Ignoring Common Money-Saving Tips, or Things I’m Not Willing to Compromise On

A big part of the FI movement is streamlining your expenses and finding ways to increase your savings rate by either (a) increasing your income or (b) drastically reducing the amount of money you spend*. You should locate all the fat in your budget and trim it, leaving only the absolute essentials and squirreling away the rest into your FIRE fund. Common tips for doing this include things like cancelling monthly subscriptions, splitting rent costs, moving, getting side hustles, etc. Could I be incorporating some of those things into my life? Yes. Am I willing to consider some of those things? Honestly, no. 

Fancy gym memberships should be the first to go. BUT I JUST CAN’T QUIT YOU. Image from pexels.com.

Here are three things I’m not willing to compromise in order to achieve FI faster: 

Living without Roommates

Right now, I live alone, and I intend to keep it that way. I do have a serious romantic/life partner, but he is currently out of the country living his dreams, etc., which means he is not available to live with me and, erego, split my rent in half. Eventually, two will become one again, and rent will be easier to pay. As it is, I am living on my own.

I am not willing to compromise on that.

Here’s the thing: I have IBS. And what that means is that I use the bathroom a lot. Sometimes I have to use the bathroom very suddenly. And if someone strolls into the bathroom to take a nice long shower and get ready for their big night out, it can create a very uncomfortable situation for me. And while I (apparently) don’t mind explaining my embarrassing situations to strangers on the internet, I’m not looking to go into roommate interviews and having to reveal all the secrets of my bowels just to have people choose another roommate anyway because my bodily functions gross them out. 

Maybe if there was a situation in which I could have my own bathroom, I would consider getting a roommate. However, I also hate people and love quiet and cleanliness, so as far as keeping stress levels low, it’s not ideal. And while I live in a HCOL area, my current apartment is subsidized by my employer, which means I am essentially saving nearly the same amount as what I would save if I had a roommate, give or take a hundred bucks a month.

To me, the extra hundo is worth the peace of mind.

Once my lease runs out, and if I don’t get a renewal, I might be singing a different tune. But I have until June to worry about that. 

My Gym Membership

My gym membership is approximately $100/month, which I know may seem like an astronomically frivolous expense to a lot of people. However, it’s a specialty gym–a climbing gym. Climbing is one of my favorite hobbies, and other than hiking (which is difficult to fit in after a full eight to nine hour day at work), is pretty much the only real ‘active’ activity that I do to stay in shape. Gym memberships are often listed as one of the first things that should be axed when slimming down your budget (and, indeed, if I lost my job, would be something I would consider taking off), and it’s usually accompanied with such reasoning as (a) you can work out anywhere, (b) running is free, (c) there’s probably a park or somewhere with pull-up bars that you can just hop on and get in shape, and (d) you’re not really going that much anyway.

While those are all valid points, they don’t translate well to climbing. The only way to truly get better at climbing is to climb. There are definitely a lot of add-on and cross-training activities that can be accomplished–hang-boarding, pull-ups, etc.–but to be active in the sport, one needs to either have enough free time to go outdoors several times a week or keep their muscles moving indoors on plastic rocks. 

Additionally, I don’t really love basic workouts. I get bored. I have to watch a movie on the elliptical, because if I don’t, I just keep counting down every second until I can stop. And if I haven’t had fun climbing first, I’m not motivated to just go into the gym and hop on the treadmill or do my pull-ups. Climbing provides me with a mental puzzle to solve in order to successfully complete the exercise. And because I’m vain and want to solve all these puzzles**, I’ll try really hard to do it. 

What it boils down to is this:

  1. Climbing is fun
  2. I will not work out unless it is fun
  3. Erego, if I do not have the opportunity to do some climbing, I will probably not be very motivated to work out

One way to view the gym membership is as an investment–I’m making an investment in my current and future health, which will hopefully pay off by reducing the chance of any major medical issues that can be prevented by keeping myself in shape.***

Moving to a LCOL Area

Another way which is touted as a route to FIRE is moving to a LCOL area. However, this is not possible with all jobs–and my job in particular. I work in an education-adjacent not-for-profit sector, and jobs that pay as well as my current one are few and far between. If I moved to a low cost of living area, I would possibly be able to accomplish the same savings rate by percentage, but I would have far less money to save. My partner’s job is also relatively location-dependent–he’s studying language and cultural/refugee issues, and if he would like to actively pursue employment related to those fields, we’ll probably end up back in NY or DC (although he says he doesn’t mind going back to teaching, but once again, teachers make very different salaries in different places). If we moved before July 2021, I’d also lose my 10% retirement from my employer (it’s not even a match–they just give me 10% once I meet two years, back-dated to my first pay period. They just give it to me!!!!) and I’d have to pay back the $4,000 in moving money they reimbursed me. So, a move would currently cost us about $19,000 before we even shipped a single chair. 

