We’re closing on our lot out in Canyon Lake this Friday and we’ve been doing a lot of reviewing of the numbers and seeing if we can make them work to start our Lifestyle Change. It’s difficult to know what will come of all of this, and how accurate they will be, because they are all estimates based off of our current house/utility usage, current lifestyle, and some moving forward assumptions. We have tracked our spending for over 2 years now, so we have that to go off of, but again, they’re all just estimates. Since that’s the best we have to work with, it’s what we’ll move forward with in our planning scenarios. The short answer is that we’ll be right around break-even or living paycheck to paycheck. We’ll only need to draw off of investments for travel and unplanned items that pop up, assuming I make zero money.
What a month it was around our household. There was a lot going on and the year of spending seems to continue. Some quick highlights were that we found a lot around Canyon Lake that we liked and are closing on that in a week, woohoo! We finalized our vacation plans up to MT and ID for the summer trip and I can’t wait to get to hang out in that part of the country for a few weeks. Property taxes just keep rising, but it looks like home value is actually commensurate with that this time. I’m trying a new cell phone plan that will drop my part of the bill to only $17/mo. More on that to come. Overall, it was a pretty rough month financially even though it was a great month in every other aspect. For more details read ahead, and for everyone else, we’ll see you next week with a detailed finances post about our Canyon Lake Fully Funded Lifestyle Change projections.
Okay, I know that in this “financial space” it might not be gauche to talk about why saving money isn’t worth it, but hear me out. I made a mistake a week ago and thought I’d save myself some money. To save myself ~$8 I cost myself almost 3 extra hours of time. Yeah, that doesn’t sound frugal, that is starting to sound cheap, and not to mention I cost myself a lot of extra work too. What mistake could cost me that much time for so little money? Brewing beer. Yep, homebrewing can be a great way to save money per beer, but when you add in the time cost, for me at this point in my life, I’d rather have time over cheap beer. So here’s what started the “saving money” idea and what led to me understanding how much that “saving money” actually cost me. I basically cost myself 3 hrs of working time to save myself $8, wtf was I thinking?! How did that even make sense?! This is what made it make sense in my head and how I forgot why I quit all-grain brewing to begin with.
February was a great month for us! Or maybe it wasn’t who knows? Oh wait, I should know… Maybe I should write “February was A month for us!” and just leave out a descriptor, good or bad. There wasn’t a lot of change although I noticed our “pets” category comprised 10% of our total spend for the month. Yipe! I got a bonus at work – woohoo! That was pretty unexpected considering we still didn’t make money last year, but I am not complaining. Beyond that, it was a pretty normal month. For the number voyeurs out there, here is a look at the charts and graphs of our spending and how it stacks up to last month.
January, thank goodness you’re over… It seems like once one thing gets taken care of another comes up. So how did January pan out for us – expensive. Lots of deltas, not too many plusses. Some of it was fun, some of it was sad, and some of it was routine things that snowball into more expensive costs than we expected. Here’s the rundown of our spending this month and where we are in relation to our FIRE/FFLC goal.
November, the month of high spending, at least around this household. I realized mid-month that last year we also had a big overage in November due to an errant $1200 grocery bill that month $350 of it was a wine/liquor restock that got moved to “shopping/misc” lol). This month looks like a similar high spending month, though not due to groceries. My thoughts for this recurring phenomenon are two-fold. First, I think we do a pretty good job of staying on track most of the year, so we’re bound to have some “off” months. Secondly, I think November is the month that we let down our guard because we’ve been doing so well relatively speaking from the rest of the year.
Like me and Calculus – as long as I diligently did the 2-3 hrs of home work every week, I could get A’s on the tests. As soon as I stopped doing homework because I thought, “I’ve got this, I don’t need to do the homework”, I get D’s on the tests. I only got A’s because I was mindful and worked hard at it, and staying on track with our spending requires a similar effort. I think this is why so many people find tracking spending or trying to stick to budgets so discouraging. You can’t be perfect all the time. Except, I’m okay with that, just not every month, lol. Without further ado, here’s how our November spending broke down.
August, what a great month! It’s my birthday month, yeah Leo’s, it starts the slow trend toward cooler weather around here (it’s still supposed to be 92 today), and now we have school starting to add to the list for August since our oldest started kindergarten this year. How did all this affect our spending though? There were some minor upticks in spending due to kindergarten, life, and oh yes, the allure of a new grocery store. For the full report out and comparison spending chart read on.
Well, another month has come and gone and we are now halfway through the year. So far tracking how our our “real” budget numbers compare to our anticipated Fully Funded Lifestyle Change costs we seem to be pretty close. We have been averaging $4035/month spending and that’s assuming no mortgage, which ends up being ~$48420/year needed. We like to add in a little slush/cushion to round up to $55k, which is what we are generally assuming our year to year costs to be and we’re right on track. Heck, we’re even under budget, which I will never complain about. So what were the big hits and little misses that we saw this month?Time to get into some details!
Hooray us, as it has been a nice and fairly uneventful month financially! Any questions? See you next month then! Kidding… Personally, it was a pretty exciting month though. Mr. SSC completed his first half-marathon, and Mrs. SSC is gearing up for a new job (hopefully, because so far only a verbal offer has been given, and the school seems completely bogged down in their bureaucratic hiring practice – but she is assured weekly a legit offer is on the way…). Only time will tell how that plays out, but is it an omen of disappointment and frustration that they’re that inefficient? Here are the highlights and how it all panned out.
