I don’t really talk much about being frugal here – I mostly talk about where to save your money. A few years ago now, a friend of mine convinced me to try a menstrual cup. It took many months before I actually bought one and a few more before I was really using it, but it is AMAZING ladies. It’s also a magical unicorn of savings, but that’s mostly besides the point.
Cramps, migraines, so many PMS symptoms were reduced. I forget I have my period for most of it. I forget about it. At first, I was super worried about needing to rinse out the cup at work, but I’ve managed to not need to do so, which is amazing! (Your body may vary.) I super hated dealing with my period while at work. And it’s totally safe to put in before your period gets there too. I used to plan trips around when my period was because I always found that traveling threw it out of whack and was super annoying, but traveling with a menstrual cup is SO much easier. Also great in summer and hot yoga!
It’s also environmentally friendly. And way better for your body than pads or tampons. No itchiness or bad reactions. I clean it with boiling water after every period to keep it clean. Plus, it came in a cute little bag. The internet seems torn on how long you should use a cup for before replacing it – I’ve seen anywhere from 2-3 to 10 years suggested.
I still spend about $10 on liners every two years, but I only spent $35+tax on the cup and will probably use it for 3ish years before replacing it mid-next year, which means my period now only costs me about $17 per year. Not bad, considering that I was spending about $80/year before. I’ve definitely noticed that spending reduction and plus, my period is much less annoying!
As everyone knows, tax time is my favorite time of year! I’m using TaxAct again and I’ve been anxiously awaiting all of my tax forms. I have a checklist of all the forms I need and in my income taxes folder for 2014, I have text files with filenames saying things like “Need HSA Bank.txt” and “Need 1099-B.txt”. Before we left for New Zealand, I had: two 1099-INTs, my one W-2, my 1098, my 1099-R for my Backdoor Roth IRA, and 75% of my charitable donation receipts. I made a donation in January of last year and they still hadn’t sent my receipt! I was still waiting on my HSA form and my 1099-B for my RSUs.
I always make a “W-2 Estimate” spreadsheet in which I estimate my W-2 numbers based on my last paycheck. In another worksheet, I estimate how much of my Vanguard Total International Stock Index Fund’s dividends were qualified/ordinary and how much of a foreign tax credit I should get, based on the 2013 numbers. I was spot on with my W-2 estimates this year and only off by a dollar on my qualified dividends estimate.
Usually I wait to do my taxes until I have all of my forms, but this year, I decided to start on TaxAct and then stop at any point that I needed a form I didn’t have yet. It’s kind of fun this way and means that I only spend ~5-10 minutes at a time entering my taxes. Since I haven’t entered any of my deductions yet, it still thinks I owe taxes. It’s so fun watching the refund/owing amount change as I enter new numbers!
The last two forms came in while we were gone, so I filed my taxes last week! My refund was the exact $ amount that my tax spreadsheet had calculated :) I have a spreadsheet in which I input all of my paychecks, deductions, bonuses, interest income, dividend income, capital losses and gains, and an estimate of the foreign tax credit. I then use those numbers to calculate based on the marginal tax brackets, ordinary vs qualified dividends, etc. how much income tax I’ll need to pay that year vs how much my employer will withhold and I use it to set my allowances throughout the year.
I expect to get a larger refund than usual. Normally, I update my allowances on my December paycheck to plan on getting ~$50 of a refund, but since I was unsure of how much I was going to get paid in December until just before Christmas, I couldn’t do that. Oh well. I’ll get the money back soon and it’s “only” around $1,000, which will help with the negative cash flow for February pay/March spending. I’m looking forward to saving again instead of living paycheck to paycheck! That should happen with my March paycheck, so only one more month to go…
Readers, are you getting ready to file your taxes?
This trip was a splurge, flat out. We went in high season, booked a month out, stayed in hotels the whole way, and ate delicious, delicious food. It was amazing and totally worth it, but holy cow was it expensive!
My total cost for the trip was $6,779.06, including flights and just over 3 weeks in New Zealand.
I feel super weird sharing that amount since there are so many people who blog about credit card rewards and churning. My boyfriend used the trip to churn the Barclaycard and the Chase Sapphire Preferred, which got him/us a decent number of points. This trip was not planned far in advance and we spent a lot of time not in big cities that had hotel chains, so hotel points weren’t that useful. We used discount hotel booking sites to book a lot of the hotels and we got better flights by paying for them than we could have with points. I don’t know where we would have managed to churn Air New Zealand points from the US?