I also have big expenses that I don’t want to compromise on–for example, my student loans. Once my grace period ends in January , I will have to start paying around $500/month to pay these off (although I’m making estimated monthly payments now). If I move to a LCOL area and make less money, I could change my repayment plan to be income-based, but I don’t want to spend 20 years paying off what could be paid off in nine. Additionally, while my debt amount feels high to me, it’s not high enough to grant me the freedom-after-twenty-years-of-payment perks that income-based repayment plans (IBRP) offer, nor am I confident that Public Service Loan Forgiveness will exist in ten years (nor do I want to limit myself to only working at nonprofits for a decade in the hope that one day the government will forgive my loans). 

Additionally, moving to a LCOL area generally involves some sort of compromise in regards to public transit and walkability. Right now, I can walk to work, to the grocery store, to a movie theater and mall (not that I go to the mall that often, but whatever), several bars and restaurants, etc. This means I use my car much less. Even though gas in California is currently over $4.00/gallon, I only spent $35 on it last month. I drive to the gym and to go hiking. That’s about it. And that’s something I would have to compromise if I moved. 

For now, staying put is worth it.  The benefits described above–the solace that comes with living alone, the health benefits (physical and mental!) gained from my gym membership, and the salary and perks of my current job–outweigh the potential benefits by compromising on these three issues. While I believe its important to plan for my future, I know that it shouldn’t come at a sacrifice to my current mental health.

How about you? Are there certain measures that may make you reach your FIRE number quicker, but would seriously compromise your quality of life? Feel free to share in the comments.

*A combination of both is usually advocated, but one is usually easier to accomplish than the other.

**And there’s definitely some self-esteem issues combined with wanting to smash the patriarchy and gender norms in here, etc. etc. etc. I AM SMART AND STRONG AND I CAN DO IT, SO GET OUT OF MY WAAAYYY!!!!
***Please note that this is a very able-bodied viewpoint. Not everyone has the ability to work-out, sign up for a gym, etc., and not going to the gym is a totally valid lifestyle, etc. etc. etc. For a much better/more eloquent exploration of the intersection between FIRE, personal finance, perceived health issues, and fat-shaming/fat-phobia, please view this excellent post on Owning the Stars titled ‘The FIRE Movement’s Fatphobia Problem.

Open Grocery – September 2019

Welcome to the first post in a series titled Open Grocery!

I love this photo because it was described as ‘Cabbage, Up Close.’ Image from pexels.com.

Once a month, near the beginning of the month, I will post my entire grocery bill from the previous month–including a breakdown of every grocery food purchase I made during the month and whether or not it was on sale and/or I had a coupon. There are two main reasons why I want to do this.

I want to keep myself accountable in regards to budget. Currently, I have a budget of $200/month for my own grocery needs. In theory, this amount should be more than enough to cover my diet. However, sometimes I have a tendency to slip novelty items into my cart–for example, fruit bars or cookies–that don’t directly correlate to a healthy diet. I don’t feel like I need to cut these items out entirely (everyone should have a cookie now and then!), but I think it would be interesting to see just how much I’m spending on them. This budgetary concern also includes accidentally buying damaged products–but more on that later.

Additionally, I thought it would be a great exercise in seeing how much it actually costs to feed a single human being* in a month. Frankly, the $200/month I have budgeted is probably excessive, given my actual nutritional needs. It would be an interesting experience to see how low I can get my bill while still meeting all my dietary concerns. Also, as of February 2019, the maximum monthly allotment for SNAP for a household of one is $194–I think it would be a useful exercise to see just how you can stretch that amount.

