stellar looks, but he had the personality to match. He was playful, mostly potty-trained, and slept through the night from Day 1. He was wise beyond his weeks. The “Doobie Brother” was a very good boy.
Coming in at numero uno, it’s got to be Sadie. I’m a big softie for Sadie. She was our first foster and probably the only one who arrived at our door significantly unhealthy. She had been homeless in Houston, scrounging for nutrition to support herself and her three puppies (Josie, Raven, and Oscar). Sadie was only 27 pounds when she showed up. But we nourished her, fell for her, and adopted her ourselves! She’s now a sturdy 42 pounds and has been a great friend to all the other fosters to come through our house. She’s also kinda famous in the blogging world.
2021 and Beyond
In 2021, I’d love to help half-a-million (or more!) readers.
Monetization of the blog is something I’ve considered before. Right now, a few generous Patrons donate to the blog, and I don’t run ads (here’s why). But if the income from running ads allowed me to further the blog’s mission without interfering with that mission…would that be worthwhile? I’m interested in what you think about that idea. Do ads bother you?
Content-wise, I’m always looking for useful questions to answer. My own confusion inspired my Explaining the “Big Short” post. The many new parents in my life inspired this guide to 529 plans. If you want to learn something, let me know.
I’m excited for 2021! And I hope you are too.
Thank you for reading! If you enjoyed this article, join 6000+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week.
-Jesse
Want to learn more about The Best Interest’s back story? Read here.
If you prefer to listen, check out The Best Interest Podcast.
Northwestern Mutual, Special Spaces Recognize 10-Year Anniversary of Company’s Childhood Cancer Program with 10 Dream Bedroom Makeovers HGTV star Mina Starsiak Hawk collaborates on latest bedroom reveal for a child in her hometown MILWAUKEE, Nov. 17, 2022 /PRNewswire/ — In recognition of its Childhood Cancer Program’s 10-year anniversary, Northwestern Mutual, through its Foundation, collaborated with Special … [Read more…]
We’re living longer than ever before, and doing so in better health. So what can you do when you retire and want to keep your mind sharp or need to gain additional skills to stay competitive at work?
For many, the answer is to go back to school. But tuition can be prohibitively expensive.
At the same time, schools want their classrooms to be full of engaged students, regardless of age. In the interest of continuing education, many colleges and universities offer reduced or free college for seniors (typically, adults 60 and up, although the rules vary).
In fact, we found at least one option in every state.
Free (or Cheap) College for Seniors in Every State
While some institutions only allow senior students to audit classes, many offer the chance to earn credits toward a degree at a reduced — or completely waived — tuition rate.
Does your state have a senior citizen education program you can use? Find out below!
1. Alabama
The Alabama Commission on Higher Education states that Alabama seniors can attend any two-year institution within the state tuition-free.
Adults 60 and older should contact the financial aid office at any community college for admission and eligibility details.
Some Alabama schools, like Coastal Alabama Community College, offer online courses if you want to avoid in-person classes.
2. Alaska
The University of Alaska waives tuition for senior-citizen residents who receive full Social Security benefits. Seniors must wait until the first day of classes to enroll to ensure that there’s space remaining; they must also complete a tuition-waiver form.
Additional costs such as student activity, health center and lab fees are not covered; the student must pay them directly.
Online courses may be included if offered; check with the admissions office for confirmation.
3. Arizona
All 10 campuses of Maricopa Community College allow senior citizens to take classes for credit at 50% of the full tuition cost.
Students 65 and older must register between the first and second class sessions of the semester to ensure space is available. You can register for in-person, online or hybrid classes.
4. Arkansas
Arkansas waives tuition for anyone 60 and over who wants to work toward an undergraduate or graduate degree at state institutions.
Student fees may apply, and senior citizens may register only for classes with space available. If you need online courses, check with your chosen college to see what options you have.
5. California
California State University waives all tuition for state-supported classes and dramatically reduces campus fees for residents age 60 or older.
Different Cal State locations may offer online courses or in-person classes. Students who attend in-person classes must provide proof of COVID-19 vaccination.
6. Colorado
Students age 55 and older may attend class on a space-available basis at Colorado State University. There is no tuition fee, but visitors don’t get credit for attending class. It is up to the instructor how participation and grading of assignments and tests are handled. CSU currently offers face to face, hybrid and online classes.
At the University of Colorado Denver, people 60 and older may enroll on a no-credit basis to attend up to two classes per semester as auditors when space is available. (Courses with a lab component are excluded, as are computer courses and online courses.)
