Even though I don’t feel bad about recent financial decisions my husband and I made, they are probably not what you would expect from a personal finance blogger.
While both decisions were very intentional, I am certain our choices would differ from others in the personal finance realm.
That said, we try to make decisions, financial and otherwise, that are in line with our dreams and values, or our Why, if you will. And that is exactly what happened when we made these personal finance-altering choices.
Confession #1: We bought a boat
Last summer, we took a little camping trip to a lake in Minnesota and we rented a ski boat. We’ve rented boats before but this time our kids were older and we rented a tube. A fantastic time was had by all.
Unfortunately, our teenagers don’t love taking regular camping trips with mom and dad anymore (they used to love it!). But, boating, they said, was something they were more than willing to do.
My husband started looking at boats on Craigslist before we even arrived home. I admit, I wasn’t completely “on board” for quite some time. First, the boating season is fairly limited in the Midwest. Second, we had financial goals and buying a boat would put us behind on our goals.
But, then, I took a step back and looked at how much time I have left with my kids at home. Maybe they’ll decide to continue to live with us into their college years, but they will start their own lives despite where they live. Things will change very soon. I can see it with my 16 year old son already; he’s getting excited about his future and making plans for what he wants to do in his adult life. He sometimes spends an entire weekend with his friends and we hardly see him. We want to spend as much time as we can creating lasting memories.*
So rather than be so stubborn and focus too much on the money, I climbed aboard. We wanted to be cautious and make an informed decision about the boat. Our plan was to buy with the assumption we may want to sell it in a couple of years. My husband educated himself about all things boats (by educate, I mean he relentlessly obsessed about everything and anything there is to know about buying a quality, used ski boat).
In September, we bought a 1999 Chapparal ski boat for $1500 under NADA value off of Craigslist (with cash). The boat had been in climate controlled storage it’s entire life and was well maintained and clean. If we decide to sell the boat in a couple of years, we will likely be able to sell it for what we paid for it. We are on the hook for tax, title, license, insurance, operating costs and maintenance (which we will DIY). That’s the beauty of buying used – the cost of use is quite low compared to new.
We were able to buy the boat because we save money in so many other ways. We cut ruthlessly on the things that don’t matter to us, but are willing to spend on the things we love. Sometimes it’s vacation and, this time, it’s a boat.
Confession #2: The Investing vs. Mortgage Payoff Experiment is Dead
Remember the investing vs. mortgage payoff experiment I posted about several months ago? Well….I reserve the right to change my mind!?
I wanted to pay off the mortgage for peace of mind. I really did. At least I think I did. But after refinancing at a rate of 3.25% and looking at our 5 and 10 year goals, paying off the mortgage didn’t make economical sense. It would slow our goals. My motivation waned and I converted to the investing side of the equation.
Once again, the decision goes back to taking a good, hard look at my “Why”. One Why is our kids, who will soon be heading off to college. Though we don’t plan to pay for all of their education, we would like to help them out along the way. Another big Why is creating freedom. Freedom for my husband to walk away from the 9 to 5. Freedom to start working on a business idea we’ve had for years.
I am not saying we won’t pay off our mortgage eventually. It is in the plan, just not right now. We have enough equity in our house that we could sell it in a few years and pay cash for a smaller home, so it’s not a huge barrier to early retirement.
To help speed early retirement, we plan to invest in real estate. For years, we’ve talked about buying a rental property and we’ve finally decided it’s time to stop talking and just do it! At this point, we are working on the numbers and down payment strategy, but hope to buy our first property within a year. Stay tuned…
Making these decisions really boiled down to making sure we are spending and living in a way that’s in line with our dreams and goals, our WHY. We’re happy with our decisions and I’m grateful we are in a position to be able to make these decisions.
Do you have any confessions you’d like to share? Please!?
I was inspired to share my “confessions” when I read Ms. Montana’s post, “When Frugal Buys a Classic Car”, where she shares how the “little things can be leveraged into bigger things”, and Penny’s post, “The Best Money I Spent This Month”.
*We have had the boat out on the water, with the kids on board, three times since we bought it (before it got too cold). So far, so good!
That is the great thing about used toys, keep them for a while, then you can sell them. House repayment vs investing in tricky. We thought about doing a refi on one of our rentals, but in the end decided to invest more. There is always more than one thing at play. For us it would have also lowered the amount we could borrow if we want to buy another property. So between those two things, it just wasn’t quite right for us.
