As I've now committed to ERE/FI, I want to start holding myself accountable with a public journal. At minimum I plan to provide a monthly update of my progress.
Before I provide my March numbers, I feel obligated to admit freely that I really let my financial self go over the past 3 years. Before my first kid, I tracked everything and my savings were extremely high. As my kids started taking all of my free time and energy after work, and as my income continued to rise, I got lazy. I'm not proud of it, but my wife and I are taking steps to fix it.
Without further adieu, March info:
Total investable assets: $730K
Income: $9515 (after taxes and 401K)
Income was high this month given that March happened to have 3 paychecks.
Expenses: $5858
Breaking it down:
- Mortgage + Escrow: $2229
- Home Services: $1000 (deductable on a busted AC unit)
- Home Supplies: $399 (I hate my pool!)
- Kids school: $205 (monthly fee)
- Wife's College loan: $143
- Phone/Internet: $65
- Cell phones: $110
- Water: $116
- Electricity: $287
- Groceries: $308
- Restaurants: $271
- Auto Fuel: $254
- Auto Service: $90
- Auto Insurance: $80
- Doctor: $20
- Gym Membership: $54
- Entertainment: $52 (including the Kindle download of ERE!)
It really hurt to write this down. It's embarrassing to admit how much money I'm throwing away on a monthly basis on things I don't value. Fortunately we're making VERY significant changes over the next 2 months that will change this.
1. I'm changing jobs/cities/houses
I pay over $10K per year in home property taxes alone (that's how Texas makes up for not having a state income tax). I put in my 2 weeks notice yesterday(!), and have accepted a job in Colorado. When I sell my house I will have about $220K in equity, which will be the max I spend on my new house. I will pay this off with no mortgage. It's also worth noting that my new employer is paying all closing costs and moving costs, so the move costs me nothing. It's basically a get out of jail (money pit) card.
This will remove the monthly mortgage + escrow. Taxes and insurance should be less than $225/month, meaning an immediate drop of $2K from my monthly expenses.
It also means way less on electricity and water. And by getting away from my pool, that should drop me another $100/month on average (yes, it is that expensive).
2. Getting rid of my car
My wife will keep hers, and I still have my motorcycle (which is very cheap). We're looking at houses within 3-5 miles from work, so I will bike or run every day. I'm a little worried about the winter, but I'll cross that bridge when I get to it. This will reduce insurance, and will also reduce service charges and fuel charges significantly.
3. Canceling gym membership
I run a lot, but I'm thinking that 6-10 miles of biking to work on a daily basis will be a good base. Combine that with the natural beauty of Colorado Springs, and I really would prefer to run outside. I may require a pretty good initial investment in good warm clothes for running, which I don't have given that I'm in Texas right now.
4. Change in attitude
My wife and I never meant to reach this point. We used to budget wisely, but got caught up in things and lost control of our spending. With the attitude change, we're getting rid of miscellaneous purchases, eating out less, and eating healthier. I'm hoping that this builds momentum and we find more enjoyment in life.
ERE Goal:
- Get spending down to $3000 per month (maybe less) for the 4 of us, and achieve ERE/FI by summer 2013.
tjt's Journal
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Robert Muir
- Posts: 280
- Joined: Thu Jul 22, 2010 10:15 pm
It really hurt to write this down. It's embarrassing to admit how much money I'm throwing away on a monthly basis on things I don't value.
Congratulations on re-seeing the light. Knowing you have a problem is the first step to recovery
Looks like just getting rid of your house with the pool will just about get you down to the $3k/month goal. With the new life/house/transportation needs in Colorado I bet you'll be able to whittle it down quite a bit more if you wanted to.
Congratulations on re-seeing the light. Knowing you have a problem is the first step to recovery
Looks like just getting rid of your house with the pool will just about get you down to the $3k/month goal. With the new life/house/transportation needs in Colorado I bet you'll be able to whittle it down quite a bit more if you wanted to.
It really hurt to write this down. It's embarrassing to admit how much money I'm throwing away on a monthly basis on things I don't value. Fortunately we're making VERY significant changes over the next 2 months that will change this.
@tjt
Be on the lookout for my first journal entry soon. I think your embarrassment level will decrease.
