Celebrating Financial Milestones

At the beginning of the year, my husband and I reached a big asset milestone and, by the end of this month, we’re on track to reach a nice round number in terms of our net worth as well (albeit, lower than our assets because of the mortgage).

We’re definitely in the phase of our financial journey where it feels like we’re sneaking onto the other side of the inflection point (which I peg as near our “financial freedom” number). Our money seems to be putting in a lot of hard work on its own so we don’t really have to. That’s kind of cool and, surprisingly, less nerve wracking than I thought it would be in times of high volatility in the stock market.

So, coming upon this number and the bonus I’ll be getting, we decided to treat ourselves a little bit to a fancy dinner date just the two of us. Not that I am a miser when it comes to food spending, but we usually don’t go the both of us to somewhere nice unless it’s a special occasion.

To a degree it seems a little perverse to celebrate saving money by spending it. Shouldn’t I want to fuel the fire even faster? And, yet, it’s nice to enjoy the fruits of our labor. Part of me wants to just live it up in the next year, before the reality of child-rearing sets in. But in the interest of prudence, letting off a little steam in the form of a memorable meal with my favorite person seems like a reasonable compromise too.

How do you celebrate financial milestones?

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Squeaky Wheel Gets The Grease

Another entry in the never-ending saga of YAPFB baffled by working in corporate America.

Today my boss, chatting with me in our normal weekly one on ones, told me he had some good news. I was getting a surprise $10k bonus, in part because the company hit a big milestone that I had absolutely nothing to do with and in part because the senior management had asked that some people to get extra cash based on performance. Note this is the second time this has happened since I started work here, the first being when I got a surprise $10k raise toward the end of the year, six months into my tenure.

On the one hand, I am very grateful that management has demonstrated that they appreciate what I am contributing in the universally understood language of more money please. Plus my job has gotten a lot more enjoyable in the past couple weeks after I moved a lot of the projects I dislike off my plate. On the other hand, I am still looking for other jobs, though I’ll admit the recent changes have made the urgency… less.

It reminds me a bit of a moment in my last company. We were acquired by a larger entity and within a few months everyone’s pay (including mine) got cut 10-15%. I remember complaining to the new management about it, but they were adamant that that’s the way it’d be– sorry, kid. Fast forward a few months and I just kept getting bonuses and raises, for my “performance” nominally, but mostly I think because (1) I had a lot of useful institutional knowledge and (2) because I had complained. I know the latter was important because there were others just as important to the organization as me who got none of the same benefits. It’s like I was getting paid to complain. Is that what self-advocacy is supposed to mean?

So, yeah, I think it was a good call for me to negotiate hard on my initial offer with this group. I think it set the tone of what I wanted (i.e. money) and it’s just kind of come on its own since? I don’t know. The politics of working are weird.

Are you a squeaky wheel at work? Has that been beneficial to you?

Financial Update – January 2019

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 joint net worth progress.
  • Spending Table – Compares monthly spending to an average (for us) budget, keeping us accountable for additional expenses. I will also include my personal discretionary budget as well; I will not include my spouse’s discretionary spending, which I do not see.

Financial Progress

Each net worth goal in the Financial Progress table is broken down into undisclosed units of money. Our current goal is to reach “Financial Freedom.” By the time we reach this goal we will have:

  • A retirement account that can support us when my husband 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 husband and/or I to make a career change with one to two years’ runway
  • A mortgage less than two times our combined gross salaries without bonuses or equity.

Once “Financial Freedom” is achieved, the focus will then working be towards “Financial Equilibrium”, where the income from investments covers all our ongoing expenses.

jan 2019

Spending

We’ve created a joint budget which represents the average amount we can expect to spend each month. This is average amount we need to comfortably live in case of a job loss, emergency, etc. I expect to frequently mostly keep in line with our budget when amortized over the year, even though amounts may vary from month to month.

For privacy reasons, there are two things I do not include in our joint spending updates: our monthly mortgage and charitable donations (pegged at 10% of our net income).

j19.png

Here is my own personal discretionary spending for the month. I try to spend $600 or less each month for my “fun money” since that’s the allowance that’s apportioned to me and my husband.

january 2019

Monthly Summary

Huh, I guess stocks bounced back. Cool.

