Barlotti in Boston II
Re: Barlotti in Boston II
Wow, a $180,000 condo in the Boston area? Where do you live that is that cheap and still have access to the T? I thought I was doing well at $950/month for a two bedroom in Waltham. Good job!
Dec, Jan, Feb expenditures
@jdc732: I live in Quincy. Oddly, a London friend told me to check out Quincy. I couldn't believe how affordable it was, and I live a mile from the Ocean and a couple miles from Blue HIlls reservation. Move to Quincy! (Even though you're getting a fantastic deal in Waltham.)
I'm catching up on tracking expenditures.
December 2014
home repair 1083
mortgage 1081
condo fee 296
auto 296
work related 285
dining 268
gifts 239
groceries 203
entertainment 176
household 136
health and fitness 119
medical 115
utilities 85
cash 62
misc 55
vacation/travel 28
charity/donation 20
clothing 16
pets 8
$4,578
January 2015
condo fee 296
dining 295
household 205
mortgage 200
vacation 166
auto 137
entertainment 136
groceries 106
health and fitness 91
misc 66
cash 62
medical 43
utilities 32
gifts 14
$1,855
February 2015
mortgage 1003
vacation 692
dining 452
auto 212
cash 142
utilities 97
clothing 75
gifts 51
health and fitness 51
groceries 45
work related 41
pets 28
entertainment 25
household 8
medical 6
$2,935
I feel OK about my spending. I spent about $1K on a new range in December. I spent about $1K in February on a trip to San Diego. I think my 6 month moving average has trended down. If I have some time, I'll go through my journal entries and make some graphs to see whether this is true. It's been a hard, record-breaking winter in Boston, and I'm glad I went to San Diego.
I worked on my taxes tonight and have about $2K coming back to me. I'll use the refund to top off my Roth IRA. I'm glad I reviewed my December expenditures as I picked up on a few charitable donations I should add to my itemized deductions.
I joined Planet Fitness yesterday and am going to try and walk 10K steps every day on the recommendation of my doc. Today, I walked over 4 miles and took only 9K steps!
I'm catching up on tracking expenditures.
December 2014
home repair 1083
mortgage 1081
condo fee 296
auto 296
work related 285
dining 268
gifts 239
groceries 203
entertainment 176
household 136
health and fitness 119
medical 115
utilities 85
cash 62
misc 55
vacation/travel 28
charity/donation 20
clothing 16
pets 8
$4,578
January 2015
condo fee 296
dining 295
household 205
mortgage 200
vacation 166
auto 137
entertainment 136
groceries 106
health and fitness 91
misc 66
cash 62
medical 43
utilities 32
gifts 14
$1,855
February 2015
mortgage 1003
vacation 692
dining 452
auto 212
cash 142
utilities 97
clothing 75
gifts 51
health and fitness 51
groceries 45
work related 41
pets 28
entertainment 25
household 8
medical 6
$2,935
I feel OK about my spending. I spent about $1K on a new range in December. I spent about $1K in February on a trip to San Diego. I think my 6 month moving average has trended down. If I have some time, I'll go through my journal entries and make some graphs to see whether this is true. It's been a hard, record-breaking winter in Boston, and I'm glad I went to San Diego.
I worked on my taxes tonight and have about $2K coming back to me. I'll use the refund to top off my Roth IRA. I'm glad I reviewed my December expenditures as I picked up on a few charitable donations I should add to my itemized deductions.
I joined Planet Fitness yesterday and am going to try and walk 10K steps every day on the recommendation of my doc. Today, I walked over 4 miles and took only 9K steps!
Savings fatigue, why?
I am suffering from savings fatigue. I feel like I look at my numbers every month and although I'm pretty happy with my progress, tonight I feel exhausted.
I've been using my friends' savings as benchmarks. A year or two ago, a 40 year old friend told me that she had $110K in her 401K, and I set that as my goal. I am 39 now and have about $110K in investments (although not all of it is in tax-advantaged accounts). A few months ago, a 39 year old friend told me that she had about $200K in her 401K and about $200K in home equity. Based on that, I decided that I need $200K in investments ASAP. With diligence, I should get there by age 41. A couple months ago, another friend told me that she had $400K in her 401K. I recently found out she's 43, and I think I could have about $400K in investments by age 43.
I'm tired of feeling like I don't have enough money for all I want to do: save faster, pay off mortgage, increase my emergency fund, pay off credit card debt. Yes, I am whining.
I met the former general counsel of a major investment company while eating lunch with a friend one day. He was eavesdropping on our conversation and interjected with, "contribute regularly to your retirement accounts, investing in index funds, and forget about it. It's better to focus on growing your career, and cultivating passion for your work." Here's the thing, I don't feel passion for my work. How do I find passion for work so the path to FI doesn't feel like such a slog?