This trip was also our second foray into shared finances and the biggest one, the first one being our shared checking account for groceries. At home, we split every expense except groceries at the source. This sounds tedious to everyone else, but it works for us. When we go out to eat, we either pay for what we ordered or we split the bill evenly if our separate amounts are within a dollar of each other’s. We agreed as we were booking this trip on about how much it would cost, how long we wanted to go for, where we wanted to go, and the type of trip that we wanted to have: hotels not hostels, renting a car instead of tour buses, not a big group experience. We also decided to put most of the expenses on one credit card (and agreed to use a recent card that my boyfriend got) and then deal with things when we got back. We both had separate credit cards that we used for non-shared expenses. This system worked out pretty well! We’re still talking about getting a joint credit card and trying to figure out which one we’ll get. I think it’ll probably be a few months before we figure that out.
This trip was also the longest amount of time that we have spent together consecutively, without anyone else around. And it was awesome! It’s definitely nice to have two bathrooms again, as well as couches, and gave us perspective on how nice my condo is.
It was interesting seeing people’s reactions to our trip. Some people assumed my boyfriend couldn’t possibly have this much vacation time, so he must have quit his job too. Someone else called it a once in a lifetime experience. I laughed at that because I hope to do another trip like this again in a few years. My mom told me that unemployed people shouldn’t take expensive trips. (My dad thought it was an amazing idea!) Another person called it a honeymoon! Most people were pretty excited for us though and other than my mom, no one seemed to wonder how we could afford to do this. The weird part though is that going to New Zealand for ~a month seemed crazy enough to people that the reactions we got seemed pretty similar to how I would expect people to react if we were quitting our jobs to travel full-time.
How did my portion of the costs break down? The number seems huge when I look at it, but once you break it down, it doesn’t seem quite so crazy.
- Lodging – $61 USD per night. This isn’t that crazy considering that we did no cleaning other than one load of laundry while we were gone and we stayed in hotels.
- Rental car + gas – $695.77 USD. This was about 2,000 miles of driving and included the ferry cost for the car and us. We rented an older model car which cut costs down a bit. Gas was simply expensive though compared to how much it costs in the US – our weighted average per US gallon was $5.285 USD per US gallon on gas. At the time of writing, the average gas price across the US was $2.28 USD per US gallon.
- Food – $40 USD per day. We ate out for mostly every meal, occasionally super cheaply and sometimes a wonderful splurge dinner. I had leftovers a few times and we picked up some snack food from the grocery store like fruits and granola bars.
- Mobile phone - $25 USD. We both picked up SIM cards in the Auckland airport since we have unlocked phones, which was awesome. I used about 1 GB of data while I was in New Zealand and a few minutes.
- Flights – just under 40% of the overall cost. This was mostly poor planning as when we went ended up being super expensive and we bought them somewhat last minute. This was part of why I wanted to go for so long.
- Activities – just under $600 USD. This included a dolphin cruise, checking out a LOTR attraction, going to a thermal village, the cable car in Wellington, some thermal pools, a train, a couples massage, some caves, and a few other items.
Beyond the finances, what did we do?
We went in January/February, in the height of a very hot summer they’d been having. I packed for that and was missing some long-sleeved shirts when it got chillier in parts of the South Island.
We spent about half the trip on each of the North and South Islands. The ferry between the two islands was one of my favorite parts about the trip! It was incredibly gorgeous. We spent a few days in Auckland, Bay of Islands, Rotorua, and Wellington. We only spent one night in the Marlborough (wine) area, which we regretted pretty quickly. Post-earthquakes Christchurch was both really sad for all the historical buildings that they had lost and really interesting to see how the city is changing. Milford Sound was absolutely amazing! Such a long day though. Queenstown was gorgeous, but super touristy. Wellington was fun because we didn’t do too many touristy things and more so went to interesting cafes and restaurants.
Driving on the other side of the road was both weird and not weird. The rental car we ended up with was pretty similar to the one I drive at home, so that wasn’t too much of an adjustment. The weirder part was the volume of driving we did and the windy roads. We drove about 2k miles in the 3ish weeks we were there, which is about what I normally drive in 6 months.
