Finance

October 2016 Expenses

Wow, it’s mid-November already. Was October a blur for anyone besides me? The month started with so much promise: I was excited to celebrate my 40th birthday and start a new (internal) job. Staying true to form, life threw me a couple curve balls.

Before I get into the details, I want to thank everyone who read my October posts and a huge thank you to those of you who posted comments. I’m so sorry that I didn’t post replies. Hopefully this will help you understand why.

Let me start by saying I had a wonderful birthday. I took the day off and spent it with my parents. I also took the next day off and spent it with a couple friends. Saturday was a joint birthday brunch with a close friend who was also celebrating her 40th birthday, hosted by her sister, and our close college friends attended. Sunday was brunch with my high school friends. It was a fantastic weekend with amazing friends and an abundance of delicious food.

The next week, things started to turn. While I was happy to start my new job at the beginning of the week, my cat, Rocky, suddenly stopped eating and looked really sick. I took him to the vet that Thursday and they ran a bunch of tests. The blood panel results came in early Friday and we learned he had stage 4 kidney failure. I knew it was something really bad because he wasn’t acting like himself and would hardly let me pet him. The vet and I agreed that the most humane option was to euthanize him, rather than put him through extensive treatment that may not work. I brought him in about an hour after getting the lab results. He looked miserable and I couldn’t let him suffer any longer than necessary

Rocky would have turned 11 a week later. I had adopted him when he was only 8 weeks old (you can read about it here). We had a great run and I miss him like crazy, but I know that I made the right decision. I’m just glad that we had a few days to say goodbye and his passing was very peaceful.

The same day that Rocky passed away, my other (diabetic) cat, Moe, decided to stop eating. The vet had taken him off insulin 3 weeks earlier to determine if he could go without going forward. Luckily we had a glucose check the next day and the vet put him back on insulin. He still wasn’t eating much so I had to babysit him during each meal to make sure he ate enough. It was just 10 days ago that he finally returned to normal and is back to his old self. It’s hard to say how much is due to his glucose being off or if it’s due to Rocky’s passing. They weren’t the best of friends, but Rocky had a huge presence so there’s a very noticeable shift in his environment.

With so much going on, only one word can describe how I’ve been feeling: Overwhelmed. While this blog is important to me (as well as reading the many other great blogs out there), I’ve been taking a step back and focusing on getting things back on track instead. Hence the October expense post not being written until almost mid-November.

While I hope to start writing more soon, it may just be monthly expense posts for the next couple months. I want these posts to be as good as possible and, right now, I just don’t have that in me. If you’re a blogger, please know that while I may not be commenting, I am getting back into reading your posts and hope to rejoin the community soon.

On to the numbers…

Financial independence is really important to me and it’s currently my main financial goal. Like I mentioned in my August post, I’ve decided to increase my budget to allow for monthly spending of $1,667. This is still very reasonable, coming in at $20,000/year.

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 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.

In early 2017 I’ll post my total spending in specific categories. In the meantime, if you have questions regarding how much I spend on groceries, my cell phone, etc., feel free to drop a note in the comments and I’ll happily provide those details.

Here are my October expenses:

I spent $481 on fixed costs (e.g. association fee, utilities, insurance, etc.). No surprises here. It was exactly what I was expecting, as fixed costs tend to be.

I spent $1,894 on variable costs (e.g. food, gas, house supplies, gifts/donations, etc.). The biggest expense category was my cats. I spent $889 on them in October, which includes the $600 for Rocky’s tests and euthanasia, as well as Moe’s glucose checks and insulin. I also spent money on new sweaters, some gifts, and a carpet steam cleaner. The carpet in my house is 11 years old so I’m hoping this will make them presentable until I’m able to replace it altogether. Now I just need to find the time to actually use it….

Total spending for the month was $2,375. So far this year I’ve spent $17,514, with an average of $1,751/month, which has slightly exceeded my goal of monthly spending of $1,667 or less. This definitely wasn’t how I saw the month going, but that’s just how life is. It seems the more we try to plan, the more surprises life has in store for us.

How did your October go? Any challenges?

Finance

Financial Lessons In My First 40 Years

The birthday month continues! It’s now been almost 2 weeks since I turned 40. I’ve already talked about emotional maturity and what I love about aging. Today I’ll talk about the big financial lessons I’ve learned. If you read a lot of personal finance blogs like I do, these won’t come as a surprise. Hopefully I can add something by providing some personal details. While it would be hard to list everything, I’m instead going to talk about the main 3 lessons that have had the biggest impact on my finances.

