The month of May has come and gone – quite quickly, in my opinion. We spent nearly half the month in beautiful Hawaii, which will require multiple blog posts on its own to recap everything we did and how much it cost. On top of that, May included due dates for our semi-annual property tax payment and our 2020 income taxes. We knew going in that it would be a pricey month, but just how much did we spend? Check it out below in our May 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, 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
With that, here’s where our net worth is at through May 2021:
| | BALANCE | CHANGE FROM PRIOR MONTH |
| ASSETS | | |
| Cash, Checking, Savings | $11,849 | ($4,074) |
| Investments | $823,222 | $12,360 |
| Home Equity | $103,625 | $562 |
| LIABILITIES | | |
| Credit Cards | ($2,663) | ($562) |
| Misc. Other Debts | ($100) | $105 |
| NET WORTH | $935,933 | $8,391 |
Not quite the banner month for investment growth that we’ve seen since February, but still growth nonetheless. Given the amount of spending we did, no complaints here.
Cash, Checking, Savings
This consists mostly of our emergency fund held in a high-yield online savings account at Ally Bank. We dipped into our Ally Bank reserve a bit at the end of April to make sure we had enough on hand for the aforementioned tax bills paid in May, but that will be replenished within a month or so. The rest is held in a “big bank” for depositing our paychecks and paying bills.
Investments
Several different accounts are included here, most of which are true “retirement” accounts. It also includes our taxable brokerage account at Schwab. Most of May’s increase ($7,600) was due to our own contributions, with another $4,700 coming from market gains. It’s a pretty boring ride on the lazy river of broad-based stock index fund investing, but I’m perfectly fine with that instead of the rollercoaster of stock trading.
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 May:
| EXPENSES | Budget | Actual | Over/Under |
| Home (mortgage, property taxes, maintenance, etc.) | $2,259.05 | $4,402.94 | ($2,143.90) |
| Utilities | $218.41 | $245.69 | ($27.28) |
| Automotive | $480.21 | $135.18 | $345.03 |
| Groceries | $375.00 | $311.68 | $63.32 |
| Dining Out | $116.67 | $236.90 | ($120.23) |
| Health & Beauty | $266.96 | $193.18 | $73.78 |
| Cell Phones | $16.67 | $202.35 | ($185.68) |
| Travel & Entertainment | $369.32 | $1,690.88 | ($1,321.56) |
| Pets | $119.17 | $33.96 | $85.21 |
| Work-related | $8.50 | $504.30 | ($495.80) |
| Merchandise (furniture, decorations, clothes, etc.) | $250.30 | $362.88 | ($112.58) |
| Other Expenses | $269.75 | $3,111.00 | ($2,841.25) |
| Total Expenses | $4,750.00 | $11,430.94 | ($6,680.94) |
*Shudders* Well that’s not pretty. Even with the planned expenses of property taxes, income taxes, and the Hawaii vacation, that’s still a lot of categories over budget.
Some analysis on individual categories:
Home Expenses & Utilities
Our semi-annual property tax bill came to $2,680.75, which makes up most of this big, ugly number. The budget is built to average that cost over the year, so most other months we should be under budget. It’s started to warm up here in Minnesota (we hit a record high the day before typing this), so the cost of cooling our home increased a bit as well. Other than that, we spent a bit on the never-ending maintenance of our yard. Homeownership is losing its luster by the day…
Dining Out
We fell off the wagon a bit here considering we were in Hawaii for half the month and all the food/drink consumed there is included in the Travel category. It just goes to show that laziness in meal preparation can really hurt your wallet. We’ll try harder next month.
Cell Phones
As I’ve explained previously, we both have cell phone plans through Mint Mobile that only cost about $15 each per month. Mrs. FIby35’s annual renewal came due in May, so this is the cost of paying for 12 months of their 4GB plan in full. 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!
Travel & Entertainment
Believe it or not, we actually came in under budget for our Hawaii trip – no small feat given the absurdly high cost of goods there. Naturally, Mrs. FIby35 is already planning our return trip, whenever that may be. She also visited family at the cabin over Memorial Day weekend, so there’s a little bit of that rolled into this number as well.
Work-Related
This includes $220 for a work trip for Mrs. FIby35, which will be reimbursed. She also found a cool new way to potentially make an easy $25 or so just by buying and returning merchandise. This included an up-front cost of $284, which should be reimbursed when the return is processed in June. I’ll write a post on this new little income source once we have a better idea how it works.
Merchandise
Mrs FIby35 bought a few pairs of shoes on Amazon, but none of them passed muster and were returned in June.
Other Expenses
There’s that income tax bill…while it’s never fun shelling out 3 grand at one time, we intentionally choose to go this route instead of having more taxes withheld each paycheck throughout the year. As the old investing saying goes, “time in the market is better than timing the market” so we choose to throw money into our investment accounts as fast as it comes in during the year and kick the tax hit down the road. To each their own, I suppose.
Conclusion
May was another painful month of heavy spending, but I suppose it was necessary (yes, even Hawaii was “necessary”). We were well aware of the tax amounts owed and planned accordingly – including them in our yearly budget, and planning accordingly for the large cash outlay. It would have been easy to drop $2,000-3,000 or more on the Hawaii trip, but we set a budget and stuck to it pretty well over the course of two weeks there. Given the amount of reimbursements/credits we have coming in early June, and *spoiler alert* selling my car, I consider this month to be a mild financial success with better spending days to come. Hopefully June provides The Spreadsheets with some much-deserved relief.
How did your May spending end up? How do you budget for big, lumpy expenses like taxes? Feel free to comment below!
