Hello! And welcome to our First Friday Finance Farts. (We are working on the name but I really like alliteration, and farts are always funny, so this may or may not change. And don’t “finance farts” sound like what people might have when they get nervous about talking about money?) Anyway, we thought it would be interesting to pull back the curtain and give a little report on how we are doing on our monthly finance goals at the beginning of each month. We can show where our percentages ended up for the month prior, address any areas where we struggled, and also corrections we intend to make for this upcoming month. And to top it all off, since we have this huge dream of having this little ol’ blog become a source of income, we will share how the monetization of it is going! (Newsflash, this last part will likely be very brief for a very long time. 😂)
So let’s start with our savings rate. When I first started hearing that term, I assumed it meant how much you were able to transfer to a savings account during the month. And then when I heard people in the Financial Independence community talking about getting to a 50-70% savings rate, my head almost exploded. Like, what the what?! How is that possible?! So we talked to our friend, The Economist. (We legit have a friend who is an economist and I am hoping to introduce him soon-ish.) Anyway, The Economist shared with us his spreadsheet that he’s been using to track his monthly expenses and calculate his savings rate. So we are basically copying him, and I’m going to break down what goes into figuring out this elusive number.
We start by looking at our gross pay, subtracting our taxes (since we can’t change that expense) and using that number as our base. We then consider any money that is directly put into investment accounts as part of our savings rate. So for January, we had funds from Philip’s pay go into his 401K and also an HSA. Then we add to that the principal portion of our mortgage payment. And lastly, we include any money that we have transferred from our checking account to our savings account.
Now, all that being said, one of Philip’s goals for 2020 was to have a 40% savings rate every month. My first thought about it was, “Uhhhh, shoot for the stars buddy!” Because, good gravy, that was more than I thought we could do. But! I’m so pleased to announce that after he crunched all the numbers at the end of the month, did a last minute Hail Mary transfer from checking to savings, he was able to get our savings rate to 40.3%! Hallelujah! One month down, only 11 more to go! We will see if we get as lucky in upcoming months.
Now to break down a couple items in our budget. One category of our budget that totally blew up in January was our car expenses. While we typically only budget for gas, with enough wiggle room for an oil change or possibly a car wash, this month we also needed to get new tires and sensors on our truck, as well as pay our auto insurance premium for the next six months. It made it so that our monthly expense that is usually less than $200, was well over $1500. Yowza, not my favorite way to spend a crap ton of money. But hey, we are adults, it’s what we do. We knew that both of these expenses were coming up and we planned for them (and used a new credit card for them to help us hit a minimum spend!) so it wasn’t a surprise, but wasn’t fun either.
On the other hand, I was proud of us for sticking to our eating out budget! We have cut it down to $150 a month, which can be tough when burritos are just so dang good, but are seeing if we can really make that a workable number for us. Well guess what, as of 10 pm on January 1st, we had spent HALF of that budget. Yep, we had a birthday lunch with some family members and then friends in town to do dinner with, and boom. Just like that, we had spent $75. Hot dang! So for the rest of the month we really reigned it in. We either ate at inexpensive places, somewhere where we had a gift card that we could use, or ate at home. It was a little depressing at times, but at the end of the month, we were at $156.81. A little over budget, but we were still able to get together with friends and family members for special occasions, grab post-kids-in-bed-treats at night for us, and get the kids churros at Costco as bribery to be nice while shopping. And while I would have loved an extra trip to Filiberto’s in there somewhere, I really didn’t feel too deprived during the month. Better than that, now I feel dang proud of us for not just figuring that we ruined it on day one and not caring for the rest of the month. Yay us!
So for February, we have a family trip at the end of the month that we forgot to account for when we were setting up our budget for the month, whoopsies! But it is to Louisiana to visit family for Mardi Gras, so I think most of the money we spend will be on king cake, crawfish and boudin, so hopefully it won’t bust the budget! We will see how that shakes out! We also had the opportunity to open a Simple IRA through my employer that we will be contributing to, which will help our savings be more automated, but I haven’t quite decided if it will be a good thing or bad thing. (I mean, of course it’s a good thing, but it’s just new, so it is weird.) Time will tell, I guess! And everything else should be pretty similar as far as I can tell.
Lastly, let’s talk about our little blog here. We have high hopes of this becoming a source of income some day. Like I had mentioned, if we could make $100 this year from this, it would pay for the web hosting fee that we paid back in October to get this site up and running. We know it will be a slow process to grow it, but we are in it for the long haul! In January, we obviously made zero dollars from it. Shocker, it was only publicized for nine days of the month! But you guys, in February, I think we are going to see our first entry in the positive column. Just yesterday Philip sent me a text while I was at work that said, “I don’t want to alarm you but we may have got our first Amazon Affiliate purchase.” And here comes the excited sweating, right on cue! Holy crap, we did it! So to the absolute sweetheart that used our link to purchase something from Amazon, THANK YOU from the bottom of our hearts. It seriously was the highlight of our day to see that. More than anything though, I’m just thrilled that a product we recommended could be of use to someone. We really do want this blog to be useful and full of helpful information as well as practical things that will be beneficial in your lives! So thank you again for supporting us.
And that is it! First Finance Fartday in the books! (I’ve really got to nail down a better name. 😂) Let us know what you think!