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 and save the remainder. This equates to $18,000/year in total spending.
I’m sharing my monthly expenses to illustrate that it’s not difficult to have a great life while spending far less than the household average. I’m fully aware that I’m able to do this because my mortgage is paid off and I don’t have a car loan or credit card debt. It was a long journey to get here (which I hope to write about soon) and now I’m reaping the benefits.
Although I use Mint and Personal Capital to keep an eye on all my accounts, I use Excel to track my expenses. I’ve found that this works best for me, since I can easily compare months and see a running total for the year for each category.
Just as I expected, my higher than normal expenses carried into May. Here are the details:
I spent $1,136 on fixed costs (e.g. association fee, utilities, insurance, etc.). I paid my property taxes in their entirety this month, which was $750. I could pay half now and half in October but the cost is small enough that I’d rather pay it all at once, rather than risk the possibility that I’ll forget to pay the other half later. All other costs fell in line with what I expected. Fixed expenses will return to normal next month and should stay that way for the remainder of 2016.
I spent $888 on variable costs (e.g. food, gas, house supplies, gifts/donations, etc.). I bought more supplies for my diabetic cat, renewed my blog hosting for another year, brought my car in for maintenance, donated to my favorite charity, and bought a wedding gift for a relative. Whew. That’s a lot of spending for one month! These expenses are great representations of my priorities, though, and I’m happy to put my money towards these costs.
Total spending for the month was $2,024. So far this year I’ve spent $8,483, with an average of $1,697/month, which has exceeded my goal of monthly spending of $1,500 or less. This was expected, due to some annual costs being due during the first few months of the year, and my monthly expenses should remain below the $1500 threshold for the rest of the year, with the average slowly coming back down as the year progresses.
For my long-term goals, I’m currently 41.3% of the way towards financial independence, but 36.5% of the way towards my more conservative early retirement goal.
How did your May go? Any challenges?