I’m pretty comfortable with the boat purchase since our overall cost will be fairly low. But, I admit, the mortgage vs. investing decision still weighs on me a little bit. It’s really a tough choice.
Amanda, good for you for not being a slave to the FIRE crowd! The point of taking your personal finances by the reins is to live a good life and meet YOUR life goals. The point is not to hold on to every nickel you can until you die. I think that sometimes people forget that.
Spending the money intentionally on things you and your family value is what it is all about! (Even though a boat is really just a hole in the water into which you pour money – ha ha) At least you knew what you were getting into.
And the mortgage vs. investing debate is clearly a grey area. As long as you didn’t decide to blow it on a trip to Tahiti, who can fault you?
Good job aligning your financial plan to your life goals!
Thanks for the kind words, Jon. I am definitely a saver by nature, so I get a bit uncomfortable when I’m not saving what I think I should. It’s a fine balance between living for today and planning for the future.
I don’t see any expensive trips to Tahiti in the near future. 🙂 We’re generally pretty disciplined with our goals…
“Making these decisions really boiled down to making sure we are spending and living in a way that’s in line with our dreams and goals, our WHY”
This is what it’s all about! Happy to hear you got some use out of the boat already – to often they sit unused!
We aren’t attacking our mortgage at all right now and probably won’t for a bit. Focusing on building our invested assets especially with the super low rate.
Thanks, AE! Yes, boats often sit unused, which is why we made the purchasing decision completely based on resale. I’m pleased with the use we got out of it so far. If I had to guess, I bet we will sell it in two years and won’t be out much money. Only time will tell.
I’m completely wishy washy on the mortgage. The numbers tell me I’m better off investing, but the guilt is still there for some reason.
I can really get on board with both of these financial decisions.
First, time with the kiddos is invaluable. It sounds like you bought the boat as frugally as you could. You will make memories with those kids while they’re still kids. Can’t put a financial value on that. (plus, you don’t have $600k of student loan debt, like us. ha)
Second, your mortgage interest rate is crazy low. You could invest that money at a way higher rate. So that is just a smarter decision. Nothing to feel guilty about.
Love these confessions! My guilty confession is that even though we have a TON of debt, we still budget to go on vacation every year. It is factored into our monthly budget, and we save for it. but i still feel guilty about it because its money we would be throwing at loans.
Thanks for your kind words, Amber. I admit, I was a little hesitant to even write this post. Just putting it out there feels weird. Personal finance is personal though, and that’s why I decided to share our personal choices here.
You should not feel guilty about vacations, especially since you plan and budget for it. Tomorrow isn’t guaranteed. We took vacations every year when we were paying off debt and created some pretty incredible memories along the way. My kids still talk about our vacations – they will never forget and neither will we. That said, I appreciate you sharing your “confession”! 🙂
Have you heard what “boat” stands for?
B — Bust
O — Out
A — Another
T — Thousand
Happy boating!!! 😉
Ha! 🙂 Thanks, ESI! That’s sounds about right! I’m hoping that’s not true for us, but I totally expect it to happen at some point during the time we own it!
Remind me to tell you about the $4k sewing machine I bought. It’s got LASERS. SO COOL. I also use it a lot, get a ton of enjoyment out of it, and will use it for years to come. Totally worth it in my book.
p.s. anytime you want company on the boat let me know haha
And it threads itself! Can’t beat that. 🙂
You’re welcome on the boat anytime. Do you know how to ski? We need lessons!
Truthfully I have always wanted a boat. Some of my fondest memories are going to visit my grandparents in Wisconsin and going fishing in the boat or riding in the tube. It’s the definition of summer fun and a great alternative to ice fishing. I don’t have the time to fish or have a boat right now, so I don’t know if I will ever have one. But, I want my children to have some of the same memories I did.
Also on the mortgage vs investing experiment. We are in the same boat (pun intended). With interest rates so low, its crazy not to invest more. Right now we are still trying to pay off our mortgage. Thankfully it’s only $60k so it won’t take too long, but as this election has shown regarding surprises. We are trying to reduce our debt more than invest at the moment.
I’ve heard from more than one person that they have fond memories of boating when they were younger. The kids love to tube and we hope to learn to ski. And fishing! We’re really looking forward to fishing next season – we have a “fish finder” (we’ll see how well that works).
Love the pun. 🙂 I completely understand reducing the debt. It’s a guaranteed return – can’t beat that.
I don’t think these are bad at all 🙂 so cool that you bought a boat! At the end of the day, if you can afford it and you have sat back and discussed it properly, then you can buy whatever the heck you want!
