January 2016 update (+0.5%)

I’m experimenting with a new format this year in which I only fill in the net worth table here quarterly. I want to focus more on my spending and my money actions each month.

In January, I:

  1. contributed ~45% of the pre-tax 401(k) limit
  2. paid the remainder of my costs for this period of school
  3. sold my 2015 Q4 ESPP shares and transferred their value to my general savings account
  4. kicked off my first month using Alliant Credit Union for my primary checking and savings accounts. I’m really stoked about this because they pay a reasonable-ish rate on checking without having to count debit card transactions (0.65%) AND they pay the same interest rate on savings as Ally Bank (1.00%). It also made the monthly auto-transfers from savings to checking much smoother being at the same place. Some people are tempted to spend their savings if it is in the same place as their checking account, but I’m not.
  5. opened up two NetSpend prepaid cards for the sweet 5% interest on the first $5,000. I’m all about finding ways to earn a better return on my cash since I decided to keep more cash around. My plan is that later, higher interest chunks will form part of the fixed income portion of my investment portfolio and the lower interest chunks will be my savings buffer.
  6. got really stressed out when the auto-payment on one of my credit cards didn’t go through in the switching of checking accounts. I assumed it would go through on one of them and nope, neither. I got hit with a late fee AND interest, all on a really low (for me) statement balance of ~$300. That was super stressful, but the credit card company was great and reversed all of the fees, even before I made the corrected payment!
  7. made my annual January donation that is ~6 months of budgeted charitable donations
  8. sold my first item on Craigslist! I was super stoked about that – it sold in under 24 hours. Eventually, we’ll get things looking like we don’t have a mash up of two apartments in here… We’re actively trying to sell a set of other items on Craigslist too and that one is taking longer. It took a bit to figure out what price I should list at.
  9. got hit with a maintenance fee on a credit card I hadn’t used all year, oops! Looks like I need to remember to use that one at least once a year.
  10. did not contribute to my Roth IRA. My current plan is to do this in April / after I have sufficient earned income.
  11. lost about $9,000 on paper in my investment portfolio. Despite that and selling my ESPP shares, I managed to have my investments “only” be down ~$300 thanks to my large contributions this month.
  12. saw my net worth go up by $3,000 or about 0.5% to $604,000. (Note that now that it’s larger, I’m going to be rounding to the nearest $1,000 here.)

Expenses: I spent $2,301 in January including the mortgage or $1,273 without it, excluding charitable donations. That breaks down to:

  • $2,081 in fixed/unavoidable expenses: financials, cell phone, HOA dues, mortgage payment, NEXUS card, medical, and car insurance
  • $222 in discretionary expenses: clothing, entertainment, food, eyebrows, toiletries, recreation, shopping, parking and tolls

Some of my controllable expenses broke down as follows:

  • ($319) Clothing: returned two of the four dresses I bought at the end of December ($363) and bought a long-sleeved running top ($44)
  • $37 Entertainment/Social [average so far this year: $37, average last year: $116] – A book (<$1 somehow), dinner with a friend ($24), and another photo album for picture printing ($13) – I’ll get my boyfriend’s half of that back later. This will be low for this period of school, in fact I’m surprised it was this “high” this month.
  • <$1 Financials: inactivity fee on that credit card I mentioned above. It should have been more like $10, so this was actually pretty pleasant.
  • $37 Food
    • $0 Eating out by myself [average so far this year: $0, average last year: $6]
    • $6 Schoolwork-related food [average so far this year: $6] – met up with a classmate in a coffee shop
    • $31 Work lunches [average so far this year: $31, average last year: $39] – this was 7 days of lunches
  • $26 Cell phone – monthly Cricket bill. It’s lower this month because I had raised my plan just before the plan renewal date last month and lowered it again shortly after.
  • $50 Nexus card – renewal time!
  • $160 Medical – a December appointment
  • $20 Eyebrows
  • $29 Toiletries [average so far this year: $33, average last year: $48] – cleanser and wipes for my menstrual cup and toner
  • $172 Recreation – Bah, so I did a ton of research and decided to get a Jawbone Up2 ($68) instead of a Fitbit Charge, but then it being on my wrist and not having the time on it drove me crazy, plus it was annoying to get on/off, so I bought a Fitbit One ($95). I like it much better! I should have just done that in the first place. My plan was to try to re-sell the Up2 for ~$50 or so.
  • $204 Shopping – the last of the parts for my new desktop computer ($200) and the Stylebook app ($4)
  • $530 Transportation: tolls replenishment (x1), parking at school one day, and six months of car insurance (up about 8% from the six month premium)

I didn’t even look into how my spending was going until about 2/3 of the way through the month, so I’m pretty happy with how things went! I also didn’t pay attention to how often I was buying lunch at work versus bringing it.

