Stuff: 104 [Bike Brakes (21), Swamp Cooler (49), Dollar Store Stuff (9), Bike Tires (20), Mug (5)]
Cell Phone: 33
Pets: 25
Liquor Store: 10
Bars: 57
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Total Expenses (Minus All Loans, Business Expenses, Ebay/Shipping Fees) aka expenses that would carry over to ERE: 1124
Current Net Worth: $158,955.66
4% of Net Worth: 6358.27
Translated Monthly: 529.85
I am roughly 53% of the way there. See explanation in next post.
With stocks tanking, it had a negative effect on my net worth so I went backwards this month But I still feel really good that I was able to get my expenses more under control. (With the exception of groceries.)
=====GOING CARLESS?=====
I paid off my car loan this month so I could get the title in hand. I would like to sell it and go carless but a huge barrier for me is my parents live about 1.5hrs round trip/80 miles round trip from me (Via public transport, 4 Hours round trip to see each parent, 6 hours on Sundays.) and I like to see each of them at least once per month, so we're looking at 2 trips/mo. I tried to work out a Car Share with BF for the trips, but it's looking like we wouldn't be able to agree on a fee lower than $25-30 (Gas alone roundtrip is $15) and so I'm thinking at these prices it's not really a great solution. Unfortunately we do not have Zipcar, etc around here.
I was thinking maybe I'll buy a 49cc moped instead just for these trips (no insurance required). 75+mpg, so $4 round trip on gas. They cost usually under $1000, but no clue what to expect as far as maintenance goes. Denver actually doesn't get that many snow days, so I could restrict winter trips to days with good weather. The thing that gives me pause there, is that the main roads to get there sometimes have 65mph speed limits, where the mopeds only go maybe 35 from what I'm gathering. I'm thinking though there are probably some slower 45mph side roads I could take and that would probably be acceptable. Anyway I know no one with a moped so would appreciate some chimes in on the feasibility of this plan.
=====HOUSING=====
We have an large elderly dog who really wouldn't do well without a yard. Once she dies BF and I will talk about moving into a different place and renting out this place so we both can reduce our housing costs. She was going downhill fast, but she's doing better now, so who knows, that could happen anytime from tomorrow to two years from now. Anyway, I was thinking of a preliminary plan of buying a place for about $100,000 outright, which, with utilities, maintenance, property tax, insurance, I think should be less than $300/person/mo. There aren't many places like this around, but there are enough that it's not a totally outrageous idea. But at the same time I wonder if that's the best way to go about things, because had I just kept $100,000 at a 4% SWR, it would be generating roughly $333/mo and so that is an opportunity cost that has to be considered. Assuming insurance is roughly $100/mo, property tax 125/mo, utilities 100/mo, maintenance $100/mo, you could rent some place for $750 with utilities included, keep the money in the bank, and come out the same. So I am still pondering the solution to this. Even after she dies we'll still have a 30lb dog and a cat so RV living would be a touch crowded, and it makes finding just rooms with other people much more difficult. Giving the pets up is not an option for us. I suppose another option is renting out rooms to other people, too, but I am pretty bad at reading people so I am not confident that the chance of things going badly is worth it, plus the loss of privacy/security, and I'm fairly certain BF would not be comfortable with it. He values privacy and freedom a great deal. Maybe a used mobile home? Or a cheap condo? But I hate the HOA fees, and I would almost certainly have to go to HOA meetings or even get on the board just to make sure they are operating in a sensible way.
=====FOOD=====
The food thing is an issue but more pressing in my mind is that I need to lose weight. Lots of reasons for this, but one good ERE one is that I am certain it would have a good impact on future health insurance rates. So for me, I realize that I am spending more in certain food areas for the convenience and type of foods that will help me get there. This is on my mind, not sure if I'll seriously tackle it this month or not. It would probably include keeping a monthly listing of what we actually buy for food and looking for inefficiencies. I'd also have to get BF on board to keep his receipts. Anyway, so we'll see what happens with this over the next few months.
