I swear, the last days of summer go faster and faster every year – and it’s not just that the sun starts setting earlier. August was such a whirlwind month that I was too busy (and in some cases, too hung over…) to write much at all. Weddings, birthday parties, long days at work…anybody else have to deal with auditors? Oh yeah, we also jumped full on into One-Car-Household Life, more by necessity than by choice. Check out the details below in our August 2021 financial update!
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 over halfway to our target net worth of $1,250,000! Here’s last month’s update in case you missed it (Two Comma Club!), and here‘s how we fared last year in total.
This post is the latest in 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.
Net Worth
Here’s where our net worth ended up through August 2021:
| | BALANCE | CHANGE FROM PRIOR MONTH |
| ASSETS | | |
| Cash, Checking, Savings | $13,422 | ($2,923) |
| Investments | $924,526 | $39,233 |
| Home Equity | $105,319 | $566 |
| LIABILITIES | | |
| Credit Cards | ($1,903) | $188 |
| Misc. Other Debts | ($140) | ($20) |
| NET WORTH | $1,041,224 | $37,044 |
Yet another stellar month riding the S&P 500 up ~3%…investing is so easy when the market just keeps going up! We won’t fool ourselves into thinking that this gravy train will last forever, but we’re certainly going to enjoy it as long as it does. We’re now 83% of the way to our goal of $1.25 million.
Cash, Checking, Savings
This consists mostly of our 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. The balance this month was more in line with where we prefer to keep it after Mrs. FIby35’s 3-paycheck month in July.
Investments
Several different accounts are included here, most of which are true “retirement” accounts. It also includes our taxable brokerage account at Schwab. We were able to sock away $14,400 in contributions this month, with another $24,900 coming from market gains. It’s pretty exciting in the months where our investment returns outpace our paychecks, which they did again by far in August. There’s a self-perpetuating wheel of wealth generation at play here – the more we save, the more we invest, the more our investments increase (for now), the more it makes us want to save… Compound interest in its finest form.
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. Having said that, new homes are being built and others are being sold in our neighborhood for well over what we paid for ours, so this is likely a conservative number.
Credit Cards
Just the balance on our various credit cards (we use these extensively to fund our travel hacking exploits) 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.
Expenses
Here’s a look at our expenses for the month of August:
| EXPENSES | Budget | Actual | Over/Under |
| Home (mortgage, property taxes, maintenance, etc.) | $2,259.05 | $1,608.97 | $650.08 |
| Utilities | $218.41 | $328.71 | ($110.30) |
| Automotive | $480.21 | $306.15 | $174.06 |
| Groceries | $375.00 | $349.67 | $25.33 |
| Dining Out | $116.67 | $208.86 | ($92.19) |
| Health & Beauty | $266.96 | $221.95 | $45.01 |
| Cell Phones | $16.67 | $0.00 | $16.67 |
| Travel & Entertainment | $369.32 | $331.63 | $37.69 |
| Pets | $119.17 | $367.41 | ($248.24) |
| Work-related | $8.50 | $25.00 | ($16.50) |
| Merchandise (furniture, decorations, clothes, etc.) | $250.30 | $186.80 | $63.50 |
| Other Expenses | $269.75 | ($324.44) | $594.19 |
| Total Expenses | $4,750.00 | $3,610.71 | $1,139.29 |
In addition to August’s investment gains, we we came in well under budget for the second month in a row. Despite a trip to my second home…
…we still managed to keep the spending in check.
Some analysis on individual categories:
Home Expenses & Utilities
No property taxes, insurance, association dues, or major repairs this month. The budget is built to average the cost of property taxes over the year, so in all months other than May and October, we should be under budget.
Automotive
The noteworthy part of this category is really what wasn’t spent.
Back in June, we sold my car and replaced it with a temporary fix…turns out that temporary fix lasted only 2 months. Facing potentially thousands of dollars in repairs, we cut our losses and decided to attempt to survive with just one vehicle for as long as we can.
August was a bit hectic for implementing this new lifestyle, but we made it through. As long as Mrs. FIby35 continues to work from home, I don’t see us going back to owning a second car. It’s incredibly liberating to own one less item waiting to suck up my hard-earned cash and blow it out its rusty tailpipe.
Cell Phones
As I’ve explained previously, we both have cell phone plans through Mint Mobile that only cost about $15 each per month. I receive reimbursement from my employer every few months as well, so my cell phone is basically free.
We love Mint Mobile and highly recommend their services for a much more affordable option than some of the big names out there. I’d be thrilled if you used this referral link and signed up with them – you won’t regret it!
Pets
After becoming the first member of the FIby35 household to ever spend negative dollars over the course of an entire month in July, our sweet little fur baby went all-out in August. Really, we just went full-on dog parents on his behalf – a set of stairs for him to get into/out of bed without parental assistance, a set of obedience training classes, etc. We splurged a bit, but we think he’s worth it.
Other expenses
This looks a bit funny as a large negative number, but we received a refund from the IRS for the taxes previously paid on Mrs. FIby35’s unemployment income earned in 2020.
Conclusion
Another successful month financially for the FIby35 household. It’s amazing what can happen when you spend less than you earn, invest the rest, and let the low-cost, broad-based stock index funds work their magic. Even after some months with less than stellar returns earlier this year, we’ve still been able to increase our net worth every single month.
We’re kicking around ideas for some pretty big plans in 2022 if this keeps up…
How did your August spending end up? What do all the other proud Dog Dads out there splurge on for their pets? Feel free to comment below!