This month was pretty frugal. I’m curious to see how the year turns out! I’m guessing February will be similarly frugal since there are no big expenses due in February, nor are we planning any trips for the year yet. We’re debating re-painting a bunch of the condo finally, so that may happen, depending on cost. If the quotes are higher than we want to pay, we may end up doing it in the spring ourselves.

HOA dues did not go up this year and there is no special assessment, which is cool. I don’t know what the property taxes look like, but my tax value went up about 5%, so I assume they will go up about 5%.

In an attempt to rein in my clothing spending this year, I bought the Stylebook app to show me the cost-per-wear metrics of my clothing and how often I’m wearing items I have. My first goal is to get the CPW for each item in my closet down to $5. I’ll make a new goal once I get there. So far, it’s fun organizing my clothing in the app and is totally transferring the time I spent shopping to organizing my closet in the app. Only three items meet that $5 CPW goal at the moment: a $46 pair of jeans is at $3/wear, a $217 purse is at $4.25/use and a $20 summer top is at $4.95/wear. I’ve added in any clothes/purses I bought in 2015 to the app and tried to add past data where I could, but some of the stuff is going to take a while to get down to a reasonable cost per wear.

Note to newer readers: my boyfriend and I live together in the condo that I own and as part of him not paying rent, he pays for things like groceries, internet, electricity, eating out together, Ubers, and miscellaneous costs on trips, while I pay for everything related to the condo and to the car that I own. For now, he is also paying for the cleaning person that we hired to ease that burden a bit, but we’ll check in on that later this year. I may end up chipping in towards that later. My mom has commented that we shouldn’t “split” groceries 50/50 because he eats more than I do, but I take lunches to work out of the grocery budget and eat more breakfasts and snack food, while he eats more when we do share meals, so it actually evens out. In 2015, we averaged $538/month on shared groceries and restaurants, so the $509 we spent in January on groceries was a bit higher than usual, but still under last year’s shared food spending considering that there are no restaurants in there.

Readers, how was your money in January?

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25 thoughts on “January 2016 update (+0.5%)

  1. I’m happy for you and impressed that you didn’t get the nosedive in January that we got! Even with big contributions, we’re still way in the red. Womp womp. So that whole idea of retiring this year is probably not happening. But we have been at this long enough to know that what the markets are doing today has almost no bearing on what they’ll be doing in a month or 6 or 12. So we’ll see!

    • Thanks! I got a pretty decent nosedive…$9,000 is about 4% of my end of December portfolio value and it was down more at other points in the month, such as when I noted my mid-month paycheck. I made huge contributions though – about $8,500 between me and my employer after the ESPP sale. My biggest $ loss was back in September at just over $10,000…

      I’m sorry that with the way the markets are going, you guys might not retire this year! Who knows, it could end up turning around by the end of the year :)

  2. I spent 80% of my monthly budget in January due to traveling for work for two weeks. My net worth still took a hit due to my equity heavy portfolio. Looks like your larger fixed income allocation definitely helped you out. Nice job on the spending!

    • Thanks! Heh yep my monthly budget is $4,000 and I didn’t spend very much of that so the remainder rolls forward to the next month. Some of that is setting aside funds for property taxes for example, but I’m still starting February with about $3,000 available for discretionary spending if you count the April property taxes as gone already. It’s nice to be under budget at the beginning of the year – leaves some more flexibility for the rest of the year!

  3. I probably wouldn’t be losing any sleep over the grocery split. If it was me, I might feel like I was being nickeled and dimed by the other person and wonder how committed we are to a joint financial future, if we got to the point where we need to start measuring the portions that each person eats and charging accordingly….that seems like a roommate rather than a partner? Though I also think ti would be hard to accept the offer of free rent…being the highest expense in my budget, it would be pretty gamechanger-life and drastically speed up the FIRE quest.

