Mr. Smith and I have a dream of achieving financial independence (FI). We’ve been on this path for quite some time and now feels like the time that increased accountabiity through reporting our monthly finances. Every month, I’ll report the percentages that we spent in each category, our savings rate for the month, and our progress towards our FI number.
You might wonder why I’m reporting percentages and not the actual numbers. Personally, I think that percentages make a lot more intuitive sense for most people. For example, we often general financial rules expressed as percentages such as the rule that your housing expenses should be no more than 30 percent of your gross income. In addition, I’m not quite ready to discuss our actual numbers as I think that both detracts from what we’re trying to do and I want our story to be a bit more approachable.
When working out the numbers, I pull in everything from our paystubs and go from there. I think that it is really easy to forget the cost of health care and taxes when one doesn’t include them in their montly expenses.
Without further ado, here’s where we ended up in July 2018.
Questions most people are too polite to ask
Most people know that we moved for Mr. Smith’s new job. However, everyone seems too polite to ask about my employment situation. For the last three years, I have been a tenure-track assistant professor at a small regional university. When we decided to take his new job, we had to quickly figure out what do about mine. In conversation with department leadership and others, we decided that I would work remotely for this upcoming academic year on a reduced appointment. This means that instead of teaching three classes per semester, I will teach two classes each semester online. At the end of the winter semester, my employment with the university will end. Due to the nature of our pay cycle, my reduced appointment pay started this month.
One Month’s Rent
This month we only had to pay rent for one apartment. Yay! As an added bonus, our security deposit and excess rent payment was returned. We had paid a whole month of rent despite the lease ending on the the 23rd of July. Not surprisingly, we got our entire deposit back. I’m one of those people who tries to leave their place better than when they found it. When the leasing agent came to do our move-out checklist, he was way impressed by how clean the apartment was. After savings, rent was our largest expense this month. This will be fairly normal going forward.
Traveling and Pets
Percentage wise, traveling and pet care were slightly lower than our rent. I’m combining discussing these categories because they are directly related. When we went to Alaska, the boys went to boarding. Sisko had a blast as he was able to do doggie daycare during the day. Scooter was no worse for wear, which means that he had a good time too.
In addition to our Alaska trip, we also went to Amarillo, TX to pick up our niece for a two-week visit (more about that in another post). We did one night at the hotel and a night of boarding for Sisko since the hotel wasn’t dog-friendly. We’ve already paid for the hotel for the return trip during the first weekend in August.
Food costs continue to be something that we need to focus on. I’m doing a separate post about it though. Needless to say, between 12 days total traveling and having a toddler here for two weeks, we didn’t do as well as I would have hoped. I’m going to do a deep analysis of August’s food bill and see where we can cut back.
The actual percentages
While we did save 43.5 percent of this month’s income, our actual savings rate less transfers from savings (the travel savings account and a long-term project account for future discussion) was 37.8 percent. Next month is a “normal” month without travel and our savings rate should rebound.
We did nudge a little closer to our FI goals, but we still have a long way to go.
How did you do this month? Were you able to reach your goals?