I bought insoles and sneakers on our joint, per earlier musings and a conversation with my husband. We also tried floating in sensory deprivation tanks for our anniversary which was super uncomfortable at the time but left my muscles super relaxed thereafter. I’m kind of interested in trying another round, but I’d want to do it multiple times in a week to see whether it’d help my terrible office-worker back.

In other news, I’m looking for new a job. I guess I should probably try to stay for a year, at least so I can hit my one year cliff. But, yeah, it’s not going that well. I’ve done a few interviews so far and I’m realizing that this role is inherently pretty stressful and political. Not sure what to do yet. 😦

Keeping on keeping on.

Notable things that happened in January include:

  • Floating!

How were your finances in January?

Goal: Stop Eating Out

Look, I’ve spent a lot of time on this blog kvetching about how much I spend on food. Well, this year, I’m going to do something about it. My two step plan is as follows:

  1. Stop going to restaurants that aren’t worth the price. You can see in the below chart I have mapped every local area restaurant I’ve gone to in the past six months in terms of price/quality and, upon reflection, I’ve found some of my most frequent haunts (“Chinese delivery”) don’t actually make the cut. This causes me to continue craving a “nice” meal later in the week, perpetuating the eating out cycle.
  2. Limit the number of restaurant trips I make in each price bracket. I typically have too many $20-30 meals which gets me in trouble. Knowing how many of those I can have in a month will hopefully help me ration it out a little better.

Copy of Untitled drawing.jpg

Based on these numbers, I’ll be able to go out to eat between 2-3x each week. That’s less than I’m used to, but not terrible. If you sum everything up, there’s a good chance I’ll still be spending ~$300/month on eating out if I go somewhere fancy every month or have a board game night where we order in (there’s always at least one). While certainly not frugal especially for a FIRE blogger, is a number I can definitely live with.

Is eating out consistently “worth it” to you? 

Financial Update – December 2018

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 joint net worth progress.
  • Spending Table – Compares monthly spending to an average (for us) budget, keeping us accountable for additional expenses. I will also include my personal discretionary budget as well; I will not include my spouse’s discretionary spending, which I do not see.

Financial Progress

Each net worth goal in the Financial Progress table is broken down into undisclosed units of money. Our current goal is to reach “Financial Freedom.” By the time we reach this goal we will have:

  • A retirement account that can support us when my husband 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 husband and/or I to make a career change with one to two years’ runway
  • A mortgage less than two times our combined gross salaries without bonuses or equity.

Once “Financial Freedom” is achieved, the focus will then working be towards “Financial Equilibrium”, where the income from investments covers all our ongoing expenses.

december

Spending

We’ve created a joint budget which represents the average amount we can expect to spend each month. This is average amount we need to comfortably live in case of a job loss, emergency, etc. I expect to frequently mostly keep in line with our budget when amortized over the year, even though amounts may vary from month to month.

For privacy reasons, there are two things I do not include in our joint spending updates: our monthly mortgage and charitable donations (pegged at 10% of our net income).

december joint.png

Here is my own personal discretionary spending for the month. I try to spend $600 or less each month for my “fun money” since that’s the allowance that’s apportioned to me and my husband.

spend ind

Monthly Summary

Big net worth drop this month due to the market. Not terribly concerned (wake me once we get back to pre-election levels), but I am keeping money coming in a bit more liquid for now, in part because I know we’ll be front-loading retirement plan investments in the beginning of the year anyway, so might as well stock up a little cash-wise while we can.

Husband bought some more work clothes, but otherwise joint expenses are what we expected for the month (including the delayed $$$ therapy bill dropped on us in November). Individual spending was just under target, almost compensating for the overage last month.

Personal life-wise, I’ve just been working a lot. But I’m hitting flow (I think) so that’s maybe good? I am trying to push hard and build all the systems I need to put in place so things will be easier to handle before pregnancy, babies, etc.

Notable things that happened in December include:

  • Nothing. 😦

How were your finances in December?

‘Tis The Season For Charitable Tax Deductions 2018

Since 2016, I’ve made the commitment to donate 10% of my net income each year. I do 10% because I grew up around very religious folk and felt like, though I’m not religious myself, I wanted to have something akin to a secular tithe. An amount that felt “moral” but not like I was giving away the farm. Something that was just the right amount of painful. Here is a link to my 2017 post.