As you may know, Mrs. SSC has been looking for teaching jobs, so every week she gets emailed new postings and if she sees something that looks interesting for me, she will also forward it along. I had an interesting job opportunity forwarded to me from Mrs. SSC that we both would seem to fit, and the company wanted both a geophysicist and a geologist. Double bonus! We figured it could fit our needs if we both got an offer, so we applied.
Last week, I got an email from that company saying that they would be interested in talking with me about the position. I returned the email and gave them some open dates and they responded with, “Would you be free tomorrow morning around 9am?” I was excited because who doesn’t like getting picked, but the down side was that Mrs. SSC hadn’t been contacted, bummer…
During the call, I found out about the position, job responsibilities, office setup, and more and it sounded great. Better yet, I qualified to start on the upper end of the pay spectrum, around $95k/yr! My schedule would stay the same with 9/80 style, and there were some other Lifestyle Change perks as well, but it was looking pretty good.
Then, reality struck, hard and heavy. We had already vetted some cost of living (COL) increases in this area, assuming we would both get offered positions. Even then, we knew that with 2 salaries it would be tight, because I haven’t mentioned this part yet, but this job was in California… GAH!!! We thought it would be worth it though, because we could start our Lifestyle Change a bit early, but just take a different path than we planned. I mean who wouldn’t want to live in California for a few years? This would be in Camarillo, which is near Ventura and Oxnard, and has topography, and well a milder version of seasons, but at least different from Houston. Also, there are a lot of parks and hiking around there, as well as the beach, and other fun stuff to do with the kids. You can even see snow on the surrounding mountains in the winter! Oooohhhh….. 🙂 Based on those types of things that we want in our Lifestyle Change, we thought it would be fine to go there for a few years, even if it would delay things a bit. We’d have better work schedules, and be living in a better geographically pleasant area.
I started doing some rough calculations based on what we spend now per month on essentials to see where how good or bad it might be. Since we’ve got a solid year plus of tracking that info, it was easy to ballpark the COL in California. When I started adding these up we were left with about $265/mo left over. This was assuming no daycare costs with Mrs. SSC staying at home, and other minor adjustments like no maids, no cable, no gym, etc… When I got to the end of the month, I had very little left over… It was depressing, as you can see in the chart below.
Even with big unrealistic cuts, it’s tight.
Between taxes (27%), 5% contribution to 401k, and housing which was about $2600-$3600/month for a 3 BR house, we were left with enough to survive and that’s about it. This would mean that we wouldn’t be able to add anything to our “extra” retirement savings, no college savings for the kids anymore, no allowance money, no replenishment of the emergency fund if/when something happened, and no extra money for anything. It’s good we’d be in beautiful CA, because we couldn’t afford to leave to travel anywhere else. With realistic tweaking of the budget averages from last year we would only have an extra $3100/year. Per year… That was not adding in the real adjusted COL to our averages, rather assuming we could cut ~10% and the rest would take care of itself in the wash.
I looked at our highest spend categories to see what other cuts could be made. Our car insurance is about $182/mo for both cars, but we have another year of $323 car payment on Mrs. SSC’s vehicle. So even if we paid it off before we left, which would be entirely doable, that still only frees up another $3900/yr to buffer the budget. Also, I asked Mrs. SSC, “What’s the house and misc. shopping, do we spend that much just shopping?” She said, “Well, that would be your clothes, my clothes, the kids clothes, light bulbs, toilet paper, stuff like that… You want toilet paper right?” Hahahaha Not a whole lot of wiggle room there either, especially since our allowances wouldn’t exist and they used to cover our clothes. We don’t want to derail our FFLC plans this close to the goal, so I ultimately had to turn the position down because it would put us in a negative/neutral financial position.
Thinking about this from a standpoint that we’re in now though brought me back around to the positive side of things. First, it’s good to know that in a few years, this position might be open again, and I would be an effective shoe-in to get that spot. Second, since we’d be at our FFLC number, we wouldn’t have to worry about whether we have extra savings to add to it, because according to our plan, we’d be living off of it solely without any extra income. A position like this would effectively allow us to live in CA with the only real expense being me working for a year or so. Since we wouldn’t be touching our savings, they’d just grow too. Now that’s a win! Third, this is exactly what Mrs. SSC has been talking about in the sense that if a geologist job or other random teaching type of position opens up, it’s fine if it only offers $30-$40k/yr if it’s somewhere that we would like to live for a few years. We could live somewhere fun and interesting, explore around there for a few years or more, and then move on to the next cool place.
This whole exercise did make me realize that our budget for FFLC is looking pretty nice though. Even with it re-adjusted since we’ll be renting for a couple of years, and then possibly buying in a more long term area, we should be doing well and living fairly comfortably without a lot of worries about needing extra income. Also, I realized that if any unexpected expenditures that come up, we have our allowances to use as a buffer, which is comforting too. In the end, it did end up with me feeling a lot better about our numbers, plans, and expectations of our Lifestyle Change. I’m even more excited now, knowing in another year or so, we’ll be in full control to do what we want, and not have to be constrained by the thoughts of “Can we afford to live there on that salary?” That is a pretty cool feeling. Until then, we’ll just keep sticking to the plan and counting down days. On the plus side, we’re under 850 days to go until then…
breakdown from Smartasset.com and their tax calculator
