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Early Retirement Extreme Forums » ERE Journals

1. 

   S
   

   Journeyman
   Joined: Jul '10
   Posts: 288

   I've finally decided to start a journal. I'm hoping this will help me focus on keeping expenses low by putting the numbers out there for public viewing. I have two big challenges for figuring out when I'll actually make ERE: my budget fluctuates wildly each month and I don't know where and in what situation I'll be living in ERE. For now I'm just concentrating on saving money with the goal of being that much closer to retiring when I finally do settle down. I'm going to be in one place for the next few months, so that will help with the wild fluctuations.

   Since May 2010 I've been location independent. My husband and I have been traveling around the US and Canada by staying with friends, renting places, sleeping in our vehicle, and most recently tried wwoofing. I have a full time online programming job that pays well. DH is working seasonal jobs so he can spend time with his son during the summer and also is a full-time cheapskate.

   I own a house which I lived in before we began traveling. It's currently rented out to an excellent tenant who takes care of the place, never complains, and pays on time. I understand this is a lucky situation as an absentee landlord though, so we'll probably sell the place when she moves out. For now it's almost zero hassle and slightly profitable. It's not a house I would buy again as an investment, but a great place to live (1BR, lived there 3 years car-free, nice neighbors).

   Investing in the stock market seems kind of scary to me (yes, I know this is somewhat irrational). Both sides of my family have become wealthy through owning businesses and real estate but avoiding the stock market. Ideally, I'd get comfortable enough with stock/bond investing that it could be an additional income stream. For now I have my 401k/roth/IRA savings in plain mutual funds and I feel exactly like the clueless buy and hold indexer that I am. I put my taxable savings in a savings account (probably losing money there due to inflation) and also into paying the house off early (the mortgage is only 3.375% though).

   All budget numbers I post are for *two people* since DH and I track and share everything jointly.

   Posted 1 year ago #
2. 

   mikenotspam
   

   Apprentice
   Joined: Oct '11
   Posts: 55

   Cool, glad others are starting journals to keep everyone motivated.

   Posted 1 year ago #
3. 

   dragoncar
   

   Expert
   Joined: Oct '10
   Posts: 1,287

   With highly fluctuating expenses, are you considering using some kind of rolling average?

   Posted 1 year ago #
4. 

   S
   

   Journeyman
   Joined: Jul '10
   Posts: 288

   Oct 2011:

   This month we spent the first 3 weeks wwoofing on a farm in rural California, so we didn't have food or housing expenses but paid for those with extra work instead. After doing the math, it was roughly equivalent to DH working a full time job for minimum wage but much more pleasant and educational. We spent a week staying with friends in the Bay Area which meant eating out a lot. We moved into our new place on the 30th. All this travel took a lot of gas. We had a big grocery bill to stock up the new kitchen pantry with basics. We paid a massive deposit and first month's rent on this place in September, but hope to end up breaking even on the rent here which needs a separate post to explain.

   I only track money as "saved" when it goes somewhere specific. We keep a slushy pile of unallocated money in the checking account that periodically goes off to saving, so the difference between income-expenses will not match up with savings here. Most expenses go on a credit card which gets paid off in full the next month for 1% cash back at the end of the year. This was a tough month for savings because last month we paid a security deposit and our house taxes so the checking account was too low for much to go to saving.

   Income:

   My paychecks (after 401k, taxes, and health insurance withholding): $6,135.28
   Rental house income: $1200
   Investment interest: $9.99
   <b>Total: $7345.75</b>

   Expenses:

   Mortgage: $554.27
   Child support: $450
   Groceries: $336.49
   Car insurance: $265.67 (only 2x per year)
   Eating Out: $264.80
   Gas: $208.09
   Lawyer bill: $200 (this is almost paid off, but we're in no hurry since it's interest free)
   Misc: $158.65
   Rental Utilities: $113.48 (we rent for an extra $200/month for taking care of this)
   Clothing: $73.70
   <b>Total: $2625.15</b>

   Savings:

   $1000 towards mortgage

   Goals for next month: I'd like to see eating out get below $150. Gas expenses should be much lower, though DH will need to drive to work until bus service starts in December.

   Posted 1 year ago #
5. 

