In today’s episode, Cody and Justin are joined by Kim from The Frugal Engineers.
Kim started nowhere near engineering and with no financial goals.
A math professor and an intro to Dave Ramsey would turn her life and career choice completely around.
Kim would eventually build a side hustle that would become her full-time job.
That side hustle brought in more money than she ever made in traditional employment, allowed her to stay at home with her child, and even let her husband reduce to part-time work.
Now both Kim and her husband are self-employed and working for joy instead of stressing about finances.
Listen and follow along with the summary below and make sure to check out the links at the bottom of the page.
Episode Summary
Kim took a gap year after her junior year of college to work at Disney worldShe had been living off scholarships and didn’t really have to worry about incomeDuring that gap year, the scholarships endedShe bought a car and racked up $10k in credit card debt The main culprit was a guy she was dating who was already in a corporate jobShe kept trying to keep up with his spending along with the travel and eating outKim ended up graduating with an engineering degreeEngineering wasn’t on her radar until a math professor pushed her that wayHer financial turnaround came after a friend introduced her to Dave RamseyWhile she always understood the math she didn’t have a grasp on the psychological sideFrom there she made a plan that included never taking on debt againIn grad school, she’d meet her future husband who took her on a date to dollar treeKim made a vow to pay off all her debt before they would get marriedIt was on their debt payoff celebration that he proposedThen we dig into how she graduated from just Dave Ramsey teachingsNow that she’s comfortable with credit cards, she fully embraces travel rewardsFast forward and they have a child and are just discovering the FIRE communityAfter some quick math, they realized at age 29 they were only 6 years from retirementThat plan was if nothing changed but Kim wanted to work from homeKim dual-hatted a side hustle with her jobShe built that up so much that she now works from home and reduce childcare costsAfter just two years she was making much more than her traditional workInspired by Kim’s transition her husband started working for himself as a consultantKim’s side job was hard to juggle with being a new mom at firstAfter calculating things, they realized it was more profitable for her husband to go part-time and free up time for her and greatly increased their work-life balanceOnce they were completely location-agnostic they decided to leave FloridaThey tried Oregon for a while but it was too expensiveStarting this year they started the journey of finding a place to put down rootsThey tried Tennessee, Alaska, Nevada but ultimately settled on WyomingWyoming has great tax benefits and access to skiing for their daughterNow the next thing they needed to tackle health insuranceThey tried standard heathlcare.gov plan with a high deductibleThen they tried a health share program through LibertyThese plans are interesting because they can be more selective of who they coverIt was $450 per month for a family of threeKim would have to pay upfront for the bills and then file for reimbursementThey struggled with timelines on reimbursement and lack of understanding from doctorsAfter 6 months they went back to a standard plan that was over $900 per monthCurrently, they’re on a “short-term” health insurance planIt’s only $230 per month but comes with a high deductible and no HSAThen we shift to discussing the detailed steps of finding your FIRE homeThey made spreadsheets that would mimic their spending in a specific cityThey visited playgrounds, realtors, and the Wal-Mart TestHer rule is if you don’t like Wal-Mart in your town, it’s probably not a good choiceWe finish off the episode detailing their investment strategyTheir strategy is a traditional approach through Vanguard and index fundsThey’ve decided not to retire as early as originally plannedThat decision is a factor of enjoying work and being able to add more cushionTheir current total spending is $40k per year for the householdKey Takeaways
It just takes a spark: Kim got redirected by a math teacher to go to engineering and she found a husband that fits perfectly with her restructuring her financial journey. It’s just amazing to see how these small moments change our livesNontraditional meet traditional: I love how Kim wants to live a traditional life in one location with her family but made it possible in such a nontraditional way.Pen to paper: Kim was thorough and realistic when making the decision on where to move. She understood it required a lot more research than simply googling the average cost of living for a city.Call to Action
Sit down and consider where you want to live in retirement. Build some calculations based on taxes and cost of living and make plans to visit those locations over time.
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Via her blog TheFrugalEngineers.com
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