It’s already September…where has the year gone?
In our inaugural blog post, I briefly introduced you to our goal of achieving financial independence (“FI”) by the age of 35* and shared that we are already (finally?) halfway to our target net worth of $1,250,000! Here’s last month’s update in case you missed it.
This post is the second in what is becoming a regular series of monthly financial updates to track our progress to FI and beyond. Bear with me – I’m a little obsessed with spreadsheets and track every penny we make and spend in excruciating detail. I’ll do my best to summarize that activity in a way that gives enough insight into our financial maneuverings without boring you to tears.
With that, here’s where we are at through August 2020:
| BALANCE | CHANGE FROM PRIOR MONTH | |
| ASSETS | ||
| Cash, Checking, Savings | $15,163 | ($130) |
| Investments | $585,354 | $50,085 |
| Home Equity | $98,630 | $547 |
| LIABILITIES | ||
| Credit Cards | ($3,408) | ($1,398) |
| Misc. Other Debts | ($40) | ($18) |
| NET WORTH | $695,699 | 55.7% to FI |
Cash, Checking, Savings
Consists mostly of our $9,000 emergency fund held in a high-yield online savings account at Ally Bank. The rest is held in a “big bank” for depositing our paychecks and paying bills.
Investments
Several different accounts here, most of which are true “retirement” accounts. Also includes our taxable brokerage account at Schwab. The increase in August is almost exclusively due to increases in the stock market, along with our regular contributions. As the S&P 500 goes, so goes our investment balance.
Home Equity
Purchase price of our home, less the outstanding mortgage balance. I don’t worry about adjusting the value to whatever our Zestimate is on a particular day because it doesn’t matter until we sell.
Credit Cards
Just the balance on our various credit cards (future post on our travel hacking exploits to come) as of the end of the month. We pay these off on time and in full each month, so the change in this balance will usually manifest itself in the expenses below.
Misc. Other Debts
Usually just my administrative accounting of who owes what for various fantasy sports leagues.
Here’s a look at our expenses for the month:
| EXPENSES | |
| Home (mortgage, property taxes, maintenance, etc.) | $1,975.93 |
| Utilities | $305.15 |
| Automotive | $825.77 |
| Groceries | $276.03 |
| Dining Out | $242.56 |
| Health & Beauty | $473.44 |
| Cell Phones | ($10.00) |
| Travel & Entertainment | $1,550.68 |
| Pets | $144.22 |
| Work-related | $47.01 |
| Merchandise (furniture, decorations, clothes, etc.) | $564.47 |
| Other Expenses | $279.00 |
| Total Expenses | $6,674.26 |
Another month exceeding our average monthly budget of $5,000. Let’s dig in.
Notes
Home expenses included a one-time payment to have our windows washed, inside and out. Normally, I would take on most cleaning tasks myself, as it is one of my relatively few strengths when it comes to home maintenance. However, the outside of our home doesn’t lend itself to easy maintenance, as we have a walkout basement…a big no thanks to getting on a ladder 3 stories up – I’ll leave that to the professionals once every few years.
Automotive expenses included $700 for an oil change and multiple trips to the shop for repairs. Very much a love-hate relationship with my car right now.
A note on cell phones: August actually included a $10 credit in this category, as I received cash back through Mr. Rebates for my renewal back in March. We both own our phones outright, and pay Mint Mobile for service once a year (~$200 each for 3GB of 4G LTE data and unlimited talk/text). No need for outrageously high phone bills when we are connected to wi-fi more often than not and receive adequate service elsewhere.
Travel & Entertainment is a bit misleading, but the accountant in me says it’s accurate. Long story short, we booked some Southwest flights back in 2019 (and cancelled, and rescheduled, and re-cancelled, and rescheduled…) and received full refunds in the form of Southwest travel vouchers. Recently, Southwest made the option available to cash in travel vouchers for miles…rather than continue to deal with the travel vouchers (which have expiration dates), we decided to cash in our vouchers for miles in the name of flexibility. Unfortunately, it shows up in The Spreadsheets as an expense even though we didn’t receive the pleasure of actually going anywhere.
The Merchandise category includes $300 for a new lawn mower, since apparently all motorized possessions have a binding contract with one another to require maintenance/replacement at the same time (see Automotive category above).
Conclusion
That’s it for August as the Minnesota summer is beginning its annual fade into darkness. Any surprise expenses for you this month? Want to debate me on my accounting for travel miles? (Please don’t…it’s not worth it for either of us).
*Technically, The Almighty Spreadsheets project we could reach FI sometime during 2024 if the market cooperates, which would put me at age 34 and Mrs. at age 33. But in the interest of being conservative, we’ll stick with “by 35.” It also provides this blog with a more succinct name than “FI by 34 and a half.”
