Each month I will post an update on my finances to both give you, the reader, some insight into my situation and to give me markers of my progress on my financial journey. My updates consist of two parts:
- Financial Progress Table – Tracks net worth progress.
- Spending Table – Compares monthly spending to an average (for me) “bare bones” budget, keeping me accountable for additional expenses.
For now, monthly updates include only my personal net worth and spending. As my fiancé and I combine our finances, updates will shift to cover going values instead.
Each net worth goal in the Financial Progress table is broken down into undisclosed units of money. My current goal is to reach “Financial Freedom.” By the time I reach this goal I will have:
- A retirement account that can support us when my fiancé hits 65
- Two college savings funds funded for four years of in-state public university tuition, room, and board
- An emergency fund for six or more months of living expenses
- Sufficient liquidity for my fiancé and/or I to make a career change with one to two years’ runway
- A mortgage less than two times my gross salary without bonuses
Once “Financial Freedom” is achieved, the focus will then working be towards “Financial Equilibrium”, where the income from investments covers all our ongoing expenses.
I’ve created a “bare bones” budget which represents the average minimum amount I can expect to spend each month. This is the minimum amount I need to comfortably live in case of a job loss, emergency, etc. I expect to frequently go over my “bare bones” budget in a number of categories (here’s looking at you, “Groceries & Dining), but I want to remain accountable to myself when I do so.
For privacy reasons, there are two things I do not include in my spending updates: my monthly mortgage and charitable donations (pegged at 10% of my net income).
In spite of some big end-of year charitable contributions, I managed to just barely stay in the green this month. Mostly because the stock market has been crazy. I’m sure to pay for the progress in due time.
While I was high on the spending front, there are a few ameliorating factors.
For one, since Fiancé has been out of work, I’ve taken over all the utilities, including our once-every-four-months water bill. This skews my individual numbers a bit, even though as a household we’re going along as expected. When we finish joining our finances, our new budget will reflect our combined numbers more accurately.
Another big contributor to this month’s spending is the annual fee for my new Amex Platinum card. I will more than make up for the fee in points and benefits, with $450 in comped AA gift cards and Uber rides by the end of January. But, since I won’t be taking out the rewards in cash back (like for my Amex Blue Preferred), it makes sense to track the fee.
Other big purchases made just for the indulgence include my Kobo e-reader and a couple’s massage. Also some food delivery, in spite of my “spend less on food” challenge, because it is <10 F right now in New England and leaving my warm cozy bed covers let alone my house in search for food is hard.
How were your finances in December?