@tjt
Be on the lookout for my first journal entry soon. I think your embarrassment level will decrease.
@sshawnn: Thanks, looking forward to it. 
As I've gotten into this, I also read YMOYL and they preach the mantra: "No shame, no blame." My wife and I continue to remind ourselves of this. It's not about blaming or feeling guilty, it's about moving forward positively. We're still figuring this out much earlier than most, right?
As I've gotten into this, I also read YMOYL and they preach the mantra: "No shame, no blame." My wife and I continue to remind ourselves of this. It's not about blaming or feeling guilty, it's about moving forward positively. We're still figuring this out much earlier than most, right?
... Sorry people, no offence meant, that sentence made me instant recall that scene Well, April was another month of way too much spending. There are a couple of silver linings, however. My income was unusually high due to my annual bonus, several Restricted Stock payouts, a positive tax return, and 3 paychecks this month. It's really the reason I kept my job through this month (I'm transitioning to a new job in June). My last day in my current job is next Friday!
Current Investable Assets: $782,000
(last month: $730K)
- $50K in cash
- $396K in taxable stocks and bonds
- $336K in 401K's and IRA's
I also have approximately $220K in home equity, which I'm not including. I do still track it, however, since it will be the only money I will spend when we move into a smaller house.
If you read my March report, you'll see this was a big jump in assets. That was due to a very high income, not stellar returns on my investments.
April Expenses: $6,546
(last month: $5858)
$2,293 - Home Mortgage and Escrow
$910 - Car Service (This car will be gone soon, when we move in 1-2 months)
$611 - Groceries
$391 - Utilities
$315 - Motorcycle Registration (one time fee for taxes)
$302 - Vet (rough month for my dog)
$262 - Restaurants and fast food
$241 - Auto Fuel
$220 - Home Supplies (preparing house to put it for sale)
$205 - Kid's tuition
$153 - Miscellaneous Shopping (when I get the bigger things under control, I'll look more into this)
$143 - Student Loan
$110 - Cell phone
$82 - Doctor/Medical
$80 - Cash
$80 - Auto Insurance
$55 - Gym
$40 - Poker Night
$32 - Tax Software and submission
$21 - Bike Maintenance
Overall, this month was actually worse than March, and still a long way to go. I didn't really make any big changes because I'm still planning on making the overhaul when we move in 1-2 months. That will remove our mortgage payment completely, and greatly reduce other fees.
One thing to note is that a very small percentage of my expenditures brings me joy (this observation is an output of actually paying attention to my cash flow). In fact, more than half my spending does the exact opposite - it angers and frustrates me. Fortunately, the actions my wife and I are taking now will correct a lot of this.
After we move into a smaller house, I'm expecting significant drops without much effort. The mortgage will go to $0 (just about $150 for property taxes and insurance), and utilities will drop. Since I'm planning on getting rid of my car (plus living closer to many things), auto fuel and insurance will drop. Once we get settled in, we're going to focus on food. We actually thought we made some changes this month, so seeing that our bills went up for food was a surprise.
April Income: $52,418 (cash after taxes and 401K)
(last month $9515)
$31,045 - Annual bonus
$7,352 - Salary
$6,438 - Restricted Stock Payout
$105 - Google Adsense
$7,476 - Tax Return
* Note: all numbers above are after taxes and 401K investments
Overall, I'm feeling more optimistic than I was after my March report. The reason is partially due to seeing a little progress, partially due to a huge income this month, but mostly due to the positive support I got from this forum after my March report.
At this point, I'm building confidence that I can get my expenses down to $3000 per month when I dump my McMansion and use my equity to pay off a smaller house (when we move). If we achieve that, then that would put my currents assets at 67% of where they need to be (assuming 3% payout, and no side incomes). Since I took a new job with a relocation package, I am committed to 2 years of service. I'm starting to believe that I can reach ERE/FI by the time those 2 years are up!
Currently my wife is in Colorado finding a house for under $220K (equity in our existing house). I quit my job last Monday, with my last day being next Friday. Our house went on the market yesterday. All this will, at minimum, reduce our expenditures by $2300/month. In actuality, I believe it will reduce it by closer to $3000/month.
