We spent what felt like a lot of money this month.
I have to admit, I put off adding up our expenses in January because I just knew we hadn’t done as well as I would have hoped when I set our big financial goal for this year. After all, we decided to go out of town for my husband’s birthday and splurged on a bigger rental house for the weekend, spent some time in breweries and restaurants, and started paying for some of the expenses (airfare, lodging) for a big trip coming up in May. Plus we went out of town again last weekend, but camped in the truck to keep costs down.
I couldn’t get myself to regret any of our purchases over the month, though, because they were in line with what we truly value. I went into this year knowing full well that the goal I set for us is a stretch one, and we may well fall short by some margin. However, we are in this thing for the long haul and won’t pinch pennies in areas that feel like deprivation. The goal is to be simply much smarter about where our money goes and make decisions about where we spend it, instead of coming to the end of the month and figuring out where it went.
What we didn’t spend money on this month.
1. Coffee and take out lunches
I did not buy coffee or lunch out any day this month (my husband did have a couple McDonald’s/Subway meals but I won’t begrudge him the occasional hot lunch – he has no microwave at work). I’ve been fighting this habit for a good year now, and it’s finally starting to feel like the new normal. As much as I love coffee shops, they were taking way too much of my money and I wasn’t getting nearly enough value in the exchange.
2. Clothes and shoes
We didn’t spend any money on clothes again this month (February marks a one year clothes ban for me!) and I still have plenty of clothing for my son in larger sizes thanks to hand me downs, clothing swaps, and occasional thrift store purchases. My husband got some great new work clothes for Christmas, so he’s covered for a while as well.
All new books came from the library. The best part about this beyond the cost factor is that we get to read a ton of different books but we don’t fill up our house in the process. I really can never say enough good things about the library.
4. No spend days
We had another 12 days this month where we spent absolutely no money. I’m learning that these days are so powerful for us because they’re a way to cull the extraneous costs that don’t bring great value to our lives.
Now that I’ve outlined where we did and did not spend money in January, I should probably share the numbers. Like I said at the beginning, I really didn’t want to add everything up because I knew we’d spent too much. There’s no way we could have such a fantastic and busy month and hit our savings goal at the same time. We are solidly in the median income bracket for our area and don’t have crazy high paychecks coming in every two weeks.
However, I promised that I would be transparent and share our monthly spending for all of 2018, so I reluctantly added up my daily ledger – which I did keep up every day in January! I was proud to have kept up on tracking, at the very least. I told myself that I would share even when our savings rate fell well short of our 50% goal. So without further ado, our numbers for the month.
January 2018 Spending (Excludes mortgage + daycare)
Spoiler alert: we saved 53% of our income this month. Freaking fifty-three percent.
|Excl Mortgage Principal||47%|
**note that for better or for worse, we have seen a slight uptick in our take home pay as the new tax bill was implemented at the start of the year.
I think it’s going to take a number of months of this high savings rate for it to feel real and achieving enable to me. We spent years doing “pretty well” with a 22-23% savings rate, but it honestly didn’t feel like there was that much room for improvement, unless we really wanted to give up our vacations and weekend adventures. Only now am I realizing how much fluff was actually in our monthly spending – and that most of us didn’t add much value to our lives.
I actually had to triple check that our mortgage had been paid (no, I do not automate almost any of our bills) because I couldn’t believe we still had so much money in our checking account after it had been pulled. As in, it now feels like we have a full extra mortgage payment to put toward savings every month because we’ve cut out the mindless extras. It never felt like we had inflated our lifestyle by that degree, because it came in small increments as our incomes increased, but we had really expanded our “needs” over time to fill our larger paychecks. My younger self working part time at Petsmart while paying off student loans would be shocked to see how much money we were able to spend every month. Lifestyle inflation is seriously a thing. And it’s taken a full year of incremental changes to finally take back our financial future into our own hands.
A few more months and I expect to have a good enough sense of our (new) regular spending to set some actual FI milestones for us. So far we’ve just been focused on increasing savings with a nebulous FI date somewhere in the next 15ish years. Since it’s so far out – and neither of us is ready to quit our jobs anyway – this calculation hasn’t felt as important. But as our spending shrinks and our savings grows, that fate looms a bit closer and I’d love to know where we really stand.
Where our savings has gone:
1. Slowly refilling our emergency fund, and then expanding it. After all the unexpected expenses we had this past summer, I’ve finally become a believer in a larger cash emergency fund.
2. Paying off our real estate investment. We paid off an additional $800 in January, leaving the final balance at $2,948.91.
3. Contributing to an IRA. I’m currently backfilling for 2017 because I didn’t max it out, and the tax benefits are greater for this tax season than next.
One successful month down, another 11 to reach our big goal this year of a 50% savings rate.