So yesterday we clicked the right button and paid off our car. We now own both of our cars free and clear, which is a great feeling. From a technical perspective, this actually wasn’t the best choice. We have an interest rate of 4.5% on the car loan and something much higher on our second home loan. Technically the right thing to do would have been to put that money towards our second home loan. But it feels so much better to get rid of a debt entirely. It’s just one of those things that sometimes works for the better even if it isn’t the best choice.

So in terms of debt we are now down to just our student loans and our mortgage. That’s not too bad, I think. The student loan ones we are in no rush to pay off especially since my wife’s loan is at some ridiculous 2.25% or something like that rate. It’s cheaper to not pay off that loan almost!

We both have huge families. My wife literally has 40 family members who live within a 10 mile radius of where we live. I have about that many family members in Southern California alone. For years we have had an agreement with our extended families that once you pass a certain age (like moving out of the house), the family doesn’t really buy you gifts anymore. It’s worked well, and we’re fine with that.

But there are still siblings, parents, grandparents, nieces, nephews, etc. to think of. Every year for the last several years, all the siblings have gotten together and pretty much agreed with the policy that we have had with our extended families. We buy gifts for the kids, but not for each other. Prior to that we all had these wish lists that we would send out, and people would dutifully shop from our wish lists and ho hum money and stuff would trade around. This always worked in favor of me since I was the youngest with the least money. I would get the best gifts and give the cheapest - but it made me feel like I wasn’t being generous enough (which, in retrospect, I often wasn’t.)

So we are down to just buying gifts for the little ones. Here I know there is still going to be some discrepancies. My wife and I believe in living simple. We are going to buy a couple toys and some clothes for each of the little ones, and that’s about it. We both know, however, that our siblings, and especially the grandparents, are going to go overboard. They always do. We love the generosity of our siblings, but it doesn’t always agree with the lifestyle that we’ve chosen for ourselves, and when we only give a few gifts and our little one gets so many in return, it does make us feel bad sometimes. But at the same time, we have to stick with what we believe in.

So we often supplement with homemade gifts. I have no idea how these are received, but we do spend a lot of time on them. This year we are considering making homemade chalk for our niece and nephew made out of the letters of their names. And we’re going to make a DVD of all the pictures and movies that we have of each of them and give those to the parents.

Overall, we’re probably going to spend about $150-$200 on Christmas for everyone else. That’s a much better number than in years past. On each other, we also usually do homemade gifts, although I have already bought my wife something for $100 (that we’ve been talking about getting anyway, so in some ways it doesn’t count as a gift, right? =)

So don’t be afraid to talk to your family about reducing gift giving to just little ones or something like that. Most people would be happy to not have to rush around so much, and focus on a few people well instead of a lot of people poorly.

We’re still a little confused at just how much we’ve been dipping into our savings lately, though. We aren’t going out at all, so we’re not spending money there. We aren’t buying a lot of gifts for the little one (our gifts are mainly of our time, which we spend a lot of with him). We really just don’t know where the money is going. It’s sad to say that as someone who wants to have a great idea of where his finances are and wants to retire way early. We just have not done a good job of keeping track of our finances since the baby was born. We figured that it shouldn’t matter too much since we aren’t spending a whole lot, but apparently we have some figuring things out to do since we are down quite a bit of money at the moment. We’re still doing fine because during our year of pregnancy, we saved up enough money to last us 5-6 months if we were in dire need (thank God for emergency savings), but we’d still like to know where our money is going! I’ll let you know if anything comes up!

That means we have spent a lot on cloth diapers and a little washing machine and a little spin dryer, and we won’t really be using them much anymore. We might try again when he’s 6-9 months since their skin is sometimes less sensitive by then, but for the moment, we are 100% disposable which makes me sad mostly from an environmental perspective, but also from a financial one.

The Diaper Count

We have an Avanti Eco-Egg washer (which is unfortunately not made anymore) that we use to wash the cloth diapers. 8 of the diapers can fit in the washer at a time (it’s a small washer). We do about 1 1/2 loads of laundry per day, meaning that the baby uses about 10-12 diapers per day. We’ll just set the total to 10 a day because that’s a much easier number to work with.

The cost of cloth

The cost of the cloth diapers and the covers was $100 for 36 diapers and 6 covers. We have since bought one more cover for $13 and we have bought 3 snappies (these are basically diaper pins without the pins - we love them) at $2 each. So we’ve spent $119 on cloth diapers. We also have worked out that we are using about 3 cents of laundry soap per load for the diapers. In six weeks, that’s about 63 loads, or another $1.89 for laundry. The electricity to run the washer is hard to gauge, but not too expensive. Water is included in our monthly condo dues.

Now, of course, one needs to figure out whether to include the cost of the washer ($70) and the spin dryer ($90) in the cost of the cloth diapers. We wouldn’t have bought either of them if we weren’t doing cloth diapers, yet we use them for other things. In the short run I am not going to include these costs since hopefully both of these appliances will last us for several years and the amortized cost should go way down.

So, 63 loads of diapers at about 10 diapers a load gives us 630 diapers. We have spent about $121 on those 630 diapers, so we are averaging about $0.19 per diaper so far.

Disposable diapers

Looking at a national brand name diaper, $32.69 buys you 192 diapers. That’s $0.17 per diaper. I cannot find a price at the moment, but I know you can get Costco diapers a decent bit cheaper than that. Let’s call it $0.10 per diaper.

