Entry 3, August 14, 2016: In depth background
FI Strengths vs. Weaknesses (Financial)
I feel like I’m in a better position that most of America, but not as good as some others pursuing this path. I have a sliver of experience in financial advising. This mostly exposed me to how disorganized the average person is with their finances. Nearly every person I met with had to stumble through figuring out their budgets. It also exposed me to some of the brick and mortar when it comes to financial planning. This sort of started off my experiences budgeting. All throughout college I just aimed for enough money in my account at the end of the month to pay rent with. After my financial job I started really thinking about my finances. I also have some intangible strengths such as interest in a nomadic and/or minimalist lifestyle. My girlfriend and I aren’t really one for material things. Moreover, she recently got on board with the idea of downsizing to a van even! I’ll have to build on these strengths I figure or at least use them to my advantage.
Some of my situation will make it more difficult. I have very low-income. My gym pays $10.00/hour and my store pays $11.30/hour. This only comes out to a few thousand more than $20,000/year. I also don’t have any hard skills - mostly due to a liberal arts education. If there is an opportunity to learn some hard skills, I would prefer it be in a field I’ll be interested in or use in my free time. I feel like there are potential outdoor guiding classes/certifications that may work well for me. I also have a negative net worth. I’m starting pretty far back in the race as far as I can see. These may push back my retirement worst-case, but they won’t prevent it.
My interests consist of outdoorsy things and seeing the world. My main hobbies are rock climbing, hiking, and backpacking. Some of my spending will revolve around these, as I’ve mostly neglected these as of late. I climb fairly consistently at the gym, but I haven’t been outside since early summer. I studied International Affairs (IAFS) and picked up a couple foreign languages in college. I just love learning about foreign cultures. I find some of them very interesting, and I also enjoy learning/practicing different languages. This culminated in a trip to China with my girlfriend the last half of 2015. It was pretty fun. I miss the culture and the people for sure. I want to make sure I spend more time on these personal interests, at least more time than I’ve spent as of late.
I don’t have a car so that helps (and hurts). Before moving back from China, we planned our new home to fit biking distance. This makes it easy to get around without spending gas. All of my work and shopping is within biking distance. This works well but summer is a slight inhibitor. Temperatures are reaching 110F here or 43C. Most of my commutes are short enough that this isn’t an issue, but it is enough that we haven’t braved any leisure rides lately. Also, my bike just broke. I was riding it and the derailleur mechanism seems to have fallen off. It looks like there was some sort of bolt that held it on, but I couldn’t find it. Just two holes now. If I knew more about bikes, I would probably fix this myself. Since I don’t, I may have to spend more money on this. I do want to fix my bike.
Grocery store work is easy and uses my strengths. The skills required are relatively easy to learn. I never feel challenged to do my individual tasks. The sooner I learn how to do more administrative tasks the sooner I can move up. Advancement requires learning new tasks as well as managing others. The latter half of this is easy for me, and I enjoy it. Plus, I’m currently in a managing role, but only when no other manager is working. A major con is that a lot of the older people here are falling apart. We’re lifting close to a ton (2,000 lbs or 907 kg) of product each day, which is hard on your body. A couple people at my store have already needed surgery since I started working 5 months ago. This could be lucrative and good experience managing people, but it is also dangerous.
I also work at the climbing gym. It is my first climbing gym working at but it seems great. I do many different things there. Some days I run summer camps, or coach youth teams, and other days I set routes. Routesetting feels like a hobby since we spend half the time creating new routes and the other half “testing” them. Unfortunately, I’m not sure what this would look like as a full-time gig. There aren’t enough routesetting hours, without going to multiple gyms. Moreover, since it is a new gym, there aren’t really any announced upcoming or soon to be available full-time positions that I know of. Sometimes this feels like hobby income (routesetting), but other times it just feels like a nice chill job (working with kids).
I have an upcoming online tutoring job which will pay much better. Current grocery job pay $11.30/hour and $10/hour. The online tutoring job will pay $10 for each 20-25 minute tutoring session. You can only do 2 of these per hour so its $20/hour. That’s near enough that it feels like double what I make now. This is a Chinese company and you make your own schedule (on China time). So the hours I can choose fall between 2:00AM-8:00AM or 4:00PM-8:00AM on the weekends. It is really flexible outside of the weird hours because I can select what slots I want and there’s no minimum. The demo session also felt very natural. One difficult thing with teaching is managing the classroom and also planning the lessons. With the tutoring the lessons are pre-prepared and it takes a miniscule to no amount of time to prepare. Just login on time and start. Still, it is a Chinese company so I am worried about stability/timeliness of the income. My experience in China was rarely well-planned out. School years started at the “beginning” or the “middle” of the month up until the day they started. IE we would find out we had to go to class the morning that we had to go to class. Already there have been issues in getting compensated for the demo session, scheduling training sessions, and even staying registered to work. This is one of those things that is really a “wait-and-see” at this point, but sounds like a great opportunity if it works out.
