I can’t believe we’re already a month into the new year! Statistically, most of those new year’s resolutions you made have already gone by the wayside, though hopefully the financial ones are still intact. Is our brand new budget already toasted after just one month? Read on for the January 2023 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 90% 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 2023:
| | BALANCE | CHANGE FROM PRIOR MONTH |
| ASSETS | | |
| Cash, Checking, Savings | $86,524 | ($1,677) |
| Investments | $1,110,055 | $69,456 |
| LIABILITIES | | |
| Credit Cards | ($5,585) | ($2,588) |
| Car Loan | ($30,143) | ($30,143) |
| Misc. Other Debts | $0 | $0 |
| NET WORTH | $1,160,851 | $35,048 |
Investments went up, that’s nice…a little more on the credit cards this month…wait a minute…CAR LOAN?!?! 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. After the sale of our home, we decided to keep about 2 years worth of living expenses in some form of savings. We’re spending out of that balance now while the market is down instead of selling investments.
We anticipate having a baseline budget of about $50,000 for the next few years, so we stashed $80,000 in savings and purchased $10,000 each in Series I savings bonds in 2022. The Treasury announced new I-Bond rates of 6.89% in November, still well above what we would earn in a savings account so we bought $10,000 more for each of us in January. The interest rate is tied to inflation, so as long as inflation stays high we will continue to buy and hold these, building a sort of I-bond ladder.
Investments
The S&P 500 climbed over 6% in January, recovering our December losses. With our cash buffer there’s no need to actually sell any investments any time soon, giving the market time to recover. The only real reason for me to track market performance is for these monthly updates.
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.
Car Loan
We were hoping to run our 2009 Toyota RAV-4 into the ground someday in the distant future, but that day came sooner than expected. Showing signs of significant upcoming repairs, we started to do some car shopping and things escalated quickly. After test driving a few cars on a Friday, we ended up coming home with a brand new 2023 Subaru Forester on that Sunday.
We quickly narrowed our search to a mid-size SUV similar to the RAV-4 in order to be able to haul our minimal belongings between Florida and the Midwest, as well as something I could actually fit into comfortably. Unfortunately, the mid-size SUV market is pretty sparse when it comes to reasonably priced, lightly used models (no surprise) which cost just about as much as a brand new model. Worse yet, most of the models available are the pricey premium packages with too many features that we don’t need or value.
Ultimately, we chose to bite the bullet to the tune of $471 per month starting in March. We traded in the old RAV-4 but did not put any other money down, as that cash is worth more to us in our current state of Funemployment. It pains us more than a bit to carry a car loan, something we thought we would never do again. The plan is to likely pay off the loan in full during our next stage of employment before leaving the workforce again, whenever that may be. Now we have an almost-base model Forester with little to no maintenance requirements and peace of mind for our upcoming road trips – not to mention a smooth, quiet ride for our dog.
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 January:
| EXPENSES | Budget | Actual | (Over)/Under |
| Home (mortgage, property taxes, maintenance, etc.) | $1,128.25 | $0.00 | $1,128.25 |
| Utilities | $0.00 | $0.00 | $0.00 |
| Automotive | $449.75 | $304.84 | $144.91 |
| Groceries | $308.33 | $123.82 | $184.51 |
| Dining Out | $135.42 | $94.14 | $41.28 |
| Health & Beauty | $568.33 | $520.25 | $48.08 |
| Cell Phones | $33.33 | $0.00 | $33.33 |
| Travel & Entertainment | $1,235.00 | $2,960.84 | ($1,725.84) |
| Pets | $87.50 | $63.29 | $24.21 |
| Merchandise | $135.67 | $408.51 | ($272.84) |
| Other Expenses | $293.42 | $195.04 | $98.38 |
| Total Expenses | $4,375.00 | $4,670.73 | ($295.73) |
We held spending pretty well in check except for a few conspicuous places. Let’s take a look at individual categories:
Home Expenses & Utilities
No home = no home expenses. We do anticipate returning to work and (likely) renting a place of our own later in the year. Until then we will continue traveling and staying with family.
Automotive
Despite the brand new car, our insurance premium increased only minimally for the remaining 5 months on our policy. This seems suspicious, so I’ll enjoy it for now but will definitely be watching for a huge increase once the policy is up for renewal. Actual expenses this month included renewing our old car’s plates (before we knew we would get rid of it) and a duplicate title to be able to sell it, since the current title is packed away in storage up north. Just a bit of gas to get around and a mechanic bill on the old RAV before deciding to dump it rounded out the spending.
I budgeted conservatively for insurance this year and also had a pretty good chunk budgeted for maintenance. But with the new car, most of that budgeted maintenance will be shifted to paying the loan instead. All in all, the new car shouldn’t cost us much more out of pocket this year than the old one would have.
Groceries & Dining Out
We chipped in for groceries and did a reasonable amount of dining out before embarking on our most recent worldly adventure.
Health & Beauty
This category includes our monthly health insurance premium (~$435 for 2023). No other significant medical expenses in January.
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.
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. Right now, you can sign up for 3 months of service just to try it out before committing to a full year. Mr. Rebates is also running a $10 cash back deal that you could use to stack your savings, and Rakuten is offering $5 cash back if that’s more your style.
Travel & Entertainment
We set off on our latest adventure: 5 weeks in Southeast Asia!
January expenses included a rental car to Orlando, where we stayed overnight prior to flying to Chicago. From there we did a 3-night stopover in the United Arab Emirates, visiting Dubai and Abu Dhabi, and continued on to Bangkok from there. After Bangkok we will visit Kuala Lumpur, Bali, and Singapore. So far it has been a fantastic trip – such a different experience than any of my travels so far!
As we tend to do, we also booked more future travel in January. We will be taking another Caribbean cruise, this time with friends aboard the Celebrity Millennium in March. It sails out of San Juan, Puerto Rico and ports include the following before returning to San Juan:
- Charlotte Amalie, St. Thomas, USVI
- Basseterre, St. Kitts & Nevis
- St. Johns, Antigua
- Castries, St. Lucia
- Bridgetown, Barbados
I still haven’t even posted recaps of our Europe trip…so far behind…
Pets
Stocked up on supplies before leaving him with Grandpa & Grandma for a few weeks.
Merchandise
Mostly clothes for the hot, humid weather of Asia that will also function well in Florida.
Other Expenses
Two credit card renewals this month along with the net expense of ATM fees from withdrawing cash in Asia. We’re reimbursed for these through our Charles Schwab Debit Card, but sometimes there’s a slight difference in the exchange rate between the withdrawal and the reimbursement.
Conclusion
January was a great mix of relaxing time with family (and our dog) before leaving for another trip late in the month. The only problem with the amount of travel we’re doing is that it fuels us to keep traveling! We’ll see how long the Spreadsheets allow these escapades to continue, but we’re enjoying it all right now.
I only managed to finish two books in January before we set out for Asia:
- Unbroken: a World War II Story of Survival, Resilience, and Redemption by Laura Hillenbrand
- Moneyball: the Art of Winning an Unfair Game by Michael Lewis
There are still plenty of books on my list for when we return stateside.
How was your start to the new year? Leave a comment below!
