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).
This month has been a train wreck. Not financially— in that respect January has been pretty dang good. But my job? Oh my goodness. It’s like the entire city’s economy emerged from its winter doldrums all at once. With frenetic energy, everyone has decided there are no more bomb cyclones to delay us: work needs be done. And it was all due yesterday.
In any case, my personal life is going swell. I’m making good progress on getting my core into shape as per my yearly goals. I’ve also managed to dredge up enough energy to work on some personal coding projects. With all this activity, though, I’ve fallen behind on blogging. I think, for the foreseeable future, I’m going to be posting less, though certainly not disappearing.
Finances, a.k.a. the theoretical topic of my blog and this post. What to say about those? Well, the stock market is bonkers. I know it’s bad to say this, but I kind of wish the market would have a minor to moderate correction (say, 15%+). Right now, because of bullish spirits in the financial markets, I feel like we’re being gaslit to believe in this weird parallel universe where everything’s just fine guys and what could go wrong? Anyhow, I have enough in my investments and the market is speeding forward so quickly that I’m seeing four-digit daily fluctuations in my net worth. I know I should be celebrating, but more than anything I find it deeply concerning. That said, maybe the dip last few days are an indication that we’re finally in a period of downturn. Which is good, I think.
Since it’s the beginning of the year I’m back to maxing out my traditional 401k. If my projections are right on our incomes— there is some uncertainty regarding by bonuses and fiancé’s job prospects— we should be able to max out our Roth IRAs. Because I’m contributing so much pre-tax, at least nominally my net worth progress is rocketing, nearly twice as much in January as it’d be in a normal month. This should more or less continue through April, though unlike most years it seems I owe taxes for 2017. So no refund to look forward to. Womp, womp.
As far as spending goes, my food was high for any reasonable person but normal for me. We had really high utility bills this month due to the devastating cold. I’ve also added a line item for wedding expenses, which I’ll total up after we have the actual ceremony. On the whole, though, January has been alright on the spending front. I’ve been too busy to even think of buying things.
How were your finances in January?