This sounds pathetic but I was just sat here feeling guilty about a ready meal I bought earlier for lunch tomorrow. I never buy them but it was reduced and it’s this chicken and chorizo dish that I never eat – so thought it would make a nice change. It was a tiny amount of money but still more than I usually spend on lunch so I was just thinking what an idiot, I could have used that towards debt. Need to stop beating myself up so much!!
Thanks so much, Francesca! 🙂
As a saver myself, I understand the guilt. It’s something I work on constantly. It’s really a balance…sometimes you just need to have the chicken and chorizo! It’s okay!
Good for you Amanda! They call it PERSONAL finance for a reason. I like the way you went about buying the boat, You did your homework, bought used, and with cash.
I said at one point that we would never use credit cards ever again. Well I lied. We have a few rewards cards today and are saving a ton of money on travel. We are using credit cards as a tool and not to overspend or to inflate our lifestyle. We saved $2K on our last trip.
Thanks so much, Brian! You’re right, it is definitely personal finance for a reason.
I think it’s great that you guys were able to use the credit card rewards to save so much on your trip! I guess never say never, right?! I said I would never buy a boat – ha!
I don’t consider these to be confessions at all. I think one thing that we should encourage more of in the financial community is the right and expectation of individuals to make personal financial decisions. I mean, it’s personal finance after all. I believe that if your financial habits align with your values and you’re making decisions that will result in an ideal outcome, no one has the right to judge that. So sail on, girlfriend. I wish I could join you, lol:)
Awww, thanks so much, Latoya! 🙂 I agree with you completely. I’m grateful for all of the kind, supportive comments and feedback I’ve gotten on a post I was hesitant to publish. And you’re welcome to sail with me anytime!
I agree with Latoya – confession isn’t necessary here. Spend and invest however you please – opinions of others be dammed.
I appreciate seeing the thought process that others go through to make decisions. Seeing how others operate helps me better navigate my own personal finances.
PS – very jealous of your boat!
Thanks, Ty!
This post really drove home to me the fact that the pf community is the most kind, generous, supportive community around. I love you guys!
It is interesting to see how others make their decisions. For me, it’s about balance between today and tomorrow. I’m one that can get totally caught up in the goal and forget to enjoy the journey – it’s something I have to constantly keep in check (and my husband gently reminds me as well). 🙂
I think you’re in good company with the mortgage issue, actually. I feel like I’m the lone goof trying to swat away at 3.5%. And I know boats are expensive and blah, blah, blah. But my very best memories growing up and currently involve my parents’ boat (and my kayak!).
You’re certainly not a lone goof, Penny. You can’t put a price on peace of mind and a guaranteed rate of return! It’s one of those personal choices in personal finance.
I remember you mentioning your fond memories of boating growing up – I hope my kids have the same. And when they’re out of the house, I’m selling the boat and buying a kayak – I love kayaking!
I hope your kids continue to love the boat and don’t get “over it” in the typical teenage fashion! I think your motives for buying it are exactly what money should be used for sometimes – money is a tool to bring us things we need/want, your kids are only young for a short period of time, no money in the world will buy you back that time with them as a younger family.
Jasmin
Thanks, Jasmin! Excellent point! I tried to approach it cautiously with the expectation that they may get “over it” and not want to go any more. But if it will give us a few more memories, it will have been worth it. Time will tell! (Maybe I’ll have a post next fall entitled “We Sold Our Boat”! 🙂 )
I think it’s great your family isn’t letting saving or being frugal impact your quality of life. Personal finance should be a good mix of saving and spending on things that really matter.
And it’s not like you got ripped off on the boat purchase (I’ve heard horror stories before from friends). It sounded like a very frugal purchase 🙂
Thanks, Andrew! So far, no horror stories. But we don’t have any oars in the boat yet, which I think needs to change. As they say, I’d hate to be “up a creek without a paddle”.
I don’t think you need to be defensive about your boat purchase (as an aside, a boat! a BOAT! So, so cool). You did a ton of research, made a financially sensible purchase (buying used, with probably a decent resale value), and most importantly, you’ve made a purchase that will give you the gift of experiences and memories with your children. This just sounds like a win to me.
Thanks, Mrs. BITA! We were trying to be smart about the boat purchase…and I think we were. Only time will tell!
I agree with the philosophy of ruthlessly cutting the things that aren’t important to you and spending on the things you truly love. Spending quality time with family is obviously important to you and the memories will be everlasting. And as for paying off the mortgage…I always was on the side of investing when you have low interest debt so that sounds like a fine decision by me!