I can’t wait to take a long trip again with my boyfriend! Some of our fellow introvert friends were surprised we managed to not kill each other despite not hanging out with anyone but each other for almost a month!
|taxable assets – debts||$70,600||$75,400||-$4,800
|$ until FI||$845,000||$713,200||-$131,800
This is a bit late, but these are the numbers as of 1/31. We got back from New Zealand and it was an amazing trip! Such a beautiful country. Thanks to NZMuse and her husband for showing us around a bit while we were in their city :) I’ll post about the trip later – we still need to sort out all of that spending and will probably work on that this weekend.
Kicking the year off with a net worth loss, just like last year. This year’s loss was only $2,700 though compared to last year’s $5,300. Spending wasn’t too bad either as most of the New Zealand trip was in February. I only worked a small bit in January, but if I had seen a normal paycheck, I would not have seen a net worth drop at all – things would have come out about even. January seems like forever ago now!
There is a positive financial note though: this January’s spending was so much lower than last January’s that the rolling 12 month spending total went from $48,045 to $44,012, which caused most of the dramatic drop in the “$ until FI” number.
Expenses: I spent $2,974 in January including the mortgage or $1,946 without it. Some of my controllable expenses broke down as follows:
- $242 Clothing – a new pair of black leggings and two pairs of pants, plus 9 pairs of socks since all of the ones I bought in early 2014 now have holes in them. Not very exciting.
- $261 Entertainment/Social [average last year: $211] – I originally set out trying to spend less money during my unemployment, but then I had all this new found time to hang out with friends while not stressed out! So I did and I had fun.
- $12 Eating out by myself [average last year: $18]
- $89 Groceries [average last year: $185] – We somehow managed to spend exactly $0.15 less on groceries in January than in December. This was low since we left partway through the month.
- $44 Work lunches [average last year: $147] – There weren’t too many work days in January :)
- A big chunk of charitable donations, that I’ve mostly saved up for – just need one paycheck to be able to finish covering it! I’ll be fully prepared for this next January.
- $23 Presents – a straggling Christmas present that I needed to pay someone back for.
- $83 Internet – I overpaid as I was playing around with something payment-wise. It’ll be negative in February to compensate.
- $161 Travel health insurance for 4 weeks outside of the US
- $20 Eyebrows
- $23 Toiletries [average last year: $33] – moisturizer, ointment, bandaids, and shaving cream while in New Zealand.
- ($47) Furnishings – returning the wood swatches and buying some silicone spoons with a post-Christmas sale
- $70 Car maintenance – an overdue oil change and wiper blade replacement
- $243 Travel – cash, a bit of food, maps for the GPS, a New Zealand SIM card, and a cave tour. There will be at least ten times this in February’s report…
Savings: $47,800 (down $5,500)
These funds are spread across a checking account that gets free ATM fees anywhere in the world, my health savings account, a savings account at my credit union, and a bit of a buffer in my credit union checking account.
This is down from making my full 2015 Roth IRA contribution.
Investments: $167,500 (up $3,000 or +1.8%)
This includes my Roth and Traditional 401(k), my 401(k) employer matching (fully vested!), my Roth IRA, my taxable investments including stock index funds and Series I Savings Bonds.
The change here comes from:
- Making my full 2015 Roth IRA contribution
- ~$2,500 in stock market losses
Mortgage: $142,300 (down $700 or -0.5%)
Some statistics here:
- 2.5%: the interest rate on my 5/1 ARM
- January 2018: when the interest rate on my mortgage is set to reset, possibly to 7.5%
- 0: months of payments eliminated with this month’s pre-payments
- $0: extra payments made on the mortgage this month
- $0: interest this month’s extra payments will save me on the next regular payment
- 29.0%: portion of my regular payment went to interest (originally was 59%; down 1.0 percentage points)
- 60.3%: amount of equity in my condo, assuming purchase price (up 0.3 percentage points)
- 50.2%: amount of the mortgage I’ve paid down (up 0.2 percentage points)
- $24,500: amount extra remaining to pay to be on track at the end of 2015 to pay the mortgage off before the rate resets in 2018
I’m just letting the regular, automatic payment go for now. Nothing special to see here.