P.S. I walked over 10,000 steps today, or 4.6 miles, by taking a ramble through MIT, Central Square, and Harvard Square.
P.S.S. I know that I could cut my spending by about $1K per month and have $12K at the end of the year to put towards my mortgage or my kitchen reno. But I'm still feeling fatigued.
I've been using my friends' savings as benchmarks. A year or two ago, a 40 year old friend told me that she had $110K in her 401K, and I set that as my goal. I am 39 now and have about $110K in investments (although not all of it is in tax-advantaged accounts). A few months ago, a 39 year old friend told me that she had about $200K in her 401K and about $200K in home equity. Based on that, I decided that I need $200K in investments ASAP. With diligence, I should get there by age 41. A couple months ago, another friend told me that she had $400K in her 401K. I recently found out she's 43, and I think I could have about $400K in investments by age 43.
I'm tired of feeling like I don't have enough money for all I want to do: save faster, pay off mortgage, increase my emergency fund, pay off credit card debt. Yes, I am whining.
I met the former general counsel of a major investment company while eating lunch with a friend one day. He was eavesdropping on our conversation and interjected with, "contribute regularly to your retirement accounts, investing in index funds, and forget about it. It's better to focus on growing your career, and cultivating passion for your work." Here's the thing, I don't feel passion for my work. How do I find passion for work so the path to FI doesn't feel like such a slog?
P.S. I walked over 10,000 steps today, or 4.6 miles, by taking a ramble through MIT, Central Square, and Harvard Square.
P.S.S. I know that I could cut my spending by about $1K per month and have $12K at the end of the year to put towards my mortgage or my kitchen reno. But I'm still feeling fatigued.
Last edited by Barlotti on Mon Mar 09, 2015 11:56 pm, edited 1 time in total.
Re: Barlotti in Boston II
Sounds like keeping up with the Joneses net worth style. There will always be someone with more. But remember that there are also always those with less!
You can only be the best you. Don't focus on the numbers/things you can't control. Keep plugging away, you'll get where you want to be.
You can only be the best you. Don't focus on the numbers/things you can't control. Keep plugging away, you'll get where you want to be.
Re: Barlotti in Boston II
@theanimal. Hahaha. I am trying to keep up with the Joneses. Best to keep plugging away.
I read Liberate Minds Journal, and that made me feel better because she's very calm, deliberate and consistent. Also, I re-read my journal and felt better seeing the progress I've made in spite of some flip-flopping.
In re-reading my journal, I was reminded of a goal I set back in January -- to save $35K this year. I'm going to start a count towards that goal. I've contributed $10,150 to my 403b so far. Apparently, I've also put $2K net into Vanguard. That means I've got $22,850 more to save this year.
Also, I revisited the question of when I might be FI. If I just keep plugging away, I'll have about $385K when I'm newly 44. If I put $118K towards my mortgage for five years (from ages 44 to 49), while continuing to fund my 403b and Roth fully, I'll have about $720K in investments and no mortgage on my condo at age 49. I think that's good enough to call FI. In ten years.
On another note, I'm going to look into driving for Uber to make a little side cash to pay down my mortgage.
I read Liberate Minds Journal, and that made me feel better because she's very calm, deliberate and consistent. Also, I re-read my journal and felt better seeing the progress I've made in spite of some flip-flopping.
In re-reading my journal, I was reminded of a goal I set back in January -- to save $35K this year. I'm going to start a count towards that goal. I've contributed $10,150 to my 403b so far. Apparently, I've also put $2K net into Vanguard. That means I've got $22,850 more to save this year.
Also, I revisited the question of when I might be FI. If I just keep plugging away, I'll have about $385K when I'm newly 44. If I put $118K towards my mortgage for five years (from ages 44 to 49), while continuing to fund my 403b and Roth fully, I'll have about $720K in investments and no mortgage on my condo at age 49. I think that's good enough to call FI. In ten years.
On another note, I'm going to look into driving for Uber to make a little side cash to pay down my mortgage.
Finding a partner
I'm sad to report that my recent relationship has disintegrated.
I've worked very hard to escape the legacy of abuse in my family-of-origin, but I've still got a ways to go. To me, financial independence means freedom, not just from the daily grind, but from being financially dependent on an abusive person.
I am happy to report that Boston is filled with incredible men.
I've worked very hard to escape the legacy of abuse in my family-of-origin, but I've still got a ways to go. To me, financial independence means freedom, not just from the daily grind, but from being financially dependent on an abusive person.
I am happy to report that Boston is filled with incredible men.
Last edited by Barlotti on Mon Mar 23, 2015 7:59 pm, edited 2 times in total.