Current Investable Assets: $782,000
(last month: $730K)
- $50K in cash
- $396K in taxable stocks and bonds
- $336K in 401K's and IRA's
I also have approximately $220K in home equity, which I'm not including. I do still track it, however, since it will be the only money I will spend when we move into a smaller house.
If you read my March report, you'll see this was a big jump in assets. That was due to a very high income, not stellar returns on my investments.
April Expenses: $6,546
(last month: $5858)
$2,293 - Home Mortgage and Escrow
$910 - Car Service (This car will be gone soon, when we move in 1-2 months)
$611 - Groceries
$391 - Utilities
$315 - Motorcycle Registration (one time fee for taxes)
$302 - Vet (rough month for my dog)
$262 - Restaurants and fast food
$241 - Auto Fuel
$220 - Home Supplies (preparing house to put it for sale)
$205 - Kid's tuition
$153 - Miscellaneous Shopping (when I get the bigger things under control, I'll look more into this)
$143 - Student Loan
$110 - Cell phone
$82 - Doctor/Medical
$80 - Cash
$80 - Auto Insurance
$55 - Gym
$40 - Poker Night
$32 - Tax Software and submission
$21 - Bike Maintenance
Overall, this month was actually worse than March, and still a long way to go. I didn't really make any big changes because I'm still planning on making the overhaul when we move in 1-2 months. That will remove our mortgage payment completely, and greatly reduce other fees.
One thing to note is that a very small percentage of my expenditures brings me joy (this observation is an output of actually paying attention to my cash flow). In fact, more than half my spending does the exact opposite - it angers and frustrates me. Fortunately, the actions my wife and I are taking now will correct a lot of this.
After we move into a smaller house, I'm expecting significant drops without much effort. The mortgage will go to $0 (just about $150 for property taxes and insurance), and utilities will drop. Since I'm planning on getting rid of my car (plus living closer to many things), auto fuel and insurance will drop. Once we get settled in, we're going to focus on food. We actually thought we made some changes this month, so seeing that our bills went up for food was a surprise.
April Income: $52,418 (cash after taxes and 401K)
(last month $9515)
$31,045 - Annual bonus
$7,352 - Salary
$6,438 - Restricted Stock Payout
$105 - Google Adsense
$7,476 - Tax Return
* Note: all numbers above are after taxes and 401K investments
Overall, I'm feeling more optimistic than I was after my March report. The reason is partially due to seeing a little progress, partially due to a huge income this month, but mostly due to the positive support I got from this forum after my March report.
At this point, I'm building confidence that I can get my expenses down to $3000 per month when I dump my McMansion and use my equity to pay off a smaller house (when we move). If we achieve that, then that would put my currents assets at 67% of where they need to be (assuming 3% payout, and no side incomes). Since I took a new job with a relocation package, I am committed to 2 years of service. I'm starting to believe that I can reach ERE/FI by the time those 2 years are up!
Currently my wife is in Colorado finding a house for under $220K (equity in our existing house). I quit my job last Monday, with my last day being next Friday. Our house went on the market yesterday. All this will, at minimum, reduce our expenditures by $2300/month. In actuality, I believe it will reduce it by closer to $3000/month.
Thanks sshawnn -
While I consider you in another world in regards to expenses (hacing read your journal) I also think we're probably closer to each other than most in this forum. I'll be keeping a close eye on you, and I hope you'll do the same for me.
I'm in the process of some pretty significant changes to start spending my money where it brings joy. I'm looking forward to see you do the same.
While I consider you in another world in regards to expenses (hacing read your journal) I also think we're probably closer to each other than most in this forum. I'll be keeping a close eye on you, and I hope you'll do the same for me.
I'm in the process of some pretty significant changes to start spending my money where it brings joy. I'm looking forward to see you do the same.
I've had a very productive 2 weeks in my ERE goal, so I thought I'd go ahead and log a mid-month report while it's all fresh in my mind.
- We got our money-pit house under contract for 407K, and also found a new one in our new town for $200K. I have $232K in equity on the house we're selling, so I'll be paying cash for the new house and investing the rest.
