Fall 2015 Financial Plan

As of my mid-September paycheck, I will finish contributing to my retirement accounts for the year. There will still be some dribbles of match from my employer each paycheck for the rest of the year. I estimate that I should have about $20,590 of money available for savings throughout the rest of the year. This comes from selling ESPP in October, my bonus at work, and my regular paychecks, including two months of paychecks with no Social Security tax, a $1,400 savings!

First, I plan to re-build my general savings account up to a year of non-travel expenses ($30,000). I need about $15,788 to do that.

Next, I want to top up my grad school savings account to cover my entire expected cost of grad school. $2,760.16 more is needed for that. I’ll probably top this up once I have $20,000 in my general savings account, in October.

That leaves $2,041.84 remaining and I plan to just put that into my general savings account since I’ll take my 2016 Roth IRA contribution out of there next year.

My fall finances are going to be pretty boring, just stuffing a bunch of money into savings accounts!

Note: As part of my project of reclaiming time for grad school starting this month and reducing my time spent on the details of my finances, I’m going to cut back on the net worth and spending updates. I will probably keep them up in some capacity, but not monthly like I have for the last several years.

Readers, what do you have planned with your money for the fall?

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On June

June was a pretty awesome month, probably the best month I’ve had all year. For a lot of reasons, the first quarter this year was really hard emotionally. April was a bit hard from the remnants of that and things started to look up in May and starting with the May long weekend (and a few before…), I’ve had really awesome weekends and the weeks haven’t been half bad either. I’m also still adjusting to the new job that I started back at the end of 2012.

I made a few mental rules in June:

#1: Spend as much time unplugged (and outside!) as possible.

This was really awesome. I spent the vast majority of weekends both unplugged and outside. So much so that I ran out of sunscreen! (Don’t worry, I bought more!) There are now multiple evenings each week where I don’t open my laptop at home. I also turn off even Wi-Fi on my phone for some periods of time at home if I just feel like reading.

#2: Say ‘yes’ to any social event if I don’t have something already booked for that time.

There were so many fun social things this month! I can’t even begin to list them all. All of this socializing contributed to almost 700 miles of driving this month, which is absolutely insane. There were a few road trips in there. (I’ve still averaged under 400 miles/month in the time I’ve had my car though.) I’ve been making new friends, reconnecting with old friends, and enjoying my balcony and the general outdoors in my area. I’ve been spending 4-7 days/week socializing outside of work and it’s been really fun. Have I mentioned that I absolutely love combining fitness and social activity together?!

I’ve also found a pretty good, varied weekly workout routine that keeps me active about 4 days/week in addition to my walking 4 miles round-trip to/from work each work day. According to Fitbit, I averaged 6.65 miles of exercise per day for a total of 200 miles of exercise for the month. I’m loving the running trails near my condo! I’ve been trying to run once or twice a week. I think I need to start running earlier or later in the day with the heat though.

#3: Don’t worry or think about my finances.

This is why I didn’t blog at all in June. I think I did pretty well with this one. I still tracked my spending. I definitely blew multiple budget categories out of the water. (oops!) But, I had a really awesome month and my finances still survived – my non-mortgage spending came in under $2,000. I didn’t remember about my Total International stock index dividends until two days after they posted. (Normally I would have been obsessively refreshing the day of.) Until I logged in to Vanguard to check on those, I didn’t notice that the stock market wasn’t doing so hot in June either.

I’m still getting used to the auto-pay feature of my credit cards. I’m learning that it doesn’t always go through on the due date, but I should just be patient and not worry about it. I now have a credit larger than what I will spend down before the next statement date on one of my credit cards. (Oops!) Other than that and scheduling the July 1st mortgage payment on pay-day last week, I didn’t make any manual money moves in June.

June was a really good month to try this since it wasn’t a bonus month. I have a few posts lined up for July though I won’t be thinking about my finances all that much still since I know I’m just throwing my entire bonus at the mortgage. I can’t wait to see the mortgage balance at the end of July :)

 

I’m going to try these same mental rules again for July since I did so well with them in June. Here are some extra plans for July:

  1. Apply for the Fidelity 2% Investment Rewards American Express credit card and start using it as my primary credit card.
  2. Throw the entirety of my bonus at the mortgage principal.
  3. Break 9 minutes/mile in my short (~3-6 mile) runs. (I’m trying to find the time to increase my distance.)
  4. Improve how productive I feel I am being at work.
  5. Read 3 books.

Readers, how was your June? Anything exciting happening in your summer so far?

