2017 Half-Year Update

Income

This year so far has been a relatively boring year for income, which has been surprisingly not that noticeable, probably thanks to my front loading my retirement accounts last year.

  • ($384) My portion of the extra income taxes due (marriage tax penalty)
  • $2,513 My portion of the value of the credit card points redeemed or rebates from cash back sites
  • $68 Last paycheck from my fall part-time gig for a professor in my program
  • ~1 month’s salary gross: deferred compensation from my former employer, from which they withheld way more taxes than they needed to with my low income this year, so I should receive all ~$3,000 of the unnecessary taxes withheld back in early 2018
  • Generous four figure sum: We received and deposited the generous wedding present from my parents this year. It went straight into the “Wedding Gifts” savings account where I’ve been putting any wedding presents until we use them for something specific, at which point I transfer the money into our checking account.

Net Worth and Cash Flow

Personal

As of June 30th, my net worth is up 1.1% for the year. I was originally projecting a 1.4% decrease for the year, but the stock market has had a mind of its own,
so I’m currently forecasting to be up 0.7% for the year, assuming no further income. That’s not too bad for taking a year off from full-time employment, during which I’m paying grad school tuition and for my portion of a wedding reception.

My June reconciling left $17,247 in my personal savings account, which should last me through the end of February at my current spending rate. I have a separate savings account from which I pay my grad school tuition, which is on track, ~$20,000 in Series I Savings Bonds, and ~$25,000 in my Vanguard money market fund. After covering my part of the wedding, all of those non-tuition cash accounts combined would last me for two years, through sometime in July 2019. Once I start a job again, I’ll experiment with how low I’m willing to let my cash reserves go, whether I’m comfortable going down to $10,000 and investing the rest. The most I can realistically see leaving in a savings account is $20,000.

Family

Our combined net worth, on the other hand, is up 13% since we got married, which is just incredible. The condo equity represents about a third of our combined net worth, which is a pretty reasonable figure.

On the household accounts side, we have a primary checking account which is used for cash flow, budgeting, and paying the credit card balances at the end of the month, a “Wedding Gifts” savings account, and a general savings account. We keep a one month ($3,000) buffer in the checking account and we have a second one month buffer in the general savings account. We also have a joint Schwab checking account that we use for international ATM withdrawals. (I closed my personal one when we made the joint one.) Lastly, our Donor Advised Fund doesn’t count in our net worth as it’s not legally ours anymore since it’s already been donated to Schwab Charitable.

Investments

My husband has started the process of buying into the condo. I used these funds to make my full 2017 Roth IRA contribution back in January and then in June, I transferred the entire amount that he gave me into my Vanguard taxable account. I added $10,000 into my international stock index holding, rebalanced between international and US stocks in my Roth IRA, and left the remainder in the money market fund. I set up a $500 automatic exchange from the money market fund into the international stock index for each of the remaining months in 2017 (one has already happened!) and left the rest alone.

Why didn’t I invest the entire amount? I wanted to wait until we have a firmer picture of how much the wedding reception will cost and until I’ve started a job before investing the entire amount. I left a generous eight months of expenses in the money market fund for now. I’m sleeping great at night, so this seems like a reasonable approach for now.

Why did I send all of the money to Vanguard if I wasn’t going to invest it all? I wanted to be really prudent with this money as it was previously locked up as condo equity and not spendable. Putting it all in Vanguard helped to see it as transferring the money from condo equity to more liquid investments, rather than as money available for spending. The Vanguard money market funds have pretty comparable returns to my Alliant Credit Union savings account, so they seemed like a reasonable parking spot for now.

As of June 30th, my investments are up an absurd $25,605 for the year so far solely on market returns. The last few years were not great for international stock returns and they seem to be making up for that this year, which with my staunch 50/50 US/International split has done wonders for my portfolio returns this year. My 401(k), which is relatively heavy in international stocks at the moment, is up $13,075 with the markets this year, which is about 70% of what one is allowed to contribute to such a plan each year.

In May, I tried an experiment of not checking my investment balances all month until it was time to update my net worth. I managed to make it with only peeking once, which I’m calling a success based on my behavior in the previous months of the year. I ran the experiment again in June and I barely peeked when I made my Vanguard contributions. It seems this habit has successfully mostly stuck for now!

Not paying the mortgage in 2017 has seen some months starting to get very visually closer to the passive income (credit card rewards and selling stuff) + 4% of investments line. It’s incredible and really motivating! It makes me want to find more money to add to my investments to get those lines closer together.