    Obviously, you guys need to figure out whatever money strategy that works for both of you. I’m guessing you both are saving far more by living together vs. the alternative, not to mention all the non-financial benefits, so good for you.

    My portfolio is still small enough that the new contributions seem to be masking the volatiity to some extent. I had a nice tax loss harvest in January. My January month end is not too far off from my December month end, but January was also the lowest expenditure month I’ve had in quite some time, so there’s that…

    • Yeah we don’t worry about the grocery split. It’s working out to be similar to what we spent combined before anyways.

      We didn’t really know what to do about the rent thing. It was a hard problem that we spent months discussing. The fact of the matter was though that market rate for half of a two bedroom condo of my size is pretty comparable to my mortgage, property taxes, HOA dues, and maintenance. So if I charged him that much, then I would be the one with a free place to live. So then do I charge him less than market rent? What do I do? Especially when about 75% of the mortgage payment goes to equity now. He could have paid me say $700-1,000/month in rent and then we split the utilities and groceries, but then that seems like a landlord/tenant relationship and not a long term romantic relationship. So in the end, we’ve settled on this and we both seem to be happy with it so far. It does make a difference on his spending that he isn’t paying rent, but he’s also now buying groceries and electricity for two rather than one, etc.

      The other quandary was that renting a similar apartment would cost us closer to $4,000/month with utilities and parking and this place costs us more like $2,000/month including mortgage principal…so selling just to simplify the finances seemed odd. At that price, we probably wouldn’t rent a similar apartment and probably would have hunted around a bit more though too. Relationships and money raise plenty of quandries.

    • If he’d had a lower income than me like a now-nonexistent blogger’s partner, then we probably would have gone with a low rent idea. But his income is comparable to mine, so that seems silly too.

  4. I’ll never forget some of the stuff I’ve sold on Craigslist. Don’t ask me how but I listed 5-year old mattress and sold it in one day. I mean, who buys a used mattress? You never know how things will sell on Craigslist, but that thing sold immediately. We bought it for $200 and sold it for $80.

    I find that Cost Per Wear metric fascinating. Is it really just dividing the cost paid by how often you wear it? I have a rotating set of like 10 pairs of work pants, each cost $20-30, so I guess a year after buying each they’d be at about $1 per wear. I’ve always thought about stuff like that, but have never done the math. I’m sure my shoes are well below $1 per wear now. Imagine handing over a couple dollars just for the privilege of getting dressed every morning. I wouldn’t be happy until I was down to paying pocket change.

    • Lol! I wish we had your luck when we were trying to sell our extra mattress. We finally ended up donating it…

      Yup, it’s just dividing the cost paid by how much you wear it. It’s meant to show you which types of items are more reasonable to spend more on / which items were terrible value.

  5. I cannot even imagine how ridiculously low my “cost per wear” mightd be. Most of my short and long sleeve button down shirts I’ve had for at least 5 years, maybe closer to 10 years (or more!) on some of them.

    I tend to replace clothes rather infrequently, I guess I’m fortunate that my size has stayed relatively the same over the years. I have a couple sport coats that my dad didn’t want anymore, so I just took them to a tailor and had them re-sized to my (smaller) size. I don’t think I’ve even worn those yet as I’m an incredibly super casual dressing dude. The only reason I would “dress up” would be for some special occasion like a wedding or funeral. :D

    • That’s great that you’ve had such great longevity of your items! I typically haven’t, so maybe I’m not buying from the right stores / maybe I tend to decide I’m no longer interested in clothes after a year or two or three…

      • I’d say half the new clothes I get are gifts. The “no longer interested in” concept is foreign to me. If I spend $$$ on clothes, I’ll use it til it wears out, but I can’t say I have the slightest sense of fashion. :)

        • Makes sense – my dad hasn’t gone clothes shopping in several decades now. I hate getting clothes as presents other than pyjamas. My boyfriend buys all of his own clothes though. People seem to think his clothes are my choice, but nope, he’s the one picking them.

  6. My cost per wear probably gets under $1 for pretty much everything except cocktail dresses. Although a couple of those were darned cheap and are probably fast approaching $1. But I hate shopping, so wear things until they are completely worn out just because the idea of making an effort to find a replacement is so terrible.