- I finally came to a direction on how I want to invest my money, at least for now. All of my investment income will be through stocks and bonds (as opposed to real estate or other more active methods). I've studied the market for years and I'm very comfortable with the associated risk, especially since I'm young and have high income potential if things go south. With the help of much online material plus The">www.amazon.com%2Fs%3Fie%3DUTF8%26x%3D0%26ref_%3Dnb_sb_ss_i_0_31%26y%3D0%26field-keywords%3Dthe%2520intelligent%2520asset%2520allocator%26url%3Dsearch-alias%253Daps%26sprefix%3Dthe%2520intelligent%2520asset%2520allocator%23&tag=latgadtobuy-20&linkCode=ur2&camp=1789&creative=390957">The Intelligent Asset Allocator by William Bernstein (great book, by the way), I have a mix that I'm comfortable with. I've started rebalancing my portfolio already, although it's difficult to do while trying to avoid major tax hits. Most of my money is in taxable accounts.
3. I fixed up and sold my car. Got 2100 for it, which I'm actually pretty happy about even though I paid $3100 for it a few months ago and dropped $1000 into it over those months. I'm just glad to see it gone.
4. We've sold a ton of other things on Craigslist, removing clutter and making a little money. And in some cases, like our extra freezer, I'll also reduce the electric bill.
5. I quit my job. This was set in motion last month, but my last day of work was just last week, so its still an accomplishment. My excitement about this is diminished somewhat given that I do plan to start a new job in a few weeks. That will be for 2 years (per the contract) then I will hopefully be retired!
Looking at Quicken, it appears our expenses are also down this month (so far). We aren't really pushing that part of the transformation yet, since we have so much going on with the move. Once we get settled in, we'll be ready to tackle things like our food budget.
Still to do this month: quit the gym, continue rebalancing portfolio, and move to our new home in Colorado.
- We got our money-pit house under contract for 407K, and also found a new one in our new town for $200K. I have $232K in equity on the house we're selling, so I'll be paying cash for the new house and investing the rest.
- I finally came to a direction on how I want to invest my money, at least for now. All of my investment income will be through stocks and bonds (as opposed to real estate or other more active methods). I've studied the market for years and I'm very comfortable with the associated risk, especially since I'm young and have high income potential if things go south. With the help of much online material plus The">www.amazon.com%2Fs%3Fie%3DUTF8%26x%3D0%26ref_%3Dnb_sb_ss_i_0_31%26y%3D0%26field-keywords%3Dthe%2520intelligent%2520asset%2520allocator%26url%3Dsearch-alias%253Daps%26sprefix%3Dthe%2520intelligent%2520asset%2520allocator%23&tag=latgadtobuy-20&linkCode=ur2&camp=1789&creative=390957">The Intelligent Asset Allocator by William Bernstein (great book, by the way), I have a mix that I'm comfortable with. I've started rebalancing my portfolio already, although it's difficult to do while trying to avoid major tax hits. Most of my money is in taxable accounts.
3. I fixed up and sold my car. Got 2100 for it, which I'm actually pretty happy about even though I paid $3100 for it a few months ago and dropped $1000 into it over those months. I'm just glad to see it gone.
4. We've sold a ton of other things on Craigslist, removing clutter and making a little money. And in some cases, like our extra freezer, I'll also reduce the electric bill.
5. I quit my job. This was set in motion last month, but my last day of work was just last week, so its still an accomplishment. My excitement about this is diminished somewhat given that I do plan to start a new job in a few weeks. That will be for 2 years (per the contract) then I will hopefully be retired!
Looking at Quicken, it appears our expenses are also down this month (so far). We aren't really pushing that part of the transformation yet, since we have so much going on with the move. Once we get settled in, we'll be ready to tackle things like our food budget.
Still to do this month: quit the gym, continue rebalancing portfolio, and move to our new home in Colorado.
tjt, Very Happy for you on your house contract. The issues you have the least control over are the most difficult and I am glad someone is deciding on your house!
I intend to get the book you reference. I am not at peace enough with total stock and bond investment. I suppose some of that is just because of my partial ignorance concerning the market.
Keep up the craigslist sale. You will be surprised how much cash you will accumulate.
