Let’s talk about money. Something I really enjoy about the FI community is that they talk about money! I think it’s important to talk about and not treat it like a taboo subject. To be honest, I feel a wee bit queasy as I write about our spending and income for all the world to see. I’m still figuring out what I’m comfortable sharing. But I know that I have personally benefited from bloggers who have shared their numbers. Talking about money is GOOD.
One of the reasons I started this blog was for accountability and to track our progress on our path to Financial Independence (FI). Also I hope that by sharing our wins and fails it will be useful to others who are on the same path or maybe even inspire others to give FI a try. Spread the FIRE if you will…
I did a review of our first year but this is my first monthly review. Um yes, I realize that this is the last day of February and I’m just now getting to reviewing January but better late than never! Ammiright? January just flew by in a whoosh. So here goes…
FRUGAL THINGS (and eco-friendly!)
At first I did the classic mistake of trying to do everything all at once and got overwhelmed. I also made the mistake of buying low quality groceries one time but I learned from it so not all was lost. I now understand what kind of frugal choices work for us and it really does help cut expenses.
Another cool thing about frugality is that it can often go hand in hand with being eco-friendly. Here a few frugal things I did this month.
- I made a batch of vegetable broth from frozen veggie scraps. I freeze the broth to use for later in soups and sauces.
- Homemade broth is delicious and cuts down on the grocery bill.
- Making it at home reduces the amount of packaging I consume.
- Using veggie scraps reduces food waste!
- I made laundry soap and toothpowder.
- Both are way cheaper than buying at the grocery store.
- Eliminates a laundry soap container from being recycled and a toothpaste tube from going in the landfill.
- I baked banana bread from saved frozen bananas. I also regularly bake two loaves of rustic white bread a week that we use for morning toast.
- When I buy bananas we somehow always end up with brown ones. This is a great way to reduce food waste.
- The bread I make is delicious, saves us a few bucks every week, and reduces the amount of packaging we consume. I store it on the counter wrapped in beeswax wrap.
- I clipped some leaves from our bay leaf tree and dried them for future use. These are a nice addition to the homemade broth.
- Root Jr. had a tear in his favorite sweater and I had two pairs of socks that had holes in the toe area. I mended these using my sewing machine. Like new-ish!
- I’m trying to maintain a spending fast on clothing items for myself. I did pretty good last year and I’ve made it through the new year without buying any new items. Spring is right around the corner though and I’m not sure I can stand using my swimsuit one more year…
FAVORITE CONTENT CONSUMED
I love to read. I used to read mostly fiction but after finding FI this past year I read and listen to content mostly about personal finance. I’m including this in my monthly review for two reasons.
One: this stuff keeps me inspired. Getting to FI is a long game. It’s not always easy to stay frugal. Lifestyle inflation can creep back up on you. FI fatigue can set in. So continuous learning is a way to stay motivated and keep my eye on the ball.
Two: I find out about great content through other bloggers and podcasters so it may be useful to my readers if I share it too.
Here’s what I read and listened to in January.
- FI After 50 – In particular a post about choosing a word of the year. This inspired me to chose the word CREATE – create good systems, create good habits, create memorable experiences. I wrote it out on a post it note to keep on my desk. I should probably get it tattooed on my forehead though because despite my efforts at creating good systems I seem to have mostly ignored them this month (see “5 AM fail” below).
- Late Starter Fire – This blogger writes about being late to FIRE. A subject close to my heart as we are late starters too. She also has a great series where she interviews other late starters. It’s so fun to read about what other people have accomplished and all the different experiences they have had.
MONEY SPENT ON EATING OUT
In my Pre-FI days I didn’t pay much attention to what we spent on eating out. Once I started tracking our expenses it became clear this was an area we could cut back on. We used to just eat out whenever for whatever reasons. Too tired to cook, bored, convenience, FOMO (fear of missing out).
Now we try to be more intentional. Anyway… I figure it’s probably a good idea to pay special attention to this area so it doesn’t creep back up to a mindless spending category. Also, I am obsessed with food.
Looking at what we spent in January I can say that most of these outings were well spent by hanging out with friends and fixing a boo boo. One was just straight out convenience while traveling.
- $31 for lunch and coffee with my close friend in the first week of the year. It was nice to spend some leisurely time with her while I was on winter break from work. We had some fancy Thai food at Sway and stopped for a cup of coffee afterwards to talk more. Divine.
- $36 for dinner and margaritas with my close girlfriends at Chuys TexMex.
- $27 at Jason’s Deli with my boys on a drive back from H-Town (Houston).
- Pizza with a friend and colleague at Rapollos on the drag (that’s Guadalupe street). About $7 bucks. Would definitely go back to this joint.