TOTAL: $528,900 (down $2,700 or -0.5%)
I ended 2014 with a net worth of $531,600, so I’ve seen a change of -$2,700 or -0.5% so far this year. I’m going to set the y-axis on this graph to $650,000 so we can see how my net worth grows towards that throughout the year, but I’m too lazy to make the graph right now since it’s already almost the end of February and I’ll have to make another one next week.
My primary retirement goal is to be able to retire at age 50. I already have enough money to do that at 26 years old, to spend $2,183/month of today’s dollars. That’s the power of compound interest.
In general, I assume that I will probably have some form of income over the next 24 years until I turn 50 and I’m also not going to spend it all since that would be the counter opposite of my personality, which will bring in this retirement date.
I remember reading rave reviews of FIRECalc as a retirement calculator over at the MMM forums that I decided to play around with it this morning. I started wondering how much I am really over saving for retirement by. Sure enough, it’s a lot! I already have enough in my portfolio to retire at age 50 and live for the rest of my life at my current spending rate. That’s pretty good! So then I started wondering if you just look at the contributions to tax-advantaged retirement accounts of ~$58,500 per year, when does FIRECalc think I could retire? Age 39! It unfortunately doesn’t seem to be able to answer the question of “How much more do I need to be saving now to retire at X age?” But when I told it I was saving $100,000 per year for retirement, it changed its mind to me being able to retire at age 32.
What do these numbers tell me? So long as I don’t increase my standard of living, I should be able to completely retire in about 10 years or in my late thirties. Or if I prefer to donate most of my current income, I could retire happily around age 48.
This is why I feel that there’s really no bad choice of where to stash my savings. I can pay down the mortgage faster, I can invest more in taxable accounts or in retirement accounts, or keep more money in cash. They’re all good options since I’ve already met my real goal. I still plan to keep contributing to retirement accounts since they help save on taxes.
Now, let’s talk expenses. I spent $48,018 when everything was tallied up this year. I gave a small gift to my sibling to help out with something and I don’t count that in my spending. It certainly puts things into perspective the fact that I can’t even tell by looking at my net worth which month I did that.
This pie chart looks pretty similar to 2013’s version, except that travel is a much bigger chunk of the pie. In my 2013 year in review, I talked about what I thought my 2014 spending/savings might look like. Let’s check in with that:
1) My boyfriend and I are working on a system to split some expenses more so than randomly because we’re working on incurring more shared expenses than we had this year. For now, the plan is to make it easy to transfer money between each other’s accounts since we use the same credit union for our primary checking accounts.
SUCCESS! We set up the transfers between each other’s accounts and near the end of the year, we set up a joint account that we’ve slowly started using. For now, we’re just using it for groceries. We’ve also talked about getting a joint credit card at some point.
2) I plan to contribute more to charity in 2014 than I did in 2013. The plan involves getting my donations up to 1% of my gross income, including my bonuses. I have a few annual contributions set up and will continue to donate to the random causes that my friends participate in. When my bonuses post, I will transfer 1% of the gross amount to my checking account, add that amount to the donations budget and then figure out where to go from there.
SUCCESS! I’m calling this a success because even though I only donated $30 more in 2014 than I did in 2013, I set aside the 1% of my gross income from every paycheck and bonus and the reason why it’s under is because I’m going to make a big donation in January 2015 and I wanted to have the money set aside for that. Near the end of the year, I moved the balance of this budget item to a savings account at my credit union in an attempt to separate it from my normal spending plan.
3) Overall insurance costs should be about $1,000 cheaper in 2014 because I had been paying monthly through July 2013 and then paid for a full year in August.
SUCCESS! In 2013, I spent $2,670.67 on insurance (auto, condo, and umbrella). I spent ~$1,800 on the same policies in 2014, a savings of ~$900. The new company raised my auto policy rate in 2014 by a decent chunk that I will probably try to shop around again in 2015.
4) I think that I will spend less on electricity. I spent about $700 in 2013. I’m hopeful that I can get that figure down to around $440 for the year, but we will see how things play out!
PASS! The average in 2014 was 0.33 kWh/day more than in 2013. I hadn’t planned on my boyfriend moving in this year when I set the goal to reduce electricity costs. All things considered, a 0.33 kWh/day increase for a second person isn’t too bad. I’m hopeful that with some of our new energy saving light bulbs, we should not increase our electricity consumption in 2015.