7. Connecticut
Residents 62 and up may attend state colleges, including community colleges, for free on a space-available basis.
At Central Connecticut State University, for example, tuition is waived for any resident over the age of 62 who applies for full- or part-time admission for a degree-granting program. Online courses are included.
Senior students may also take noncredit courses on a space-available basis and have tuition waived. All students must still pay all other fees.
8. Delaware
The University of Delaware, Delaware State University, and Delaware Technical and Community College allow all permanent state residents age 60 or older to audit or take classes for credit for free.
At the University of Delaware, students wishing to use the program must apply for admission on a space-available basis. Some graduate degrees may be eligible, as well. Residents can register for online or in-person courses.
Participants must pay all related student fees and buy their own textbooks.
9. District of Columbia
Senior citizens 65 and up may audit undergraduate courses from Georgetown University’s School of Continuing Studies. These students pay a fee of $32 per credit, which means a three-credit course will cost $96.
To audit a course, there must be available space and the instructor of record must approve the enrollment.
10. Florida
The Florida college system waives application, tuition and student fees for those age 60 and above, but colleges will award no credit and will grant admission on a space-available basis. Check to see whether your chosen college covers online courses as well as in-person ones.
Fun fact: Florida Atlantic University’s Lifelong Learning Society has the largest adult continuing education program in the U.S. It even has its own auditorium on campus to help serve FAU’s 30,000 new registrants each year.
11. Georgia
Georgia residents age 62 and above may take classes on a space-available basis for “little or no cost” at the state’s public colleges.
Seniors may choose to take classes for credit or continuing education, but they must apply through the regular admissions process at their school of choice. Many general education courses are offered online.
12. Hawaii
The Senior Citizen Visitor Program at the University of Hawaii and state community colleges allows senior residents age 60 and up to attend up to two courses per semester free of charge. Seniors who have been residents of Hawaii for at least one year may enroll in in-person, hybrid or online courses for no cost. It’s recommended but not required for students to be vaccinated against COVID-19. Students must demonstrate tuberculosis (TB) clearance by providing test results or a TB risk assessment form signed by a licensed U.S. health care provider.
Schools will not award credit nor will they keep permanent records of students’ class history.
13. Idaho
Programs in Idaho vary based on institution, but some schools offer good deals. The College of Southern Idaho offers free tuition for lower division courses for students aged 60 and older, in addition to other benefits. The college has online and in-person courses.
At Boise State University, Idaho residents who are at least 65 years old can audit classes on a space-available basis for free except for applicable special course fees. BSU offers online courses as well as in-person ones.
14. Illinois
Upon admission, senior citizens age 65 and up who meet income requirements can attend regular credit courses at Illinois public institutions for free. Lab, student and other fees still apply. Each institution will have guidance on registering for online or in-person classes.
15. Indiana
Indiana University offers programs that allow retired residents age 60 and older to take up to nine credit hours per semester and pay just 50% of in-state tuition fees. Courses are in person.
16. Iowa
Private institution Simpson College in Indianola allows people 65 and older to take one noncredit class for free per semester. Courses are open on a space-available basis and do not include lab courses. Online courses may be available.
17. Kansas
Tuition and fees are waived for students age 65 and older taking classes on a space-available basis. Residents must be admitted to a state-supported school to take advantage of this discount. Each school can also provide info on in-person versus online courses.
The registration process varies: The University of Kansas and Wichita State University, for example, require senior auditors to apply for admission. Online or in-person courses may be offered.
18. Kentucky
Tuition and fees are waived for students age 65 and older taking classes on a space-available basis. Residents must be admitted to a state-supported school to take advantage of this discount. Each school can also provide info on in-person versus online courses.
19. Louisiana
Students age 65 and up attending Louisiana state schools receive free tuition and 50% off books and materials at the campus student bookstore. Check with each school to see if online courses are included.
20. Maine
Senior citizens 65 and up may attend undergraduate classes as degree-seeking or audit students in the University of Maine System for free, subject to space availability.
Each college within the system can provide info on the types of courses covered (i.e., online, in-person, hybrid).
21. Maryland
Any student in the University of Maryland System who is retired and over the age of 60 may have tuition waived for up to three courses per semester, even for degree-granting programs. Online courses are available as well as face-to-face offerings.
Online courses are available as well as face-to-face offerings.