Thanks for the supportive comment, Andrew! You know, I miss the days of creating those memories on a simple hike or the walk to the park. But I actually already feel like we have some great memories with the boat. I hope we can continue to make those memories next summer, as it’s the summer before my son’s senior year.
I can see how you’d derive more peace of mind from investing than from paying off the mortgage. And the boat purchase was very well thought out. We all have a right to change our minds – even if we wrote a blog post saying we’d do one thing and then decide to do another! Thanks for sharing this.
Thanks, Mrs. Groovy! I appreciate your supportive comment. It was difficult for me to put it out there, but everyone has been so kind. You guys are the best! 🙂
“While both decisions were very intentional, I am certain our choices would differ from others in the personal finance realm.” Two or maybe three years ago I wrote a post saying if your interest rate is low enough it makes no sense to pay off your debt faster than you need to. I got a lot of comments on the post and 47 disagreed with me and 3 agreed. After ripping my hair out I laid the foundation for my argument and then showed in a spreadsheet how much you are losing if you DO pay off more than the minimum. Finally everyone in the comments agreed that it made financial sense but that paying off debt is psychological at times – which I agree with. Long story short I also have a 3.25% interest rate mortgage and 26 years left on it. And I’m not paying a dime more than I need to each month, that’s for sure!
Thanks so much for sharing this, DC! I think it’s great that you put the spreadsheet together to show the economical benefits of investing over a low interest mortgage payoff (I will go look at it!). Being completely debt free would, no doubt, bring peace of mind. But the numbers tell me to invest – I want FI asap and I believe paying off the mortgage will actually slow progress. Time will tell, but my gut tells me investing is the best path for us right now.
Also I NEED to gather all the Minnesota personal finance bloggers sometime soon! Peter Anderson at Bible Money Matters used to organize events but it’s been a while. Not sure if you live near the cities or not, but would be fun to have an event in early 2017!
https://www.facebook.com/FinConMN/
Awesome! Just liked the page. Keep me posted if you get something lined up.
Oooh! YES! I’m in the Des Moines area, but it’s an easy drive and I would LOVE this! I was just telling a blogger friend last night how many pf bloggers are in Minnesota…
The investing vs. mortgage is super tough. I decided to invest more AND re-finance.
3 months ago I was able to re-finance my 3.85% 30 year mortgage into a 2.625% 15 year mortgage, which I very carefully calculated would end up saving me approximately $82,500 over the life of the loan. I also of course now have more of the payment going to the principal, but less mortgage interest to deduct on my taxes. Calculating the tax implications of having less of a mortgage interest deduction based on the re-finance was tough – but I also will come out ahead with the re-finance. Even at 3.25% though, it’s a much tougher call, but while rates are still so low a 15 year is super attractive. Just a thought. Thanks for sharing and CONGRATS on the boat! Always good to live the good life!
Thanks for sharing! 2.625% is a great rate! Congrats on the savings – the 15 year mortgage can save a ton over a 30! We actually did consider a 15 year mortgage but, ultimately, chose the 30 year so we weren’t locked into a higher payment. Our reliance upon one main income and our desire to start investing in real estate were the main deciding factors there. On the boat – thanks – we’re looking forward to next summer so we can get good use out of that boat!
You have nothing to confess! Good for you and enjoy your boat! The point of all this saving money is so that we don’t have to be slaves to our jobs, so that we can enjoy our lives and the years we have with our children! Sounds like you got a great price anyway. My husband grew up in Rhode Island – his dad raced boats and their family was always on the water. He has great childhood memories of boating that he gets to relive with our kids when we are there. A beautiful way to spend your time and money.
Thanks, Linda! I love that I keep hearing about all the great memories adults have of boating in their youth. Exactly what I needed to hear. Thanks for sharing!
Amanda, I love how intentional your decisions were! It’s refreshing to see this real life perspective. I for one have purchased plenty of “things” that weren’t great investments (like cars, etc.). While I don’t have a boat, I certainly would love one in the future (I love fishing!).
Thanks so much, Michael! We are looking forward to fishing next summer, for sure!
Never forget we’re saving $$ for a reason, to enjoy life. A balanced approach is always best. My confession:
We’re seriously considering a new F250. We’re 18 months from our FIRE dream of traveling 6 months per year with a 5th wheel. We’ve built wealth, but I’m still struggling with letting go of the $$ to buy a really nice truck. Need the dependability, and it’s part of our retirement dream, but still hard. Will keep you posted….
