I Can Make Something Expensive, How About You? with Hannah Rounds
On this episode of Financially Naked: Stories from The Financial Gym, our host is Emily Egan, PR Manager, and she is joined by Hannah Rounds, client of The Gym.
Podcast Notes
Hannah has been a Financial Gym client for about two years. She started living a frugal life when her son was born and her husband went to grad school, because they were going down to one income.
When Hannah and her husband moved to Raleigh, they bought a house to fix and flip. Her husband did all of the work himself and they saved a lot of money, but it still cost over $30,000. It did pay off in the end, but they were cash strapped at the time, because it was about 40% of their income.
She has a hard time regretting that decision, because it paid off for them financially in the long run. Her husband went to school to be a scientist and he is now loving his job as a handyman.
If he hadn’t done that flip, he may not have followed that career path, but it was really difficult at the time and she doesn’t recommend it. She wasn’t aware of what they were getting into.
One of their sacred cows is improving their current house, but they don’t expect to get the money back out of it. If you are interested in flipping houses, start with a small project like refinishing a piece of furniture.
If you stumble into frugality blogs, they talk a lot about bike commuting, but the only way for this to save you money is if you are getting rid of a car.
It didn’t save them any money, when she was biking to work in Minneapolis. She spent $450 to bike to work and she already had a bike — she would have spent less if she took public transportation.
The frugality blogs also say to cook at home, but Hannah’s favorite meal is the dollar menu, so eating out is cheap. When she cooks at home, it costs more when she needs to buy specific ingredients for one recipe.
To use those ingredients, you need to spend time looking for other recipes. With most things, you can have it fast, cheap, or good, but you can only choose two.
Hannah has three kids. She tried to save money on childcare early on, and she did a nanny share. However, if the nanny got sick or she needed to leave early, it got complicated and there was less flexibility than a daycare center.
Look at the whole picture, when you are trying to save money.
It is a lot easier for your spending to mimic your values, when you have more income. A lot of Hannah’s frugality journey was them trying to cut as many expenses as possible. It was much easier to increase income instead.
Don’t kid yourself about how much you spend. If you are into DIY home repair/remodeling, it is an expensive hobby. Hannah needs to set aside about $1,000 per month. Have an honest look at your budget and compare that to your values to see if that is where you are spending your money.
Resources Mentioned
House flipping: Bigger Pockets and The Build Show