- The boys stopped at Amy’s Ice Cream after Root Jr. twisted his ankle on his skateboard. Ice cream does wonders. $12 bucks.
- $20 at Mothers Vegetarian restaurant with the same close friend I went out with earlier in the month. When I’m at work we try to sneak away during my lunch hour once or twice month to catch up with each other.
- Lunch at Veggie Heaven with my buddies who also work where I do – $13.
MONEY SPENT ON OTHER THINGS
Like eating out, what we spend on “other things” is an area that’s worth scrutinizing. It’s the “other things” that pop up in life that can eat up our savings. I think we did pretty good here.
- $30 for wildflower seeds to sprinkle on the side grassy area of our property. They have yet to emerge.
- $36 for a haircut for Root Jr. (he won’t let me try to cut his hair).
- $100 for a birthday present gift card for my mama.
- $26 for wrist guards for Root Jr. He had wrist guards on when he twisted his ankle on his skateboard! Go figure.
- $25 for a calendar made on Shutterfly plus shipping. I make these every year. Each month includes photos from the previous year. It’s a fun walk down memory lane. Totally worth it.
- $15 for a new shower curtain. We cleaned our old one multiple times to make it last but it was time to put it to rest. NOT eco-friendly. It’s plastic and we tossed the old one in the landfill.
I am a fan of Slow FI, coined by the Fioneers. To me it means I will not forgo meaningful and fun experiences with my family and friends in order to save money in an effort to get to FI as fast as possible. That being said we need to be careful how much we spend.
My weakness is spending on Root Jr. For example, when we go out to a movie, I don’t deny him ridiculously over priced candy as a treat. To me it’s part of the experience. We do discuss the prices and compare how much more we could buy at the grocery store with that amount. So not all is lost right? Teachable moment? Eh?
- Movie tickets to Little Women plus treats – $31 total. I took Root Jr. to see this with his grandma and cousin. Root Jr. is eleven and willingly watched this movie with us but it’s not something he would pick on his own. He was a good sport though and made it through the whole thing without falling asleep! In my opinion it was a little lonnnng.
- Impulse purchase – I signed up for a $4 a month online subscription to the New York Times. I had two weeks off over winter break and I read quite a bit. I reached the free article limit and just clicked a convenient link on my phone for the subscription. Just like that. They make it so easy! Last year in my cutting expenses frenzy I canceled our $14 a month subscription to the New York Times. At least this one is cheaper…right? Win?
- Tickets to the Lady Bird Johnson Wildflower Center for the Fortlandia exhibit – $18. Another excursion with grandma. The Wildflower Center is a jewel of Austin. The exhibit was a series of interpretations of forts dotted throughout the landscape. It provided lots of climbing opportunities for the kiddo. A day out in nature with the fam – money well spent.
- We have a camper trailer and try to use it often. One – because we financed it (Pre-FI) and are still paying on it so we darn well better get some use out of it. Two – because we love camping. Spring break is coming up so I booked two nights at a park about 45 minutes outside of Austin. $76 bucks. Cheaper than a hotel right?
WINS and FAILS
Oh summer camps. I love and hate you. Love – because they are a fun and rewarding place for Root Jr. to spend time with friends in the summer while we
slave away at our jobs earn a living. Hate – because they are SO expensive!! Almost three months out of the year our kids are released from school. Most of us cannot take a three month vacation. So summer camps.
I’m fortunate to have a great tribe of mama friends that I coordinate with to plan summer camps and child care over the summer. Last year we traded days where we took a day or two off from work to watch each other’s kids. We called it “home camp”. This helped to cut back on summer camp costs. We are doing the same this summer. Out of 11 weeks off this summer I will book 5 weeks of camp. The rest of the weeks will be covered by home camps and other creative solutions.
Yes, January is crazy early to be planning for summer but these camp organizers are clever by getting you to reserve your spot early in exchange for early-bird pricing. Also, some of these camps fill up super fast so getting in early is a must. This month I booked 4 of the camps for a total of $1,650.
In our Pre-FI days we had to put this expense on our credit cards. But I am proud to say we cash flowed these suckers last year and this year! WIN.
I have been kicking around the idea of line drying our clothes. The main reason is to lessen our impact on the environment. Our dryer is propane powered so it’s not super expensive to run but I thought it could be an opportunity to use less energy.
We live in Texas so there is plenty of sunshine year round. Sunshine is good for whitening and sanitizing clothes. There is also the added benefit of reducing the amount of wear and tear on our clothes by line drying. Plus, it would get me outside and get me to move around instead of just shoving the loads into the dryer.
I got buy-in from Mr. Root as he is the one who would have the task of setting up the lines. We searched on Amazon and found an umbrella style clothes line for $75 bucks that would work on our property.