Without further ado, here they are:

Your Friends Matter

No surprise here: Who you spend your time with will largely dictate how you spend your money. Back in college, I spent a lot of time with one of my high school friends. We were going to different schools in the same town so it was easy to get together often. However, her perception of money was far different from mine and it was her bad influence that won. She felt that there was no reason not to spend a little more than you currently make since you’ll likely make more in the years to come. I was doomed, since we lived near the biggest shopping mall in the country and we liked to hang out there.

A few years after college graduation, we drifted apart. It wasn’t because of money but because we seemed to have less in common as we got older and both focused on our careers. While I sometimes miss her friendship, I’m grateful that I was able to pull myself out of debt shortly afterwards. Not spending time with her improved my finances greatly.

One of the benefits to getting older is that many people have additional financial responsibilities (read: kids). No one scoffs at the idea of doing something cheap or even free, since they have other obligations. Meanwhile, I get to bank any savings. So much easier to be cheap when everyone is in the same boat!

It’s Not What You Earn, But What You Spend

Sure, it’s easy for me to say that now, making close to the average of an MBA graduate. But I wasn’t always making this much (see below). It took earning more to make me realize that income matters far less than your lifestyle and spending.

Part of my journey towards financial independence has been exploring the concept of minimalism. For me, the idea of enough is what I’m striving for. I’m not going to deprive myself of experiences or anything that would truly make my life better. Instead I want to create a life where I’m grateful for what I have and don’t live a life of excess. This, to me, is mindful spending.

Mindful spending allows me to create a lifestyle that works best for me. In the process, I’ve been able to see just how little I need in order to life a great life. If you read any of my monthly expenses blog posts, you know that I plan to spend $20k/year. What’s crazy is that I feel like this is still too high, and I should be able to live off a lot less.

Your spending dictates how much you need to save for retirement, and that’s the real lesson here: What is the number you need to reach to buy your freedom? The oft-quoted 4% rule says you need 25x your annual expenses to be able to retire/reach financial independence. I’m aiming for something more conservative, 3-3.5%, and increasing my annual spending figure to determine my number. While I could try to live off $20k/year in retirement, it would be very difficult given the increased medical expenses and additional time on my hands.

It’s up to you to determine just how much you need to live and how much you need to save to buy your freedom. The less you need, the sooner you can be free.

You Can Be Debt Free at Any Income

I racked up a lot of debt between the ages of 22 and 28, between credit cards and house expenses/remodeling. By many people’s standards, it wasn’t much (around $7k total) but to me it was overwhelming. At that time, I kept track of my budget in a notebook, using a pencil. I was looking at how much money I owed and started to panic. It was then that I decided I’d had enough and finally turned things around. I consolidated everything into my line of credit and aggressively paid it off. I’ll never forget the feeling of being free from that debt, even though it happened 11 years ago. The best part of this story? I was only making $37k/year.

What lessons have you learned? Which have had the most impact on your finances today?

Lifestyle

Best Things About Turning 40

If you read my post last week, you know that I just turned 40 years old. Since I couldn’t figure out the best way to put my thoughts and feelings into just one post, I’ll be spreading those ideas out through the month. Today I want to talk about my favorite aspects around turning 40.

My absolute favorite is the ability to say what’s on my mind and have the experience to say it tactfully. I don’t know if other people experience this, but a few months before my birthday it was like a switch flipped. I suddenly didn’t care so much about what people thought and began to feel more open about expressing my ideas. That’s huge, considering how shy I’ve been my entire life. Not sure what the real driver is behind this, but I’ll happily go with it.

My second favorite thing is self-confidence in my appearance. We live in a culture that is brutal to women. We’re inundated with images of how we’re supposed to look and the products that can help us achieve just that. I’ve never had body image issues but I’ve always been very aware of how I look compared to everyone else — I’d be shocked if there’s a woman out there who feels differently. But seeing as I’ve had the same body type for as much of my life as I remember, I’m totally comfortable with that. Could I lose a few pounds? Sure. But would it really impact my life in a significant way?

