I’m Done Optimizing

I never thought I would wrote this post. Until I experience a major life change, I’m done optimizing my finances. I’ve stopped worrying about money. I’m done. A friend asked me why I thought I had hit this point and I’m not quite sure why exactly it is.

Is it because I bought my condo and now have no real financial goal to save for other than retirement? (That was my friend’s assumption.)

Is it because my income has basically hit $200,000 per year? Is it because my net income exceeded my expenses by more than $100,000 this year?

Is it because I have not touched my cash reserves in almost two years? (Knocking on wood…)

Is it because on a normal month, I can save $2,500/month after maxing out my 401(k) and HSA? To put that into perspective, that is about or more than what each of the following cost: 1) moving apartments last year, 2) closing on my condo ignoring the down payment, 3) almost the cost of my bedroom furniture set, 4) the cost of my living room furniture set, 5) my patio furniture, 6) my health insurance deductible, 7) my annual insurance costs, 8) my property taxes for the entire year, 9) my car insurance deductible, 10) my homeowner’s insurance deductible, 11) my entire budget ignoring the mortgage but including wants like travel, 12) my two week trip to Japan including flights, 13) the cost of having closet organizers professionally installed in two closets in my condo, 14) two months of mortgage payments, and the list could go on forever. Basically, I can cover many minor extra costs with my extra cash flow each month rather than dipping into savings.

Is it because I have enough available credit to cover over a year’s worth of credit card spending? (Not that I would actually use it, but the fact that it is there is freeing.)

Is it because my bare bones budget is less than a quarter of my monthly gross pay?

Is it because I could live off of my liquid funds for over a year without reducing my budget?

Is it because I am enjoying my life today?

Well, I’m done optimizing. I’m done worrying about my finances. I’m not going to optimize my credit cards, savings accounts, investments, or checking accounts further. Everything is mostly on auto-pilot and it’s awesome. Now all that’s left is to enjoy life with my boyfriend and kick butt at my new job! This is what financial freedom feels like!

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  1. #1 by nicoleandmaggie on December 20, 2013 - 6:44 am

    Hahaha, If I ever get around to writing it, our January mortgage update post is along this theme. Not that we really had time for optimizing before, but I was constantly thinking about money when DH was unemployed/self-employed because my income was not that much larger than our regular out-go. Having a high income and a high savings rate is really awesome and freeing. (And the key, I think, is not lifestyle inflating BIG things like cars and houses and things in that price range… we’ve been spending like crazy at the grocery store and some bigger ticket items like feral kitty spaying or annual donations… but we still have money leftover at the end of the month. Though it’ll be closer when they start taking money out for DH’s retirement.)

    • #2 by Leigh on December 20, 2013 - 8:15 am

      The other reason I came up with is that maybe I like my boyfriend enough that I don’t feel the need to spend my time optimizing my money :D

      This: “Having a high income and a high savings rate is really awesome and freeing.” Also, having it not go away and last really helps with that. At first, I was so worried it would go away that I saved a lot.

      And this: “the key, I think, is not lifestyle inflating BIG things like cars and houses and things in that price range…” That’s something I like about buying a condo early and single. I have friends who (as a couple) are looking at condos worth more like $1 million versus my modest (???) $400,000. They are DINKs each with incomes like what I’m at now, whereas I bought when I still pictured my income as more like $90,000, so half. Also, since I’ve already bought, I would have to move and sell to lifestyle inflate. And moving just plain sucks. If I was looking now, I would have been more tempted by more expensive places with nice views…

      Glad we’re thinking along the same lines :)

  2. #3 by SP on December 20, 2013 - 9:09 am

    Totally feel the same way, and have for awhile. Moving in with my husband was a major trigger – there was always something more fun to do than optimize. Simultaneously, the budget got a lot easier since we reduced our overall rent. Recipe for disaster or FUN!

    Now that we’ve had several changes, I need to set up a new system and re-optimize, but I hope to set it and forget it!

    • #4 by Leigh on December 20, 2013 - 9:36 am

      I think that with major changes, that’s definitely a good time to set up a new system and re-optimize! As much as I’m okay with how much I pay for housing now, my boyfriend moving in would shave $10k/year off my housing costs and that would definitely be noticeable. I don’t think there’s really much need to re-evaluate my system until the mortgage is paid off though, which is two years away!

      Awesome boyfriend/SO >>> spreadsheets. Who would have known? :)

  3. #5 by mateo on December 20, 2013 - 12:53 pm

    Ha. I like the flavor of this post Leigh. I too agree you don’t need to worry, as I’m sure you’ll deal with your finances/investments as usual. Just don’t use your debit card at Target ;)
    You may have answered this somewhere else, and a bit off-topic, but I was wondering why your bond allocation is so high (IMHO that is).

    • #6 by Leigh on December 20, 2013 - 1:18 pm

      I haven’t shopped at Target in a while! I’m glad I don’t have their RED card or whatever it’s called.

      Why do you think my bond allocation is too high? What do you think it should be? I’m 25 and I have $132,700 in retirement investments.