22. Massachusetts
Residents age 60 or older can take at least three credits per semester at any state-supported school in Massachusetts and receive free tuition.
Each location has information on what online courses are offered.
23. Michigan
Opportunities for seniors in Michigan vary by institution.
At Michigan Tech, for example, students 60 and older can have tuition waived for up to two courses per semester. Seniors must apply through the admissions office.
Western Michigan University invites seniors 62 and older to register for one class per semester tuition-free, which may include online classes.
At Wayne State University in Detroit, seniors 60 and up receive a 75% discount on tuition but must pay registration and related fees. Wayne State offers some online courses.
24. Minnesota
Minnesota waives tuition for senior citizens 62 and older, but fees and online options may vary by school. At the University of Minnesota, seniors pay a $10 fee per credit, but they can audit for free.
25. Mississippi
There’s no statewide benefit in Mississippi, but some schools have programs for seniors.
Mississippi State University provides a waiver to residents age 60 or older for classes offered on the Starkville or Meridian campuses or by the Center for Distance Education. Seniors are limited to six semester hours per semester and a maximum of 18 credit hours per calendar year, where space is available. MSU offers online courses as well as traditional in-person ones.
The University of Mississippi’s Office of Professional Development and Lifelong Learning allows seniors 65 and older to take one class for free per semester (up to four hours) at any UM campus.
26. Missouri
Missouri residents age 65 and older are exempt from paying tuition at state-supported institutions for classes attended on a noncredit basis. Schools may limit the number of students who receive the tuition benefit based on space availability. Online classes are offered in addition to in-person ones.
27. Montana
The Montana University System offers a tuition waiver for in-state residents 65 or older. Campus and registration fees are not waived. Choose from online or in-person classes.
28. Nebraska
Chadron State College allows adults 65 and up to audit one course per semester for free. The college offers classes online and on campus.
29. Nevada
The University of Nevada, Las Vegas allows seniors 62 and up to take autumn and spring courses free of charge. They pay 50% tuition for summer classes. Lab and other course fees are not covered. Online courses may be offered.
30. New Hampshire
The University of New Hampshire offers residents 65 and older free tuition for two credit-bearing classes per academic year on a space-available basis, so long as they’re not enrolled in a degree program. Courses are offered online or in person.
31. New Jersey
Rutgers University allows retired New Jersey residents 62 and older to audit courses for free in the spring and fall semesters at its Camden, New Brunswick and Newark campuses, space permitting. Current guidelines allow senior citizens to audit in-person or online classes if they have been fully vaccinated against COVID-19.
32. New Mexico
New Mexico offers reduced tuition of just $5 per credit hour to state residents 65 and older. Online courses are available.
For-credit classes are eligible as well as auditing; senior citizens can take no more than 10 credit hours per semester. The program is offered on a space-available basis, and students are responsible for paying any additional course fees.
33. New York
Many schools offer free or reduced tuition for senior citizens. Queens College allows residents 60 and up to audit any course on a space-available basis after completing a Senior Citizen Auditor Application and paying $80 per semester. Up-to-date COVID-19 vaccinations are required to enroll.
At SUNY Purchase, New York state residents 60 and older can enroll tuition-free in a maximum of two credit-bearing, on-campus courses in which space is available. They pay a $50 audit fee, $20 ID processing fee and any course fees. In-person, online and hybrid courses are available, and COVID-19 vaccinations are required for anyone coming on campus.
34. North Carolina
Tuition and registration fees are waived for residents 65 or older attending North Carolina community colleges. Senior citizens can take up to six credit hours per semester for free. Audit options may be available at other schools.
At the University of North Carolina Wilmington, for example, senior citizens may audit classes for free after getting the instructor’s permission and submitting an application. Lab, studio, performance, distance education, independent study, internship and special topic courses are excluded. Online courses are available for those who prefer them.
35. North Dakota
Programs vary by institution in North Dakota. At Bismarck State, for example, senior citizens 65 and older can audit one course tuition-free per semester on a space-available basis. They’re still responsible for other course fees. Some online courses are available.
36. Ohio
Ohio residents at least 60 years old may attend class at any state college for free. Senior-citizen students do not receive credit and can register only on a space-available basis. They are still responsible for special assessments, such as lab fees, that may apply.
Many Ohio state colleges offer online courses, as well as in-person and hybrid.
37. Oklahoma
Oklahoma state colleges and universities waive tuition and fees for senior citizens 65 and older who wish to audit classes on a space-available basis.