And then here’s a similar view with the percentage of expenses covered by 4% SWR + Passive Income, but dating back to January 2010:

4/6 of the months so far in 2017 have been over 50%, which is incredible to see! I’m forecasting that I’ll surpass 100% one month this year, which I’m really excited to see!

Spending

As the year has gone on, we’ve been continually discussing what should be personal or household spending. It’s been evolving over time and we’ve reimbursed each other from the joint account back dating to January 1st for anything we spent this year. The main changes are:

  • Any bags of coffee bought count as “Groceries” and are thus household, but takeout coffee is personal spending
  • If we’re out at a restaurant together, the entire meal is household, even if one of us drinks or eats more than the other (my husband used to pick up the entire tab if he spent much more or we would pay based on what we ate)
  • If I grab takeout for lunch because there isn’t food to eat for lunch in the house, that counts as household spending. (Realistically: all food except for food where one spouse is out without the other spouse counts as household spending.)
  • Any medical related expenses are household
  • At home exercise equipment is household, even if only one of us uses it (but outside of the house fitness is personal spending)
  • Most toiletries are now household (shampoo, conditioner, other hair products, deodorant, allergy medicine, dermatologist products, body wash, moisturizer, feminine hygiene products, etc.). If a product was bought at the grocery store or at Costco, it was previously considered household, but if it was bought somewhere else, it ended up being personal spending, which we’ve corrected. Eyebrow waxes and make-up are still considered personal spending.
  • My husband’s Amazon account should probably be double checked every month or so since he’s bad at remembering to use the right credit card and usually just lets the default payment method take care of things.

I’ve been marking these items, as well as anything else we forget to budget for (condo and umbrella insurance, ahem) out of the “Miscellaneous” category from our budget and then next year, we’ll add the items to the budget more accurately.

The below chart counts all household spending as being half mine and also includes my personal spending. Without the mortgage payment, only 17% of my spending for the first half of 2017 was on housing! My half of the household spending plus my personal spending came to $20,157.28 or an average of $3,359.55 per month. Considering that last year, I spent $3,868.10/month on average in the first half of the year which included a $1,027.32/month mortgage payment, I’ve spent about $518.77/month on average more in 2017 than I did in 2016, which is probably mostly explained by the frontloaded travel spending this year and that we didn’t buy any Christmas flights in 2016. I expect my H2 spending to come in about $1,000/month under my 2016 H2 spending, even accounting for the difference in mortgage payment and paying for the wedding.

Household spending

Note that all of the numbers below are the full household numbers, meaning that my portion is half of those numbers.

Category Budget Actual Avg. Monthly Description
Travel $5,000.00 $10,854.17 $1,809.03 All travel pre-booked for the year. This covers our Christmas flights and lodging, a trip for a friend’s milestone birthday, a weekend getaway, and airfare and lodging for our Italy honeymoon coming up in the fall. We went over-budget on all of the trips, but we skipped one, so we’re technically under the travel budget for the year by $1,277.
Housing $8,897.23 $8,235.96 $1,372.66 Very little condo maintenance so far this year ($285), which is why we’re under budget. Otherwise, we’ve been paying monthly HOA dues and paid this year’s special assessment, paid half of the year’s property taxes, paid for the winter electricity, paid Comcast every month, and our mostly-biweekly house cleaners. My husband is paying the mortgage out of his personal cash flow.
Food $4,490.00 $4,373.91 $727.44 This is mostly groceries ($3,188) and Costco ($420), with the rest being convenience food. We’ve been averaging about 20% above our grocery budget for the year ($450/month), but a lot of toiletries end up in here too as well as cards.
Wedding ~ $3,628.80 $604.80 This includes the last bills for the postnuptial agreement ($650), my wedding dress (under $400), some cake tasting fees, our cake deposit, and a cake topper ($622.50), DJ deposit ($1,100), hair and makeup deposit ($200), paper invitations, RSVP cards and address labels ($57.82), and photographer deposit ($500). I’ll write a post about this all more specifically once I have final numbers.
Entertainment $756.06 $2,013.01 $335.50 This budget is a bit fuzzy because the “Restaurants” budget is included in the “Food” budget, but “Date night” spending ($1,188) went here, same with meals with friends ($121). This also includes our annual theatre tickets ($510), Pandora and Spotify music subscriptions ($125), and Netflix ($66).
Shopping ~ $1,551.84 $258.64 The last piece of our new living room furniture ($637), a popcorn popper ($21), replenishing measuring cups ($36), picture hangers ($26), a blanket and five tablecloths ($160), Lightroom ($66), replacing our seven year old mattress cover ($33), replacing some old towels ($173), repairing our camera lens ($264), a sun alarm clock ($119), replacing a five year old soap dispenser ($15), some vacuum sealing clothing bags ($20), some pieces to attach some of the new furniture ($30), and annual Prime membership ($109).
Personal care ~ $447.59 $74.60 Shampoo, conditioner, moisturizer, cleanser, shower cap, allergy medicine, etc.
Gifts and Donations $440.00 $407.24 $67.87 This covers one wedding gift and three baby gifts, some cards, and some stamps because we keep losing them and we’ve mailed paper invitations to anyone who has asked for one. We used our Donor Advised Fund for another wedding gift, so that isn’t accounted for here.
Transportation $430.02 $376.16 $62.69 We are way under budget on gas (averaging $20 per month instead of $30) because we’ve bought most of it at Costco this year, which is unusual. Also included is a new battery for the car and jumper cables ($150), some Lyft rides ($83), and one time of parking ($0.58).
Life ~ $18.84 $3.14 Updated insurance on my ring set – most of the premium was paid in December.
Recreation ~ $11.76 $1.96 One, two and three pound weights
Medical bills ~ $6.00 $0.50 A resistance band for physical therapy. Not included here are the insurance premiums that are taken out of my husband’s paychecks pre-tax every month. We’ll reconcile that into being household spending come tax time. So far, we’ve paid nothing out of pocket for medical stuff this year.
Total $19,152.11 $31,925.28 $5,319.34 Only $2,013.60 over budget if you take out the wedding and honeymoon, which weren’t budgeted for, that isn’t too bad considering that we frontloaded much of our travel spending for the year.