      I’m using age in bonds + a percentage point for every $100,000 I have invested. So next year I will turn 26 and estimate ending the year with a portfolio around $156,000, which gives a fixed income allocation of 27%.

      • #7 by mateo on December 20, 2013 - 4:25 pm

        Somehow the criminals hacked the Target POS devices, so any credit/debit cards (~40 million!) used were potentially affected. You can read more here: http://krebsonsecurity.com/2013/12/sources-target-investigating-data-breach/
        I was curious how the criminals managed to do this on such a large scale, so let me know if you hear about it at work. I wonder if they hacked into the software on the POS devices?
        I’ve read the “age in bonds” rule and it does have variants like “age-10″ or “age-20″, but I guess my risk tolerance is higher than yours, that’s all. One thing I was thinking is that you will have a huge bond-like investment in a few years (your paid off mortgage). So this “imputed” rent, as Jonathan Clements of the WSJ used to say, will be quite valuable.

        • #8 by Leigh on December 20, 2013 - 6:59 pm

          I don’t really see my mortgage as a bond – it just reduces the amount I need to be able to withdraw from my investments. I have some friends though that think we don’t need bonds yet at our age. To each their own!

  4. #9 by eemusings on December 20, 2013 - 1:28 pm

    I’m not gonna lie, I’m envious of your income and your financial position! If it was me, I would probably have called it quits on trying to optimise everything a little while ago. We’re in the opposite boat though, lots of life changes and thus a need to get new systems in place.

    • #10 by Leigh on December 20, 2013 - 1:42 pm

      My OCD tendencies definitely lead to a lot of time spent optimizing and playing with spreadsheets. It gives me a sense of peace. I’ve definitely been doing that a lot less over the last 6 months though! I think my personality though is such that no matter my financial situation, I’ll always want to optimize things as much as possible. I’m curious to see what new systems you end up putting into place!

  5. #11 by Emily @ evolvingPF on December 20, 2013 - 3:29 pm

    Love it! Congratulations on getting to this point! I think I’ll declare “I’m done with this!” when playing around stops being fun, or at least fun in comparison to what else I could be doing. I’m hoping for a more enticing life later, I guess. :)

    • #12 by Leigh on December 20, 2013 - 4:04 pm

      Thanks! Even though I have decided this, I still play with spreadsheets occasionally. I guess you can’t take the spreadsheets completely away from me ;) I just can’t optimize any further right now. Pretty much all of my fiddling is in spreadsheets now, not actual fiddling.

  6. #13 by dan23 on December 20, 2013 - 4:18 pm

    Maybe it’s just because you have already set things up and are near optimum (and made choices you are happy with, with awareness of the alternatives).

    • #14 by Leigh on December 20, 2013 - 7:00 pm

      That too :)

  7. #15 by Elroy McGregor (@MoiAndMoney) on December 20, 2013 - 4:26 pm

    Agreed. I’m also at the point where I can spend the money, but I don’t want to. And because of that I have plenty of surplus at the end of the month. It’s a great place to be!

    • #16 by Leigh on December 20, 2013 - 7:02 pm

      It is a great place to be! Glad you’re there too :)

  8. #17 by Shante J on December 20, 2013 - 5:44 pm

    So does this mean no more of your guidance ….I have learned a lot from you even though financially not there yet, but getting on track come April/May….

    Shante L. Jones

    • #18 by Leigh on December 20, 2013 - 7:03 pm

      I’m sure I’ll still be around! This doesn’t mean I’m going anywhere at all – don’t worry :)

      Hope you have a good holiday and thanks for reading!

  9. #19 by NoTrustFund on December 21, 2013 - 8:22 pm

    Who are you and what have you done with Leigh? :-)

    • #20 by Leigh on December 21, 2013 - 8:34 pm

      Hahaha I’m still me! I’m just working on analyzing my finances less…. It’s really not going that well, but I at least don’t feel like I can optimize much further from where I am!

  10. #21 by AJ (@insidiousx) on December 21, 2013 - 10:15 pm

    This is amazing, congratulations Leigh! I think everyone should strive to get to this point in their lives. I know I hope I do! And I also read this thinking you were done blogging…hope not! As another comment above stated, I am envious of your financial position, it’s motivating for me.

    • #22 by Leigh on December 21, 2013 - 10:57 pm

      I’m definitely not done blogging! I’m glad my financial position is motivating for you.

  11. #23 by Bridget on December 22, 2013 - 8:19 pm

    Well done! I can’t wait until I can be done worrying about my finances; you’re in an amazing place!

    • #24 by Leigh on December 23, 2013 - 10:30 am

      Thanks Bridget! You can’t be that far – you have such a great handle on your finances!

  12. #25 by TJ on December 30, 2013 - 10:16 am

    I’m not sure why having available credit gives you comfort. I have 160k of credit available, but I don’t think that I would ever spend more than 20% of that on cards in a year….

    • #26 by Leigh on December 30, 2013 - 12:41 pm

      Well it means that I don’t need to keep cash immediately accessible – I can make it harder to get to and get the funds out after a few days.

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