Jan/Feb 2016

So, obviously one of my goals I talked about in my intro post was to get a handle on our money situation.  We have a budget, but when we thought long and hard about exactly what we spend on a monthly basis, we really didn’t know the answer.  We can ballpark it, but ballpark doesn’t work for us when we’re on a mission.  So, that was job 1.

The other thing was to compile all of our accounts into one place to get a handle on our net worth.  This was an area that, honestly, we were far less certain of.  After compiling the number for March 1, I can honestly say that I would have been off.  WAY off.  Like possibly tens or a hundred thousand dollars off.  Luckily the result was better than I expected.  And in this market I consider that a huge win.

So, I’d like to get more detailed on this in the future, but for simplicity sake I’ll do this:  Personal Capital says our spending for Feb (I didn’t start using it until mid-January and not relying on it for that month) was $85% of our income.  YIKES.  Obviously that needs to come down if we’re going to make any sort of progress getting to financial independence more quickly.  Without our mortgage  it’s 66%.  I should also add that the spending amount also includes additional amounts paid toward some debts (mortgage and student loan – our only actual debts).  THIS is why you don’t want debt, people.  It literally eats up all the payments I could instead be saving.  “Same as cash” is NOT a good deal, I don’t care if it’s zero interest!  Because both are low interest (3%) we have decided to instead start saving the additional payments starting in March.

Net worth….this month our net worth totals in at $448K and some change.  Like I indicated, better than I expected, but we still have a ways to go.  $448K isn’t bad, but if your spending is 85% of income, it pretty much sucks.  The FI formula would tell us we have a LONG way to go before FI.

So…..spending.  We are in the midst of two projects that is causing spending to be higher than normal; a laundry room renovation and an outdoor project.  Once complete spending will come down, and then we really need to have a “no additional spending” month to get a good handle on what our minimum monthly expenses really are.  One win though was bringing food spending down $300 this month.  I’ll take it.

feb2016

In summary, we suck.  We really are two fools.  Gah!  Onward toward progress!

Two Fools

Two fools, huh? Yep, that’s exactly how we feel. Foolish. We are 40ish year old professionals that should be well into enjoying our years of financial independence, yet, we’re not. And the more (most?) scary part is we really have no clue how close we are.

There’s a quote out there….”you weren’t born to pay bills and die.”  People can think what they want of it, and while we enjoy our jobs, there are plenty of people out there who do not clock into an 8 to 5 job every day (or at least, past a certain point for some) or have non-traditional jobs that keep money coming in.  This is what we’re after….freedom.  Freedom to have more time with our children and more time to travel and spend time together as a family.  Last year I spent 10 days in Italy. It was the trip of a lifetime!  Thanks to the $75 airfare (cost for using our miles) I was able to swing it.  But what if we could do trips like that more often?

We found Mr. Money Mustache a few years back and had a fire lit to get things in order, but I’m honestly not sure what happened. We are busy (but that’s a lazy man’s excuse in the grand scheme of things). Back then I was a stay-at-home mom spending my days with my kids not-yet-in-school. Currently I’m working a mostly full-time job and two part-time jobs. But this new job also was a boon to our income (yes, a 33% increase to your income is substantial, you should treat it as such and not waste it). I’ll admit we haven’t done things the way we should have all these years, but we’re ready to get on track.

So, thus this blog is born…our place to document our plans and hold ourselves accountable. We have used YNAB for years. I have signed on to Personal Capital (though the two seem to be at odds and I need to figure out where I fall on that) and am using it to track our net worth and calculate our FI date. I’m trying to ensure that every single dollar of my part-time jobs goes to pay off debt and/or get reinvested.

Look, the fact that we have any debt at this point is somewhat embarrassing. And I’ll admit, I don’t expect our journey to be near as extreme as other financial independence bloggers, but more to come on that in future posts. We have to find our own path, but now we need to commit.

So, first steps. Establish our baseline spending which we have a decent handle on, but need to do some serious tweaking to. Our food spending is high, other spending needs to be examined….so time to get serious. I need to finish loading the last of our accounts into Personal Capital and have a better handle on our total net worth. Then it’s time for action….what are we going to tackle first (I also have a good idea what this is going to be) and why? What next?

So many questions!!! Stay tuned…..