_bb_ Journal

Where are you and where are you going?
Post Reply
_bb_
Posts: 12
Joined: Thu Nov 22, 2018 7:58 pm

_bb_ Journal

Post by _bb_ » Sat Dec 08, 2018 7:22 pm

Hello, friends!

This is the start of my journey towards FI - I still have a lot of thinking (and acting) to do regarding optimizing expenses and figuring out the numbers required to reach my own personal FIRE situation.

Background & Current Expenses:

My wife (27) and I (26) currently live in a very populous city in North America. At this point only I have read Jacob's book but after many exciting discussions my wife is fully onboard with a new financial journey! At this time I am choosing to only represent my portion of expenses - they are currently listed in USD at some point in the near future I will change reporting to CAD (moving). My half of the expenses break down into the following:

Fixed Monthly Expenses:
Student Loans: $826.88
Rent: $644.73
Parking: $114
Gym: $68.33
Internet/Cable: $49.36
Electricity: $19

Total Monthly Fixed Expense: $1,722.30

For the month of November and moving forward I have begun recording all purchases in a spreadsheet. It was enlightening and horrific experience at the same time. I was disgusted with the 'discretionary' spending; on the bright side by writing it all down and having a clear picture I feel in control.

November Variable Expense: $1,809.15

Immediate Course Correction:

After closely examining the cash flow of my personal finance my wife and I quickly made the easy adjustments.
- We cancelled our cable & landline, kept the internet
- My wife is getting rid of her car, we've decided to share mine and split the parking expense
- The examination really gave us the kick in the pants to re-evaluate our living situation. We have begun our search for a new geographic location to call home. Additionally, we would like to be the landlords rather than the renters. Updates in future posts.

_bb_
Posts: 12
Joined: Thu Nov 22, 2018 7:58 pm

Re: _bb_ Journal

Post by _bb_ » Sat Dec 08, 2018 7:52 pm

November Recap:

Fixed Monthly Expenses: $1,722.30
Variable Monthly Expenses: $1,809.15

Total November Expenditures: $ 3,531.45

Wage Income(*): $ 4,738.12
Investment Income: $ 0
Rental Property Income: $ 0

* I work a commissioned based job, so the monthly reported income will vary.

Cash Flow Analysis (at this point its only my Wage that is contributing to my Debt & Cost of Living):
Student Loans: 17.45 %
Cost of Living: 57.05 %
Savings Account: 25.50 %

Assessment & Analysis:

November is really my jumping off point, so the real changes will be reflected in the December Recap. That's not to say I am not very excited with the November recap. I have two major takeaways, first I am in control and can make conscious choices for the benefit of my strategy. And second, while I can (and will) minimize my expenses (consumption) I am not constrained by a salary - I can (and will) earn more to fund my strategy.

Mae
Posts: 58
Joined: Wed Dec 27, 2017 3:44 am
Location: Belgium (Western Europe)

Re: _bb_ Journal

Post by Mae » Sun Dec 09, 2018 2:53 am

Yay, monthly reports!

I recommend the book Your Money or Your Life (most recent version).

Good luck with your journey.

Jason
Posts: 2003
Joined: Mon Jan 30, 2017 8:37 am

Re: _bb_ Journal

Post by Jason » Sun Dec 09, 2018 3:01 pm

_bb_ wrote:
Sat Dec 08, 2018 7:22 pm
- My wife is getting rid of her car, we've decided to share mine and split the parking expense
Huge savings move. I wish we could get back to that.

fell-like-rain
Posts: 54
Joined: Fri Jun 15, 2018 12:19 pm

Re: _bb_ Journal

Post by fell-like-rain » Mon Dec 10, 2018 8:43 am

Sounds like you're making some good, concrete changes. Good luck! Keep us posted with how things go in the months to come.

_bb_
Posts: 12
Joined: Thu Nov 22, 2018 7:58 pm

Re: _bb_ Journal

Post by _bb_ » Sun Dec 30, 2018 8:47 pm

December Recap:

Fixed Monthly Expenses: $1,741.77
Variable Monthly Expenses: $840.61

Total December Expenditures: $ 2,582.38

Wage Income(*): $ 3,417.83
Investment Income: $ 0
Rental Property Income: $ 0

Cash Flow Analysis:
Student Loans: 24.19 %
Cost of Living: 51.36 %
Savings Account: 24.45 %

Assessment & Analysis:

I have a few points to note right away - I forgot my cellphone bill in the November recap resulting in a higher fixed expense value for December. Additionally, we haven't been able to drop the expense of the second car just yet because one month's notice was required for the parking spot. Same principle for the cable/internet bill. January should have all expenses updated.

December has been an exciting month because I've been fully conscious of all of my financial decisions, even when not making the optimal choices I was aware of my actions. The focus will be to develop the discipline to avoid a greater percentage of the "want" expenses, which for me revolve around eating out with friends. With this in mind my friends and I signed up for a city sports league - now I can still see my friends during the week with the added benefit of exercise!

I read through Jacob's book for a second time and one of the concepts from the philosophy 'section' that really struck home this time was maximizing value - I read it in terms of people, possessions, and time.

Last but not least, I have begun consuming economic, investment, and real estate books all from my favorite place - the local library! I'm still in the accumulation phase, so for now I have plenty of time to focus on learning and practicing investment analysis before it becomes worth while to dive in with a 'live' investment.

Stay safe out there tomorrow and have a happy new year!