5) HOA dues went up a small amount for 2014. I have been budgeting for property taxes to go up about 3% per year, but it looks like my property value went up by much more than that for 2014 and so I’m guessing that they will go up by closer to 20%, putting those two items at about an increase of $800 in 2014. I don’t have much control over those items without moving though.
These two items ended up going up by about $700 in 2014. It looks like my property taxes may go up an additional 20% in 2015, which I’ve budgeted for since they sent me a notice with my new assessment value for the 2015 tax year a few months ago.
6) I think that I will spend less on my household goods and toiletries items because there were a lot of cleaning products and different items that I stocked up on that should last for a long time – I shouldn’t have to re-buy very many of those items.
SUCCESS! This was accurate on household goods. I spent $342.23 in 2013 and only $197.10 in 2014, a savings of about $145.13. I spent $347.89 on toiletries in 2013 and only an additional $24.87 in 2014 of $399.76. That’s not bad.
7) I will spend around $400 more on recreation in 2014.
SUCCESS! I spent $882.01 on recreation in 2013 and only an additional $97.43 in 2014 to $979.44. Looks like I underspent on recreation! This is definitely true – I didn’t exercise nearly enough in 2014.
8) I will probably spend around $1,500 less on shopping in 2014- fewer condo projects.
FAIL! I spent $3,538.94 on shopping in 2013 and $3,383.68 in 2014. So yes, I spent less, but not $1,500 less like I had predicted. Where did all of the shopping money go this year?
- $1,666.59 painting and second half of closet install
- $411.38 small furnishings: picture frames, a pizza stone, a nice knife and some other kitchen things, new sheets, artwork, a temporary desk, and some wood swatches
- $354.37 a new camera
- $301.59 small electronics: batteries, a new router, a speaker
- $267.54 fixing my laptop (includes shipping costs)
- $141.07 plants and a container
- $123.69 three hats and a scarf
- $108.13 new thermostats
- $20.22 a case for my cell phone
9) I will spend a lot less on taxis and nothing on tolls.
PASS! I spent $52.83 on tolls in 2013 and only $30.00 in 2014. I spent $259.25 on taxis in 2013 and only $63.85 in 2014. Since I own our one car and pay for that, my boyfriend tends to pay for taxis when we’re going somewhere together.
10) I will increase my overall savings rate to 85%.
FAIL! Hah! This would have required my income to be in the higher end of my estimate and to have spent much less.
11) My current forecast is about $38,500 in spending in 2014, which would be about a $7,000 reduction from 2013.
FAIL! Hah! I spent $48,000 or about 25% more than my forecast. Oops! It was a good year though :)
Comparing 2014 to 2013:
- I spent $619 more on housing (internet, condo insurance, electricity, HOA dues, household goods, mortgage loan fees, property taxes, required mortgage payments).
- I spent basically the same amount on clothing/shoes (~$1,900) and personal care (~$800 on hair cuts, eyebrow waxes, toiletries, and make-up).
- I spent $697 less on entertainment in 2014 than in 2013, for a total 2014 cost of ~$2,500.
- I spent $109 less on eating out by myself in 2014 than in 2013 (almost all of my eating out these days is with my boyfriend or with friends rather than by myself).
- I spent $354 more on groceries, which was to be expected since I’m eating out a lot less and we also cook meat a lot more at home than I was on my own. This amount is less than the decrease in entertainment and eating out though and still under $200/month so I think this is fine.
- I spent $863 more on work lunches since I didn’t take my lunch very much in 2014, for a total 2014 cost of ~$1,800.
- I spent $637 more on presents.
- I spent $671 less on health (medical, dental, and vision) than in 2013. I estimate I’ll spend even less in 2015 since my premiums are lower with the new job.
- I spent $155 less on shopping.
- I spent $1,448 less on transportation.
- I spent $3,082 more on travel – a whopping $7,558.45 on travel in 2014!
- Overall, I spent $2,736 more in 2014 than in 2013.
Where would I say my $9,500 over my spending goal went?