For the sake of transparency, here are some things that may make my bill different than yours:

  1. I don’t have high caloric requirements. I am currently about 112 pounds and about five feet four inches in height. Even though I am athletic and go to the gym several times a week, I’m not a bodybuilder or currently trying to put on more muscle mass. As such, the amount of calories I require each day may be much lower or higher than others, depending on their nutritional needs and fitness goals.
  2. I have gastrointestinal issues. My doctor thinks I have IBS; as such, there are certain foods that I can and cannot eat if I want to be comfortable. This means I can’t always pick the cheapest foods at the grocery store or only eat what is on-sale. Beans are thrown around a lot as an affordable protein option–unfortunately, if I eat too many, my bowels riot, so I have to find other sources of protein as well.
  3. I try to eat a plant-based diet (with some cheese thrown in on occasion). I don’t purchase meat, eggs, milk, or butter. I do purchase hard and/or goat cheese sometimes. While I should stick with getting protein from pulses, my IBS makes it difficult to eat more than small amounts of things like beans and lentils. This leads to a tendency to rely too heavily on expensive protein-added products as opposed to more ‘natural’ sources of protein. 

So let’s get started!

If you’re interested, you can view my September 2019 groceries in this google sheet

Overall, I spent around $196 for groceries in September 2019 (I lost $0.90 somewhere between the receipts and the totals, but whatever).

Several things affected this amount: (1) not paying attention to coupons and whether or not they were applied correctly; (2) accidentally purchasing damaged products; (3) vegan meat substitutes; and (4) alcohol.

  1. Coupons. Some of the products I purchased should have had coupons applied to them. The biggest store that I had problems with coupons at was Safeway. On the website, shoppers can download digital coupons to their accounts and, when they type in their phone number on the credit card key pad, they get those coupons taken off. For some reason, for several of my products, the coupons were not applied. On one particular visit, there was an especially long line and the cashier was in a hurry to get me rung up. I didn’t notice that the coupons hadn’t worked correctly until I got home. Next time I go, I will ensure that the coupons ring up correctly–regardless of how fast they’re trying to push me through. I also had issues with coupons at Sprouts, although these issues were my fault–for example, on my first visit, I didn’t know that you had to download the app in order to have your coupons applied; I thought I could just enter in my phone number to get my coupons (you know, like at pretty much every other grocery store in the US). Nope! As such, a couple items I had coupons for rang up at full price. The other coupon I had issues with was a BOGO Chocolove coupon; apparently it was only for one specific flavor. I have now learned a lesson in checking the text of every coupon I intend to use.
  2. Damaged Products. Out of everything I purchased this month, I had issues with two products. The first was a pack of tempeh I purchased at Sprouts. I didn’t look at it properly until a few days later when I was going to eat it; however, there was a paper-thin slash across the front of the package. I’m guessing that it was the first layer in the box, and when someone used a box-cutter to open the box, they accidentally slashed the first layer of tempeh and either didn’t notice it or didn’t care. Regardless, $3.29 down the drain, because lord only knows how long that package had been open. The second damaged product was a Silk yogurt I bought at Safeway that was three weeks past the sell-by date. I didn’t take this off the grocery bill because I accidentally ate it before I saw the date (although I didn’t get sick, so I learned something?). This was slightly hilarious to me because I usually check the date on every refrigerated item I buy. So, in essence, what should I remember?–CONSTANT VIGILANCE.
  3. Vegan Meat Substitutes. I go back and forth on this one. Mostly, my downfall in this category this month was purchasing two packages of Lightlife Plant-Based Burger Patties. I’ve been a vegetarian for over four and a half years now, but gosh do I remember what burgers taste like. This new frontier of plant-based burger-y burgers has rocked my world. However, at $2 to $4 for a single patty**, it’s not a cost-effective way of eating, although in some instances I cut the patty in half and spread it over two meals. I also purchased a four-pack of soysage, but I feel less bad about that because I usually stretch those out over eight meals. As long as they’re on sale and I am mindful of the cost per meal, I’m willing to forgive this a little bit.
  4. Alcohol. I bought a bottle of wine for like $10. I include it in my grocery bill because I consume it and I buy it at the grocery store, but alcohol is not a necessity. In fact, now that my partner is gone, I don’t even really enjoy having a drink that much anymore. And if I buy an entire bottle of wine, I feel pressured to drink it all before it goes bad, and since I’m such a lightweight, this just leads to headaches and lethargy the next day. So, I think I’ve pretty much decided that, at least until my partner gets back, I’m probably just a social drinker as opposed to an enjoy-a-glass-at-the-end-of-a-long-day type of gal. 