I was soooooo close to just clicking that button to make that purchase. BUT, I paused. I had one of those moments where I had to reflect on the purpose of the purchase, flexing my frugal muscle.
- Why am I buying this? Well because it’s better for the environment.
- Yes but we are in debt. Do I NEED to spend $75 dollars right now for the benefit of this small impact?
- Maybe I should wait until we are out of debt. If I still feel strongly about line drying I can revisit this purchase.
- I could also wait until our dryer stops working eventually. Instead of replacing it with a new one I can buy the clothes line at that point.
So I’m calling this one a WIN! I didn’t spend $75.
My goal is to keep our monthly grocery bill under $1,000. “Groceries” for us includes food, household products, pet food, and even Root Jr.’s school cafeteria bill.
$1,000 might seem high to some of you seasoned frugal folks out there but for our family it’s a big improvement from our Pre-FI days when it wasn’t unusual for me to spend upwards of $1,450 a month.
This month we spent… $900!! Wahoo! That’s a WIN.
WAKING UP AT 5AM
One of my goals for 2020 is to optimize my time. To do this my plan is to wake up one hour earlier at 5am on weekdays so I have time to meditate, do a quick yoga routine, and get some writing in before work. On the weekends I aim to wake up by 7am for the same reasons.
I can’t say exactly but out of 31 days in January I think I might have woken up early maybe 5 times? I will cut myself a little slack here because I was working through an illness and made two weekend trips to H-town which made it challenging to stick to my super-optimized schedule.
Overall I will call FAIL on this goal for the month. I blame it on my pets. It’s their fault because it’s cold outside and they get all snuggly in our bed and there’s just no way I can leave the coziness.
A 2020 goal of mine is to increase income by selling something every month. I have miscellaneous unwanted items as a result of my ongoing process of decluttering our home. I want to try making a little extra money each month by selling these things. When I run out of things to sell I imagine myself finding things at Goodwill or yard sales to fix up and sell. Alas, I sold NOTHING this month. FAIL
I don’t really use a budget. We are just actively trying to spend less and save as much as possible. I track my expenses in Mint and kind of use their budget tool but it’s very loosey goosey. And at the end of the month I do a sort of review of what we spent by entering everything into a budget spreadsheet I got free.
But these tools don’t actually dictate what we spend. There’s no moment in the month when I’ll say something like “we can’t spend more than $80 at the grocery store this weekend because that’s all we have left in the budget”.
We have room to improve in cutting back our expenses and saving more so I think using some kind of actual proactive budgeting method could take us to the next level.
The backwards budget that I heard about at Wicked Wallet appeals to me and I meant to give it a try in January.
But I have also heard so much praise for YNAB. Recently the creator of YNAB was on an episode of the Choose FI podcast. He seemed like a genuinely nice person that wants to help people with budgeting so that really helped me decide to give it a try.
But there it sits on my to-do list: “YNAB”. I didn’t get to it in January. FAIL
SUMMARY OF INCOME AND SAVINGS
I work a salaried 9 – 5 and get paid once a month. Health insurance including dental and vision for the family, flex healthcare reimbursement contributions, retirement contributions, parking garage fees, and my life insurance premium all come out of this check.
Mr. Root is self-employed in the construction industry. His income can be variable but generally he pays himself twice a month. We each make in the low 60s in gross income.
My goal since finding FI is to live off of my check plus one of Mr. Root’s and save the rest. Actually, I started out wanting to live off just my paycheck, so about a 50% saving rate. But after a little simple math I realized that’s not actually possible at the moment. I mean unless we increased our income…
By tracking our expenses I have figured out that our life costs about $5000 a month on average. Some months are more spendy than others. In January we spent $4855. That’s a pretty frugal month for us.
We would have saved $900 in January with this scenario which is less than my goal but our expenses were high because of summer camps. The fact that we cash flowed summer camp expenses AND still saved some money is astounding for us so I will call this a WIN!
But one of the things about Mr. Root being self-employed is that his income can be variable. This is great when it’s variable in our favor and January was one of those months. He’s been hustling hard and he was able to pay himself extra!
With what we saved and the extra dough he brought in we paid off the balance of our solar panel loan of $4200. That loan is now GONE. WIN!!!!!
NEXT DEBT OBLITERATION GOAL – attack student loan!!!
We are now going to shovel our savings into paying off the stupid, stupid loan with the next highest interest. That’s my student loans at 6.125 %. If we can save on average about $1,500 month we can have that sucker paid off in less than two years.
With the extra income used to pay down debt plus our auto-drafts into our emergency fund and a retirement account that’s about a 48% savings rate this month. That’s our best yet. It’s way easier to hit that kind of savings rate when your income is higher. Go figure!
And voila! My first monthly status check. I guess I’d better get started on February since it’s the last day! Ack!