Catch Up Series: March 2016 Income, Spending and Investing

At the bottom of this post is a screenshot from the spreadsheet I was using in 2016 when I became serious about tracking my income, spending, and my investing.

In hindsight I wish I had made these posts in real-time, as my situation was unfolding. I had intentions to do so, but, I was focused on graduating at the top of my college class and landing a job that would triple my income.

This is for the month of March, 2016.

Let’s see what we’ve got!

Total Income: $2963.45
Total Spending: $1402.50
Total Invested: $873.99

% of Income Invested: 29.49%

Total Net Worth: $26,497.35

Ahhh…there we go. The sigh of relief I’ve been waiting two months for.

The numbers look really good for March, but there’s an obvious explanation. Found under the category of “Random/Other/Found” is where I list my federal tax return.

I was in school for the latter half of 2015, and worked a low paying minimum wage job for the first half. I was also receiving income support while in school through a Government run program that aids in the re-training of adults. Combining these three scenarios allowed me to reduce my income tax burden, and receive some refundable tax credits I otherwise would not qualify for.

I can remember thinking, “damn! I was only 4 cents away from receiving more than $100 in dividends and interest payments for the first time.” And, “I need to stop spending so much money on alcohol!”

The alcohol spending has always been a problem. The more updates I post the more you’ll notice; especially when my income spikes in 2017.

It probably sounds defensive but I should point out that that number includes alcohol I would purchase for my wife, way-too-expensive drinks bought at restaurants, and it naturally reflects the higher cost of alcohol where I live; a government run monopoly is likely responsible (e.g. $45 for 24 cans of beer).

Otherwise, I have to say, seeing my net worth jump by about $3000, or nearly 15%, was exciting. Crossing $25,000 seemed symbolic as I was officially 1/4 of the way to $100,000.

Click the picture below if you want to explore the different categories.

 

March 2016. Income, Spending and Investing

Catch Up Series: February 2016 Income, Spending and Investing

At the bottom of this post is a screenshot from the spreadsheet I was using in 2016 when I became serious about tracking my income, spending, and my investing.

In hindsight I wish I had made these posts in real-time, as my situation was unfolding. I always had intentions to do so, but, I was super focused on graduating at the top of my college class and landing a job that would triple my income.

This is for the month of February, 2016.

Let’s see what we’ve got!

Total Income: $1186.75
Total Spending: $1235.46
Total Invested: $342.30

% of Income Invested: 28.84%

Total Net Worth: $23,367.33

Once again you can see that the numbers don’t make sense. I was in the red, having spent more than I earned. I still managed to save/invest over $300 of my $1186.75 income. I was determined to maintain a 25 to 30% savings/investing rate while in school, even if it meant that I was dipping into my emergency fund. It was a fluid fund, it ebbed and flowed.

The mental satisfaction that came from investing each and every month, using the “pay myself first” method, was more important to me than rationalizing my income and expenses. I know, that’s weird, and not sustainable, but it all worked out. These numbers are three years old, and where I sit now is more or less where I want to be in 2019.

Click the picture below if you want to explore the different categories.

Hitting the Brakes on My Savings Rate

Becoming obsessed with savings rate is not a unique experience. I’m willing to bet it’s kept many of us awake at night after learning about its importance in the pursuit of financial independence. To me, it feels like something that I should have complete control over, but I’m not sure that’s realistic.

It’s a love/hate thing…is this feeling sustainable?

Like so many, I stumbled upon the glory of Mr. Money Mustache years ago, seemingly out of nowhere, and became intrigued. I’ve always been the nerdy type, so percentages and numbers were right up my alley. At the time I was broke, living in “negative net worth” land, and working minimum wage jobs. Getting a full 40 hours a week was reason to celebrate. Coming across his now classic article (The Shockingly Simple Math Behind Early Retirement) lit a fire under my ass.

I was slowly creeping nearer and nearer to my 30’s and I was pretty down in the dumps about not having any “marketable skills.” I knew I wanted to go back to school to acquire some, but I was confused about what direction to take, and I was scared to commit.

(If I’m being honest, I’m still not sure I made the right decision. But at least by understanding the possibilities of FI, and the power of a healthy savings rate, I’m able to have short term focus that is leading to positive change.)

