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 January 2020.
Kid expenses made up 15 percent of our spending and 15 percent of our income. I’ll be honest. I spend a lot of money on our kid. The bulk of the spending was for his Owlet, clothing for future seasons that was on sale, finishing up his play area, trying every remedy available over-the-counter for eczema, and books on child development.
We decided to buy the Owlet smart sock after an entire day of shenanigans that resulted in a whole lot of crazy for absolutely nothing. LP was sent home from the NICU on oxygen due to his chronic lung disease from being born super early. He was sent home on such a low amount of oxygen that a home pulse ox device wasn’t ordered. It’s really not a big deal. We know what to look for in terms of his breathing. But I digress…
When we went to the pediatrician’s office for his six-month check-up, they decided to check his oxygen levels with their device. When the levels came back a little low, they asked for us to come back the next day for a re-check. Using the same device, the levels still seemed low and so the PA decided to increase LP’s oxygen until the numbers were better. On one hand this makes sense. On the other hand, he never asked the question of why LP would suddenly need SO much more oxygen. It was a comedy of errors. A bunch of people were treating my son who had never met him before. We ended up in the ER to use their monitors to check him. He was PERFECTLY fine. They sent us home with him on his original amount of oxygen.
After that, we decided that having an at home pulse ox device would give us some peace of mind. We put the sock on him every night when he goes to bed. It has only “red alarmed” twice when LP managed to pull off his oxygen in the middle of the night. Otherwise, it’s just nice to pop in and see how he’s doing throughout the night. I’ve been sleeping a lot better and it was money well spent.
We did have a successful family outing to IKEA one Sunday morning. It sort of worked out perfectly. LP ate his meal and then we headed out to the store with the plan of getting home before it was time to feed him again. It somehow worked! It also turns out that people will give you right-of-way when you’re wearing a baby and carrying his oxygen tank.
We got him frames for his photos, a huge mirror, and a tiny armchair that matches the adult armchairs. He’s not quite big enough for his Charitys yet, but Sisko certainly is a fan of it.
Gifts made up 11 percent of our spending and 11 percent of our income.
We actually spent this money in December, but it took a while for the charges to be processed. Justin got me an Apple Watch for Christmas. I’ve been wanting a new wearable that can sync up with my other Apple products. So far, I’ve been liking it quite a bit.
We also decided to get Justin’s mom an iPad. It was partially for selfish reasons. We wanted LP to be able to FaceTime with his Grandma. (His other Grandma already has an iPhone.) In his first two months home, she spent over two weeks with us and has fielded my meltdowns and worries on a daily basis. We couldn’t have made it through that really stressful time with 24 appointments in two months without her.
food and dining expenses
Food and dining expenses made up 8 percent of our spending and 8 percent of our income.
If you’re a long time reader, you know that food costs have been our Achilles heel. For the month of January (and beyond) we’ve decided to go meat-free. So much of our budget was eaten up (pun intended) by meat products that we felt removing them was the next logical step for us to start making a dent in this area.
At the end of the month, we didn’t even miss the meat. This wasn’t our first time attempting a meat-free month, but it was the first time that we were willing to continue. We ate a lot of vegan tacos, fancy ramen, avocado toast, and gnocchi puttanesca. Thankfully, we own several vegan cookbooks so we’ll be able to experiment a bit more going forward.
the actual percentages
We only include paycheck spending in this section. This means that the money that comes out of our HSA for various medical expenses isn’t included here. (Fun fact: We’ve already hit our deductible for the year, but that’s for another day.)
Overall, the month was a little strange for us. It was a three-paycheck month so we made an extra 1/2 mortgage payment (check out my Instagram for the nitty-gritty mortgage details @SmithHappens2019). The “home” category also includes (by Mint) our purchase of various home supplies like a year’s worth of toilet paper from Who Gives A Crap (that’s my referral code!).
We don’t typically spend as much as we did on bills and utilities, but our annual composting bill was due this month. We pay the city to handle our compostables for a couple of reasons. First, I no longer have time for the worms as my list of daily and weekly tasks has exploded with the baby. Second, A LOT more can be composted through the city than with my worms. The city is happy to take meat and bones (although less of a problem these days) and the worms couldn’t care less. Don’t worry though. The worms found a new home with a fellow ChooseFI fan.
progress to fi
As of this month, we are 44 percent of the way to our fi number. This is one percent higher than last month. Nothing really major happened this month inn terms of our savings. We put the normal amount in and didn’t need to pull anything out for major (and planned) expenses.
While I like how nice and clean this looks, I’m starting work on a new post about our “buckets” saving strategy for FI. More to come soon.
How did your month go?