I intend to get the book you reference. I am not at peace enough with total stock and bond investment. I suppose some of that is just because of my partial ignorance concerning the market.
Keep up the craigslist sale. You will be surprised how much cash you will accumulate.
-
irononmaiden
- Posts: 61
- Joined: Sun May 08, 2011 5:33 pm
I skipped a May update because things have been so crazy with me switching jobs and moving to a new city (along with some other major events that I'll elaborate on with my June update).
But I wanted to stop by to celebrate a major victory in my march to ERE. Today I closed on selling my old house, for a grand total of $400K.
My old mortgage (plus escrow) was $2300/month. Going forward it will be $780/month. That's a $1520/month cash flow improvement! That's the equivalent of $600K in savings according to my ERE assumptions!
I expect the impact to be even more once we get settled in. Utilities will be less, as should maintenance and repair.
Additionally, we love our new house. It's half the size, which allows us to be closer to each other and to get from area to area much faster. Also, the neighborhood is more our style. We never fit in with the economically wealthy homeowners in our old neighborhood, only having a few friends in the entire place. In the new area, we made friends the day we moved in.
But I wanted to stop by to celebrate a major victory in my march to ERE. Today I closed on selling my old house, for a grand total of $400K.
My old mortgage (plus escrow) was $2300/month. Going forward it will be $780/month. That's a $1520/month cash flow improvement! That's the equivalent of $600K in savings according to my ERE assumptions!
I expect the impact to be even more once we get settled in. Utilities will be less, as should maintenance and repair.
Additionally, we love our new house. It's half the size, which allows us to be closer to each other and to get from area to area much faster. Also, the neighborhood is more our style. We never fit in with the economically wealthy homeowners in our old neighborhood, only having a few friends in the entire place. In the new area, we made friends the day we moved in.
June was a very productive month for my ERE goals. It's probably better to describe it qualitatively than quantitatively, since so much went on and the numbers may not accurately reflect my progress.
In June I sold my car, moved half-way across the country, and down-sized my house. No more McMansion, with huge mortgage payments, huge electric bills, and that damned money-pit we called a pool. No more 15 mile drives to work to a job I had long outgrown.
No we live in a beautiful part of Colorado, with a view of Pikes Peak from my back porch. We downsized significantly, from a $400K, 3100 square foot house to a $200K, 1800 square foot house. The house is 3.5 miles from my office, which I will likely go to 4 days a week mostly by bicycle. I will work from home 1-2 days per week. And the real kicker is that we really like our house and neighborhood. When I bought the McMansion I was a 26 year old fool with confused ideals. The neighborhood and the neighbors never fit our desires. Here, after just 3 weeks in the house, we've already made more friends than we did in 7 years in my old neighborhood.
OK, enough of my happiness, let's sober up with the numbers.
Expenses: $3777
Mortgage: $0 (this is because I purchased the home in late May)
Relocation: $2042 (I'm not including this in the overall numbers because I will be reimbursed)
Auto Service: $921
Fuel: $165
Auto Insurance: $51
Groceries: $673
Restaurants: $75
Fast Food: $42
General Shopping (Amazon): $226
Clothing: $55
Bicycle Stuff: $43
Books: $10
Utilities: $214
Student Loan: $143
Cash: $142
Doctor: $95
Pharmacy: $22
Gym: $14
Entertainment: $40
ATM Fee: $2.50
I have mixed feelings about this number. My target is $3000, which I'm over even without my future $870 payment. On the other hand, we had a $900 car issue after driving up to Colorado, so if you cancel those out then I would only be about $750 over my goal.
Groceries are still too high, so I've made a plan for this. For the next month, I will do the grocery shopping instead of my wife, and I'll do it all by bicycle (about 1.5 miles away). That should reduce how much we spend. I also intend to further analyze our expenses on Amazon. I thought my wife mostly bought diapers from there, but I don't think we go through that much between 2 kids, one of which is mostly potty trained.
I'm also taking out too much in cash. That's me, not my wife. I'm looking to improve that this month.
The good news is that this will be my last gym payment, I cancelled in May. Utilities were down, and I expect them to go lower in this small house. Auto-insurance is down with only one car, and so was fuel. I've only put in $13 of gas into my motorcycle in 5 weeks!