Re: Barlotti in Boston II
It's nice to see that you were able to end a post starting with "I'm sad" with "I am happy".
Positioning yourself amongst a collection of good people (online and IRL) is a good thing, and it sounds like you've done that.
Positioning yourself amongst a collection of good people (online and IRL) is a good thing, and it sounds like you've done that.
Re: Barlotti in Boston II
Sorry to hear about the demise of your relationship.
Everyone has scar tissue to some extent or another. When there's a lot of it, it can be difficult to accept how much we still carry around years or even decades later. Sometimes counseling can be useful. Other times, it's just a matter of finding the right person and a healing relationship.
In the meantime, it sounds like you've got a fascinating pool of people to get to know.
Everyone has scar tissue to some extent or another. When there's a lot of it, it can be difficult to accept how much we still carry around years or even decades later. Sometimes counseling can be useful. Other times, it's just a matter of finding the right person and a healing relationship.
In the meantime, it sounds like you've got a fascinating pool of people to get to know.
Re: Barlotti in Boston II
Thanks to both of you. I'd just like to find someone reliable and trustworthy, who I like and get along with, without freaking out along the way. Fingers crossed.
OK well, turning back to saving, I got my tax refund, but most of it will go towards March expenses. I'm still expecting to break the $150K net worth mark in April, and I'm going to start driving for Uber once my car is out of the garage. I'm fixing my front bumper, which shattered during this gawd awful Boston winter. The repair will be about $750. In addition, my car was towed ($90) on account of an expired registration ($60) that I couldn't renew because of some 2013 EZ pass violations ($260). This brouhaha is going to cost me about $1200, which pains me. We'll see how much money I make driving Uber.
I put about $500 of my tax refund into my Roth IRA. Counting down my savings goal, I now have $22,350 left to save.
OK well, turning back to saving, I got my tax refund, but most of it will go towards March expenses. I'm still expecting to break the $150K net worth mark in April, and I'm going to start driving for Uber once my car is out of the garage. I'm fixing my front bumper, which shattered during this gawd awful Boston winter. The repair will be about $750. In addition, my car was towed ($90) on account of an expired registration ($60) that I couldn't renew because of some 2013 EZ pass violations ($260). This brouhaha is going to cost me about $1200, which pains me. We'll see how much money I make driving Uber.
I put about $500 of my tax refund into my Roth IRA. Counting down my savings goal, I now have $22,350 left to save.
April net worth
Assets 309,172
condo 188,000
403b 74,032
Roth 24,174
after tax 15,108
pension 7,000
checking 858
Liabilities 160,208
mortgage 138,190
heloan 13,461
cc1 1,440
cc2 518
cc3 6,599
net worth 148,964
For my $35K savings goal for the year, as of last month I had $22,850 more to save. I saved $250 in my Roth and $3,625 in my 403b. That means I have $18,975 more to save this year.
Update April 13, 2015: I just learned that I now qualify for Social Security retirement benefits!!!! I've been anticipating this for a couple years. I'm 39 years old, and this is marvelous!
condo 188,000
403b 74,032
Roth 24,174
after tax 15,108
pension 7,000
checking 858
Liabilities 160,208
mortgage 138,190
heloan 13,461
cc1 1,440
cc2 518
cc3 6,599
net worth 148,964
For my $35K savings goal for the year, as of last month I had $22,850 more to save. I saved $250 in my Roth and $3,625 in my 403b. That means I have $18,975 more to save this year.
Update April 13, 2015: I just learned that I now qualify for Social Security retirement benefits!!!! I've been anticipating this for a couple years. I'm 39 years old, and this is marvelous!
A decision to save cash, the solo 401k, maximizing tax deductions, and CPA
A DECISION TO SAVE CASH
William Cowie, on Get Rich Slowly, is warning of another recession as part of a cycle that has repeated itself every 7 to 10 years historically.
In the aftermath of the Great Recession, I felt frustrated because I didn't have any cash on hand to buy stocks, which I knew to be "on sale". So for the rest of 2015 and 2016, I'm depositing my 403b contributions to a money market account (that should amount to about $25K).
THE SOLO 401K
In anticipation of my Uber quest, I've been reading up on the individual 401K, which seems like a pretty good way to increase my tax-advantaged retirement savings. As the sole proprietor of a business (an Uber business), I can contribute 25% of my earnings (before FICA taxes) to a 401k. This is more tax-deductible saving than via a SEP IRA in which I can contribute 25% of earnings minus half the FICA taxes due on those earnings.
The lovely thing about a SOLO 401K is that you can put in up to $53K in 2015, including 25% earnings, all 401K/403b contributions up to the $18K limit, and after tax money (which will grow tax-deferred). Also, you can elect to contribute to a Roth 401K, which could eventually be rolled over into a Roth IRA. The SOLO 401K sounds like a good vehicle for investing after tax money in high dividend yield investments.