=====GOAL SETTING=====
I am fairly certain that rather than just quitting work cold turkey forever, I will likely go work PT somewhere fairly soon after I reach FI. I have interests in property management, estate sales and bookkeeping (all things that could eventually become a small business with low start up costs) and it would be nice to make mistakes and learn with other people's money rather than risking my own. It just feels like a stupid risk to go for it now. I don't want to be stuck in a job I still hate and yet making half as much as I make now. I want the safety net of FI before I make the leap. So I opted to change to a 4% SWR in my calculations.
So taking into account the above three items getting a little better, paying off my student loans, and putting together a hypothetical ERE budget, I have calculated that all together I need to save about $400,000 before quit day, to yield a monthly budget of roughly $1000 (plus a paid off house). I guess once I amass that sum I can decide if I hate it so much I just want out, or if it would be worth it to work another year or two for some extra luxuries/peace of mind. Quitting with just $400,000 makes me nervous. It is a minimum of living expenses and doesn't allow for much extra to live a little or handle any contingencies that come up (black swans, new technology like tomorrow's cell phones/internet, or family emergencies). I don't know how much more than $400,000 would make me comfortable though, and if the trade off of staying at this job is worth it. I suppose working PT/opening a business would be a nice buffer for that, and I could try to live off of my taxable accounts for the remainder, and leave the TSP in tact for some future date.
Anyway, I am about halfway there which is somewhat encouraging, but what is not encouraging is that it will still take 4-5 more years to FI time unless the stock market kicks some ass and I can pocket some gains, or I come up with some other income source or some way to comfortably reduce the ERE budget (I am reviewing every couple of days and pondering). At least that is 4 years of tracking expenses so when that day comes I should be pretty confident of what my spending levels will really be. As of today though, with a net worth of approximately $158,000, assuming an average 4.5% return on my current portfolio, assuming sometime soon I can average expenses under $1000 monthly, I anticipate FI in 2016 sometime.
=====MONTHLY HYPOTHETICAL ERE BUDGET=====
Note: This is only what I have now and this changes almost daily.
Housing/Utilities: 200 (Assumes the following: splitting costs with boyfriend, with me purchasing a $100,000 home)
Food/Restaurants: 200
Pets: 20 (includes some build up for vet expenses)
Cell Phone: 15 (would likely change to a Page Plus pay per minute plan)
Miscellaneous/Buffer: 50
Health Insurance Premiums: 100
Recreation/Bars: 200 (I intend to take some classes)
Travel: 0 (I hope to make this up with the PT work I will do later)
Gifts: 30 (this includes Xmas spending, birthdays, etc)
Medical CoPays: 25 (represents $7500 in savings which I think would work for an HDHP, $5000 for a catastrophic event and $2500 for just "stuff" that comes up. I have no ongoing medical needs.)
Thanks for the thought about Greyhound, I hadn't thought about them. I checked it out, but it is $31 per round trip, so I might as well just car share at that rate. I checked out Hertz & Enterprise (the two companies in my area) and they aren't open on Sundays, and are only open Saturday mornings (and their website forces me into a Monday return), and would charge $40/day. Thanks for the food for thought, always looking for out of the box ideas!
Car Update:
So I am still trying to decide if driving a moped in non-snowy but definitely winter Colorado climate is stupid crazy or ERE crazy, if you know what I mean. So far, amongst people I've polled, stupid crazy earns 2 points and ERE crazy earns 1 (two if you count my opinion).
In my opinion, car insurance is the number one thing to look at when it comes to owning a vehicle you only use very occasionally. It is a fixed cost that you will have even if you NEVER use the vehicle. So here is my research so far.
50 CC Moped: $50/6 months (25k/50k liability only) (Turns out CO has recently required insurance on these)
1976 Plymouth Dart: $136/6 mo (100k/300k liability only)
1993 Buick Regal: $144/6mo (100k/300k)
1996 Mercury Cougar: $140/6mo (100k/300k)
Electric-Assist Bicycle: $0
For comparison purposes:
2007 Toyota Prius: $242/6mo(100k/300k, $500 Ded Coll & Comp)
Still don't know the solution here yet, though.