   S
   

   Journeyman
   Joined: Jul '10
   Posts: 288

   @dragoncar I have thought about it, but I use mint to categorize my spending right now which doesn't have that feature. I could switch over to a manual spreadsheet but I'm not sure the numbers would mean much because they don't predict anything.

   Posted 1 year ago #
6. 

   S
   

   Journeyman
   Joined: Jul '10
   Posts: 288

   This winter we've rented a big house in a resort town so we can save money on rent. Yes, I know that doesn't sound right, but that's the plan. We're renting out the extra space as a ski share. For those not familiar, in a ski share a bunch of people pay up front for the season to have a place to stay when they come to ski on the weekend. Last winter we rented rooms out on airbnb and did pretty well, but hopefully this will be less hassle plus we get to have a regular group of people we know. Bonus points: our backyard is a sandy beach on Lake Tahoe, we can walk to the grocery store, and DH can take the bus to work for free starting in December.

   Our goal is to get 10 people signed up at $1200 each. So far we have $400 deposits from 7 and have 8 more people interested in joining, so it's looking likely we'll hit that goal. If so, we'd be paying $500 a month for rent plus gas/electric which I expect will be high. We're heating a big place in a cold climate and we have to keep the heat turned up when the guys are here. For comparison, a cheap studio apartment around here runs $800/month. I think utilities would be a wash if we were in the studio since we'd pay less for heat, but we'd have to pay for water and internet which is included in our current rent (I work from home which requires broadband).

   This is a big gamble which could be expensive if it doesn't work out as planned, but hopefully the risk will pay off. I'm tracking this separately from our other expenses because it's a lot of extra noise in the budget to see income from the sharers all come in as an income spike in November and December and the $2500 rent expense every month.

   Here's the math for the six months we're here:
   Rent $2,500/month or $15,000/season
   Income so far: $2,800
   ----------
   Monthly housing cost if we don't get another cent: $2,033

   Posted 1 year ago #
7. 

   S
   

   Journeyman
   Joined: Jul '10
   Posts: 288

   Well, better late than never to report on November. I spent too much, so I haven't wanted to face it. We spent money on some big ticket items this month like new to us used skis, adopting a dog, and getting our truck ready for winter up here (so far it's only snowed once though). We also spent a very large amount on groceries. I'm hoping this was mostly a stocking up a new pantry thing and will mean the bill will be lower the next few months, but it could just be that I'm really excited to have my own kitchen again and want to cook a lot for fun. I'd like to be spending around $300 a month. So far December is looking more reasonable.

   I didn't have to pay rent on the house here this month because it was pre-paid along with the deposit in September. We have 9 guys signed up for our ski share and should be getting the rest of the money from them in December and January. We've decided to have a slightly higher guest charge to make up the difference for not getting a tenth person.

   I'm breaking out healthcare expenses and 401k from my paycheck to be more accurate.

   Expenses
   ---------
   Groceries: $563
   Mortgage: $554
   Child support: $460
   New skis for DH and I: $402
   Car stuff and gas: $315
   Eating out: $264
   Adopted a dog: $251
   Lawyer bill: $200
   HDHP: $154
   Rental house utilities: $150
   Gifts (baby shower and step son b-day): $110
   Misc: $54
   Total: $3477

   Income
   ---------
   My paycheck (after tax): $7419
   Rental house: $1200
   DH paycheck (after tax): $144
   Investments: $9
   Total: $8772

   Savings
   ---------
   Extra house payment: $1500
   401k: $1050
   HSA: $80
   Total: $2630

   Posted 1 year ago #
8. 

   ExpatERE
   

   Journeyman
   Joined: Jul '11
   Posts: 219

   If it makes you feel better, my Dec is shaping up to be more expensive than it should. I will be feeling like you did for Nov. I still believe the averages are more important than any specific month. Best of luck in the coming year.

   Posted 1 year ago #
9. 

   S
   

   Journeyman
   Joined: Jul '10
   Posts: 288

   Dec 2011

   This month ended up... ok. Our expenses were almost the same though the categories changed around a bit. They're still too high. DH is now working full time so his paycheck boosted our income nicely. While the grocery amount did go down, it didn't go down as much as I expected. This month I've decided to get serious about analyzing this. I'm going to collect all the grocery receipts and figure out where the money is going at a more granular level. Too much alcohol? Is my husband secretly buying cookies? Am I buying more processed food than I think? I have to admit I don't know right now.