We’ve decided to use my parents’ wedding gift for our honeymoon. We bought the flights with Chase Ultimate Rewards points from our Sapphire Reserve card and I transferred the amount we’ve prepaid so far for lodging from the “Wedding Gifts” savings account into the household checking account.

We are both really looking forward to hosting our wedding reception this fall! The numbers are still reasonably variable since we’re still waiting on most of the RSVPs, which is why I haven’t talked that much about the budget. The wedding costs have been covered so far by calculating how much off-budget expenses happened in a month, dividing that in half, and each of us transferring that into the household checking account. Now that we’re getting into the home stretch, we actually know the amounts that are due before we pay them (versus picking a vendor and then immediately needing to pay a deposit), so we transferred the anticipated amounts at the beginning of July for the costs that month and we’ll repeat that in August and September.

Other than Groceries and missing a ton of line items (oops), we have been doing reasonably okay with our first attempt at a budget! I’ve been pleased with how it’s going.

Personal spending

I’m really proud of how I’ve done with my personal spending this year. I’ve been significantly more conscious about it this year and reduced my personal spending (within the same scope) by more than half from what I spent last year, which is a huge part of how I’m covering my part of the wedding reception costs without spending down my savings too quickly.

I mentioned this in earlier posts, but the way I’m budgeting this year is that I took my savings account balance on 12/31/2016 and have added in all income I’ve brought in this year. That figure is now up to $37,500. On the first of every month, I transfer $1,500 to the household checking account to cover my part of the household budget. I add up how much I need to replenish my checking account for the prior month’s spending that and transfer that money. Once all that’s done, if I’ve spent less than N/12ths of the total annual budget (where N is the current month), I transfer the excess to my personal “Wedding” savings account. My husband just takes money out of somewhere when a bill needs to be paid, but I prefer doing it this way so it doesn’t feel like it’s withdrawn all at once from my savings account.

Category H1 Avg. Monthly Description
Clothing $2,044.90 $340.82 $837.56 of this was on replacing my underwear and my annual bras stock-up. This year, I splurged and bought six bras instead of my usual five, so that I don’t have to wash them quite as often.
Transportation $783.62 $130.60 $252 of this is bus passes that I’m required to pay for through grad school and are really useful. $522 was the six months of car insurance that I paid for in January and $10 was a Lyft home one time.
Recreation $378.77 $63.13 A pair of running shoes ($161) and two months of unlimited barre classes ($109 each) – yay for student rates!
Personal care $351.08 $58.51 Four eyebrow waxes ($80), mascara and eyeshadow replacement ($43), returning a product that didn’t work out ($3), and two facials ($223). I’ve since eliminated the facials from my budget as the eyebrow waxes provide just as much joy.
Entertainment $246.31 $41.05 I accidentally bought two books thinking I had some e-book credit left ($23). “The Power of the Past: Understanding Cross-Class Marriages” has been fascinating. I also renewed my personal domain ($9) and enjoyed several social outings with friends ($215).
Gifts and Donations $200.78 $33.46 My husband’s birthday present. I used some points to pay for part of it, but those count in income and the full amount of the present here.
Housing $159.33 $26.56 Monthly cell phone bill with Cricket Wireless. The plan gives me 1 GB of data and unlimited minutes and texts, which seems to be mostly working great.
Travel $27.50 $4.58 $7.50 was when my husband and I each bought the same snack while traveling and we paid for it separately and $20 was transferring some airline miles to my husband to keep both of our accounts active.
Medical bills $23.30 $3.88 Coinsurance from some 2016 medical usage.
Shopping ($20.95) ($3.49) My husband used some of a credit I had at a store and reimbursed me, hence the spending credit. I also replaced my sunglasses case that I seem to have misplaced.
Total $4,194.64 $699.11