MAXIMIZING TAX DEDUCTIONS
I've also been thinking about maximizing tax deductions. If I rented out my condo, I could deduct my condo fee and property depreciation, which would add up to about $11K in deductions. I could also continue to deduct property tax and mortgage interest. If I rented a room in the Boston area, I could deduct half of rent paid up to $3K for the 5.3% state tax (I think this would reduce my tax liability by only about $500, but hey! don't look a gift horse in the mouth).
Also, I've been thinking about maximizing tax deductions for the Uber quest. I can deduct the 20% that Uber takes. In different combinations, I can deduct $0.56 per mile, parking and tolls, gas, car cleaning, smartphone, bottled water, car depreciation, insurance, car maintenance, registration fees. If you take the standard mileage deduction, there are other deductions you can't take. I'm not sure what will be the better deal for me, but the best bet is to keep careful records of mileage. I'm thinking of dedicating one of my credit cards to Uber quest expenses.
TIME TO TALK TO A CPA?
I spent several hours tonight reading about the individual 401K, rental property tax deductions, and registering an LLC. It may be a good time to talk to a CPA. I'd like to talk to an expert who can help me optimize. Also, CPAs carry liability insurance.
William Cowie, on Get Rich Slowly, is warning of another recession as part of a cycle that has repeated itself every 7 to 10 years historically.
In the aftermath of the Great Recession, I felt frustrated because I didn't have any cash on hand to buy stocks, which I knew to be "on sale". So for the rest of 2015 and 2016, I'm depositing my 403b contributions to a money market account (that should amount to about $25K).
THE SOLO 401K
In anticipation of my Uber quest, I've been reading up on the individual 401K, which seems like a pretty good way to increase my tax-advantaged retirement savings. As the sole proprietor of a business (an Uber business), I can contribute 25% of my earnings (before FICA taxes) to a 401k. This is more tax-deductible saving than via a SEP IRA in which I can contribute 25% of earnings minus half the FICA taxes due on those earnings.
The lovely thing about a SOLO 401K is that you can put in up to $53K in 2015, including 25% earnings, all 401K/403b contributions up to the $18K limit, and after tax money (which will grow tax-deferred). Also, you can elect to contribute to a Roth 401K, which could eventually be rolled over into a Roth IRA. The SOLO 401K sounds like a good vehicle for investing after tax money in high dividend yield investments.
MAXIMIZING TAX DEDUCTIONS
I've also been thinking about maximizing tax deductions. If I rented out my condo, I could deduct my condo fee and property depreciation, which would add up to about $11K in deductions. I could also continue to deduct property tax and mortgage interest. If I rented a room in the Boston area, I could deduct half of rent paid up to $3K for the 5.3% state tax (I think this would reduce my tax liability by only about $500, but hey! don't look a gift horse in the mouth).
Also, I've been thinking about maximizing tax deductions for the Uber quest. I can deduct the 20% that Uber takes. In different combinations, I can deduct $0.56 per mile, parking and tolls, gas, car cleaning, smartphone, bottled water, car depreciation, insurance, car maintenance, registration fees. If you take the standard mileage deduction, there are other deductions you can't take. I'm not sure what will be the better deal for me, but the best bet is to keep careful records of mileage. I'm thinking of dedicating one of my credit cards to Uber quest expenses.
TIME TO TALK TO A CPA?
I spent several hours tonight reading about the individual 401K, rental property tax deductions, and registering an LLC. It may be a good time to talk to a CPA. I'd like to talk to an expert who can help me optimize. Also, CPAs carry liability insurance.
Re: Barlotti in Boston II
Good news: in 2015, the standard mileage rate has been bumped up to $0.575/mi.
You can deduct actual car expenses (gas, maintenance, insurance, fees) or take the standard mileage deduction. And taking a sec. 179 deduction for depreciation, the car must be used for business > 50% of the time. So if it's an older car with decent gas mileage, you're likely better taking the standard rate. If gas is $3/gal and your car gets 30 MPG, that's a gas expense of $0.10/mi. You'd need a heck of a lot of maintenance to get beyond the standard mileage rate.
You can deduct actual car expenses (gas, maintenance, insurance, fees) or take the standard mileage deduction. And taking a sec. 179 deduction for depreciation, the car must be used for business > 50% of the time. So if it's an older car with decent gas mileage, you're likely better taking the standard rate. If gas is $3/gal and your car gets 30 MPG, that's a gas expense of $0.10/mi. You'd need a heck of a lot of maintenance to get beyond the standard mileage rate.
