February Expense Report - $40K Challenge Update
Written by Matt
February Budget - $4,865 of $40,000 challenge
Starting off 2018 we decided to take a challenge to spend $40,000 this year. We are two months into the challenge and we are on track! I honestly expected some overages with the beginning of the year travel but Feb is always a good month. Its shorter than all the other months by half a week and I get my company bonus!
Our February Experience!
We kept it pretty calm and collected this February. We had on trip down to San Diego to visit with one of Allison’s friends from college, Liz, and to record a podcast with Rachel Maddox. Check out Alli’s two podcast episodes here: LINK TO PODCAST
We stayed at Liz’s house so we didn’t have any hotel but we did spend a little bit more than normal on eating out and we went out the bar which always racks up some bills and an Uber home. It was a great little trip and I got to take some cool beach photos while Allison was in her podcast which is always a good time.
Mortgage: $2,090.74 – Same as last month. Should be the same for the rest of the year. We will likely stop paying our extra $300 toward the principle in May or June. We are planning to leave the state in the second week of May and will be having another couple move into our master bedroom and act as onsite property managers. I’m sure we will have a post on that and maybe on how we selected this property in general as a real estate investment.
Roommate Income: $1,950 – We will have one roommate that is leaving in April. Hopefully, we can fill it rather quickly and avoid any vacancy. I think we may have another one moving out in May so we will have a bit of turnover at the house! Looks like that might coincide with when we take off on our trip so we’ll do our best to get it lined up and filled ahead of time.
Vacancy is really one of the worst things for rental property income. Just one month missed rent with one empty room is $600 extra that month. If both our rooms were empty for a month that would be $1,200 or almost half of our whole month's spending!
Net housing cots: $719.67 (plus we built some equity in there!)
Bills were pretty normal other than the Gardener! We hadn’t paid him since we left on vacation in December so we had 3 months of regular bills ($60/mo plus we had trees trimmed and we reseeded the front yard). We had one bill for the maids (they come every 2 weeks so next month we might have 3) internet is always the same and unfortunately, it’s the lowest we could find for the area, water is usually pretty cheap and usually 30-40 a month. We spent a little less on gas since it’s a bit warmer than last month. That should drop of even more in March as we have solar, so the electricity side of things is practically free.
Student Loan Payment: $500 – I was fortunate enough that my parents could help me pay for college. I’m paying my mom back for ~$60k in student loans. We set up a $500 payment each month for 10 years which I’m about 5 years into. (0% interest!)
Travel: Zero travel expenses. I could have put some of our San Diego expenses in under travel but they were already categorized in our regular spending and it was relatively short and inexpensive trip.
Groceries: $386.16 – Few stops at Vons and Trader Joes. I keep hearing how great Aldi is on the choose FI forums so we might check that out. We just let our Costco membership expire as we won’t be needing Costco sized things when we are living in a Van/RV
Electronics: $370 – We bought Allison a Google Pixel. When we leave our jobs, we are going to have to get on our own plan and bring our own phones. We will be going to Project FI through google and decided we’d rather buy an older version phone instead of doing a brand new one or financing it. Project FI uses 3 different wireless providers and only costs $130/mo for an unlimited plan. If you use less data you pay less so the base price is ~$50 a month for the two of us and caps at $130. The data also works internationally which is an amazing feature for when we go international next year!
Gasoline: $187.65 – I worked from town a few extra days this month so a little less driving out the field but we also drove down to SD although we took my Prius so it wasn’t a huge hit on the gas bill.
Insurance: $145.50 - $60 for Alli, $72 for me, and $13 for an umbrella policy since we have renters in our house and because we are working on our businesses. As those become more mature we will likely have separate insurance and LLCs for each of those.
Eating out: $131.23 – Breakfast, lunch and dinner for two days basically while in San Diego. This also includes our bar tab when we were out on the town. All in all, it was pretty cheap. Nothing over $20. Thanks “California Burrito” for feeding me twice and being soooo delicious.
Pharmacy: $68.75 – Our health is super important to us. We didn’t buy any supplements this time around but we did have to hit the pharmacy to get a few things. Allison got her nose pierced and we needed some stuff to take care of that. I do think we still bought some vitamins though. Can’t get out of rite aid without some vitamins.
Registration: $55 – registration for Alli’s car was due. Thankfully we drive old beaters so its pretty cheap!
Shopping: $24.02 – While we were in SD we went to the mall. We used mostly Gift Cards we had from Christmas but had to make up a little bit of the difference. New swimsuits and some makeup.
Gym: $5 – we have a web subscription to “yoga works” which is awesome. There are a ton of great classes on there we can do from the house and its really cheap. I could save the $5 and just look some up on YouTube I’m sure but having a good range to pick from with good quality video is worth the price for us.
Bonus!!!: $19,837.99 - My company pays an annual bonus which is a big portion of my compensation. The company performed well this year and due to that, we got a pretty nice chunk of change. We had definitely planned for this and it will make up a good chunk of the money that will go into the honeypot to fund our travels for the next year or more.
401k Contributions: $10,284.59 - Since we were planning to leave our jobs we elected to kick up our Pre-tax 401k contributions as much as we could. My company allowed me to put in 25% of my income but Alli could do 100%! So, we elected to do that as we can live off my income for the next two months and still get all of the money into our 401Ks for the year. I won’t be able to top mine off but Alli will have hit the $18,000 limit by the end of this month.
Paychecks: $5,430.55 – This dropped due to the change in Alli’s paycheck going 100% into our 401k. We will save a little bit less cash prior to quitting but we will avoid a bit more California Taxes which I think will be worth it.
HSA Contribution: $376.92 – This will keep it up for the next two months. I had not contacted Fidelity to front load the HSA the same way we are doing in the 401K but I easily could. Maybe something I’ll look into this week.
Dividends: $224.91 – I have one dividend stock in my 401k that pumps out consistent dividends. Its also acting as the bond allocation for my diversification.
Starting net worth was $574,459 and our ending net worth was $590.675 for a total increase of $17,216. We had a little stock market correction. The worst it got was -6.3% for our portfolio but we are back up to -3.2% at the end of the month. The stock market is pretty heated up so I’m hoping we see it carry on up after this correction, but I think everyone expects a turn sometime soon. We aren’t trying to pick when that will be, We will just hold and ride it out.
Overall it was a good month. Even with the market dip we survived and increased the net worth. No doubt due to that company bonus. Wish those came all the time!
For those that don't know we will be traveling this summer in a Rv or conversion van. I'm starting to do some research into converting our own! If anyone has some good resources let me know!
Leave us some comments below and let us know how you are doing on your financial goals for this year and if we can support you on your journey in any way! Thanks for reading!
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