mooretrees journal

Where are you and where are you going?
bigato
Posts: 1834
Joined: Sat Mar 05, 2011 12:43 pm

Re: First Journal Post

Post by bigato » Sun May 12, 2019 6:50 pm

I suggest you organize the expenses from higher to lower. It helps to see the biggest offenders. I also like to put a percentage of total by the side of each category. And you should not count the part of the mortgage that goes towards the principal as expense, because it is actually savings. You only count the interest as expense. From your report it was not clear how you are doing.

classical_Liberal
Posts: 804
Joined: Sun Mar 20, 2016 6:05 am

Re: First Journal Post

Post by classical_Liberal » Sun May 12, 2019 8:09 pm

I would also suggest you annualized known, recurrent expenses, then divide it into monthly. Otherwise looking a a single month of spending is like running a single blood glucose at a random time of day to diagnosis diabetes.

Use whatever sub-categories that best reflect your lifestyle. For instance, I consider all fixed car expenses "transportation" (ins, licencing), but all non-fixed like gas and maintenance "entertainment". Basically because I can control the later with usage, and realistically I have designed my life where I could be car free. Hence having the ability eliminate the fixed, but would likely have different fixed costs for transportation (bus pass and occasional Ubers). However, I would try to lump these subcategories into the biggies. Housing, food, transport, healthcare, then everything else, cause anything else is mostly optional. Also please no misc categories :roll: that won't help you at all.

With the major categories separated you can compare yourself to mean US (tons of data on the interwebs), or to others here (your goal). For example, It's been suggested that an ERE'er should not be spending more than about 10% of income and/or net worth for housing. A quick google search of BLS spending patterns showed me that mean housing expense for family of three in US is about 30% of post tax income. Where are you on this spectrum?

mooretrees
Posts: 22
Joined: Sun Jan 27, 2019 1:21 pm

Re: First Journal Post

Post by mooretrees » Tue May 21, 2019 7:36 am

Thanks for the feedback, I'm slowly looking into each of your suggestions. I had to look up annualized, that's how much of a noob I am.

We sold our Honda Fit. It was pretty easy, but it got sorta uncertain if it was going to work (not the best communication with the buyer), but she pulled it together and now we are down to one, supremely inefficient car. But, a paid off car. I'll adjust the car insurance today and send the extra money (our loan was smaller than the asking price) to the last of DH's student loans. We have agreed to never buy a car with a loan.

I keep feeling such relief. One giant step to being out of debt (except the mortgage). Also, it feels like we are both embracing the less consumer lifestyle. Usually when we go to Portland, we squeeze in a visit to a store we don't have locally. This time we went with our friend to a local park and walked around with our dogs and let our son ride his balance bike for a sweet, chill time. It was relaxing.

Our non-mortgage loans should be under $10k. Three loans left;
1. $177 and has minimal interest so I'm not paying it off early
2. $4700 to my dad with no interest, so also not paying it off too aggressively (though I will increase the payment once the next loan is gone)
3. DH last loan (from a high of 21 loans, around $66,000) currently at around $6700, will make a big payment on this one later this week.

So, big progress. It's so important to make progress! I'm happy that we are spending less money on food, but damnit, cutting out $8500 of debt in one fell swoop is fantastic! And gives me hope that we'll get to saving money really soon. And it feels like we are entering the realm where we are making different (better) decisions about money than most other folks. So, we're getting weird! And that is awesome.

sea
Posts: 44
Joined: Thu Oct 29, 2015 10:28 pm

Re: First Journal Post

Post by sea » Tue May 21, 2019 1:11 pm

That's awesome about paying off the car! Sounds like you on the home stretch for paying off non-mortgage debt. I also have one inefficient but paid off car that is good for winter driving.

mooretrees
Posts: 22
Joined: Sun Jan 27, 2019 1:21 pm

Re: First Journal Post

Post by mooretrees » Fri May 24, 2019 1:13 am

Two days after we sold the car, the buyer contacted us with complaints and accusations of dishonesty. She had some cosmetic concerns regarding scratches, the mileage was higher than the two week old ad, and the lack of a second key had become a sore spot. We were floored. And really upset. We had taken the car to a local mechanic to get checked out and everything was good. She had had a chance to look at it, drive it and knew about the lack of the second key. DH responded to her email pretty quickly and not so gently called bullshit on it. He was upset about the accusations of dishonesty and I was worried about getting back the money I'd already sent to a loan.