May net worth and April spending
@Chris, the standard mileage deduction sounds better.
I wonder whether it would be better for me to not take any deductions at all in view of my plans to open an individual 401k?...
I think that whatever expenses I deduct won't count as earned income, which means that the 25% of earned income contributed income tax free to a solo 401K will be less but I think my tax liability will be reduced by exactly the same amount (if I stay in the 25% tax bracket, which I expect). It seems that the advantage of deducting is that I keep my money more liquid. The advantage of not deducting is that I can get my money into a tax-deferred account. Also, if I get my money into a 401K, I could do the rollover and Roth conversion at some point... Maybe that's good enough reason to get more money into the 401K.
condo 188,000
checking 2,131
403b 76,855
Roth 25,003
brokerage 15,561
pension 7,000
ASSETS 314,550
investments 124,419
mortgage 138,189
heloan 13,351
credit card 5,967
cc2 1,958
LIABILITIES 155,549
NET WORTH 155,085 My net worth has increased by 6,121 since last month.
As of last month, I had 18,975 more to save to reach my 35K goal for 2015. This month, I've saved 1,958 in my 403b and 250 in my Roth. I have $16,767 more to save!
Update May 5:
I put another $200 into my Roth, which means that I have $16,567 more to save.
Update May 11: April spending
mortgage 1003
auto 619
vacation/travel 551
dining 426
utilities 293
credit card 170
groceries 164
entertainment 99
household 85
tax payment 65
cash 60
misc exp 55
health & fitness 10
I spent 3605 in April. I spent a lot of money on parking that I'd like to cut out. I also spent 85 on Amazon-on-Demand. Whew. I spent 551 to travel to my brother's college graduation. I'll do better in May!
Update May 24: A few months ago, I told myself I'd celebrate when my net worth reached $150K. That happened at the beginning of the month, but I forgot to celebrate. Traveling to Idaho for my brother's graduation was nice. I'd like to give him $500 to kick off his savings. When I saw him, he was talking about saving, and I'd like to support that.
I wonder whether it would be better for me to not take any deductions at all in view of my plans to open an individual 401k?...
I think that whatever expenses I deduct won't count as earned income, which means that the 25% of earned income contributed income tax free to a solo 401K will be less but I think my tax liability will be reduced by exactly the same amount (if I stay in the 25% tax bracket, which I expect). It seems that the advantage of deducting is that I keep my money more liquid. The advantage of not deducting is that I can get my money into a tax-deferred account. Also, if I get my money into a 401K, I could do the rollover and Roth conversion at some point... Maybe that's good enough reason to get more money into the 401K.
condo 188,000
checking 2,131
403b 76,855
Roth 25,003
brokerage 15,561
pension 7,000
ASSETS 314,550
investments 124,419
mortgage 138,189
heloan 13,351
credit card 5,967
cc2 1,958
LIABILITIES 155,549
NET WORTH 155,085 My net worth has increased by 6,121 since last month.
As of last month, I had 18,975 more to save to reach my 35K goal for 2015. This month, I've saved 1,958 in my 403b and 250 in my Roth. I have $16,767 more to save!
Update May 5:
I put another $200 into my Roth, which means that I have $16,567 more to save.
Update May 11: April spending
mortgage 1003
auto 619
vacation/travel 551
dining 426
utilities 293
credit card 170
groceries 164
entertainment 99
household 85
tax payment 65
cash 60
misc exp 55
health & fitness 10
I spent 3605 in April. I spent a lot of money on parking that I'd like to cut out. I also spent 85 on Amazon-on-Demand. Whew. I spent 551 to travel to my brother's college graduation. I'll do better in May!
Update May 24: A few months ago, I told myself I'd celebrate when my net worth reached $150K. That happened at the beginning of the month, but I forgot to celebrate. Traveling to Idaho for my brother's graduation was nice. I'd like to give him $500 to kick off his savings. When I saw him, he was talking about saving, and I'd like to support that.
May 2015 spending and net worth
As usual, since I received my pay check last week, I've been reflecting on my financial situation. One thing is clear, I'm spending way too much, and I don't like that I'm carrying credit card debt, even though it's interest free for the time being.
I revisited Dave Ramsey, who's all about giving every dollar a name and using cash. I also revisited this woman https://www.youtube.com/watch?v=Pk4f7Z7XGq0 who saved effectively using an envelope budget system.
I've tried going "on" cash before and it didn't stick. Why? Because it was too difficult to track my expenditures. I tried writing down each expense in a notebook, but that never lasted. I tried envelopes, and got flustered. I would live on cash for a month here and there, but felt dazed and confused about where my money was going.
But I'm spending WAY too much, and this MUST stop. I think a cash budget is the answer. The key question is, how do I make a cash budget work for me?