Back in middle school and high school, I played tennis on the school team. One of my varsity teammates had a mom who was very involved with the team and everyone adored her. I have no idea how the topic came up but she said something I’ll never forget: She told us she will happily carry a few extra pounds if it means that she can eat what she wants, including dessert. That’s something I still think about and agree with today. Wise woman.

My third favorite part of turning 40 is all the things in life I’ve been able to experience. You can read about my favorites through this post. I’ve been able to travel, get a tattoo, buy a house, and let cats run my life. I’ve also had numerous work experiences. Although I’ve worked in accounting for my entire career, I’ve been able to work across various industries (e.g. advertising, retail, med tech, a university). Each one has been very unique.

But the best experiences are through my friendships. I’m still really close to some of my high school and college friends. The fact that our relationships have stood the test of time (not to mention out-of-state moves, marriages, and kids) makes me so happy. It gives me hope that we’ll be just as close in the future.

What’s your favorite thing about getting older?

Lifestyle

Thoughts On Turning 40

Today is my 40th birthday!

I’ve spent a lot of time thinking about what I wanted today’s post to be but couldn’t make up my mind. Should I talk about financial lessons learned in my first 40 years? Should it be more introspective and broad about life lessons in general? What about a tribute to my grandfather, since I was born on his birthday? Since I can’t make up my mind, I’ll be using all these ideas as posts throughout the month. Today I’ll give you a little more insight into who I am and why it feels so weird to be turning 40.

Let me start by saying how honored I am to have been born on my grandfather’s birthday. Many people tend to think 13 is an unlucky number but my (very biased) perception has always been the opposite. How lucky am I to share my birthday with someone I care so much about? Sadly, he passed away in 1995, a month before his 80th birthday (and my 19th). I think about him often and how I know he’d be so proud of all his kids and grandchildren. He’s definitely been missed in the 21 years since his passing. Happy Birthday Grandpa.

Moving on to what today’s post is mainly about….emotional maturity.

I’ve been blessed in the fact that my appearance makes me look so much younger than I really am. It’s common for people more than 5 years younger than me to think I’m younger than they are. But I often wonder just how much of their perception is due to my appearance. After all, I’m single and childless and I’m also not interested in moving up the corporate ladder. How much do these other factors influence the age people think I am, driven by societal norms?

Just as I haven’t followed the expected life of a now 40-year-old woman, I’ll fully admit that my maturity level really hasn’t changed since my early 30s. It simply hasn’t had to. All the big life changes that make you feel like an adult haven’t happened in my life. I’ve had the benefit of being able to live selfishly through the lack of a spouse and kids. My life has mainly been all about me.

This isn’t to say that I’m immature — I did purchase my house when I was 24 years old and I’m caring for a diabetic cat entirely on my own. Those things require a great deal of responsibility. But from an emotional standpoint, I still peg myself somewhere in my late 20s or early 30s.

Since I’m behind in my emotional maturity, I find it crazy that I’m now 40 years old. I certainly don’t feel that old, although my body likes to remind me every now and then. Although I’m a Gen X-er, I laugh when I read online about millennials talking about “adulting,” as I can totally relate to this. It also leads me to one of my favorite movie quotes, from Liberal Arts (starring Josh Radnor), approximately 59 minutes in:

“Nobody feels like an adult. It’s the world’s dirty secret”

My sentiments exactly. I keep wondering when I’ll have life figured out. After all, that’s part of what it means to be an adult, right? While I’m not there yet, I do owe a lot to the personal finance community. They’ve helped me to see what life could be, living without debt and being financially independent. It’s given me more of a purpose and something to work towards.

At what age did you feel like an adult? What life events caused you to feel that way?

Finance

September 2016 Expenses

I’m going to preface this post by saying that September was a much better month than August. I went to the state fair (Food! And more food!), accepted a new (internal) position with my employer, and met up with friends for lunch and a visit to the Foshay observation deck. October is looking to be a great month too. Why? It’s my birthday! More to come on that later 🙂

On to the numbers…

Financial independence is really important to me and it’s currently my main financial goal. Like I mentioned in my August post, I’ve decided to increase my budget to allow for monthly spending of $1,667. This is still very reasonable, coming in at $20,000/year.

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 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.

In early 2017 I’ll post my total spending in specific categories. In the meantime, if you have questions regarding how much I spend on groceries, my cell phone, etc., feel free to drop a note in the comments and I’ll happily provide those details.