   Expenses
   --------
   Mortgage: $554
   Groceries: $457
   Child Support: $440
   Travel: $343
   Eating Out: $231
   Current home utilities: $221
   Car: $201
   Lawyer bill: $200
   Rental utilities: $172
   HDHP: $154
   Pets: $132
   Sports stuff: $107
   Gifts: $96
   Entertainment: $83
   Misc: $14
   Total: $3405

   Income
   --------
   My paycheck (after tax): $7419
   DH paycheck (after tax): $1559
   Rental house: $1200
   Investments: $7
   Total: $10185

   Savings
   --------
   Extra mortgage payment: $1000
   401k: $1050
   HSA: $80
   Total: $2130

   That looks like a 77% savings rate... until you add in the cost to rent our current home. Last time I posted about this we were looking to collect money from the guys renting our extra rooms on the weekends. We're still waiting on most of that money. They've been notified they can't come up again unless they bring checks for the remaining amount with them. I expect at least 6 of them will definitely make the remaining payment, but I'm worried about 3 of them. It hasn't snowed here since November which means they don't have much incentive to come up. There's talk that the resort 2 of them bought season passes to may have to shut down due to running out of water to make snow with. If we don't get another cent of income from any of them, our monthly rent cost would be $1900. I expect we will get *some* amount more this month, but will end up getting stiffed out of the full amount. Unless we get some snow I don't see being able to make up the difference with random vacationers either.

   Posted 1 year ago #
10. 

    S
    

    Journeyman
    Joined: Jul '10
    Posts: 288

    Jan 2012

    This was a good month. Despite going on vacation out of town for 9 days, we spent less. I've been tracking grocery expenses closely and found areas for improvement. Basically, I have a few favorite foods I eat frequently that I should be making from scratch at home instead of buying the overpriced pre-made version ($40/month for hummus!). We ate out only 5 times this month, but the price was high because we treated our vacation hosts to a very nice dinner. It seems like a fair trade vs. paying for a hotel. The rental house utilities were high because the toilet had a leak. The tenant found and fixed that so they should be back to normal next month.

    Expenses
    --------
    Mortgage: $554
    Child Support: $471
    Groceries: $410
    Eating Out: $227
    Travel: $220
    Lawyer bill: $200
    Rental utilities: $198
    Current home utilities: $119
    HDHP: $154
    Pets: $115
    Car: $82
    Misc: $60
    Entertainment: $18
    Total: $2828

    Income
    --------
    My paycheck (after tax): $7419
    DH paycheck (after tax): $1402
    Rental house: $1200
    Investments: $9
    Total: $10030

    Savings
    --------
    Extra mortgage payment: $3000
    401k: $1050
    HSA: $80
    Total: $4130

    This month the checks finally started coming in from our weekend roommates. Our effective rental rate is now $1,192 if we don't get any more money. I still need to chase down cash from 4 more people. It snowed some which helped.

    In exciting news, it's likely we'll be back here next winter. We'd become Nevada residents which will increase some costs like car registration and insurance (still no income tax though), but provide other benefits by dealing with the government locally. DH has been promised a promotion and raise if we come back which would be a nice boost to the savings rate.

    Posted 1 year ago #
11. 

    Phayen
    

    Apprentice
    Joined: Jul '11
    Posts: 93

    Wow, that's quite an income for such low expenses! I forget, but you're a programmer right? And you work remotely? Have you started investing yet? Or are you waiting till you're done with the mortgage?

    Posted 1 year ago #
12. 

    S
    

    Journeyman
    Joined: Jul '10
    Posts: 288

    @Phayen Yes, I am a programmer working remotely. At the moment, all my saving is in tax-sheltered retirement accounts and extra payments on the mortgage. The house is currently rented out and makes about $200/month excluding the extra principal payments. Eventually we're going to move back in or sell it to buy property in an area where we'd rather live.

    Our ideal ERE plan is to have a home that generates income while we live there for free. This could be something like a paid-off duplex to live in for the summer and our current ski lease deal in a cheaper house for the winter. DH likes working seasonally, so his income would continue to come in for the 6 months he works. At this point, I'm not sure if I want to continue my current career as a freelance developer, do something different part-time, or join DH as a seasonal worker. Having all those options available is great, though. My main savings goal right now is to take care of housing and count on some part-time work between the two of us to cover our other expenses.