If you take out the car insurance which is a household expense starting in July, I spent $612.14/month on average covering all of these categories for all of the items it covered.

I started a new spreadsheet this year which tracks my clothing spending. For each item purchased, I note the date (including month & quarter), category (necessities or wants), and subcategory (underwear, winter clothes, outerwear, athletic wear, bras, summer clothes, or shoes), price, and a description. I’m finding it really helpful to separate the necessities (underwear, bras, socks, sports bras, and having workout crops that fit so I actually go work out) from the wants.

I’ve been so consistent at working out this year that I sized my workout crops down yet again, of which I picked up two pairs in Q2. I like wearing the now-huge workout tops as it reminds me of how much my body has shifted in the last year. Last July, I hit my peak weight. A year later, I’m down 5-6 percentage points of body fat (it fluctuates a bit day to day) and I’ve lost about 8% of what I weighed last July. Those numbers matter way less than how incredible my body feels, how much stronger I’ve become, and how much more positive I am with the increased level of exercise. In June, I finally surpassed an average of 10,000 steps per day for the first time this year, which felt great. I had been increasing my monthly step goal a little bit each month until I finally got there. It’s a lot of work getting that many steps per day AND making it to as many barre classes as I have, which is part of how blogging has fallen by the way side. All around, I’ve just been feeling really great this year!

Readers, how is your 2017 going so far?

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14 thoughts on “2017 Half-Year Update

  1. Very detailed! I’m glad everything is working out well for you, and that your partially combined finances is going well. And very excited for the wedding / honeymoon – it sound like it will be great year!

    (I really want this information to be summarized for me on our spending, but I’ve been too busy to keep fully on top of the details of spending. I have been updating our net worth monthly, and recently examined spending, but not to the level of detail I wanted to do.)

    • The partially combined finances are so much better than our pre-marriage partially combined finances! It’s really awesome :) It is a great year! :)

      You sound a bit more like my husband. I’m more likely to categorize his Mint transactions than he is… I’ve been really busy too, which is why I stopped doing the monthly reports. It was too much work for too little gain.

  2. Wow super detailed Leigh! That’s great! How do you guys combine your finances? Do you take a certain percentage of your income? That’s nice that you guys have a clear cut definition of what is joint spending and what isn’t. For us, take out lunches or meals with friends (without one another) is considered personal spending.

    • Right now, the only “combination” of finances is that we both put $1,500 on the first of every month to cover the household budget and that my husband will buy into the condo in some way. All other assets and income are completely separate, though we have started tracking our combined net worth quarterly in a spreadsheet. Yes, that means that I’ve been spending down my savings while he has been earning at the highest level either of us have… We’ll see how that goes long-term. I doubt we will combine much more until we own our primary residence in equal shares because my husband needs to use separate income to buy in, though our plan at the moment is to re-evaluate this each year on a calendar year basis. I would love to see a post on how you and your husband combine your finances!

      • Will do! :) That’s an interesting approach- but he is contributing separately into the mortgage too so that means he is paying in addition to the $1500.

        • Yup, but I owned 75% of the condo when we got married, which is how we came to him paying the rest of the mortgage and slowly paying the other 25% to me over the next few years. He actually has given me about 10% this year, which has been a huge boost to my liquidity!

  3. Excellent stuff. I had a $30k expense on a rental earlier this year. Flooding. On the plus side the bleeding has stopped. The expense has been paid off. It’ll take some calendar time to recover. But 2017 takes will get some relief with a rather large write off. Cheers!

  4. Holy cow, I love your details! The first half of my year had more medical/dental expenses than I anticipated and my girlfriend had to move away for a job within 3 weeks’ notice. Traveling to her was an unanticipated line item, but absolutely worth it.

    • Thanks ZJ! I hope everything is okay with you after your unexpected medical/dental expenses! Traveling to see your girlfriend is absolutely a worthwhile line item :)

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