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 accountability 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.
I used Mint to generate the spending report and figure out our current net worth. It’s not perfect, but as Mr. Smith likes to say, “Don’t let the perfect be the enemy of the good.” Without further ado, here’s where we ended up at the end of December 2019.
Housing expenses made up 30 percent of our spending this month. I didn’t include the payment towards the new house in this because it came directly from savings for this purpose. In addition to rent, the housing expenses included our new bubble water machine and additional Weck jars for our zero waste pantry.
We had to pay our last — for the moment — payment towards the new house this month. This covered the phase 3 selections where we picked out cabinets, knobs, flooring, countertops, etc. The next time that we will need to hand over a check is when we close on the house.
More progress has been made on the house with the footers now in place and backfilling completed. The weather has not been complying much and they are waiting to pour the foundation. Once the foundation is poured, the home is considered “officially” under construction and we’ll have our first walk-through with the project manager.
Food costs, including groceries, eating out, and alcohol, made up 19 percent of our spending. While the percentage seems higher than usual, the actual dollar amount is $100 less than our twelve-month average. I think we’re headed in the right direction.
Last month we started meal planning for the entire month at once. We did one huge grocery trip at the beginning of the month for the whole month’s bulk needs (rice, flour, beans, etc.) and that week’s meat and produce. All I had to do for the remainder of the month was pick up produce and meat on a weekly basis. It very much streamlined my shopping and made us much more conscious of our eating and spending. We’ll continue the monthly meal plan in March and see where that gets us.
This month was a lesson in “be careful what you wish for.” Last month, I wrote about how I was looking forward to talking about spending that didn’t have to do with transportation. Of course, I meant this in the context of paying off the car, but the universe had other ideas.
Pet care made up 9 percent of our monthly spending this month. In addition to the usual buying of pet food, Sisko needed some routine maintenance done this month and got his teeth cleaned and heartworm preventative prescription renewed. In addition, we had to take him in to get checked out as he was having some urinary problems. Thankfully, switching his food to a new, prescription diet resolved the problem.
The higher than usual spending on pet care wasn’t a big deal because we budget for it. We know that pet care costs us about $3000 per year with routine maintenance, food and litter, boarding when we’re traveling, and the occasional unscheduled vet visit. So we save and spread it out over the year. We love our little dudes have come to terms with these costs
the actual percentages
Other than our top three spending categories, we also spent a fair amount on travel. However, this is all travel for Justin’s job as he is going to Florida in April for a quick turnaround trip and then we had to pay for the Bermuda conference fees. Since we’ll be reimbursed for those, they didn’t seem worth diving into.
The other stuff was fairly normal with us making our monthly contribution to our future child’s 529 plan and I took advantage of a really good sale at a children’s clothing store to stock up on some neutral baby clothes.
All-in-all, we don’t have anything major planned for March and I’m anticipating a nice, chill month.
Despite us pulling from savings to pay for part of the house downpayment, we still managed to increase our progress to fi by about 4 percent. Last month was a three-paycheck month for Justin which means we put more in the retirement accounts than usual. I’m going to sit down in July and do some calculations for how my leaving academia will affect our progress. I may do a new post about this as well.
How did your month go? Are you meeting your financial goals?