I spent some time today looking for a certain kind of app. I wasn't sure what, but after clicking through over a dozen, I think I found the app for me. It's called "envelopes 2" https://itunes.apple.com/us/app/envelop ... 93979?mt=8 in the Apple app shop, and it features digital envelopes! At the start of your budget period, you add money to your various digital envelopes, and take it out as you spend it. Envelopes 2 has a pleasant, intuitive interface. I'm going to give it a go starting June.
Now, here's my spending for May, which prompted this cash budget initiative:
$1004 mortage
$632 condo fee
$586 travel
$489 dining
$283 auto
$275 groceries
$139 bank fee
$106 cash
$104 household
$103 entertainment
$35 medical
$34 utilities
$23 misc exp
$15 clothing
$14 financial services
$10 health and fitness
For a total of $3858 spent in May.
In the way of comment, I paid two months worth of condo fee in May. I ended up spending more on my trip to my brother's graduation than anticipated. Unexpectedly, I paid for a hotel room and also for a rental car. In addition, I footed the bill for a couple restaurant meals. My auto spending is too high. I think I drove into work 5 times, costing me about $155 in parking. Also, I spent about $80 in gas, but this included gas to drive from the airport to the idyllic rural University town where my brother lives.
Returning to the subject of the cash budget, I crunched the numbers, and apart from my fixed expenses, I should be able to live on $500 cash a month, apportioned between groceries, dining out, parking, gas, entertainment, coffee, my cat, and treats. I'll try this with "gazelle intensity" for as long as I can. I'll need to in order to reach my $35K savings goal, while paying down the credit card debt and also my mortgage (the rate's set to increase from 2.49% to at most 4.5% in August of 2017 and I want to make sure my monthly mortgage expenses don't increase).
I revisited Dave Ramsey, who's all about giving every dollar a name and using cash. I also revisited this woman https://www.youtube.com/watch?v=Pk4f7Z7XGq0 who saved effectively using an envelope budget system.
I've tried going "on" cash before and it didn't stick. Why? Because it was too difficult to track my expenditures. I tried writing down each expense in a notebook, but that never lasted. I tried envelopes, and got flustered. I would live on cash for a month here and there, but felt dazed and confused about where my money was going.
But I'm spending WAY too much, and this MUST stop. I think a cash budget is the answer. The key question is, how do I make a cash budget work for me?
I spent some time today looking for a certain kind of app. I wasn't sure what, but after clicking through over a dozen, I think I found the app for me. It's called "envelopes 2" https://itunes.apple.com/us/app/envelop ... 93979?mt=8 in the Apple app shop, and it features digital envelopes! At the start of your budget period, you add money to your various digital envelopes, and take it out as you spend it. Envelopes 2 has a pleasant, intuitive interface. I'm going to give it a go starting June.
Now, here's my spending for May, which prompted this cash budget initiative:
$1004 mortage
$632 condo fee
$586 travel
$489 dining
$283 auto
$275 groceries
$139 bank fee
$106 cash
$104 household
$103 entertainment
$35 medical
$34 utilities
$23 misc exp
$15 clothing
$14 financial services
$10 health and fitness
For a total of $3858 spent in May.
In the way of comment, I paid two months worth of condo fee in May. I ended up spending more on my trip to my brother's graduation than anticipated. Unexpectedly, I paid for a hotel room and also for a rental car. In addition, I footed the bill for a couple restaurant meals. My auto spending is too high. I think I drove into work 5 times, costing me about $155 in parking. Also, I spent about $80 in gas, but this included gas to drive from the airport to the idyllic rural University town where my brother lives.
Returning to the subject of the cash budget, I crunched the numbers, and apart from my fixed expenses, I should be able to live on $500 cash a month, apportioned between groceries, dining out, parking, gas, entertainment, coffee, my cat, and treats. I'll try this with "gazelle intensity" for as long as I can. I'll need to in order to reach my $35K savings goal, while paying down the credit card debt and also my mortgage (the rate's set to increase from 2.49% to at most 4.5% in August of 2017 and I want to make sure my monthly mortgage expenses don't increase).
Re: Barlotti in Boston II
What's with the $139 bank fee?
Re: Barlotti in Boston II
@Chris: Good catch! I'd thought about addressing the bank fee, and then promptly forgot to. The bank fee is a 3% charge for transferring debt to a 0% APR for 18 months credit card. The 0% promotional APR on one credit card is set to expire in October of this year, and I decided to transfer a portion of the balance to a new cc. I'm not happy about carrying a credit card balance, but it did allow me to nearly max out my 403 b in the first four months of the year, which was more important to me than not carrying a cc balance. Now that my 403b is nearly maxed out (minus what I need to get my employer's match), I've started saving to pay off the remaining balance on the cc with the 0% promotional rate that expires this October. I also want to get my FICO score back into the excellent range.