So there we have it! A month’s worth of groceries for a single human and my lessons learned. The goal for next month: maybe get it down to $175? We’ll see!

(But no pressure though.)

* In the US — California — South Bay area.

** Not to mention the saturated fat. THIS IS NOT A HEALTH FOOD, Y’ALL.

The Thing About Money, Part 6: Reflection, or, So now what?

(This is the sixth and final post in a six-post series titled The Thing About Money. Click to read The Thing About Money, Part I.)

The last few weeks have been an exploration of my attitudes toward money (Part I), how they were formed (Part 2), the debt issues I am currently facing (Part 3), my fear of being forced to eat cat food in my old age (Part 4), and how tracking my daily spending helped control my money anxiety (Part 5). So what have I learned about myself over the past few weeks?

  • Wanting money makes me feel like a phoney because…
  • I view money as an evil that just makes people emotional/feel bad because…
  • I grew up in a household where money caused people to be upset.
  • I am afraid that my student debt will never be paid off and…
  • I will be poor in retirement because I don’t have enough saved up but…
  • Tracking all of my spending and income kind of makes me feel better, because the situation is not as dire as it seems.

Whew. 

Those are my truths. So where do we go from here? 

Is life really all about the Benjamins???? Image from pexels.com.

I recently stumbled across the FIRE movement, which, if any of you are into personal finance blogs, you will know as standing for Financial Independence, Retire Early. The idea behind the FIRE movement is that you save as much as possible until you have 25 to 40 times your annual salary worth of assets, and then you can RE — retire early — make your grand exit from the world of your nine-to-five, if you so choose. There are several variations of FIRE — fatFIRE, for instance, is for people who want to retire but still live a life of comparable luxury; leanFIRE is for those looking to retire at a lower income; baristaFI is for those who will supplement their income with a part-time job (usually the plan is to “work part-time in a coffee shop,” hence the name) after retiring from a career; etc. 

What particularly interests me is FIOR–Financial Independence, Optional Retirement. This mindset involves saving enough money so that if you wanted to step away from working, you could; but that doesn’t mean you have to. Some people have a weird vision of FIRE–if you do any type of work at all (blogging, building things, selling art, etc.), you haven’t actually ‘retired,’ and you’re somehow lying about your life experience by claiming about being retired (*insert extreme eye roll here*). To me, being ‘retired’ just means that you aren’t chained to a desk/warehouse/counter and unable to make any life-changing decisions because you fear dying in the street of starvation. 

I would like to FIOR, and I can certainly tell you I wouldn’t just put my feet up, sit on some imaginary porch with a glass of lemonade, and watch the world go by*. What I want from FIOR is the freedom to do whatever the hell I want, whenever the hell I want, and it just so happens that what I want to do involves things like volunteering at causes I care about,  enjoying and preserving nature, working on my art and writing, and spending time with people I love. 

What FIRE, FIOR, and all those other acronyms buy is time. Time to not only make the world a better place by serving others, but also by serving ourselves. For instance, I recently went to a volunteer information session about working at a local adoption center for my region’s humane society. I’ve submitted the application and am waiting to hear back on whether or not I’ll get an interview** for a three-hour-a-week shift. In the past, I’ve volunteered at museums and historic cemeteries–all worthy causes that I care about. If I pursue FIOR, I’ll have more time to dedicate to these causes without having to worry about whether or not I can feed myself. 

I would also have time to increase my relationship with nature and move toward a more sustainable lifestyle. I’ve mentioned previously on this blog about how the earth is dying; I’d like to do my part to prevent that. I love hiking, camping, and rock climbing; I love just being in nature and letting its awe and beauty wash over me. I love breathing and drinking without dying. These things–trees, fresh air, the ocean, birds–are worth conserving. FIOR would give me time (and money, depending on how I budget) to help lessen my own impact on the earth (i.e. growing my own food or having time to go to local farmers’ markets, as opposed to going to a grocery store which has had produce shipped in from elsewhere, wasting fossil fuels; stop purchasing/consuming clothes whose only value is to make myself look ‘presentable’ at a job, etc.) and volunteer for causes that help the earth.  