I'd worry about the safety of the moped on a highway -- they really aren't designed for that. But I don't know what the traffic is like. Any chance you could just borrow the BF's car a couple weekends a month? (Maybe if you leave him a moped? )
Have you looked into insurance-by-the-mile? It looks like it might be available in Colorado (it's kinda new and not everywhere... you have to let big brother track your odometer though).
Edit: Oh, and the moped seems just normal crazy. ERE crazy would probably frown on it, since ERE seems against taking a gamble that could wipe you out, financially and physically. That said, I can see why someone would want to take that risk.
LiquidSapphire: I don't think a 50cc scooter is a good vehicle for long trips on a regular basis. A few times a year it would make a great adventure, but for regular transportation I wouldn't plan on more than 5-10 miles.
I bought a used Honda Elite several years ago ($150). I rode it into work (20 miles one way) a few times, but it just seemed too slow to do it more often. And that was in the summer. I also have a 250cc motorcycle that I used to commute with, in-season. Here in Michigan it starts to get miserable around November, and I would be one of the few motorcycles still going then. Driving 30mph (scooter) or 50mph in 30 degrees gets cold fast. You can buy better winter riding gear with electrical heaters, but I never got into that.
Two other possible issues would be hills and ice. Unless you hop up the scooter, it will greatly slow down on uphills. I'm about 175 pounds and can hit almost 40mph on flat ground (which is actually more than the legal 30mph, but...) Going up steep hills (for Michigan, probably wouldn't even be called a hill in CO) the speed might drop to 15mph. And hitting ice on a two wheel vehicle is usually a bad idea.
I've held onto the scooter cause it is fun to ride and cheap to keep ($15 for 3 years registration, no insurance, could even skip the helmet if I felt like it). Maybe someday I will be in a situation that it is more useful to me.
The plan for the moped was 80 miles round trip, primarily on side roads with a top speed limit of 45. But you all are smart and if even the ERE forums can't get on board with a regular trip under these conditions, I probably should scrap the idea and go for something else. I guess there is no escaping the car for the foreseeable future.
Insurance by the mile.... GENIUS....it looks like you can get costs to 5 cents per mile which is equivalent to the cost of the moped insurance. Unfortunately not offered in CO. Looks like TX, CA, AZ, MN, IL, IN, Pennsylvania is it. I'm going to try to check annually though, that would just be awesome.
I guess since bicycling/moped/public transport,etc is pretty much out of the picture I'm in the market for a car that costs less than $3,000 but has the lowest possible insurance premiums. So far I have yet to break the $135 barrier, but it seems that there are plenty available between $136 and $150 for six months. I contacted my current insurance company for a list of cheapest cars with liability only on a whim, of course, they did not indulge me.
In case anyone cares:
100K/300K Liability only, 50K Property Coverage, quoted for 2500 annual miles, six month premiums, all premiums with my spotless driving record, great credit, and federal employee discounts via GEICO:
1994 Jeep Wranger 140
1994 Kia Sephia 139
1999 Ford Taurus 145
1991 Honda Accord Coupe 141
93 Ford Tempo GL 141
97 Chevy Lumina 144
97 Geo Metro 140
97 Plymouth Voyager 136
96 Oldsmobile Ciera 144
2009 Smart ForTwo 136 (even this piece of crap costs $136!)
2005 Ford Five Hundred 146
1996 Chrysler Town & Country 137
And the winners were:
1996 Subaru Legacy Outback 131
1985 Mazda RX-7 134
Conclusion: Pretty much any ol' car will run you between 130-150 per six months. On cars at this age, better to save your cash by getting a great deal on your purchase price.
Sorry, I saw an article about insurance by the mile on a page called Colorado springs car insurance. After a closer look, it's just one of those stupid content aggregation portal things. I blame that guy on there who does that as a side business- it hard to keep names straight but you know who you are (there might be more than one of you)
=====GOING CARLESS?=====
I went without a car for almost three years. Got a car again about a year and a half ago. When I didn't have a car I did almost everything locally by bike (commute, groceries, etc).