Here's my net worth calculation for the month even though my 403b contribution and mortgage payment haven't cleared yet.
condo 188,000
checking 595
403b 77,400
Roth 25,191
brokerage 15,255
pension 7,000
high yield savings 700
ASSETS 314,141
investments 124,846
mortgage 137,484
heloan 13,240
credit card 3,100
cc2 4,726
LIABILITIES 158,550
NET WORTH 155,591
Last month, I had $16,567 more to save toward my yearly savings goal. This month, I'm saving $825 in a high yield savings account, and $290 in my 403b. I have $15,452 more to save!
Here's my net worth calculation for the month even though my 403b contribution and mortgage payment haven't cleared yet.
condo 188,000
checking 595
403b 77,400
Roth 25,191
brokerage 15,255
pension 7,000
high yield savings 700
ASSETS 314,141
investments 124,846
mortgage 137,484
heloan 13,240
credit card 3,100
cc2 4,726
LIABILITIES 158,550
NET WORTH 155,591
Last month, I had $16,567 more to save toward my yearly savings goal. This month, I'm saving $825 in a high yield savings account, and $290 in my 403b. I have $15,452 more to save!
The freedom of financial soundness, and what it takes to get there
I've been experiencing some work stress, but it's not bothering me like it used to, and it's on account of my savings. Yes indeed, money in the bank makes me feel warm and fuzzy. I'm better equipped, psychologically, to weather the ups and downs in life. I want more of this! and it will require more saving.
Recently, I re-read Donna Freedman's "Surviving and thriving on $12,000 a year", which can still be found on her blog http://donnafreedman.com/2015/06/06/sur ... he-reboot/.
While living on $12,000 a year, Donna regularly donated money to her church. She also gave money to her disabled daughter. All this while getting a degree from the University of Washington. There's not a hint of resentment in Donna's writing. She doesn't complain about taking buses. She doesn't complain about not being able to eat meat every day. She doesn't complain about not being able to eat pasta every day. In fact, while living on $12,000 a year, Donna SAVES money.
Who the heck am I? I feel like such a peon to Donna who is some kind of genius.
Sometimes, I google "Great Depression" for a reality check. Last night, I stumbled upon "Migrant Mother" the iconic Depression era photo of an agricultural laborer and her children. This woman, Florence Owen Thompson, raised ten kids on fumes. When her adult kids bought her a house, she moved back into a trailer because she didn't feel comfortable in the house.
A "good life" is relative. I do not need an iPhone to be happy. I do not need Netflix to be happy, even if it costs me "only" $7 per month. I do not need gym membership to be happy, even if costs me "only" $10 per month. I can't believe I just threw away chicken because it was freezer burned...
Recently, I re-read Donna Freedman's "Surviving and thriving on $12,000 a year", which can still be found on her blog http://donnafreedman.com/2015/06/06/sur ... he-reboot/.
While living on $12,000 a year, Donna regularly donated money to her church. She also gave money to her disabled daughter. All this while getting a degree from the University of Washington. There's not a hint of resentment in Donna's writing. She doesn't complain about taking buses. She doesn't complain about not being able to eat meat every day. She doesn't complain about not being able to eat pasta every day. In fact, while living on $12,000 a year, Donna SAVES money.
Who the heck am I? I feel like such a peon to Donna who is some kind of genius.
Sometimes, I google "Great Depression" for a reality check. Last night, I stumbled upon "Migrant Mother" the iconic Depression era photo of an agricultural laborer and her children. This woman, Florence Owen Thompson, raised ten kids on fumes. When her adult kids bought her a house, she moved back into a trailer because she didn't feel comfortable in the house.
A "good life" is relative. I do not need an iPhone to be happy. I do not need Netflix to be happy, even if it costs me "only" $7 per month. I do not need gym membership to be happy, even if costs me "only" $10 per month. I can't believe I just threw away chicken because it was freezer burned...
July net worth and June spending
condo 188,000
checking 2000
403b 77128
Roth 24805
brokerage 15326
pension 7,000
high yield savings 0
ASSETS 314259
investments 124259
mortgage 137,129
heloan 13,133
credit card 2100
cc2 4463
LIABILITIES 156825
NET WORTH 157434
My net worth has increased by about 1843.
Last month, I had $15,452 more to save, but then I liquidated my high yield savings account because I was overdrawn on my checking account. So back to having $16,567 more to save toward my yearly savings goal. This month, I'm saving $290 in my 403b and $1,050 in my Roth to top it off. I have $15,227 more to save!