Here are my September expenses:

I spent $443 on fixed costs (e.g. association fee, utilities, insurance, etc.). No surprises here. It was exactly what I was expecting, as fixed costs tend to be.

I spent $1,007 on variable costs (e.g. food, gas, house supplies, gifts/donations, etc.). I had a few expenses pop up: clothes for my interview, Amazon Prime renewal, and a furnace tune up. I also switched my cats to canned food. While I got a deal on my first order, the cost will be about $80 every four weeks going forward. Two cats on a wet food diet is not cheap!

Total spending for the month was $1,450. So far this year I’ve spent $15,139, with an average of $1,682/month, which has slightly exceeded my goal of monthly spending of $1,667 or less. All in all, a very reasonable month considering the few extra expenses.

Coming up in October, I’ll have an update on my diabetic cat and I’m celebrating my birthday month with various posts regarding how I feel about turning the big 4-0.

How did your September go? Any challenges?

Finance

Personal Finance Isn’t An All-Or-Nothing Proposition

I have to admit that one of my favorite things to do is read the comments for online posts and articles. Some people really hate the comments, but I find it interesting to hear all the different perspectives around the same post. There’s usually a wide range of opinions. Even though I know my thoughts on the post, it’s fun to read what other people think.

By far the best articles for comments are around bloggers who have already retired early (like this one, and this, and this). Aside from those, my favorite blogger website for reading comments is Mr. Money Mustache. If you are a finance blogger then you’re definitely familiar with him. If not, be sure to check out his website. He and his wife retired in their early 30’s BEFORE having a child. Impressive to say the least. For simplicity, I’ll be referencing MMM throughout this post, but please know that the idea I’m discussing applies to any blogger or personal finance article.

The reason why this is my favorite is because MMM takes a strong stance regarding ways to improve your finances and he’s very outspoken about it. Most of the comments are from people who wholeheartedly agree with him (and often defend him). But there are a few who disagree with MMM’s stance or question how viable it is.

What strikes me most about the comments that question MMM’s ways is that many seem to think that if you can’t adopt all the ideas, then it’s not worth making any change. Or if one idea isn’t practical then the entire idea is impossible. Maybe this is a reflection on each person’s individual outlook on life, or maybe we become jaded as we get older. Regardless of the reason why people feel this way, it’s important to remember:

Life isn’t an all or nothing proposition, so why do we treat our finances that way?

In no other facet of our lives would we have the perspective that if one aspect isn’t how we want it, we should give up altogether. For example, if your job responsibilities include a few items that you don’t care for, you probably won’t quit your job. Or if your kids aren’t turning out exactly how you want them to be, you wouldn’t give them up and quit parenting. So why do we treat our finances differently? Just because we can’t do something exactly how someone else has done things doesn’t mean we should give up on trying to better our situation.

I’m a by-the-books kind of person, in that I am fine working within a formula if it’s proven to work. After all, I’m not out to reinvent the wheel, so why not follow the path of someone who has already achieved what I’m currently striving for? But it seems like people new to the idea of early retirement, high savings rates, and frugality decide that it’s not worth trying if they can’t embrace the exact path that led someone else to that end result.

By all means, I’ll admit that MMM has some ideas/methods that may be hard to implement. For example, he suggests ditching the car and biking to work instead. That doesn’t work for me for two reasons: 1. I work 20 miles away from home (which MMM would take issue with anyway) and 2. I live in Minnesota, home of -20 degree (-40 degree wind chill) winters. It’s just not practical or safe. But this doesn’t mean that I don’t find other ideas from him that I can incorporate into my life and finances.

Instead, we should be adopting the ideas that work for our lifestyles. No one needs to live a life identical to MMM or any other blogger. We should be living the lives that best suit us instead. Rather than focus on an all or nothing route, we should be incorporating changes that improve our situation but still fall in line with our lifestyles. Over time, you can make more changes as your lifestyle evolves.

All I ask is that you read blog posts with an open mind. What one person is doing may not be suitable for you, but it doesn’t discredit the idea of early retirement or a high savings rate as a whole.  Please don’t treat your finances as an all or nothing proposition. Even small changes throughout time can make a huge difference.

Finance · Lifestyle

What’s Your Personality Type?

Last week, Business Insider published an article discussing how your Myers-Briggs Type Indicator influences your average pay. Intrigued? Take the quiz here if you don’t already know your type.