In 2018 we continued to donate 10% of my net income, but not our joint income (though we will be contributing based on joint in 2019). We donated much more in 2017 than in 2018 because I “prepaid” my balance for tax optimization purposes due to the Republican’s new law. However, we did get our wedding guests to donate a few thousand dollars to our favorite charities rather than buy us expensive presents, which is not reflected in the below numbers.

Here are the areas we donated to in 2017 and 2018:

donations.png

We don’t plan at the beginning of the year how much we’ll donate to each area, but we think this is more or less a decent reflection of my values. Note that we donated much more in 2017 than in 2018 because I “prepaid” my balance for tax optimization purposes due to the Republican’s new law.

Here are the organizations represented in each bucket:

  • Food Security. This is for the small, local food rescue organization that donates fruits and vegetables to seniors, people with disabilities, and other food programs in our area. This is money I feel “proudest” to donate to each year (see: my deep emotional connection with food).
  • Immigration. Lots of money to RAICES because we as a country continue to jail and torture migrants in droves. Honestly, I don’t understand why the press continues to fuck around about the internal politics of the administration when children are literally dying under ICE custody. I am deeply ashamed for how impotent I feel on this issue. Money doesn’t feel like enough.
  • Environment. I used to divvy this bucket up amongst a lot of different environmental advocacy groups, but nowadays I just dump it all to the National Resource Defense Council.
  • Criminal Justice. Local (state) bail fund.
  • Civil Rights. Local LGBTQ+ advocacy organization.

What we didn’t donate to this year:

  • Brother’s education. He graduated and while I gave him a little money to celebrate that, there are no more tuition/room/board etc payments going forward. Woohoo!
  • Political organizations. I feel somewhat guilty about this but, honestly, every time I thought about donating for the 2018 cycle I kept thinking (1) Dems already had landslide levels of funding and (2) the money would be better put to use targeting migrant issues. So that’s what happened there.

What is your charitable giving philosophy? How much did you donate in 2018 and to what organizations? 

What’s Your Personal Discretionary Spending?

The past couple months, my husband and I have been easing into a his-hers-ours version of joint finances. As part of that system, we each get $600 of discretionary “allowance” money, no questions asked, shielded off from each other in our own personal accounts.

Spoiler alert: I’m having a hard time with it.

I knew I had inflated my lifestyle since I started working six years ago. What I didn’t realize is just how much. You can see in my previous budget update that I like to eat out a lot, though I guess I’ve documented that pretty well over the months. In addition I go to a fancy climbing gym near our home — it’s so convenient, I love the exercise classes, I guest in friends all the time. And then there are my material wants: nice clothes, noise canceling headphones so I can actually focus in my open office. My wants are overwhelming. I am, very clearly, not frugal.

The other thing we’ve been trying to calibrate as a couple is what actually counts as discretionary spending, like:

  • Clothes: I’ve been putting clothes on my personal account while he needs business casual clothes for work and has been putting on the joint.
  • Haircuts: He has more expensive hair maintenance than I do (dying and more frequent cuts)– is that a him thing or an us thing? We’d previously discussed this as being individual, but lately he’s gone to a cheaper place and wants to put on joint.
  • Gym: I could go to a cheaper gym but I like the nicer gym more, so I’ve defaulted to eating the expense in personal. On the other hand, I go frequently and it is an important facet of my health maintenance– physical, mental, and social. His therapy is a joint expense because it’s important for his self-care, so shouldn’t my gym membership be too for the same reason?

Writing it out, I realize part of the angst I am feeling is that in a lot of these cases we’re defaulting to his self-care as being a joint expense and mine as being an individual expense. There’s a lot there, including how we approach self-care and a lot of differences in our self-image (particularly our own body images) wrapped all up in there. So yeah, some “fun” (read: difficult but probably necessary) conversations to be had there. Whee.

Obviously, I / we don’t have answers to all of them, but we’re sorting through it. But I’d love to hear feedback from y’all:

Do you have a budget for your discretionary spending? If so, how much do you spend?

Is self-care an individual or a joint expense? What type of self-care is a “want” versus a “need”?