Stock market went down (about 2% down) due to the Greek debt crisis. Didn't lose as much as I could have because I moved about $26K in investments into money market and guaranteed annuity before it happened. I'm paying off the 0% APR credit card debt fairly aggressively.
Here's my June spending
$852 mortage
$335 condo fee
$332 dining
$118 auto
$87 household
$74 utilities
$64 health and fitness
$39 groceries
$27 entertainment
$20 bank fee
$18 my pets
$14 financial services
TOTAL $1986
So I tried a cash budget for part of the month before breaking out the credit cards. It helped with my savings. I'm going to try a cash budget again. I've already withdrawn $300 and am putting away my credit cards and debit card tonight. I'd like to have about $1500 left in my checking account at the end of the month.
I had another spurt of minimizing this last weekend, because my condo was feeling too crowded. It was easier to let go of stuff compared to last summer when I did this. This time around, I understand the benefits of living light firsthand.
checking 2000
403b 77128
Roth 24805
brokerage 15326
pension 7,000
high yield savings 0
ASSETS 314259
investments 124259
mortgage 137,129
heloan 13,133
credit card 2100
cc2 4463
LIABILITIES 156825
NET WORTH 157434
My net worth has increased by about 1843.
Last month, I had $15,452 more to save, but then I liquidated my high yield savings account because I was overdrawn on my checking account. So back to having $16,567 more to save toward my yearly savings goal. This month, I'm saving $290 in my 403b and $1,050 in my Roth to top it off. I have $15,227 more to save!
Stock market went down (about 2% down) due to the Greek debt crisis. Didn't lose as much as I could have because I moved about $26K in investments into money market and guaranteed annuity before it happened. I'm paying off the 0% APR credit card debt fairly aggressively.
Here's my June spending
$852 mortage
$335 condo fee
$332 dining
$118 auto
$87 household
$74 utilities
$64 health and fitness
$39 groceries
$27 entertainment
$20 bank fee
$18 my pets
$14 financial services
TOTAL $1986
So I tried a cash budget for part of the month before breaking out the credit cards. It helped with my savings. I'm going to try a cash budget again. I've already withdrawn $300 and am putting away my credit cards and debit card tonight. I'd like to have about $1500 left in my checking account at the end of the month.
I had another spurt of minimizing this last weekend, because my condo was feeling too crowded. It was easier to let go of stuff compared to last summer when I did this. This time around, I understand the benefits of living light firsthand.
Last edited by Barlotti on Mon Jul 06, 2015 8:36 pm, edited 1 time in total.
Re: July net worth and June spending
Sounds like a great weekend! I love chucking stuff. You've got your space, and there's all this excess stuff, sitting around for a long period of time. And you're fine with it for weeks/months/years on end. Then one day, when you're head's in the right state -- BAM -- it clicks over and what was once good stuff is now an obstacle to your happiness! And away it goes. I've often felt buyer's remorse, but I've yet to feel chucker's remorse.Barlotti wrote: I had another spurt of minimizing this last weekend, because my condo was feeling too crowded. It was easier to let go of stuff compared to last summer when I did this. This time around, I understand the benefits of living light firsthand.
Gotta maximize those minimizing weekends.
Re: Minimalism
@Chris
I guess there's a reason why great men have espoused minimalism: Thoreau, Ghandi, my Korean mom... Although I'm pretty sure my mom was recycling a Korean aphorism, and her exhortations had more to do with keeping a clean bedroom than minimalism per se. One thing is for sure, minimalism helps on the clean bedroom front so I'm sure my Korean mom would be happy.
I love the mental and spiritual benefits of owning less. I see that I imbue objects with meaning and not that objects have meaning on their own.
P.S. I should note that at one time, I was in the I-want-to-surround-myself-with-beautiful-things camp. To my surprise, I find that I appreciate what I own more if I own fewer things. I'm more open to incidental beauty. For example, that window I just cleaned. It's so flippin' beautiful, I want more of it!
I guess there's a reason why great men have espoused minimalism: Thoreau, Ghandi, my Korean mom... Although I'm pretty sure my mom was recycling a Korean aphorism, and her exhortations had more to do with keeping a clean bedroom than minimalism per se. One thing is for sure, minimalism helps on the clean bedroom front so I'm sure my Korean mom would be happy.
I love the mental and spiritual benefits of owning less. I see that I imbue objects with meaning and not that objects have meaning on their own.
P.S. I should note that at one time, I was in the I-want-to-surround-myself-with-beautiful-things camp. To my surprise, I find that I appreciate what I own more if I own fewer things. I'm more open to incidental beauty. For example, that window I just cleaned. It's so flippin' beautiful, I want more of it!
Last edited by Barlotti on Thu Sep 17, 2015 12:49 pm, edited 1 time in total.