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Last summer El Carino asked if I wanted to go to Peru the next year. He explained that the World Congress would be in Lima and he planned to submit a presentation—would I go? Without much thought I said, “Of course.”
How was it so easy to agree to an expensive trip? Back when we first married, he was in graduate school and I worked full time at San Diego State University. I earned the equivalent of $53,000 and his tuition came to about $20,000. As soon as I started, I signed up to contribute the maximum—about $17,000—to my TIAA-CREF 403(b). That left roughly $36,000 in pre-tax income; after tuition we had about $16,000 to live on. We leaned on some prior savings, but we were determined to put as much as we could into retirement accounts to lower our taxable income and let our money grow tax-deferred.
In that early TIAA-CREF account we went 75% into the stock fund and 25% into the fixed option, which paid around 7% then. We lived frugally during his four years of graduate school: nights out meant hitting a happy-hour buffet with a discounted drink and free hors d’oeuvres. By the third year he earned a little from internships, and after four years we became a two-income family—though at first he juggled three jobs to make ends meet. He later opened a retirement account through work and also contributed the maximum. Year after year we saved more than we thought possible.
We didn’t miss out on life. We traded time for freebies—two-hour presentations in exchange for luggage, shows, and dinners. We hiked Torrey Pines, went to the beach regularly, and window-shopped in La Jolla for the price of two ice cream cones. Potlucks with friends and beach touch-football kept things lively. Our lives were simple, not miserable.
Decades later we reached our retirement goal but kept working and saving. We now spend heavily on what we value—travel—and cut back elsewhere. Who needs a new car anyway? That’s why the Peru trip felt like a no-brainer.
In Lima we stayed in Miraflores with a breathtaking ocean view. While getting used to the city we walked down the main street and found ourselves in an Independence Day parade filled with elaborate costumes and dancing—a free afternoon of entertainment. At the Inca market, $20 bought a Peruvian hat and a genuine leather-and-woven backpack for Jr. Carina. To avoid pricey hotel breakfasts we shopped at a local market and kept milk and cheese in the room fridge; fruit, bread, and cereal fed the three of us for three days for under $20. I always check the supermarket when I travel—it’s a window into local life and a cheap source of gifts like candy and coffee. Jr. Carina loved Inca Cola Light, a fizzy drink somewhere between 7 Up and lemon soda. Buying grocery-store snacks is a smart way to save, even on vacation.
After strolling the oceanfront park and touring the city’s highlights—like the extraordinary San Francisco Cathedral and ancient ruins still inside the city—we headed to Machu Picchu. Words fall short describing the place. We hiked in the Andes, climbed through the ruins, and sat quietly, taking in the snow-capped peaks and the river below. Knowing the Inca took 150 years to build that town reminded me how important patience is: anything meaningful takes time.
This is why you build wealth. Live conservatively and spend on what matters most to you. Take a few minutes alone in nature. Think about what gives your life meaning. Schedule time for what you love to enrich your life. Where do you splurge, and where do you scrimp?