My results were: Introvert (50%), iNtuitive (9%), Thinking (22%), Judging (28%) = INTJ. In short, this means that I tend to be vision orientated, quietly innovative, insightful, conceptual, logical, seeking understanding, critical, decisive, independent, determined, and pursuing competence and improvement. Scary how accurate these tests are! I’d say it’s pretty well suited for my career in accounting.

So what does that mean for my earning potential? According to the chart, it looks pretty good. If only I was an ENTJ, though! They by far have the highest average pay, due to their extroverted nature.

 

I’d be interested to see these broken down into types of careers — I’d bet that there are people in accounting/finance making at least twice what they show for ENTJ, especially as they move up the corporate ladder. It would be fascinating to see how an ENTJ in that field compares to someone who is in a different profession.

How did you score on the quiz? Does the description match how you perceive yourself to be? How much weight do you put on the average pay chart?

Finance

August 2016 Expenses

Was August a tough month for anyone else? It seems like I was dealing with one thing after the other, both at work and at home. I’m glad it’s September so I can move on and start fresh. There are some great things on the horizon so I’m looking forward to what this month holds. Next month’s recap should be a lot brighter 🙂

On to the numbers…

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 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.

In early 2017 I’ll post my total spending in specific categories. In the meantime, if you have questions regarding how much I spend on groceries, my cell phone, etc., feel free to drop a note in the comments and I’ll happily provide those details.

Here are my August expenses:

I spent $437 on fixed costs (e.g. association fee, utilities, insurance, etc.). No surprises here. It was exactly what I was expecting, as fixed costs tend to be.

I spent a whopping $1,964 on variable costs (e.g. food, gas, house supplies, gifts/donations, etc.). Yeah, this was completely unexpected and totally busted my budget for the year. My cat went in for a dental cleaning and ended up having 8 teeth pulled! It wasn’t cheap but his health is important so it had to be done. I spent over $1400 on the cats this month, when I was expecting to spend around $180. Outside of that, my expenses were mostly what I was expecting, although I did make a donation and buy a gift this month, which weren’t entirely planned.

Side Note: If I didn’t have the cats, my variable spending for the month would have been only $479. I see value in having my cats around, so this additional cost is worth it to me. If you are considering a pet, please take into account all possible expenses to ensure that you can truly afford it.

Total spending for the month was $2,401. So far this year I’ve spent $13,689, with an average of $1,711/month, which has exceeded my goal of monthly spending of $1,500 or less. I won’t hit my annual expenses goal of $18,000 due to all the vet bills this year. Hopefully there aren’t any more surprises so that I still come in at a very reasonable $20,000 in total expenses for the year.

With all the cat expenses this year, I’ve rethought my budget and will be adding $2,000 to the annual budget going forward. With both cats getting older, there’s a greater chance of large vet bills so it’s probably wise to factor that into my budget. Besides the additional vet visits, my cats will likely need to be switched to canned food going forward. Nothing cheap about that!

Best surprise this month? I met up with two friends at a Caribou Coffee and ordered a medium decaf. Since they didn’t have any already made, they didn’t charge me for it. They explained by saying that I shouldn’t have to wait 5 minutes for something they should already have on hand. It was only a couple of dollars, but a really nice gesture, which you don’t usually see at the larger chains. Thanks Caribou!

How did your August go? Any challenges?

Lifestyle

Embracing Minimalism

One of the best parts of my journey toward financial independence has been learning more about the concept of minimalism. For years I’ve known that it’s a problem that I live in a 3 bedroom house by myself yet full of stuff. But it wasn’t until a couple of years ago that I started to do something about it. Minimalism-lite, I’ll call it. Cleaning out the overflowing closets and stuffed garage, but never really considering the other items I own because the clutter was gone.

The best (and most inspiring) resource that I’ve discovered is The Minimalists. I’ve read quite a few of the essays on their blog, subscribe to their podcast, and have read their book Everything Remains. They do a great job of spreading their message but doing so in a way that isn’t preachy. The basis of their message is that different items may provide value to you but not to them, and that’s okay. It’s about surrounding yourself with only the things that provide purpose and value. It’s this message that has allowed me to really embrace the concept of minimalism because it resonates with me.

Side Note: If you have any interest in minimalism, be sure to check out their documentary, Minimalism: A Documentary About the Important Things. It also covers various subtopics such as tiny housesProject 333, and meditation. The film is extremely well done and worth your time. You can find details here.