Two more days past and we get an apology/explanation email from the buyer. Long story short, she didn't ask questions when she had them (like what is the actual mileage right now, how much does a second key cost?), she ignored her own concerns about the car (again all cosmetic and mileage related, not mechanical) and then freaked out and blamed it on us. She apologized for accusing us of dishonesty, and wrote several paragraphs about how she didn't check something out when she had a question/concern. I feel for her. When I'm not angry at her. My take away is that she wasn't sure about how to go about buying a car from a private dealer, and when the situation required her to ask questions or perhaps be slightly annoying as a buyer, she didn't feel comfortable doing it. Not my problem, but damn it I didn't appreciate the rollercoaster! We haven't written back to her yet, not sure exactly what to say.

It was good of her to apologize, but I feel sorta like telling her, you need to learn from this. She had no obligation to buy from us. The key to a good feeling walking away from that situation was to be annoying, ask a dozen questions, and perhaps be honest that you are over your head and need someone's help. I hope she can enjoy the car and get over this bad start.

Anyway, on to other money stuff.

Debts:
1. $177.59 (should be paid off in three months)
2. $4525.00 (no interest loan)
3. $3756.93

Total: $8459.52!!!!!!

We are under $10k!!! We started out a little over four years ago pretty close to $100k in debt. We weren't as focused as we could have been, made some bad decisions (car loan), and good ones (had our son), but we are almost out of the woods.

I've had some boring days at work, I hate that. I've struggled to not leave early and to find projects. I have two days off and the farmers market this Sat. I love having the coffee cart. People come and visit, they give us feed back on the coffee, we drink coffee and eat fresh strawberries, we wander around and listen to music, and we make some money.

I'm thinking of hiring a local teenager to watch our son two afternoons a week. Partly to give DH time to work on projects, partly to give myself time to do the same. My paperwork is spilling over and I need concentrated time to organize/purge papers. I want to go trail running alone, and read a novel without interruption. I need some alone time.

mooretrees
Posts: 22
Joined: Sun Jan 27, 2019 1:21 pm

Re: First Journal Post

Post by mooretrees » Thu May 30, 2019 9:24 am

bigato wrote:
Sun May 12, 2019 6:50 pm
I suggest you organize the expenses from higher to lower. It helps to see the biggest offenders. I also like to put a percentage of total by the side of each category. And you should not count the part of the mortgage that goes towards the principal as expense, because it is actually savings. You only count the interest as expense. From your report it was not clear how you are doing.
The top three categories for us are housing, transportation, and debt. I'll focus on those right now.
We are doing just okay with the housing, compared to folks here.
Not including principal, mortgage and utilities = $980/month, 25.8%.

So slightly lower than the US average for housing for three, but an area to make progress in to reach an ere goal of around 10%. No big changes will happen with this category quickly, but within the year we should have a rentable basement and we are thinking of a school bus conversion for a big change.

Transportation: May had high car expenses that should drop significantly in June, due to the pay off of the car loan (196/month), some pre-selling expenses (getting the spare tire fixed) and dropping insurance on the second car. However, we have an older, fuel inefficient vehicle that needs maintenance. So, maintenance will go up, and likely fuel as well, though only for bigger trips and business related driving.
Transportation: $530.48/14.0%.

We've been pretty good in the two weeks since we sold the car with walking and biking in town. Our roaster is in a commercial space the next town over and we haul our farmers market gear in the truck. So, with the business, we have some built in 'need' for a vehicle. I think if we really tried, we could figure out alternatives. But, we're making progress and I don't want to ask DH to build a big bike trailer for hauling supplies yet, he's got other projects to work on.....

Debt: $3778.98/55.4.% this number is crazy.

We sold the car and had extra after paying off the loan, we also got our state tax refund back which I sent to loans as well. Our 'normal' monthly payment for the remaining loans is $373.52.

The percentages for the housing and transportation are based on an average month income, while the debt is actual money in for May because the extra money coming in were one-time in flows and I didn't think it useful to have artificially low percentages for one month.