July Major Expenses in Depth (Financial)
I know those last sections were long and held a lot of background. This next one will be more of the “brass tacks”. I break my “expenses” into living, discretionary, and financial categories. The general rule to most Americans is 50/30/20 which means 50% of income goes to living, 30% to discretionary, and 20% to finances. That’s great and all for working til you drop or can’t anymore, but no thanks. You don’t need to read all of the above. If you’re more interested in the finances you can just skip down to here each monthly update.
Food spending is high. Food expenses included debt payments of $90.63. I split my food expense with my girlfriend, so if I spend $200 and she spends $100 on the food we share, she gives me $50. Since I owe her money from China and from moving back, I have “forgiven” what she owes me over the last few months, which lowers how much I owe her. Food expenses were also high because of convenience purchases. We just went vegetarian a couple months ago and this month we got lazy. Since we weren’t stocked with ingredients, we ran down to Wal-Mart and bought a bunch of processed, non nutritious, and what-seemed-like “cheap” quick meals. These added up. Vegetables are also expensive. Since it takes a lot of calories to keep me going, getting them all from vegetables can add up as well. We’ve started working on this in August and it's looking good. Food will really be split 2 ways moving forward. So some of my food bill may go to utilities or something if I overpay. But for the most part my actual consumption on food will be this category divided by 2. Alcohol spending is also included. In June I went 1 month no alcohol, and then July I started buying some once/week or so. I could cut this again because it really isn’t the best expense IMO. Food spending at the current rate is actually on track for $105 in August so far, or $210 for two.
Bills/utilities are really $414.46. The rent payment for July hit my account in the beginning of August. That makes the July category show up lower than average. Also $106.78 of the utility bills shows up as part of my “other debt” in finances for August, since I wrote a check including my money owed to my girlfriend. This category will certainly be more in August.
Overall living expenses will be similar next month. Food spending will drop, but bills/utilities will be higher (assuming rent for Aug hits in Aug). I’m not sure how much of a change this will make. It is kind of a bummer because I will have made progress on food, but because the numbers are skewed, it will look pretty close to the same. Summer time is still driving up electricity expenses. Our AC runs in the daytime until it shuts off basically because the city caps the usage. Our electricity bills were nearly ⅓ what they are now before summer started. Unless the food spending makes a larger difference than double rent payments, August living expenses will likely be pretty close to July’s.
Finances category is dominated by paying off the credit card. I started making major payments on my credit card a few months ago. It really wasn’t too hard to pay off once I made the decision. This seems like “large” sums to be contributing to my financial category, which is a good thing because I am now debt-free outside of student loans. Thus, it will feel better when these payments go from credit card to savings/investments/FI.
I have 3 different insurances. I have a whole life policy which costs $77/mo. This covers me some $50,000 if I die and builds up cash value. The cash value isn’t really anything significant yet. Payments stop at 65. I have health insurance through work which averages $122/mo. This is contingent on being full-time employed. If I want to work several odd jobs instead, I think my health insurance will actually go up since it won’t be paid for through work. I have renters insurance which costs $14/mo. I usually pay all of this, since I don’t pay any of the other utilities out of my account other than internet. This category won’t change much assuming I stay full-time at the grocery store.
Next month total financial spending will hopefully be a similar amount or more. Instead of debt payments this category will be dominated by savings/investments. That’s mostly why this felt like a good time to start the journal. I can actually start building what feels like finally. Right now my financial category is a “what’s left” plan. I spend more on my finances when I spend less on my living and discretionary categories. Maybe that’s obvious. At this point I started feeling like writing this all out was quite the labor, but it is almost done and I’m liking all the miniature conclusions I’ve come to already, at least in my own head.
This category totaled only $20.17. $8.17 of that were snacks from the gas station and the other $12.00 was printer ink. Again, convenience purchases adding up. If I want to support $10/mo in snacks from the grocery store indefinitely, that would require $3,000 in some sort of investment account. The printer ink I actually got back money for since it is my mom’s computer. This is a surprisingly slim amount of discretionary spending for July, but I also don’t feel I got much out of the month in terms of adventuring.
Discretionary will more often include things for my hobbies. There are a few basic outdoor climbing things I need. This will then lead to more excursions come climbing season. Once I get the basics, I don’t plan on many ongoing costs and the upfront costs will help me enjoy my hobbies and outdoor-time more. I am also putting together backpacking gear. I was able to pick up a couple things already in August, which I’ll share later. This helps fulfill the “adventure” goal I’ve set. I may need gas for travel, but we will also use our bikes for some of the traveling. When the backpacking gear is gathered, we’re planning on biking out to some camping areas around here. If we go any further, we’ll likely want to spend money on gas. Over the last few months, this category has been very slim compared to most people, so if I can keep the average to what it is now, I’ll be rather satisfied.