Looking around my house, there are so many items that I haven’t used in years. I’m one of those people who likes to keep things on hand, just in case I need them in the future. But the more I look at what these items are, the more I’ve come to realize that I likely won’t use them ever again. Giving them up won’t diminish my quality of life nearly as much as I think it will.

Here are my main reasons for embracing minimalism:

The Environmental Impact

There’s no denying that over-consumption has taken a toll on our environment, from the resources used to create the products we buy to the landfills that are overflowing with our discarded items. I don’t consider myself to be a tree hugger, but it really worries me that we live in a culture where everything is disposable, especially when you consider the fact that so many of these things aren’t actually needed or improve our lives in any real way while in our possession.

The Stress

The more stuff you have, the more time you spend caring for it. Being the lazy person I am, this is a huge driver towards my decision to own and consume less. The idea that your stuff owns to you is a very real concept and it’s something I want to get away from. Who wants to spend their time dusting and cleaning and dropping stuff off at Goodwill?

While I don’t participate in Project 333, I essentially have one outfit for each day of the week, summer and winter. For example, I wear the same 5 shirts/sweaters and 5 pairs of pants/jeans to work each day. Then I have 2 shirts/sweaters and a pair of jeans for the weekends. I do have a few sweatshirts (I live in Minnesota, after all) for the winter and a skort if it’s really hot on a weekend day.  I wear the same black shoes to work, Monday-Thursday and my basic generic Keds-like shoes on Fridays when I can wear jeans. I do have a couple of pairs of walking shoes to wear on the weekends and a few extra t-shirts but that’s it. My wardrobe is very basic and it’s an amazing feeling to know that I actually like everything in my closet. This has had the biggest payoff for me so far, so I highly recommend it.

No More Buyer’s Remorse

You know that feeling when you want something really, really bad? You finally get it and you’re so excited. Then a few weeks later you grow bored with it or a newer model is announced. Talk about buyer’s remorse. It’s then that you realize you should have waited or bypassed the purchase altogether.

When your main purchases are consumables, like mine are, there’s little room for buyer’s remorse. If I purchase a new flavor of tea that I decide I don’t like, I’m only out $3. A bummer but not really a big deal.

I’ve found that I’ve reached a point with technology where I have a very difficult time keeping up. Perhaps it’s my age (I’m quickly approaching 40) or my laziness or something else, but I just don’t have the energy to keep up with what the latest and greatest gadget is or the desire to own it. For me, it’s no longer sustainable.

Remember: It’s hard to regret a purchase that you don’t make.

Final Thoughts

Financial independence and minimalism compliment each other: Financial independence is about having the means to live out our dreams or lives as we see fit, while minimalism allows us to do so without being burdened with stuff.

If you feel overwhelmed or unhappy, minimalism just might be for you. It’s worth looking into whether or not consumption is driving your dissatisfaction. And remember, minimalism doesn’t mean living in an empty house with no belongings. It’s about removing anything in your life (possessions, activities, relationships) that doesn’t add value. It’s up to you to determine what’s important in your life, since no one can do that for you.

Finance

July 2016 Expenses

July was a great month: I saw friends every weekend, did the Color Run 5k, saw The Secret Life of Pets, went to the arboretum for the first time, and met a friend’s newly adopted kitten. Needless to say, the month flew by. The summer goes by so fast. Can’t believe it’s already August!

On to the numbers…

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 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.

Here are the details:

I spent $482 on fixed costs (e.g. association fee, utilities, insurance, etc.). No surprises here. It was exactly what I was expecting and finally returned to a normal level.

I spent $1,026 on variable costs (e.g. food, gas, house supplies, gifts/donations, etc.). This is a little higher than expected but there’s a good reason why, mentioned below.  My groceries also came in higher, as I try to eat more fresh food and develop a meal plan that reduces food waste.

My favorite purchase this month was a new laptop for my parents. They’d been using my old computer, now more than 10 years old, so my brother and I decided it was time for a new one. I bought it and my brother did all the configuration, since he’s our IT guy. It makes me happy that we can give this gift to our parents.

Total spending for the month was $1,508. So far this year I’ve spent $11,288, with an average of $1,613/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 at/below the $1,500 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 46.7% of the way towards financial independence, but 41.2% of the way towards my more conservative early retirement goal.

How did your July go? Any challenges?