I got a pay raise that should start with my paycheck tomorrow. I'm thinking of going to HR and increasing my 401k contribution at least 1% percent. I figure I'm still in the accumulation phase and locked into working and it helps with saving something and slightly reducing my taxes? It is a cost of living raise, 2.5%. Last year I did this and I was surprised how much it increased my contributions, without feeling any loss from it in my paycheck.
I'm off to clean the kitchen and drink coffee before work.

classical_Liberal
Posts: 804
Joined: Sun Mar 20, 2016 6:05 am

Re: First Journal Post

Post by classical_Liberal » Fri May 31, 2019 2:00 am

Many here are rather indifferent or even slightly opposed to tax shelters. This is mainly due to the short time frame of savings required to ERE and the fact that most retire so early they need "good" money. I'm of the opposite opinion. I think any money we can tax shelter we should. There are plenty of inventive ways to pull the money out, while in the meantime save on taxes now and allow the deferred amount to grow, particularly if needs/spending are low. One of my larger mistakes early in accumulation was not maxing out my 401K, when I could have, but instead elected to pay off very low interest, tax deductible, student loan debt first. I could have sheltered and invested an extra 20K or so back in 2014-2015. That mistake costs me about 15K in present $ between lost capital gains and taxes (that's almost a year of spending!). I won't lie, the paid off debt was a huge psychological advantage, but it wasn't the best way to go.

Good job on measuring the expenses! I can't remember, have you taken a look at the "Makeover" post on the ERE homepage?

mooretrees
Posts: 22
Joined: Sun Jan 27, 2019 1:21 pm

Re: mooretrees journal

Post by mooretrees » Thu Jun 13, 2019 2:44 pm

@classical_liberal
I have looked at the ERE makeover, first time I rejected it outta hand as unreasonable. That was some time ago and I've looked again recently. I will go back to it and see what I can glean from it, I can see eventually giving up the cell phone? And we're wildly excited to convert a schoolbus and get rid of the mortgage.

In other news, we sold another phone and that $350 plus another maybe $700 will go to loans. I'm two payments away from finishing my last federal loan and for both of the federal loans, our interest paid last month was $12.00. That's still too much, but a far cry from the days when it was several hundred dollars.
Living with one car has been a pretty seamless transition. We are on the bikes all the time and it's so fun. I love that bikes are super economical, but really, they're just so fun to ride. I literally have ridden hundreds of miles and every single ride was enjoyable. Not every second was amazing, but I've never regretted a ride. I can't wait to bike cross country in the next 10 or so years. ERE will be essential to making that dream happen.

I'm cleaning out our basement and getting ready for a yard sale Saturday. Sunday we will go cut our first firewood of the season, we spotted a few tamaracks on a recent hike and they are the best. Nice uniform trunks, very little branching and excellent burning.

And last but not least, I added an extra $100 to our mortgage. Should knock off around six years off of the mortgage, which is if we didn't make any extra payments. I plan on upping the extra principle payments once the last two federal loans are paid off, so in the next three to four months. That is exciting!

And I will leave all two of you reading, with my cold brew coffee recipe. It's warm out here and I'm making cold brew for the farmers market as I think we'll sell more of it than hot coffee.

The recipe is ridiculously simple and works equally well with good to mediocre beans.

4 parts water to one part coarsely ground coffee
Stir a little and put the container into the fridge for 24 hours
Filter ground out with (initially) coarse, I use a french press, and then if you really want to get the sediment out you can pour through pour over filters-this can take a long time, or use a cheese cloth folded over several times. I don't mind the sediment so I don't bother with the pour over filter step. Word of caution, this is STRONG!! as in a LOT of caffeine. It keeps really well for a long time so I make it for market and then keep it in the fridge until I drink it all.

Frita
Posts: 138
Joined: Thu Mar 15, 2018 8:43 pm

Re: mooretrees journal

Post by Frita » Fri Jun 14, 2019 10:39 am

@moretrees
Kudos, you are settling in to ERE and making some pretty big shifts.

Thank you for your cold brew coffee recipe. I can’t wait to try it. Do you drink it straight or mix with milk or something?

mooretrees
Posts: 22
Joined: Sun Jan 27, 2019 1:21 pm

Re: mooretrees journal

Post by mooretrees » Fri Jun 14, 2019 9:24 pm

@frita
I drink it straight, it’s usually very smooth and sometimes chocolatey (spelling?) so it doesn’t need anything added in my opinion.

Another benefit is that cold brew is not as acidic as hot brewed coffee and easier on the stomach. I hope you enjoy it!

Frita
Posts: 138
Joined: Thu Mar 15, 2018 8:43 pm

Re: mooretrees journal

Post by Frita » Sat Jun 15, 2019 8:16 am

@moretrees
Interesting, I love chocolate undertones. Later this week I am visiting scoffers plantation so I will get some coffee to try it. For some reason, Guatemalans drink mostly instant.

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