When I needed a car I was able to rent a car from Enterprise on weekends from Friday-Monday (sometimes through Tuesdays) for roughly $10.95 - $18.00 a day with their weekend specials. I would rent once every 4-6 weeks to visit out of town family or take a road trip and then use it to stock up on bulky stuff that was impossible to carry by bike. Some weekends the total rental was under $40.00. I had a renter's liability policy from the agent I used when I owned a car (about $100.00 for 6 months I think) and my credit card covered damage. So I did not pay any other fees.
BTW, this sort of rate is not available at airport locations. I rented at a location they had at a local car dealership. They even picked me up and dropped me off at work.
Just want to say . . . I have no affiliation with Enterprise. But their weekend specials worked for me.
Also, it is really an odd feeling to drive a car after periods of 1-2 months without driving. Very stressful.
Thanks ksoto. I was going to attempt carlessness and suffer through the 4 hour round trip bus ride just to see how it went but I didn't realize about these weekend rental deals. How did you book? (Priceline? Enterprise web site?) What city are you in? I'm about 45 min away from downtown Denver so just for comparison purposes. It seems some cities are different than others. If you got away with $40 for the weekend it would be a different story, like you said you could make big trips and I GUESS I could put up with seeing both 'rents on the same weekend if it saves me that kinda cash...
Government Debt 126
Total Expenses: 2545 (1265 on non-debt)
% Saved: 52.99%
Net Worth: $149,397
4% SWR, Monthly: $498
===REFLECTIONS===
Groceries
Looking much better. Not sure why this varies so much. I know that out of laziness some non-groceries stuff got lumped in here, such as washer fluid, cat food, etc. I suspect that on actual "food" we spent less than $200 each. That is my goal next month.
Transportation
As posted previously I was able to sell my car at a favorable price this week. BF and I were able to hit upon a car share agreement that we both can live with so I'm gonna try that for a while. ($20 to go see the fam, 0.21/mile for shorter trips). Now that the car is gone the transportation costs should be permanently lowered. I’m thinking something like $35-$40/mo on average.
Stuff
I did splurge a bit on "stuff", but had been planning about $120 of those for a while, with wait times ranging between 2-6 months. I probably could/should have avoided $15 of that in hindsight.
Medical
Not a good month for medical bills. Turns out earlier this year my doctor sent some labs to an out of network lab without my knowledge, draining my HRA. So now I am stuck without reimbursement for $71 of prior dental bills, a $109 medical bill, and an upcoming $90-105 medical bill, that should have been covered but now are not due to hitting the HRA limit. I'm appealing but I'm not optimistic. I did include the cost of my premiums this month ($78), not sure if I did that previously.
Debt
The government decided they overpaid me by $2200 a year ago and are forcing me to pay it all back. I am paying it back in installments over 3 years at 1% interest for now. Yay. More Debt.
General
Even though I feel like I am taking all of the steps to get things under control and hitting this goal hard, I am feeling a little put out since my Net Worth goes backwards each time I update this journal. I am basically where I was in May 2011 as far as Net Worth goes. I can only blame this on the fact that the value of my Prius was dropping like a rock (It has lost $3K since it's peak after the Tsunami) and stocks are gradually falling even though I'm putting in $1000 with every pay check into my retirement accounts. A stock market recovery would certainly help my spirits. It's nice to see in other journals that I'm not alone in my melancholy on this.
====GOAL SETTING===
Stuff I've done so far:
1) Rebalanced my portfolio to be more conservative (July 2011)
2) Canceled my T-Mobile Smartphone contract, paid fee, changed to a Prepaid StraightTalk plan (July 2011)
4) Taking the bus to work most days (August 2011-present)
5) Worked out car share agreement with BF (September 2011)
6) Sold car (September 2011)
Stuff I'm working on:
1) Save $10,000 Cash in Q4 2012 (not counting car sale). I'll either use it toward Housing or Debt (not sure yet.) I need to resist the urge to put it into my brokerage account.