August (and fall) Spending

Let’s take a look at why August was so cheap overall at $2,048.29:

  • Clothing: $134.95 (budget was -$8.33)
  • Entertainment: $145.24 (budget was $233.00)
    • Cash withdrawals: $20
    • Social eating: $116.49
    • Netflix: $8.75
  • Food: $405.70
    • Dinners out by myself: $38.22 (budget was $60.00)
    • Groceries: $132.38 (budget was $138.65)
    • Lunches: $235.10 (budget was $200.00)
  • Gifts and Donations: $25.00
  • Housing: $1,346.34
    • Internet: $61.30
    • Electricity: $61.38
    • Mortgage payment: $1,205.79
    • Moving: $17.87 (some small furniture at $89.57, mostly offset by the refund of the security deposit on my old apartment at $71.70)
  • Medical: +$97.88 (reimbursement from my FSA for something I’d paid for in late July)
  • Recreation: $167.70
    • Sport #2: $82.70 (exactly on budget)
    • Sport #3: $85.00 (budget was $87.50)
  • General Shopping: +$39.41 (reimbursement from work)
  • Transportation: $192.63
    • Car insurance: $123.57 (exactly on budget)
    • Fuel: $46.34 (there is a big excess here – budget rollover was $142.83)
    • Work parking: +$6.12
    • Umbrella insurance: $28.84 (exactly on budget)
  • Travel: +$271.20 (reimbursement from work)
  • Total: $2,048.29

So looking at this, there was quite a bit of reimbursements: $71.70 from the old apartment building, $97.88 fro my FSA, $39.41 in stuff from work, $6.12 in carryover of work parking reimbursements, and $271.20 in work travel reimbursements. That totals up to $486.31, which means that I really spent $2,534.60 for the month. I also didn’t have any HOA dues, I was about $100 under budget on entertainment, $10 over budget on food, and mostly otherwise on budget. I guess the weird part was that there wasn’t much in the way of irregular expenses that popped up in August – pretty much just the clothing.

I finally talked to my internet provider and downgraded from the really expensive internet that they had put me on. That should lower my internet bill to closer to $50 overall with fees, rather than $60+, which is nice.

September is definitely going to be more expensive. I need to pay some yearly sports fees, to the tune of ~$1,200. I’ve started acquiring some more furniture for the condo now. HOA dues are now due monthly, as is the condo insurance premium. (My insurance provider doesn’t charge the fees any differently for monthly auto-withdrawals versus paying in full at the beginning of the year.) I’ve also bought some new sports shoes and am trying to find a new pair of daily flats.

October is also going to be more expensive because I have to pay half of the year’s property taxes, to the tune of ~$1,300. I’ll also take my car in for service and renew the tabs on my vehicle for another year.

November, I’m hoping that the car insurance will go down since I’ll be renewing my policy. I’ll also need to set aside $100 less per month to cover property taxes for next year, which gives me an extra $100 to save each month. I normally do most of my Christmas shopping in November when things aren’t as busy, so that’ll be where the bulk of the present shopping happens to my budget.

I used December’s travel budget earlier in the year to make things less negative, so that gives me an extra $350 to save in November (yay!). I may also reduce my travel budget since my parents are paying for my December trip and I had included a trip of a comparable budget in my original travel budget.

My goal for the rest of the year is to get my savings back up up to at least 50% of my monthly net income. I think this should definitely be possible as I won’t pay the full Social Security tax amount with my October paycheck and then I won’t pay it at all on my remaining bonus for the year or the last two paychecks. Regardless, I should hit an overall savings rate of 61% for the year.

Non-Wage Income – Q2 2012 Update

I am now tracking my passive income versus my expenses each month, towards financial independence. This only includes income in taxable investment accounts (not in my 401(k) or in my Roth IRA), rounded to the nearest dollar. I also track my W-2 income to compare to the passive income and my expenses. Watching that income / expenses percentage get higher is really fun as well :)

Since the amounts are so low right now, I’m going to do this update only once per quarter.

Definitions

  • Interest income = the sum of all interest earned in my savings accounts, rounded to the nearest $5-10
  • Dividend income = the sum of all dividends posted in my taxable investment accounts, rounded to the nearest $5-10
  • Expenses are rounded to the nearest $100
April May June Q2 2012 Q1 2012 2012 2011
Interest income $85  $85  $70 $240 $185 $425 $550
Credit card dividends none  none  $10 $10 $55 $65 $65
Dividends $0  $0  $0 $0 $0 $0 $60
Total passive income $85  $85  $80 $250 $240 $490 $675
Expenses $2,800  $4,100  $4,200 $12,100 $14,700 $25,800 $39,600
Passive income / expenses 3.0%  2.1%  1.9% 2.1% 1.6%  1.9% 1.7%

I didn’t have any taxable investments in 2010. I had a very small amount in 2011. I have more in 2012 and my savings accounts had higher balances until I bought the condo, so the interest income should drop down for the rest of the year to closer to $30-40/month. That should be slightly offset by having higher values of stock index fund investments in my taxable account (and thus seeing higher dividends), but we’ll see how that’s looking with the Q3 update!