Six weeks and we get our money back

If we look at those numbers above, I’m very pleased. In about six weeks of cloth diapering, we have gotten the costs of the cloth diapers down to just above the cost of national brand diapers. And we will be able to continue to use this batch of diapers on our baby for at least another 8-12 weeks. 8 weeks more brings the cost down to about $0.12 per diaper. So by the time we are done, we will get about the same price as Costco disposables for our diapers.

But here is the good part. When we have the next kid (and the next one), we will be able to use these diapers again with only the $0.03 in laundry soap costs per 10 diapers. So although we have “evened out” on cloth diapers with this baby, we’ll be way ahead with the next one or two. And from what I have seen of the larger toddler diapers, we’ll be way ahead in the 1-2 years we can use the next size of cloth diaper.

The downside

Of course, there is a down side to all of this money saving. Some days I feel like I’m always washing diapers. Which is, of course, somewhat true since I do a load at least once a day (and since the washer is in our bathroom and uses our bathroom sink for water, it’s a bit of an inconvenience to do a load.)

Overall

Overall, we’re happy with our decision. When we switched from disposables to cloth, the amount of trash that we were throwing out decreased so significantly, I felt like the planet could breathe a bit easier. We are still using water in a desert, but we’re choosing that over filling up landfills. The cost savings are also a nice bonus, and our baby’s bottom is a much nicer color than it was with some of the disposables we were using.

I haven’t entirely forgotten about this blog, though. I am trying to figure out how I can fit in writing at the same time I am making sure that my family is taken care of in a way that works for me. And right now, that is 100% of my time. So I haven’t been writing much (OK, I haven’t been writing at all!). I hope you all understand.

As for something financially related, having a baby has really helped our eating out finances! In the two months that we have had the baby, we have eaten out a sum total of twice. And those times were special occasions (our 11 month wedding anniversary. For our 12 month, we had a picnic, just like our wedding.) Right now we really don’t feel comfortable taking the baby out because he is still feeding unpredictably and sometimes for a long time. We don’t want to sit at a table in a restaurant breast feeding the baby for two hours. We might as well just do it at home.

So that is an unexpected bonus from having the baby. I had actually thought that we would eat out more (technically that we would get more take-out food), but we have been really good about cooking our own food and we have also been very lucky that people have brought us a ton of food so that we don’t have to cook. It’s been a great two months. I hope everyone has a good weekend.

Having this little one around really intensifies our goal of financial freedom. I have spent the past three weeks with him and my wife around the house and I absolutely loved it. I loved that I didn’t miss anything in his life, that I was there to support my wife when she needed me, and that my time was my own (even though there were plenty of demands on it). As we look to the future and we have more kids, there is just more and more reason for us to become financially independent. I want to be able to be a stay at home dad with my stay at home mom. It’s still a way off, but if we are very prudent, it could happen in as little as 10 years. 10 years old seems a long way away, with this little one being 10 (!) by the time that happens. And all those years that I would miss in between.

So perhaps there is a new plan that is called for in our lives. I don’t know exactly what it is, but some images from The Four Hour Workweek are in my brain. Perhaps life could be a series of breaks instead of one long break at the end. Certainly in 3-4 more years we’ll have more than enough money saved up to last us for a year off. That way I can be with the little ones when they are little, and the whole family could move to some foreign country just for the experience. Whatever it is, I know that I can’t spend the next 30 years of my life at the full-time work thing. I’m lucky since I am in a relatively high paying field that allows us to save up money quicker than some (although we also live in one the most expensive areas of the country, so that offsets the salary quite a bit!) I’ll keep talking about this in the future as our ideas shape and form. But for now, I’m going to just enjoy spending time with my family!

As we talked about it, I found out that she is mainly resistant because she doesn’t have a good grasp on exactly how to get a hold of that money that is in the on-line account. So for her, when the money goes there, it might as well disappear. I’m the one who has been managing things since we got married, mostly because I enjoy it more than she does. We have this long term plan to switch off financial management every year, but for the moment, it’s pretty much all me.

But talking to each other about it and me listening for what she needs was very important, and saved us a lot of conflict. If I had just moved that money, she might have gotten upset at me, and I wouldn’t have really known why. By talking about it, she knows why I want to move it, and I know why she doesn’t want to move it.

So for the moment, I’m going to make a hand-written account of all our on-line assets and accounts (hand-written because I would hate for my computer to get stolen and my account numbers and partial passwords to be listed on it) that we can store in a safe place that she can use to access all of our on-line accounts. We’ll go through how to log into each one of them so she’ll know where all of our money is. Hopefully this will give her a sense of what we have and where it is, and give me a chance to make some extra money off of our money. But it would never have happened if I didn’t listen to her and she didn’t listen to me.

Sometimes it seems like making one of these meals costs a lot more than I would expect it to, so I thought I’d add up the cost of the enchiladas and see how we did on a per meal per person basis.

So we spent about $31 on about 20 meals. That brings the per meal cost down to about $1.56. Of course, one enchilada is not an entire meal, so when we do eat it, we’ll have to add some beans and rice or something like that. But the overall cost of each enchilada is relatively small (although it is definitely larger than I would think that it should be.) And the price of having home cooked food readily available is hard to quantify.

Overall, we’re pretty happy whenever we make large batches of food. The only thing we need to do now is find a cheaper source for the enchilada sauce which makes up more than a third of the total cost of the dish.