It’s officially been one year since I started blogging! While I originally started this blog as a one-stop-shop for my friends who ask me questions about personal finance, I also found an incredibly welcoming community of bloggers. Every day I’m impressed with how encouraging and supportive other bloggers are. A special thanks to everyone who has ever commented on any of my posts. I hope that anyone who looks at this site finds value in it. If there are any topics you’d like me to write about, add a comment below and I’ll do my best.
This month I read The Simple Path to Wealth by Jim Collins. If you read other personal finance blogs, I’m sure you’ve seen a lot of reviews posted so I won’t go into detail about it here. I will say that the information is almost identical to what he has posted on his site but laid out much better. Unlike a lot of finance books, it’s easy to read, with many personal stories to help illustrate certain points. It’s the type of book I want to buy 20 copies of and pass out to all my friends.
Ok, let’s move on and talk money….
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.
After an expensive first 5 months of the year, things are finally returning to normal. Here are the details:
I spent $421 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 $851 on variable costs (e.g. food, gas, house supplies, gifts/donations, etc.). I bought more supplies for my diabetic cat and had my dryer vent cleaned by a professional. The vent goes up through the roof so it’s well worth the money to have someone climb onto my second story roof since I won’t do it myself. No other large expenses — it was a very quiet month.
The purchase that I’m most excited about? It was a fundraising campaign for one of my favorite indie bands so they can record their newest album. The hardest part is waiting a few more months to receive it. They’re super talented so be sure to check them out if you’re a music fan.
Total spending for the month was $1,297. So far this year I’ve spent $9,780, with an average of $1,630/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 $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 43.8% of the way towards financial independence, but 38.7% of the way towards my more conservative early retirement goal. These are both up over last month, mainly due to my high savings rate. Overall, my rate of return for the month was about 2-3% across all my accounts.
Brexit had a lot of people worried, but the US markets bounced back within a week. It’s a good lesson in staying the course and paying little attention to events like this. I did take advantange of the markets being down over two business days to rebalance my accounts by reducing my bond holdings and increasing my equities. I wanted to buy more shares before the market went back up and I just squeaked by. The market rebounded much faster than I expected!
Keep in mind that you likely aren’t tapping into your investments anytime soon, and the number of shares you own remains the same. These are unrealized losses — they aren’t real unless you sell your shares while the market is down.
How did your June go? Any challenges?