    Our net worth took a dive in January. With the market drop, we couldn’t shovel money in quite fast enough to counteract the losses. But hopefully the market stays down through the end of February, since I’m pretty sure that’s when Mr PoP’s bonus should come through. =P

    • Yes, finding a replacement is pretty terrible! I’ve sized a bunch of my clothes up though that I probably would have kept wearing otherwise, so I’m not sure what I’ll do with them. I should be able to get down to $1/wear eventually. It’s just hard seeing that yet since I rebuilt much of my closet from scratch.

      I’ll keep my fingers crossed that the market stays down as I’m busy frontloading my 401(k) for the year and would love to buy at cheaper prices too :)

  7. I have a question about the Netspend cards, and I’m sure I’m a total idiot, but here goes anyway!

    I was really fascinated to read the post you linked to, but the part I’m concerned about is getting the money back from the Netspend cards (once you’ve transferred your balance back to the Netspend card from the savings account, where it was racking up awesome interest!).

    The original post you linked to talks about getting your own checking account to perform a draw of some type against the Netspend account (an “ACH” using the routing number, etc. associated with your Netspend card) but I’ve never tried to set up something like that in my checking account before and can’t find a way to do so (I’m assuming that perhaps my credit union account just doesn’t actually allow for that, but I’d be willing to open up an Ally checking account as he recommends in the post).

    I’m just not sure how you actually set up that kind of withdrawal – is it something that everyone else can do in their checking accounts (and is relatively common) that I’ve just not yet encountered? I imagine that it’s something like Paypal but my bank doesn’t allow me to pull money OUT of Paypal – I have to initiate that kind of transfer from Paypal. It doesn’t sound like you actually initiate the transfer FROM Netspend.

    Any help or guidance you have on this topic would be appreciated! I’ve tried Google but haven’t found much helpful…. Thanks!

    • Let me start off with: You are not a total idiot!

      My credit unions let me set up “other financial institutions” and then transfer to them. That’s how I do the ACHs. You can also do the same with Ally Bank. And then you just set up transfers like normal, recurring or one-time, to the other financial institution. They do take a few days to go through, depending on the place, but it’s pretty quick. And yes, it’s something like Paypal, except you can do it on your bank’s side unlike with Paypal since Paypal doesn’t give you routing info/a bank account number. It’s like how when I wanted to send money to Ally from my original credit union, I would always initiate the transfers on the Ally side, not the credit union side since the credit union wouldn’t let me set up external accounts to transfer to/from.

        • Thanks, Leigh! I’m going to keep track of how the Netspend experience goes, because it sounds like there were some changes with the transfers. I want to try it, but I get nervous about things when I don’t fully understand them. (I may have missed the boat on being able to make a $5000 transfer without a direct deposit paycheck, but I’m not sure if my sources are reliable on that front!)

        • My last transfer went through after the date the internet said that it would no longer qualify as the direct deposit to qualify for a savings account and I did qualify. So I’m not that concerned.

  8. I do NOT get the appeal of wrist-based trackers. I have a fitbit one, and have for years. I even lost the first One (slipped out of its own clip while on my pants), and they replaced it for free – win! I did buy a special little loop to prevent that from happening again.

    I don’t track cost per wear at all, but I have noticed that I haven’t bought much since my new job has basically no women who dress in trendy fashions. I might try out Stylebook, but then I have to go through and figure out how much things in my closet all cost? sounds like data i’d like to have, but would loathe to track! like so much in my life….

    • Sadly my boyfriend gave his FitBit One away late last year before I decided I wanted one. I had had a Zip for ages and it would stop sync’ing every six months or so and be a pain. I eventually gave up on it, since my routine was so solid. I wanted one again though because my routine is a little less solid these days…

      You seem to not be the biggest fan of tracking. I feel like tracking the cost per wear in Stylebook mostly works for me because the vast majority of my wardrobe was purchased in 2015. I didn’t add everything all at once – I just added things as I wore them and now it’s mostly an accurate representation of my closet.

    • That sounds like a great fit for you then! I am not a fan of wearing something on my wrist with any form of notifications – time only. And it has to look pretty. I should get the battery replaced on my watch.

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