Thanks for sharing your confession, Fritz! I understand – I had a hard time letting go of the $$ for the boat too. We also love to camp and one of our retirement dreams is to travel part-time in the travel trailer (or maybe 5th wheel at that point). A reliable truck is important when towing, that’s for sure. And, yes, I love to hear what you decide!
Hi Amanda! I’ve been reading a while but it’s my first time commenting. 🙂 I think what you’re doing is awesome. You’re right, the kids won’t be around much longer and squeezing as much quality out of the limited time you have is so important. $1500 in the grand scheme of things is nothing compared to the joy you will share together. My BFs son is 15 and we never see him! Friends and video games have taken over. 🙂
As for the house, pay down or invest is such a personal decision. You have a great rate – might as well take advantage of it! I think the oay down scenario works best when people are prone to debt. Let them focus on one goal instead of seeing the possibilities around them. Investing see,s to be is way better route for your situation. College kids are expensive!!
Great read! 🙂
Jeez – proof read much? Sorry for the typos – not a great first impression for my comments!
I do it all the time. No worries! 🙂
I hear you, Miss Mazuma! I still lurk more than you all know. I’ve been reading your site as well! 🙂
It seems the priorities of a teenager don’t typically involve spending quality time with the parents. Go figure. Actually ours are actually pretty good about hanging out with us (when their friends are busy!), but they aren’t into going away for several days camping anymore. And I understand. We thought we’d meet them where they’re at. I’m betting we’ll have a boat full of teenagers more than once next summer.
I agree on the debt. Focusing on one goal can really provide the motivation to get ahead. In our case, I think focusing on our real estate investing goal will keep us motivated to get started. We’ve been talking for years, with no action, but now we’re determined to move forward.
Thanks for commenting, Miss Mazuma! 🙂
Love your thoughts on all of this stuff Amanda, I think the boat sounds like a great decision, and a well balanced one! I look forward to hearing more about your venture into buying the rental property in the coming year!
Thanks, MMM! I’m looking forward to sharing our new ventures as well…I’ll be sure to keep you all posted.
I get that “confessional guilt” thing too when we make a decision that I think might be perceived as “wrong” by the pf world. But that’s just evidence of a keeping-up-with-the-joneses sickness of a different sort : ) Your decisions are great! Sounds like you’ll pretty well break even with the boat in the long run, and you’re right about creating those opportunities with your kids. As for mortgage vs. investments, we focus on mortgage – but we’re older, and I have a good pensions plan. Personal finance is personal – not as in “secret”, but it suits the individual and unique person involved. No forgiveness required for your “confession” Amanda!
Yes – “confessional guilt” – that’s exactly what it is. And you are absolutely right that it is a different type of “keeping up with the Jones”. Thank you for that reminder, Ruth! The hope is to break even on the boat, but even if we don’t, we won’t take a huge loss. I understand exactly why you are working on your mortgage – and I think it’s great you have the pension and are on the countdown to retirement! 🙂 One day we will kick the mortgage to the curb too. As always, I appreciate your wisdom and kind words, Ruth.
Hi Amanda,
Great post! I don’t know anything about boats. If you would end up spending more money renting vs. owning, then it makes sense.
As far as the home mortgage, I would say you are doing the right thing now. I am an extremely logical person and don’t let irrational fears or perceived peace bother me too much.
We live in a larger home and we plan to down size when the kids go off to college. We wanted our kids to enjoy a nice home and a nice backyard.
With interest rates so low, I see no value in paying the mortgage off. I would rather invest the money which is exactly what we are doing. When the day comes, we will sell our home and buy a smaller home with no mortgage.
–Michael
Thanks, Michael! We actually did run the numbers on renting vs. owning on the boat and we are coming out way ahead there (as long as we use it several times each season).
I’m with you – we will sell the house to get rid of the remaining mortgage debt if it makes sense as we near early retirement.
Personal finance is personal, but it’s also all about having a plan. Blindly purchasing any old boat without weighing the pros and cons is completely different from researching, “obsessing” as you say and then coming to a rational decision on a boat you want to purchase. The people who get into trouble are the ones who do the former rather than the latter. No shame in purchasing anything as long as there’s logic and a plan behind it.
Thanks for the comment, Colleen! What you say is so true. I think we should all institute some sort of waiting period on purchasing decisions such as this. The boat certainly wasn’t a flippant moment of throwing caution to the wind. We sat on it for a couple of months while we did our research and made sure we made an informed purchase. So far, no regrets…