I have to say, I certainly started off 2018 on a better foot in terms of total savings rate. Then again, we also didn’t take my grandmother to Hawaii at the start of 2018. The good news is, March is a three paycheck month and it should go a long way to balancing things out, as long as nothing unexpected shows up that month.
It’s funny how just a year and a half ago I would have been absolutely amazed at a forty percent savings rate, whereas now I’m just annoyed that we’ve come up short of fifty percent for too many months in a row (Not since August. Ouch). I had considered trying to push out our savings rate goal a bit farther this year, but ultimately got convinced to keep it at the same fifty percent as last year since we came up short at an average of 46% for 2018.
In order to average 50% in the first quarter of the year, our March and April savings rate would need to be 63% each. I expect that won’t happen for April, but March has a possibility of landing in the high sixties, so maybe I can pull off that average. It’s a bit frustrating that a fifty percent savings rate is still so hard, but I suppose that shows just why it is such an impressive feat to accomplish, especially on median salaries.
Monthly Financial Update
And now for the details as to where we actually did spend our money in February. Compiling these reports take some time each month since we don’t fully combine our finances and each have reimbursable work expenses from time to time, but I have to say that tracking things this closely has been the number one piece to our success and the reason why we doubled our savings rate in 2018.
There are months that I really would rather not share because we’ve come up short from where I’ve publicly announced I want us to be, but the accountability and forcing myself to look closely is what has kept us in check. While some people seem to have super frugality on autopilot at this point, and while we have reasonably low fixed expenses for a high cost of living area, we constantly have to pay attention to our discretionary spending, especially when it comes to food and non-physical expenses.
While we did pay for the Airbnb in Hawaii prior to taking the trip, we did pay for the car rental in February as well as a few other minor incidentals like parking and park entry fees. Still, for a Hawaiian vacation, we did a good job keeping our costs down while we were there – as long as you ignore what we spent on food.
Ah, food expenses. Again and again, this is our Achilles heel when it comes to our savings rate. I think I’m glad I decided to split out our vacation food spending separate from our grocery bill at home, but we sure did spend quite a bit on food and drink while we were in Hawaii – $464.36, or just over $77 a day for the three of us. Considering we cooked a decent amount of our meals at the rental, that is A. LOT. And this didn’t even include the luau dinner.
And then, there’s the amount we spent on food for the rest of February after we came home. I thought we had actually done pretty well here since we didn’t eat out much otherwise and cooked quite a bit from scratch. I didn’t think about the kiddo’s birthday party though.
We may have made the pizzas and the cupcakes from scratch, but feeding two dozen people still adds up (we also bought a large bag of cheese and caramel popcorn and some large bags of broccoli, celery, and baby carrots for a vegetable tray as well). I suppose for a kid’s birthday party, we still didn’t spend all that much compared to what most people spend, but since it was all food expenses it certainly made up for the week we weren’t home.
We also had the long weekend where we were snowed in with our neighbors, and while we cooked all our meals together, we did buy some fancier stuff for some of the meals than we would otherwise, and that pushed up the cost a bit as well. And then there are the days where my husband went off to the store by himself and brought back Dungeness crab.
Considering our four year old will eat an entire crab by himself, he more than makes up for the fact that I don’t eat most seafood. My husband loves that he enjoys the stuff as much as he does, but it certainly doesn’t help our food budget.
I’m writing this after we’ve just gotten home from an evening out at a sushi restaurant (goodbye, another $60), but I’m determined to make March a much more reasonable month with food expenses than we’ve started out this year. Final note here: alcohol spending was up as well thanks to stocking up at both Costco and Trader Joe’s.
Nothing particularly special about this month here, other than to note than $250 is now an “average” month for us without a single vet visit – just the cost of medication, pill pockets, and food. The average for all of 2018 was $350 and I expect it will be about the same this year as well. Still, our dog is doing so much better than I could have ever hoped for a year and a half ago and I am so thankful to still have her around and currently snoring at my feet.
The one upside of the ill fated trip to the Northwest Flower and Garden Show last month was that I did get a chance to pick up some seed potatoes and a few other seed packets. My very favorite potato variety, Viking Purples, apparently had a bad blight though and are not available this year. The kiddo also picked out some corn, so we shall see if we can actually grow any (I’m not sure if we get enough heat and sun in our yard, but we’ll give it a shot).
Total cost of gardening supplies for the year to date: $36.61. I put the show entrance fee of $23 under miscellaneous because I feel that was more entertainment than specifically a gardening cost.
The strange part though is that we are still getting quite a few hard freezes and my raised beds are still under a layer of snow, so I haven’t even been able to start thinking about planting anything for the spring. By this time of year, I’ve usually planted a few things and be getting ready to plant the potatoes in a couple weeks. Looking back at my garden update from the end of last March makes it obvious how much colder it’s been. We are definitely a good month behind typical this year.
