I adore three paycheck months. While I realize that our overall income doesn’t change whether we get paid twice a month or every other week, I do prefer it this way because it feels awesome to have a big “bonus” month two times a year, and it’s a big mental boost to be sure. Money is an emotional thing no matter what we may try and convince ourselves otherwise, and playing into those emotions can either be a really good or a really bad thing.
Similarly, I can understand why some people choose to have a big tax refund each year even though it isn’t optimal. You can make bigger moves when you receive a lump sum all at once, and as long as you can use that as motivation to do good things with your money, it can be a really powerful thing.
Of course, just like if we used our three paycheck month to blow a paycheck’s worth of money on random stuff instead of using that extra intentionally, this can backfire if it ends up slipping through your fingers when it all shows up at once. As always, personal finance is personal, and knowing how you manage money best is the way you should go forward, whether or not it’s the way other people manage theirs.
Monthly Financial Update: March 2019
Not only was this a three paycheck month for both of us, but it was also the month where I got a raise! I also finally calculated bonuses that came due over the previous months, so my income this past month was significantly higher than it normally would be, even without the extra paycheck. Calculating it out though, it’s a bit staggering to realize that is what a normal month would look like if we each made the median income for a single person in our local area.
Granted, the median income for our area is REALLY high – King County in general is $72,380 for a single person and our city is significantly higher than that – but there are plenty of people here that do see those paychecks on a regular basis. We do make really decent incomes, but a month like this sure makes it clear that this whole financial independence thing is a whole lot easier with a high income. That obviously doesn’t mean that it isn’t possible on a middle or lower income, but the journey looks a lot different (and a lot slower) than someone who makes a technology or engineering salary.
With all of that said, I love my job and have no intention of changing careers to find a higher paying opportunity, and I’ve given up significant income over the past three years by cutting my hours to 80% time. The financial independence community does so many things well, from optimizing expenses to just those things of true value, to reducing the environmental cost of a traditional lifestyle, to eschewing expensive non-essentials that society says are needed to show you’ve “made it.”
But one thing this community tends to struggle with is when to say they have enough and enjoy the journey along the way instead of sprinting dead out to the financial independence finish line. My goal is to instead have a life that doesn’t look and feel all that different from the one we will have when financially independent, and that means I am giving up quite a bit of income in order to have more work-life balance now.
And then, there’s the part that we still need to work on. While we have no intention of ever getting our total food bill down to four hundred dollars a month like some bloggers I know, we regularly struggle with keeping it to what I would consider to be a reasonable number. My goal this year is to keep our total food related expense to under a thousand dollars a month, and we completely failed on that this past month ($1,319.76 to be exact – whoops). We even did better in February, when we spent the first week in Hawaii.
March didn’t have one large restaurant bill that stood out by itself, but we spent a decent amount on quite a few meals. We spent $85 out at breakfast with my family and picked up the bill for the five of us. We actually got out on a date night and spent another $55 at an awesome Thai restaurant in Seattle.
We picked up teriyaki for us and our neighbors one day after work after hanging out in their yard in the sunshine (and they provided the drinks). We went out a couple of times while down in Portland. And then there was a sushi dinner the first weekend of the month, plus refilling the coffee card for the shop my son and I visit a couple times a month before preschool.
To be honest though, I was shocked that our restaurant spending came in at almost $700 in March, even with the extra meals out (and including $200 in work lunches for my husband – which he has intentionally decided are worth it to him). It goes to show though how easily we could fall back to our old ways of spending $2,500 a month or more on food. It feels a little painful sharing this here, because it’s such a big number, but I’ve promised you all to always be completely honest, even when things don’t look perfect. And, well, our food spending definitely wasn’t perfect this month. But it sure was tasty.
**A quick note here: this does include generic household expenses like toilet paper, soap, and toothpaste, etc that get lumped in to our regular shopping. It’s never an overwhelming amount of money, so it’s easier not to separate it out. The home/tools category is solely for larger items like de mosser for our roof.
Pet Care Expenses
Our dog has two vet appointments in March on top of her medication that already costs $150 a month, so it doesn’t take a lot for this category to grow large. Luckily the other three animals (dog, cat, and snake) don’t have any health issues, but our one dog sure more than makes up for it.
We’ve been so lucky to have more than a year and a half of healthy time with her since her diagnosis of dilated cardiomyopathy, and she is so worth the cost of good health care and the medication that’s given her quality of life back.
This category is truly miscellaneous this month: payment for more soccer class at preschool (our son’s favorite part of the day), ammunition from Cabela’s for a shooting trip of my husband’s, and a medical bill for me. Bizarrely, this was all of a $0.09 difference from last month, which was a completely different set of expenses. Why they land here rather than in any other category.
Outside of the categories detailed above, this was a really typical month expense wise. If anything vacation spending was quite low considering a trip down to Portland and then a last minute camping trip. Both weekends were very inexpensive, but no less wonderful for lack of spending.
Gardening was a nonexistent expense thanks to the extra long winter, and clothing was yet again zero thanks to my ongoing clothes buying ban and hand me downs to my son. My husband will have a few things he’ll need to replace for work soon, but that hasn’t happened quite yet.
Alcohol included a visit to a winery with neighbors along with a pizza lunch there while enjoying a sunny day, but then I ended up buying another bottle to take home with us. Which I then have since not opened because it’s more expensive than I normally buy, making me want to wait for a “special occasion.”
Vehicle and transportation costs include public transit in Portland and an oil change / plug replacement for my car that I kept putting off and just ended up paying to have it fixed. I’ve found that we only save maybe $5-$10 if we do our own oil changes, so we just take them in to the shop and save our free time for other things.
Sharing even my giving percentage (though not total number) is new to me this year, and so far I’ve been very happy that I decided to share it. Like most of my goals, I simply am more likely to achieve them when I commit to them for myself and to share publicly here.
I had already given what I expected to be my total for the month of March when I heard about Josh sponsoring a woman to take an introduction to investing course, and then that others stepped up to sponsor others when the list of interested women was long.
Without thinking, I automatically said I wanted in. I then relooked at where I was for the month, and figured I would need to pay for it in April instead of March – until I remembered the three paycheck month and as such, my giving should have been higher as well. The more I give, the more I find I want to dig down and give more, and this was definitely the case. While still well short of the 10% some people find in their budget, I’m happy to see that number continue to climb. And sponsoring a woman to get informed about her finances? I am all for that.
Monthly Spending (Excludes mortgage, daycare, insurance):
|January 2019||February 2019||March 2019|
|Excluding Mortgage Principal||34%||40%||66%|
Thanks to the significant additional income this month compared to normal, we’ve tied our highest ever savings rate for an individual month. While it was also a three paycheck month, it didn’t have any additional income outside of that, so we spent significantly less that month to hit that percentage.
When combining the first three months of the year, we’ve averaged a 47% savings rate thus far, just slightly shy of the 50% goal that we have again this year. We came close in 2018, but a bit short at 46% overall, so I’m very hopeful we can make that full half savings rate on average by the end of this year. I don’t expect to have another month with as high of income as this one, so we’ll definitely have to reign in our overall expenses to get there. No matter what though, we are doing a much better job by paying close attention rather than just simply “spending less than we earn.”
How do you reign in your Achilles heel of spending? What category gives you the most trouble?