Mr. Smith and I have a dream of achieving financial independence (FI). We’ve been on this path for quite some time. Every month, I 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 see 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.
Going forward, I’ll discuss our top three expenses with the exception of housing and transportation. These two categories make up a fairly large chunk of our spending and I don’t see that changing any time soon. Frankly, it’s boring and I think the other parts of our spending that are variable are much more interesting to talk about.
Without further ado, here’s where we ended up at the end of July 2019.
Travel expenses made up 25 percent of our spending and 27 percent of our income.
We paid for the rest of my yoga retreat in Bali and purchased my plane tickets. I was going to try for a long layover somewhere so that I could get a side trip on the way to Bali but opted for the cheaper flight instead. I’ll have a 16-hour layover in Shanghai which will give me enough time to rest in an airport hotel and get something to eat. I’ll be getting to Bali two days before the retreat starts and will have some fun exploring on my own.
Justin just got back a four-day trip to Michigan for work that we’re going to reimbursed for in the near future. (As in the after the first of the month.)
This should be the last bit of travel for the year. While the trips have been (or will be) fun, I’m looking forward to being a bit of a homebody in 2020.
We did a lot more shopping this month than usual because we needed to finish preparing for our trips. Shopping made up 13 percent of our spending and 14 percent of our income.
The flood of Amazon packages was a bit much this month. We needed to get quite a few things for our trip to South Africa including appropriate clothing, binoculars, power converters, and an array of mosquito repellants. Justin is also planning a guy’s camping trip in September and he needed to get some camping gear as well.
Our largest purchase was my new camera. I’ve been wanting something better than my iPhone for some time as I think I’ve learned everything I can about iPhone photography. Getting the new camera before the trip just made sense since it’s a once-in-a-lifetime short of trip. Plus, multiple bloggers who have been on a safari in South Africa recommend a good digital camera instead of a cell phone because people often want to post their cell phone pictures (go figure) and that can tip off poachers as to where the animals currently are. I would hate to contribute to an animal’s death because I made poor choices. I’m thinking about taking a photography class at the local community college next spring. That should be a lot of fun and get me out of the house some.
Food expenses made up 9 percent of our spending and 11 percent of our income.
July was a MAJOR food budget win for us. It was our least expensive month of 2019 and of the previous 12 months. We came in $475 below our 12-month average! The big difference this month was that we only went out to eat twice, both times were while my best friend was visiting. We took her to our favorite taco place and to the neighborhood bar & grill. We did a lot of cooking at home. What this shows me is that it is possible for us to spend less in this area. We just need to be much more intentional and not let our wants overwhelm our budget.
August should be a pretty inexpensive month for us as we’ll be on our trip for 12 days and I’m working hard to make sure the pantry and freezer are empty before we go. Then there is the move to the new house at the end of the month. I’m all about trying to move as little food as possible. Plus, I’m not buying a refrigerator until after we move (due logistics and wanting to take advantage of Labor Day sales) so whatever food we have will need to fit in the cooler.
the actual percentages
Below are the rest of the month’s spending percentages. If you follow me on Instagram (@SmithHappens2019), you might notice that I haven’t included the money that I spent at the dentist or eye doctor. This is because those monies came from our HSA account that we contribute to every month. It wasn’t normal paycheck spending.
progress to fi
As of this month, we are 43 percent of the way to our fi number. This is the same as last month despite pulling from the HSA and the brokerage account.
With all of the travel and whatnot, we’ve carried a balance on our credit for the last couple of months. Some of this is because we wanted to stay as liquid as possible since we didn’t have a clue when we would close on the house. (We’re closing at the end of August!) We decided to pull money from our brokerage account to pay off the card and get us back to zero. I’m a LOT less stressed when the card is at zero.
With the closing in August, I’m expecting that our percentage to fi will decrease again since we’re pulling out the rest of the down payment, but it’s not a big deal since we knew this was coming for a while.
How did your month go? Were you able to achieve your financial goals?