Expenses · Finance

March 2016 Expenses

Financial independence is really important to me and it’s currently my main financial goal. With that in mind, I aim to spend an average of $1,500 or less each month so I’m able to invest the remainder. This equates to $18,000/year in total spending. Here’s how my March turned out.

I spent $657 on fixed costs (e.g. association fee, utilities, insurance, etc.).  Although I finally pulled the plug and canceled my landline, I had to pay in for both federal and state taxes when filing my returns. Combined it was $245 and was entirely planned. This was also my highest cost category for March. I included this in my fixed costs since these must be paid no matter what.

I spent $706 on variable costs (e.g. food, gas, house supplies, gifts/donations, etc.). The cost for groceries, gas, etc. didn’t amount to much but I bought a scanner and a cat tower, as well as more prescription cat food, and those items increased my costs greatly in March. The scanner is getting a workout, as I try to declutter and get rid of any unnecessary papers. I’ve also scanned all my photos and moved them from albums to boxes.

Total spending for the month was $1,363. So far this year I’ve spent $4,351, with an average of $1,450/month, which is still within my goal of monthly spending of $1,500 or less.

There are some large costs coming up over the next couple months so my monthly expenses will be high until June, which will cause me to pass the $1,500/month threshold.  After that, my expenses should decline and stay lower for the remainder of the year. It’s like this every year and completely expected. I have specific savings accounts that I contribute to each paycheck, which will cover these costs.

The most interesting purchase I made this month? It’s a device that clips the needle off syringes. I have to pay my vet to dispose of the needles used for my diabetic cat and being able to throw most of the syringe in the trash will cut down on the cost. I use 2 syringes per day and was filling up a quart sized sharps container every 3 weeks. This device should hold about 1500 needles, which will last about 2 years!

Our Next Life recently had an interesting post regarding the difference between financial independence (FI) and early retirement (ER). I’d been using these terms interchangeably, since I anticipate that I’ll want to “retire” as soon as I reach FI. After more thought, I’ve decided to go more conservative towards my early retirement goal so this will be a greater dollar amount than what I would consider to be financially independent. This is only because I’d like a greater cushion before voluntarily leaving the workforce, even though I would probably be fine at the lower FI amount if I was forced out of the workforce. Bumping up my ER goal would allow me to use 3.5% instead of the standard 4% withdrawal rule, providing greater assurance that my money will last through my extended retirement.

With that said, I’m currently 40% of the way towards financial independence, but 35% of the way towards my more conservative early retirement goal.

How did your March go? Any challenges?