    It might be more accurate to say I'm working toward FI or semi-ERE than classic Jacobian ERE.

    Posted 1 year ago #
13. 

    S
    

    Journeyman
    Joined: Jul '10
    Posts: 288

    Feb 2012

    This was a really good month for most expenses. Groceries are finally around $150/person which is as low as I'd care to go. Tracking everything I buy individually at the grocery store is paying off. We also ate out very little this month. Unfortunately, I broke the screen on my husband's laptop and felt obligated to buy him a new one which is most of the large "Misc" expense this month. We also bought a new tire for our truck in the Car category.

    Expenses
    --------
    Mortgage: $554
    Misc: $521
    Child Support: $450
    Car: $320
    Groceries: $309
    Lawyer bill: $200
    Current home utilities: $191
    HDHP: $154
    Rental utilities: $145
    Eating Out: $107
    Pets: $56
    Entertainment: $50
    Total: $3057

    Income
    --------
    My paycheck (after tax): $7419
    DH paycheck (after tax): $648
    Rental house: $1200
    Investments: $7
    Total: $9274

    Savings
    --------
    Extra mortgage payment: $5000
    401k: $1050
    HSA: $80
    Total: $6130

    More of the ski share money came through this month plus we had some extra paying guests up for the weekend. Our effective rental rate is now $878. One of the two remaining guys promises he'll be up next week with the money, but I'll believe it when I see it. The other guy isn't responding to emails, so I suspect that's money we won't be getting.

    Posted 1 year ago #
14. 

    chenda
    

    Master
    Joined: Jun '11
    Posts: 369

    Have you considered using a debt collection agency to persue the non payer(s)? I think there are some who are ''no collection no fee'', so it wont cost you anything if they are unsuccessful.

    Posted 1 year ago #
15. 

    S
    

    Journeyman
    Joined: Jul '10
    Posts: 288

    @chenda We don't have any sort of contract and it's only $800. I did get a $400 deposit from him. If it was more money I'd look into doing this more officially. We're planning on getting a smaller place and just inviting the dependable payers back for next year. It's annoying, but at least I made sure we could cover the cost of the place even if none of them paid before we moved in. That's a good thing to know about though.

    Posted 1 year ago #
16. 

    S
    

    Journeyman
    Joined: Jul '10
    Posts: 288

    Ski share update: We finally got a check from the last guy we expected to pay yesterday. We also took on a live-in roommate for a month at $400, so our monthly rent cost is now down to $677. I expect this is the last income we'll get from this deal. It would have been better if that one guy hadn't turned out to be a deadbeat, but over all I'm pretty happy with the outcome. I got to live in a 3 bedroom house on the beach for 6 months for less than a cheapo studio apartment in exchange for doing some laundry and a little bit of hassling people for money. We're planning on coming back next year and doing a similar deal, but in a smaller place with just 5 or so of the best guys.

    Posted 1 year ago #
17. 

    borisborisboris
    

    Novice
    Joined: Aug '10
    Posts: 29

    Wow, major props for executing on the ski share. It strikes me as 'very ERE' that you were able to get creative in a way that works for your specific situation. Especially in the housing category, which I think is one of the hardest places to cut expenses (lots of money involved, and a generally high risk of things not turning out well).

    Posted 1 year ago #
18. 

    flyer2009
    

    Apprentice
    Joined: Nov '11
    Posts: 37

    You are doing very well! I am with you on the groceries. Everyone has a point at which they say, that's as low as I am going to go on this item. For me that's groceries and travel.

    Sorry to hear about the laptop. You might have already thought of this but screen repairs are not too complicated on many laptops and you can usually find a cheap replacement or a broken laptop with a good screen on ebay.

    Posted 1 year ago #
19. 

    BeyondtheWrap
    

    Journeyman
    Joined: Jul '10
    Posts: 266

    @chenda: Wait, I thought the way a debt collection agency works is that you sell the debt to the collection agency at less than face value, and then it's up to the agency to get the money and thus make good on their investment. If I'm wrong, someone please explain it better.

    Posted 1 year ago #

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