Income: $11378
Salary: $10411
Adsense: $16
Dividends $951
I'm going to start tracking my passive income (Dividends, Adsense, and LendingClub.com) as a way to see when that consistently surpasses my expenses. That may not be the same point that I achieve a 3% SWR, but it will certainly be a cool point to cross.
Assets: $959,000
Cash: $112K
Taxable stocks: $485K
401K/IRA: $349K
LendingClub.com: $5K
Savings rate: 67%
Months to retirement at current expenses: 112
Months to retire at $3000/month expenses: 70
I'm dissapointed that it's still 70 months of work after if I get down to $3000/month. Previously, I had been counting my IRA/401K in my calculations and now I've decided to remove that since I'm only 33.
My primary source of encouragement is that at 4% SWR and $3000 in expenses, that number would be a much more attractive 34 months. And if I continue to make $500/month online when I "retire", it's only 16 months. Now that I like.
In June I sold my car, moved half-way across the country, and down-sized my house. No more McMansion, with huge mortgage payments, huge electric bills, and that damned money-pit we called a pool. No more 15 mile drives to work to a job I had long outgrown.
No we live in a beautiful part of Colorado, with a view of Pikes Peak from my back porch. We downsized significantly, from a $400K, 3100 square foot house to a $200K, 1800 square foot house. The house is 3.5 miles from my office, which I will likely go to 4 days a week mostly by bicycle. I will work from home 1-2 days per week. And the real kicker is that we really like our house and neighborhood. When I bought the McMansion I was a 26 year old fool with confused ideals. The neighborhood and the neighbors never fit our desires. Here, after just 3 weeks in the house, we've already made more friends than we did in 7 years in my old neighborhood.
OK, enough of my happiness, let's sober up with the numbers.
Expenses: $3777
Mortgage: $0 (this is because I purchased the home in late May)
Relocation: $2042 (I'm not including this in the overall numbers because I will be reimbursed)
Auto Service: $921
Fuel: $165
Auto Insurance: $51
Groceries: $673
Restaurants: $75
Fast Food: $42
General Shopping (Amazon): $226
Clothing: $55
Bicycle Stuff: $43
Books: $10
Utilities: $214
Student Loan: $143
Cash: $142
Doctor: $95
Pharmacy: $22
Gym: $14
Entertainment: $40
ATM Fee: $2.50
I have mixed feelings about this number. My target is $3000, which I'm over even without my future $870 payment. On the other hand, we had a $900 car issue after driving up to Colorado, so if you cancel those out then I would only be about $750 over my goal.
Groceries are still too high, so I've made a plan for this. For the next month, I will do the grocery shopping instead of my wife, and I'll do it all by bicycle (about 1.5 miles away). That should reduce how much we spend. I also intend to further analyze our expenses on Amazon. I thought my wife mostly bought diapers from there, but I don't think we go through that much between 2 kids, one of which is mostly potty trained.
I'm also taking out too much in cash. That's me, not my wife. I'm looking to improve that this month.
The good news is that this will be my last gym payment, I cancelled in May. Utilities were down, and I expect them to go lower in this small house. Auto-insurance is down with only one car, and so was fuel. I've only put in $13 of gas into my motorcycle in 5 weeks!
Income: $11378
Salary: $10411
Adsense: $16
Dividends $951
I'm going to start tracking my passive income (Dividends, Adsense, and LendingClub.com) as a way to see when that consistently surpasses my expenses. That may not be the same point that I achieve a 3% SWR, but it will certainly be a cool point to cross.
Assets: $959,000
Cash: $112K
Taxable stocks: $485K
401K/IRA: $349K
LendingClub.com: $5K
Savings rate: 67%
Months to retirement at current expenses: 112
Months to retire at $3000/month expenses: 70
I'm dissapointed that it's still 70 months of work after if I get down to $3000/month. Previously, I had been counting my IRA/401K in my calculations and now I've decided to remove that since I'm only 33.
My primary source of encouragement is that at 4% SWR and $3000 in expenses, that number would be a much more attractive 34 months. And if I continue to make $500/month online when I "retire", it's only 16 months. Now that I like.