Typically, January is a much-needed break from the chaos of the holidays. Not so in the FIby35 household, as we collectively spent over 2 weeks on the road this past month. Why spend any more time than absolutely necessary in the frigid Minnesota winter when places like Mexico and Florida are just a couple hour plane ride away? With that much travel, we must have blown the budget…right? Check out the details below in our January 2022 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! Since that time, our net worth has climbed to over 85% of our goal. Here’s last month’s update in case you missed it, 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 January 2022:
| | BALANCE | CHANGE FROM PRIOR MONTH |
| ASSETS | | |
| Cash, Checking, Savings | $18,193 | $50 |
| Investments | $963,335 | ($43,583) |
| Home Equity | $108,175 | $574 |
| LIABILITIES | | |
| Credit Cards | ($4,485) | $1,175 |
| Misc. Other Debts | $0 | $0 |
| NET WORTH | $1,085,218 | ($41,784) |
Well, that’s not quite the trajectory we were hoping for after closing out 2021 on such a high note. The stock market recoiled in spectacular fashion, at one point down around 10% from it’s previous highs. Luckily, the last few trading days of January clawed back some of those losses, but the S&P 500 still ended around 6% lower when the dust settled. Since we’re nearly 100% invested in S&P 500 index funds or similar, that takes a big toll on our wealth. Such is life.
Let’s check out each individual category:
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. As we get closer to our FI number, I’ve built this up to be able to accomplish some other goals in the first few months of 2022.
Investments
Several different accounts are included here, most of which are true “retirement” accounts. It also includes our taxable brokerage account at Schwab. We contributed over $11,500 to our various accounts this month and the market proceeded to wipe those out and then some – a $55,000 drop from the previous month. I’ve noted before that when your entire portfolio is subject to the whims of the stock market, these kinds of months happen from time to time. Hopefully it’s more of a blip than a trend.
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. I’m clear of all debts until baseball season starts back up in the Spring.
Expenses
Here’s a look at our expenses for the month of January:
| EXPENSES | Budget | Actual | (Over)/Under |
| Home (mortgage, property taxes, maintenance, etc.) | $1,114.27 | $1,737.59 | ($623.32) |
| Utilities | $122.50 | $193.02 | ($70.52) |
| Automotive | $350.77 | $119.82 | $230.95 |
| Groceries | $300.00 | $313.05 | ($13.05) |
| Dining Out | $116.67 | $108.89 | $7.78 |
| Health & Beauty | $337.50 | $334.19 | $3.31 |
| Cell Phones | $41.67 | ($41.70) | $83.37 |
| Travel & Entertainment | $1,386.67 | $1,567.63 | ($180.96) |
| Pets | $110.83 | $12.89 | $97.94 |
| Merchandise | $141.12 | ($121.28) | $262.40 |
| Other Expenses | $561.33 | $117.99 | $443.34 |
| Total Expenses | $4,583.33 | $4,342.09 | $241.24 |
Despite the minor market implosion and two separate trips this month, we managed to keep our expenses in check. Let’s take a look at some individual categories:
Home Expenses & Utilities
This year’s budget is built differently than in the past…previously, I averaged all expected costs over the course of the year so that most months we should come in under budget, while in May and October we would be over when our property tax payments were due.
However, 2022 will likely see lots of fluctuation in this category. We’ve significantly decreased our housing budget in anticipation of more travel later in the year. So for now, we’re likely to overspend the budget by a few hundred dollars each month (as was the case in January). This month included our mortgage, annual HOA dues of $180, and $10 for water softener salt.
Utilities came in quite a bit over budget as well, as the rising costs of natural gas combined with an especially cold month temperature-wise to smack us with a big bill.
Automotive
Thankfully no maintenance this month (other than a car wash), and 3 weeks of travel resulted in minimal gas usage. We will happily pocket those savings.
Cell Phones
As I’ve explained previously, we both have cell phone plans through Mint Mobile that only cost about $15 each per month for unlimited talk, text, and 4GB of 4G LTE data. I receive reimbursement from my employer every few months as well, so my cell phone is basically free as long as I am still working. In January, I was reimbursed for the previous 3 months, hence the negative number.
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Travel & Entertainment
As mentioned previously, we spent a fair amount of January on the road (or on the beach, rather). I took a one week siesta in Cancun with a friend, while Mrs. FIby35 spent the last 9 days of January and the first 4 days of February in Florida visiting her parents.
I paid for the Cancun trip out of pocket, using my new Chase Marriott Bonvoy Boundless card (referral link) at the Royalton Chic Cancun (a Marriott property). That allowed me to hit the new cardholder bonus for 125,000 Marriott points and a certificate for a free hotel night, in addition to the bonus points earned by using a Marriott credit card at a Marriott property.
Some back door travel hacking at its finest, which will set us up with lots of points and a free night to use in the future. Oh, and the Royalton was a great place to stay. Beautiful beach in the Hotel Zone, delicious food, and great service.
Merchandise, Other Expenses
The negative amount in the merchandise category is due to returning some items purchased in December. Other expenses this month included a credit card annual fee and another year of web hosting for the blog.
Conclusion
The market correction certainly hurts The Spreadsheets, but those kinds of months are bound to happen now and then. It’s completely out of our control, so I try not to worry about it too much.
What we can control is our spending, which we did a pretty good job of in January. I’m always happy with a month under budget, especially when it included some warm-weather travel.
With some pretty significant life changes anticipated this year, the budget is a bit wonky on a month-to-month basis – it pretty much encompasses two separate budgets with two completely different lifestyles. I’ll do the best I can to provide useful context each month along our journey.
Was January a successful start to the year for you, budgetary or otherwise? Feel free to comment below!
