How We Did It – Part 3 – Taking an Unexcused Absence (she said)17 Mar 2011
This is the third entry in a series on how we managed to spend the entire winter at Beaver Creek Resort. We are not independently wealthy, nor unfortunately is this extended vacation indefinitely sustainable. We are simply taking an Unexcused Absence from “real” life, and present a more detailed financial picture here.
The first article in the series, Fighting the “Tyranny of the Ordinary”, discusses freeing ourselves from the ever-expanding world of stuff. The second, Show Me the Money, talks about spending habits that free up our annual vacation budget and keep our expenses low. In this third article, we talk about the major lifestyle and financial decisions that make this extended vacation possible. Earning two erratic incomes challenges our planning and budgeting. However, those plans and budgets continue to work when we voluntarily dial down our income.
We are both self-employed, which frees us from the standard (American) workplace option of 2 – 3 vacation weeks per year. Self-employment radically affects our spending and savings habits (a good thing), makes it nearly impossible to get health insurance (a frustrating thing), and allows us to take more and longer vacations (an excellent thing)!
Our income stream is erratic. As a Realtor, I receive a paycheck only after completing a successful transaction. Kent right now does computer programming, which means he wins a contract, completes the job, and then starts to hunt for work again. We live with our irregular income by strict saving and budgeting which allows us to regularly pay our bills. We don’t know when we’ll earn our next dollar, so we ensure we have one or two in the bank to tide us over until we do! Saving a ‘cushion’ of money smooths out the rough income stream.
Kent’s main contract right now is writing software for an upcoming NASA mission. He adjusts his schedule to the natural ebb and flow of the project, working long hours in some phases, and stepping aside in others. This winter, Kent isn’t needed on a daily basis, but can work from Avon when needed (read about Kent’s day at the office here). This erratic work schedule creates gaps in our income, but allows us to spend the winter at Beaver Creek. Kent periodically returns to DC to work for intense stretches, which supplements the income from our jobs in the winter leisure sports industry.
The Last Good Housing Market in America
In the housing market, we simply got lucky. Washington DC’s housing market remains the strongest in America. Prices are up and rents are rising. We purchased a modest home nearly a decade ago, just before the big price run-up. Thanks to historically low interest rates (we refinanced last October), we essentially break even by renting our house. We can leave town, and not be eaten alive by our mortgage.
Once we understood how to survive gaps in our income, it no longer mattered why those gaps arose. The gaps can be accidental or self-generated. This winter, we made a conscious decision to take a pay cut! The combination of our preparing for erratic income, the ability to work periodically, and the luck to be in a good housing market have made it possible to “live the dream” here at the Beav this winter!