38. Oregon
Oregon State University allows senior citizens at least 65 years old to audit classes for free at a maximum of eight credit hours per semester.
The University of Oregon also waives fees for seniors 65 and older auditing classes on a space-available basis.
Online course options may be offered depending on availability.
39. Pennsylvania
Clarion University offers a tuition waiver for residents 62 and up to audit classes. At Bloomsburg University, you need to be only 60 to take tuition-free classes on a space-available basis.
There can be additional benefits at the community college level: Bucks County Community College, for example, waives for-credit course tuition for seniors 65 and up so long as they register after students who are paying full tuition. Many courses are offered online, though some in-person and hybrid options are available.
40. Rhode Island
Tuition waivers can be requested from citizens over 60 at the Community College of Rhode Island. Seats are granted when there is space available.
All degree-seeking senior students must fill out a FAFSA. They also have to submit a Senior Citizens Means Test to verify they have limited income.
Proof of COVID-19 vaccination is required to attend in-person classes. There are also online classes.
41. South Carolina
Residents 60 and above can attend classes at state schools on a credit or noncredit basis, pending space available, for free. The school must grant admission via its normal procedures.
Technology, lab and other fees are the responsibility of the student. Many South Carolina community colleges offer online courses for those interested.
42. South Dakota
Residents 65 and older can attend public universities in South Dakota at 55% of the normal cost of tuition for undergraduate or graduate in-person courses on a main university campus.
Interested adults should apply through the regular admissions system, and the school will automatically grant the discount upon admission. Student fees are not waived.
Contact your chosen university to see whether online courses are offered.
43. Tennessee
The University of Tennessee allows senior citizens to enroll in undergraduate or graduate courses for $7 per credit hour with a maximum fee of $70.
Students will still pay application and course fees. Senior citizens can choose between online courses and in-person ones.
44. Texas
A senior citizen age 65 or older can take up to six tuition-free credit hours at the University of Texas at Austin.
At the University of Texas at Dallas and Lone Star College, undergrad students 65 and older must maintain a 2.0 cumulative GPA to receive a tuition waiver for up to six credit hours per semester.
Check with each individual university to see which online and in-person classes are available for enrollment.
45. Utah
Utah residents age 62 and up may enroll tuition-free at a state institution, space permitting; a quarterly registration fee is required.
At the University of Utah, for example, seniors can audit most classes on a space-available basis and only have to pay a fee of $25 per semester, plus any special fees required. Call to see whether online classes are included.
46. Vermont
Vermonters over the age of 65 can audit one class per semester tuition-free on a space-available basis in the Vermont State College System. Students can take additional classes at a 50% discount of the tuition rate, either in person or online.
They’ll still have to pay administration and course fees for all classes.
47. Virginia
Under the amended terms of the Senior Citizens Higher Education Act of 1974, Virginia residents over 60 years old who earn a taxable income of less than $23,850 annually can audit up to three courses per term for free on a space-available basis at any public institution, either in person or online.
48. Washington
Institutions in Washington are required to partially or fully waive tuition fees for residents age 60 or older who are enrolled for credit on a space-available basis. Nominal fees may apply to students auditing courses.
Some schools limit senior citizens to a certain number of classes or credits; for example, Washington State University caps the waiver at six credits for the fall and spring semesters. Online programs are available.
49. West Virginia
Senior citizens 65 and older at West Virginia University seeking college credit must use the regular admissions form. Those wishing to be non-degree students pay just $5 to apply. WVU offers classes online or in person.
50. Wisconsin
Adults 60 and up may audit classes at the University of Wisconsin-Madison campus or at UW-Madison Online for free, where space is available.
51. Wyoming
At Laramie County Community College, senior citizens 60 and older pay only 20% of the resident tuition rate per credit hour, though they still need to pay any other course or online fees.
Northwest College offers adults 60 and older free tuition up to six credit hours per semester for on-site and online courses, as well as free entry to most college social, cultural and athletic events.
Another Continuing Education Option
More than 100 colleges and universities around the country offer another continuing education program for senior citizens: enrichment courses through the Osher Lifelong Learning Institutes (OLLI).
Prices vary depending upon the institution. Duke University, for example, has a $50 annual membership fee and then charges $50 to $175 per class. Senior citizens can choose to take classes online or in person.
OLLI classes don’t count toward a degree, but if you’re looking for personal development opportunities among older adults, these courses can provide opportunities that mix in the campus experience, too.
Contributor Catherine Hiles updated this post for 2023.
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