_bb_
Posts: 12
Joined: Thu Nov 22, 2018 7:58 pm

Re: _bb_ Journal

Post by _bb_ » Thu Jan 31, 2019 8:07 pm

January Recap:

Fixed Monthly Expenses: $ 1,741.77
Variable Monthly Expenses: $ 585.56

Total December Expenditures: $ 2,326.33

Wage Income(*): $ 4311.95
Investment Income: $ 0
Rental Property Income: $ 0

Savings Rate: 46.04%

Assessment & Analysis:
Still on track! Working on lowering the variable monthly expenses through optimizing grocery shopping. Getting rid of the car is still on the list of things to do. I'm going to try and get rid of the cell phone too - depending on the terms to get rid of the contract etc. - and switch to a pay-as-you-go plan.

My wife is excited with her own progress. We're going to make February a competition to see who can spend less.

I've been plowing through two investment textbooks. Still in the learning & accumulation phase.

Bankai
Posts: 402
Joined: Fri Jul 25, 2014 5:28 am

Re: _bb_ Journal

Post by Bankai » Fri Feb 01, 2019 5:48 am

That's some impressive progress cutting your variable expenses by more than 2/3 in only 2 months! With the move you are planning, how much do you think you can cut your fixed ones?

_bb_
Posts: 12
Joined: Thu Nov 22, 2018 7:58 pm

Re: _bb_ Journal

Post by _bb_ » Sat Feb 02, 2019 10:47 am

@ Bankai - a move is definitely in the works, although I think we will slow down the timeline to make sure it's not something that's rushed out of excitement. What I would like to do is eliminate my student loans, which will take roughly 11 months - save a bit more so my wife and I have around 100K cash and then buy or build something small (like a tiny house) and own it outright (house and land). With those two expenses gone, the Fixed Expenses plummet allowing us to stock pile cash and begin investing for the long haul.

This is a "first draft" of our strategy and is subject to change - for us it seems like the right direction for the time being. One concept that I've found helpful is adjusting my time horizon, realizing that I'm going to be around for the next 50-60 (70 years?) has helped me understand the importance of building a solid foundation before "building up".

Anyway, the short answer to your question is - when I move I will eliminate the Rental expense and avoid a mortgage payment entirely.

_bb_
Posts: 12
Joined: Thu Nov 22, 2018 7:58 pm

Re: _bb_ Journal

Post by _bb_ » Sat Mar 02, 2019 11:23 am

February Recap:

Fixed Monthly Expenses: $ 798.50 (see Analysis)
Variable Monthly Expenses: $ 1384.45

Total December Expenditures: $ 2182.95

Wage Income: $ 6570.92
Investment Income: $ 0
Rental Property Income: $ 0

Savings Rate: 66.78%

Assessment & Analysis:

The drastic reduction in my Fixed Expenses has an explanation. I paid for something for both my wife (before we started the tracking) and in return she is covering the rent (and some other fees) for February and March. I will resume paying my half of the rent in April. The Variable Monthly expenses, while higher than expected, contain a few exciting one time capital expenditures. Around $350, comes from paying the cancellation penalty on my overpriced smartphone plan. I am now using a dumb phone with a pay as you go plan. Even with the penalty fee, I am saving $845. More importantly, I have been far more productive both at work and outside of work!

My Wage Income includes a Federal Tax return.

I've been having fun with the entire process, I've found myself far more aware of my choices. One of the consequences of the ERE / FIRE process is that I've found a greater enjoyment in my work - I have a clear vision of where I want to go and this is one vehicle that will help me get there.

For anyone looking for an interesting biography, Young Benjamin Franklin by Nick Bunker is well written.

_bb_
Posts: 12
Joined: Thu Nov 22, 2018 7:58 pm

Re: _bb_ Journal

Post by _bb_ » Fri May 03, 2019 8:32 am

March & April Recap:

March:
Fixed Expenses: $ 798.17
Variable Expenses: $ 1,440.92
Total Expenses: $ 2,239.09
Wage Income: $ 6,381.73
Investment Income: $ 0
Rental Property Income: $ 0

March Savings Rate: 64.91%


April:
Fixed Expenses: $ 1,588.57
Variable Expenses: $ 1,444.48
Total Expenses: $ 3,033.15
Wage Income: $ 7,771.62
Investment Income: $ 0
Rental Property Income: $ 0

April Savings Rate: 60.97%

Reflection & Analysis:

I can certainly do better in terms of variable expenses. The past two months were brutal - there were a few unexpected expenses, however there were still a lot of "snacks" or food related items due to lack of discipline and preparation. On the other hand, I have had a string of good months in terms of income.

Equipped with some liquidity, I am going to pay $18,204 towards my student loans. This will take my monthly payment to $451 from $730; the principal owed will be reduced to just over $33k from $51k. I will execute on this before the end of May, I am waiting for....the first paycheck from my new job! Once that hits the bank account and the sense of paranoia goes away I'll take action on the loans.

Things were going well enough, however I had been working remote for about 6 months and was slowly going insane (of course this is a joke, I would mostly get bored and lonely). I also realized I had no intention of trying to "move up" within that particular company. So I went out into the great wide world and found someone that I can work for and more importantly learn from (the company is also awesome, but I chose the person rather than the company). I start on Monday and as expected I am very excited to be back in the mix of office life (isn't this what we're trying to escape?!?!?). Two very cool perks of the new company: free catered lunch & part of the health benefits is they will pay for my gym membership.

My goal for May: to keep variable expenses under my January best of $ 585.

Post Reply