- $3,558 to travel (a $900 bachelorette party for a friend and our upcoming month-long trip to New Zealand)
- $1,344 in unplanned shopping spending
- $907 of unplanned medical/dental/vision spending (partially an increase in premiums)
- $1,094 in unplanned clothing spending
- $1,026 in unplanned food spending
- $229 in unplanned personal care spending
- $1,338 in other miscellaneous unplanned spending that I’m too lazy to research since my budgeting isn’t really that thorough
Basically, I spent the exact same as I did in 2013, plus I spent an extra $3,000 on travel. Lifestyle deflation is apparently really hard and I think I should try to make fewer sweeping lifestyle deflation changes going forward. I was too optimistic for my spending in 2014! I recognize that $48,000 is a large sum of money to support just one person. I try to instead remind myself of the fact that I saved 68% of my net income in 2014 and to evaluate whether I enjoyed the purchases I made throughout the year and so long as I did, then my spending is fine. I also don’t want to regret not going to a friend’s wedding because I thought the price was too high to go.
How do I think my spending in 2015 will be different than 2014?
- I will spend $3,035 less on housing with my boyfriend moving in. I don’t know what the property tax bill will look like yet, but I’ve estimated for a 20% increase. There’s also a small special assessment due. I justify not caring about this by how much cheaper owning is than renting (~$14k to own my two bedroom condo last year versus ~$39k to rent a similar place).
- I am planning to spend less on clothing, but who knows how that’ll actually end up going.
- I think I’ll spend about the same on entertainment, dining out, and personal care.
- We’ve each set up automatic transfers for $200/month to the joint account to cover groceries. I’m reasonably sure this will be sufficient, but it may be more than we need.
- I’ve estimated to spend about the same in 2015 on work lunches, but I’m going to see how the new job goes, how much the cafeteria costs, and then see if I can reduce this at all.
- I estimated in my budget that I’ll spend less on recreation. My new employer will cover a certain amount of fitness related expenses. I haven’t decided whether I’ll count the funds as income or a reduction in spending. If it’s taxable income, I’ll probably count it is a income. That’ll affect what this category looks like this year.
- I’ve estimated only $500 for shopping compared to 2014’s $3,400.
- I estimate spending about $400 more on transportation. Hopefully that’s not the case and car insurance will go down!
- I’ll spend about $500 less on travel.
- Overall, I plan to spend about $9,200 less in 2015 than in 2014: 33% of that is housing, 10% clothing, 13% health, and 31% shopping.
Readers, how was your 2014 spending?
I’m not really sure what to expect from 2015. I’m starting it off with some big changes: my boyfriend having just moved in, our big trip, and then a new job. I’m also considering throwing another big change into the mix (see the mystery goal below), so I’m not sure what things will look like.
1) Enjoy living together! Have an awesome trip to NZ!
2) Contribute the maximum to all tax-advantaged accounts available to me. This means $5,500 in a Backdoor Roth IRA, $18,000 in a pre-tax 401(k) and possibly some additional funds to the after-tax 401(k) and possibly my 2016 Roth IRA amount in a savings account ready to deploy in January. This will account for probably about 2/3 of my savings in 2015.
3) Learn the ropes at my new company and have an awesome first year!
4) Exercise for at least 45 minutes per day. My phone is really helpful at tracking this for me!
5) Go to the gym (or run) three times per week.
6) Contribute enough to a Health Savings Account such that Out Of Pocket Maximum ~= Current HSA balance + Employer contribution + my contribution.
7) Succeed at Operation Bayes – I’ll explain this later.
8) Spend under $40,000.
9) Save 70% of my net income monthly…and 100% of my bonuses. (Yay for a big raise that will allow me to save that much of my monthly income!)
10) Contribute the maximum that I can to the Employee Stock Purchase Plan.
11) Pay down the mortgage with any funds that are leftover after 2), including the proceeds of 10).
Even if I make no extra mortgage payments, the mortgage will pay itself down by about $9,000 in 2015. I’m becoming much less concerned about the mortgage with the smaller balance and the likelihood of the interest rate jumping up to 7.5% when it resets seeming less and less likely. Right now, if it were to reset today, it would likely reset to 2.875%, which would actually lower my required payment by ~$400/month and increase the January 2015 interest cost by about $46.
Overall, I’m anticipating a net worth increase of about $100,000 to $120,000 for the year to increase my net worth to $630,000 to $650,000. I expect my gross income to be somewhere between $140,000 and $150,000 in 2015.