2) Price Book... it's kind of a pain but I need to rededicate to it. (Groceries)
3) Try to keep all grocery receipts and understand this expense more. This will also help with the price book. My goal is to consistently get this under $200/month. (Groceries)
4) We are opting for as many solutions as possible to avoid turning the heat on yet (it is hitting 40-50s in the mornings), and will use it as sparingly as possible in winter. We are cutting Netflix slightly (Compromise. I wanted to go lower.) (Utilities)
5) Purchase used Page Plus phone with web capability and transfer cell phone plan to Page Plus Pay as you Go. Should save $10-15 a month most months. Sell old phone. (Cell phone)
6) If I count my 401K match (5%) and manage to spend $1249 or less each month, I will be hitting an 80% Savings Rate. This is a major stretch while I'm paying debt, but this is my expenses goal going forward. If I can maintain this, I should hit the Crossover Point in 42 months (March 2015). I hope between some investment returns (I mentally chose a rate of 4.5% annually) and hopefully some future lowering of expenses, I can get there before October 2014. I'm starting the countdown.
Stuff for Future:
Housing: On CL market rates for renting a room + utilities is pretty much $450-500/month. I pay my BF an average of $600 now for all of that. It's becoming a painful bill to pay, seeing as it is close to 50% of my budget, but I love him and don't want to move out just to save a little bit of cash. I hope that in the future if we marry, I will be able to buy a home for $100,000 cash and we can live in it together just paying maintenance, taxes, insurance, or I may put $50,000-100,000 into his home in exchange for an interest in the property/title and only pay for maintenance, taxes, insurance for our current home. Either way there will be a property purchase and a some kind of sharing situation, either with BF or someone else. So in ERE I am budgeting $200/mo. for housing and utilities (Taxes = 1/2 of $550, Utilities = 1/2 of $1200, Insurance = 1/2 of $1000, Maintenance = 1/2 of $2000)
Utilities: I am going to try a shampoo+conditioner when my stuff runs out months from now which would allow me to take shorter showers. I have so much though it'll be months before this happens.
Medical: During Open Season in November I will change to an HDHP Plan with HSA.
Recreation: This cost will probably go up a little in the future just to help me for morale purposes. I'd like to begin engaging in a hobby or two.
> will use it as sparingly as possible in winter.
Is that an indoor or outdoor temperature?
Here in the Portland area, we're getting those temps as nightly lows outdoors, but indoors we haven't gone below 64 F. 62 F is our threshold for the furnace indoors, mostly due to owning orchids that won't bloom if it's colder.
It's an outdoor temp. Indoors it has gotten as low as 61. Not sure what our thermostat will be set on when we turn it on... probably about 60. We have thick comforters, the dogs have full coats of fur and the cat has a little cave covered with an emergency blanket + other blankets so I'm hoping we can make it at last 2-3 more weeks!
You can also consider using electric blankets, space heaters, moving computer to your bedroom (my computer heats the room by ~5-10 degrees). Wear sweatclothes to bed, etc.
Then again, I'm still sleeping in boxers with two sheets, and the windows open at 60 degrees.
I've brought up space heater a few times... boyfriend gives me weird looks. Also one of our animals in particular is somewhat of a steam roller and would likely knock it over constantly.
I haven't considered the computer angle but I guess we are set up well for that; Our main system is in our main living area where we spend most of our time so we can keep the temp down lower than we ordinarily would during the evenings. We do have another system that we use on occasion in a spare room... I could see if boyfriend would want to move it into the bedroom... doubtful... but I could ask?? 10 degrees is huge!
We are still keeping most windows open at night, but I suspect that will change next month.
The one big main sticking point for me is that dreadful 5am walk between the bed and the shower. How to make this as painless as possible. hmmmm. big fluffy robe with slippers at bedside?
@LiquidSapphire I think space heaters depend on the size of the room, and how you heat the room normally. Where I live, we have force hot water, heated by natural gas, so it works out to be cheaper to heat the whole house rather than use an electric (oil filled) space heater. We tried it on occasion last year, and ended up basically with the same amount spent, just on electricity instead of gas. YMMV
But I still feel really good that I was able to get my expenses more under control. (With the exception of groceries.)
)
10 degrees is huge!