Anyway…

After months of checking out local colleges and asking strangers and friends alike, I settled on a two-year program that offered a good shot at landing a job in my home province in Canada. By researching the job opportunities, I learned that the industry average for starting salaries in this field were between $60 000 and $80 000/year. Coming from someone making $15 000 to $20 000/year, this possibility didn’t feel real. I started frothing at the mouth, fantasizing about seeing my savings rate at 75 or 80 percent.

Well, here I am.

• College = done
• Professional license/ticket = acquired
• Job near my hometown? = affirmative

Last year (2018) I pulled in north of $80 000 (gross) after my first full year on the job. 70% savings rate was within my grasps!

Then, suddenly, I asked myself:

What am I doing?!.

I wasn’t miserable, but I was pinching pennies. I found myself worrying over buying life improving items, such as new sneakers and work boots. I wanted to try writing a blog, or starting a podcast, or maybe opening a Shopify website. Something entrepreneurial, as I had done in the past as a musician. Yet, none of that happened because of the pedestal I had put my savings rate up on. Spending $100 that was not in my budget was too painful to bare, even if that $100 would have equated to an investment in my mental and physical health. At it’s peak, I found myself with a savings rate of 68% (I was determined to raise it 1% per month until 70%) when I decided to pull the plug.

Phew…what a relief!

What was the outcome?
What sort of hedonistic lifestyle did I build?
How fast am I running on the hedonic treadmill?

…not very.

My new savings rate is 50%. Yup, 50%. A year ago that would have sounded laughably low for my personal goals and situation. Not anymore. I’m comfortably saving 50% of my take-home (net) pay.

It’s been about three months now and so far the changes its provided align with my values and pursuits I’ve always wanted. I’ve started looking into building a business with a friend. I’ve purchased a few “.com” addresses (including this one) and am working out some ideas for those. I’ve bought high quality sneakers, which make going for walks way more enjoyable. I bought a new laptop, which I DESPERATELY needed. My wife adores video games, and I love watching random YouTube educational videos and documentaries, so I bought us a new, reasonably sized and priced TV.

All these glorious perks, and I’m still easily and comfortably saving 50%. Amazing.

I did not heed the advice of my other FIER’s that I follow and listen to. Almost all of them, at one point, talked about this situation.

I think it was perhaps the Mad Fientist who suggested that people should experiment with cutting every expense out. Or, whittling down all discretionary spending to it’s absolute minimum. Cut out all treats, all extras, and do it for a few weeks or a month. See how it feels. Then start to bring back spending into the categories that actually provide value.

I knew of this tactic, but I did not follow it. I assumed that because I was use to living on minimum wage, saving 70% would be a no-brainer; an easy accomplishment. If I didn’t reach it I would have been letting myself down, and the two years I was working my ass off in college would have been FOR NOTHING.

I was wrong.

I’m happier now, no doubt about it. I’m still searching for true meaning in my life, but I can honestly say my mind is less clouded by percentages and net worth growth statistics.

Let the journey continue.

 

Catch Up Series: January 2016 Income, Spending and Investing

At the bottom of this post is a screenshot from the spreadsheet I was using in 2016 when I became serious about tracking my income, spending, and my investing.

In hindsight I wish I had made these posts in real-time, as my situation was unfolding. I always had intentions to do so, but, I was super focused on graduating at the top of my college class and landing a job that would triple my income.

This is for the month of January, 2016.

Let’s see what we’ve got!

Total Income: $1384.17
Total Spending: $1367.71
Total Invested: $412.42

% of Income Invested: 29.80%

Total Net Worth: $23,329.77

I was in school in 2016. I went back to college on a mission to increase my earning power. I remember being pretty happy with these numbers at the time, and looking back I feel the same.

The numbers for the month show that I was technically investing money I didn’t have. My spending for the month is almost equal to my income. I had an emergency fund built up at this point and I had made it a personal goal to save between 25 and 30 percent of my income while in school. This wouldn’t be sustainable if these numbers stayed this way, but at the time I wanted nothing more than to throw as much money into the market as I could.

I followed the “pay myself first” method. A method I still follow today. It works for me. It’s changed everything.

Click the picture below if you want to explore the nitty gritty of it.