My goal for passive income (i.e. interest and dividends) for the 2012 year is $1,000, which would cover 2.3% of my estimated expenses for the year.

At $490 after two quarters, I’m close to halfway to $1,000 for the year. Hopefully the reduced interest income doesn’t affect the goal.

Readers, do you track your non-wage income? If so, how are you doing? Do you have a goal for 2012?

Non-Wage Income – Q1 2012 Update

I am now tracking my passive income versus my expenses each month, towards financial independence. This only includes income in taxable investment accounts (not in my 401(k) or in my Roth IRA), rounded to the nearest dollar. I also track my W-2 income to compare to the passive income and my expenses. Watching that income / expenses percentage get higher is really fun as well :)

Since the amounts are so low right now, I’m going to do this update only once per quarter.

Definitions

  • Interest income = the sum of all interest earned in my savings accounts, rounded to the nearest $5-10
  • Dividend income = the sum of all dividends posted in my taxable investment accounts, rounded to the nearest $5-10
  • Expenses are rounded to the nearest $100
January February March Q1 2012 2011 2010
Interest income $50 $55 $80 $185 $550 $515
Credit card dividends $40 $10 $5 $55 $65 $40
Dividends none $0 $0 $0 $60 none
Total passive income $90 $65 $85 $240 $675 $555
Expenses $3,400 $6,100 $5,200 $14,700 $39,600 $43,300
Passive income / expenses 2.6% 1.1% 1.6% 1.6% 1.7% 1.2%

I didn’t have any taxable investments in 2010. I had a very small amount in 2011. I have more in 2012 and my savings accounts have higher balances, so I should see much more in passive income this year. My goal for passive income (i.e. interest and dividends) for the 2012 year is $1,000, which would cover 2.3% of my estimated expenses for the year.

Readers, do you track your non-wage income? If so, how are you doing? Do you have a goal for the year so far?

November update

I still haven’t met my net worth goal of $100,000. The numbers went down this month because I spent a lot of money. I emptied out most of my vacation savings account booking a trip for part of next winter and I bought a new laptop. I budgeted for both of these, so I’m not upset about not meeting the goal, but it does hurt a bit to see my overall net worth go down for the first month since I bought my car. The investment losses certainly didn’t help, but what I can control is the spending and that was all budgeted for.

In October’s update, I commented on the fact that the dividends on the bond fund in my 401(k) have been going up slowly each month since June and contemplated whether the dividends for the fund in November would surpass $10 and they did! I like those small excitements :) I think that’s also partially why I’m so good at saving – somehow $0.50 of interest can still excite me, no matter how much money I have.

I am getting excited (yes, I’m crazy!) watching my 401(k) get closer and closer to being maxed out for the year! I only have about 30 days to wait for that to come true :) Sometimes I can change the Plan too often when I get anxious, so I am really proud of myself for making this goal a priority. It has been amazing to watch the balance year-to-date grow on the Vanguard website, even though I’ve seen investment losses most months this year.

Due to the laptop purchase, I didn’t put as much into my down payment savings fund as I had hoped this month, but it’s still moving along slowly. I’m pretty confident that I will reach the $27,000 goal that I had set for myself at the beginning of the year.

I am not a big eater, so being single, I think I actually save quite a bit on eating out and groceries. It’s difficult to compare the numbers exactly and do a good A/B analysis to determine a specific dollar amount that I save, but it’s definitely something and noticeable in my spending analysis, which is interesting. Other people have suggested that it’s cheaper when you’re not single, but I think that only would apply to housing expenses for me.

I’ve been wondering whether or not I would qualify for a mortgage when I wanted one based on my small credit history report, but I did in fact qualify for pretty good rates and at the purchase/loan amount that I’m looking at. I’m still in the process of looking for a particular place that I want to buy and live in.

October update, part 2

I spoke too soon yesterday. I’ve run the final numbers now and my net worth as of October 31st is $99,965.11.

Part of me wants to count this as meeting the $100,000 goal since I have about $73 in cash in my wallet. I took out $60 from an ATM on Friday, thinking I would need it over the weekend, but I didn’t end up needing it and now I didn’t hit my goal of $100,000 in the bank because of that. I don’t track physical cash in my assets because it’s really hard to keep track of its disappearing acts sometimes – so once it’s out of the ATM, I consider it spent as “Entertainment – ATM Withdrawals”.

I am a tiny bit bummed because I didn’t hit the goal, but the only reason the goal was even possible this month is because my investments rebounded so much in October, so I don’t think that this is completely my fault, nor can you really say that the only reason I didn’t hit my goal this month was because I took an unnecessary $60 out of the ATM on Friday.

Something I have always been good at is enjoying watching the little things increase. For example, the dividends on the bond fund in my 401(k) have been going up slowly each month since June: $6.57, $8.29, $8.49, $8.70, $9.65. Maybe November’s dividends for the fund will surpass $10!