I gave exactly $0.31 more in February than I did in January, completely unintentionally. I have to say though, I absolutely gave more at the end of this month in order to keep up with what I had done in January. To be honest, had I not committed to sharing that percentage here this year, I wouldn’t have given as much this month.
Because I knew I would be sharing it here, I kept track a bit more closely than I have the previous few years. While I’ve incrementally increased my giving in a real way since 2017, I expect 2019 to do even better, and absolutely in part by including that percentage here. I simply do better when I share and keep myself accountable publicly.
I wasn’t certain if I wanted to share even the percentage here, but as it is getting me to open my wallet even more, I think it was absolutely the right choice.
|January 2019||February 2019|
|Excluding Mortgage Principal||34%||40%|
If you noticed, we spent almost exactly the same total amount in February as we did in January, but our savings rate was higher. This was thanks to our quarterly investment payments for both our real estate investment and my small amount in a dividend producing stock. That money went immediately from our bank account to our retirement accounts, and it felt so good to be re funneling that passive income into something that would continue to grow that passive income in the future. It’s way too easy for that money to disappear if it isn’t immediately put away.
0% Interest Credit Card
So I ended up opening a 0% interest credit card in the fall of 2017 after we had back to back to back expensive months. We had originally planned on draining much of our emergency fund in order to cover the costs, but I decided to look into a credit card transfer offer because the idea of reducing our liquid savings so drastically really stresses me out.
When I figured out that the Chase Slate would give us a 0% card for fifteen months with a no cost transfer, I decided it was the best choice for my peace of mind. Champagne and Capital Gains wrote an entire post recently on this kind of decision and I understand her rationale completely – using your emergency fund is actually terrifying.
While I absolutely could have paid the card off faster, I decided to prioritize other savings and investment vehicles like maxing out my IRA for the first time. The 0% rate was expiring in early March though, so I made that final payment and it feels awesome to have it gone and done.
Now that we have so much space between our base expenses and our total income, months like those wouldn’t put us in the red like they did then. No matter what your long term goals are, having the space to weather the unexpected storms is such a great goal to have.
For all that we have done so well in the last year and a half since I decided to really focus on our finances again, I do wonder if I am making excuses to some degree. We have had too many sub-fifty percent savings rates in a row, and while some of the costs are completely justifiable, I feel like we could be doing better and need to really get focused this spring.
Oddly enough, we also had a great month for no spend days in February (twelve of them), and January was the best yet at fifteen, but neither were anything spectacular as far as overall savings rate is concerned. It almost seems like there is inverse relationship lately between no spend days and total expenses in a month, and I’m not sure why that is.
I’ve done so well cutting out the little fluff but it seems like there have been some bigger expenses each month (or a vacation). Perhaps this is just the cycle we’re in, or perhaps there’s something more going on. I’m not quite sure yet. I will continue tracking closely though, and watching where we spend our money. No matter what, we will save a whole lot more this way than if we just “spent less than we earned,” as we’ve learned from past experience.
The best news is that March is a three paycheck month for both of us, as I mentioned, so it is an opportunity to really get ahead and get closer to that average fifty percent savings rate for the year. We also don’t have any large trip plans for the next few months, so our vacation spending should be lower as well.
Of course, there will be vet bills and home maintenance spending, but those we have less control over (other than doing the work ourselves, but we already plan to do that). Either way, both *should* be a manageable level of cost this year.
This is definitely one of those times when I’m glad that we have no desire to retire at the early end of when we might hit financial independence, because then I would be really frustrated that we haven’t been hitting that savings goal every month, even if there are good (as well as not so good) reasons for it.
If we were solely focused on hitting a specific number on a specific date in order to quit our jobs as soon as possible, we would make different decisions than we have recently. We might not have gone to Hawaii. We definitely wouldn’t have paid for all the awesome food we ate there, and we wouldn’t have attended the luau, which was one of the highlights of the trip for my grandmother.
I feel very strongly that we need to balance looking to the future along with enjoying and appreciate the days and years we have now, and I think the sprint to financial independence and early retirement can be very damaging if all that matters is that end goal. Financial security and eventual financial independence is extremely important to me for myriad ways, but so is living for today.
I just need to remind myself of that sometimes when the numbers don’t look as perfect as I’d like them to. We’ve made intentional decisions about our incomes and most of our spending (expect for maybe a bit too much on food, as always). If I look at our month and don’t see anything I’d change in a big way, then I think we’re doing it right.
Do you have a set “enough” number? How do you balance future versus present?