I would be able to pursue my own artistic interests, many of which I have had to stifle due to a lack of resources–both time and money. This may seem like a selfish reason; however, I’m a firm believer in self-care, especially when it results in the self having a more positive and kinder outlook. If you haven’t discovered already, I can get pretty, uh, wound up, which results in what I view as some not-as-kind-as-I-could-be behavior. Right now, after work, I feel so drained that when I come home, I just end up cooking dinner and watching netflix or youtube until it’s time to pass out and start the next day afresh, repeating the same cycle until the weekend. I feel that I have projects bubbling away inside me, but I don’t have the emotional energy to do anything with them (oh, the joys of working in a service-centered profession…).

And finally, I would have more time to spend with my family. I have a small family–my partner, and my mom and her husband***. Not working would let me spend more time hanging out with and supporting these people whom I love. I would have the freedom to move across the country to wherever my partner wanted to work without worrying about the geographic constraints of my own career; I could visit my mom when she goes to her doctors’ appointments. I’ve spent a lot of time in my life using work as the reason I can’t visit (I can’t get the time off, I can’t afford it, etc.). I know that time is going to run out before I know it, and I want to spend that time with my family. 

There are still some hard truths to swallow. For instance, I struggle with the issue of wanting more money when I know that it causes so many problems in the world. This is what I like to refer to as ‘crust-punk syndrome’–I claim that I want to live ‘outside the system’ of work/general economics, but if I’m investing in ‘evil corporations,’ I am still just as dependent on the system as before, but in a different way. Doesn’t this just make me a hypocrite? Is it better to be a hypocrite that can support herself than a hypocrite who relies on the support of others? Is the only effective way to change the system to work from within–for example, investing in ethical companies whenever possible and not spending my consumer dollars on fast fashion and gas guzzlers? Does taking the money I make off of them and using it for good cancel out how it was created in the first place? 

What this all boils down to is the existential dread of living an inauthentic life. I work anywhere from eight to ten hours a day in a traditional job that, while providing essential services to those we work with, also perpetuates a highly inefficient work culture. There’s a lack of innovation and challenging of the status quo in ways that could radically alter how we disseminate our services. Additionally, without being too specific, I am working for an institution that doesn’t reflect my personal values. There are ‘values’ that this organization claims to have, but there are a lot of different viewpoints and incidents that have happened in this climate that I don’t feel reflect my own ideas of what is ‘right’ or ‘just’ (although, to be fair, it’s certainly nothing like, say, an oil company or hedge fund). This, combined with the negative health effects of working a job that is heavily cubical-based, makes me desirous of a bit more freedom, including the opportunity to be able to work part-time in this field****. 

I still have a lot of unanswered questions. Perhaps it’s just my family-ingrained Catholic guilt speaking up; perhaps it’s a fear of being exposed as some sort of fraud. I don’t know, and I don’t know if I ever will know. But what I do know is that money would give me the time and resources to work on projects I care about and would give me the option of not working those that I don’t

So I guess the budget’s worth it. 

* But there’s absolutely nothing wrong with that, and if that’s your dream, more power to you. I just know I would go bonkers with restlessness. 

** This particular organization gets a high level of volunteer interest, so the application process is pretty… intense. 

*** I have a brother and grandparents and aunts and uncles and a biological father and an ex-stepdad as well, but with all of those people, things are… complicated, and I haven’t spoken to any of them in years.

**** I actually quite like the job itself and the field I am working in; it’s just the incessant bureaucracy that really grinds my gears. 

——-
Thank you for reading this series, titled The Thing About Money. What’s your deal with money? Are you working towards FIRE? Do you feel that you are trapped in the capitalist machine with no real options about how to lead an authentic life? Are you just trying to free yourself from the grip of THE MAN? Or are you able to emotionally distance yourself from money? Feel free to tell me in the comments.

Medical Emergencies and FI

(Warning: this has some bathroom TMI, so if you’re not down to hear about nausea or other stomach and health issues, maybe you should skip this one.) 

For the past week or so, I’ve felt a strange pressure in my lower left abdomen. Not quite a pain, not quite an injury, it’s more of a tenderness that is causing an awareness of that area. I brushed it off when it started; I’ve been doing more ab exercises at the gym recently and assumed that maybe it was a strained muscle. 

What the hell is going on???? Image from pexels.com.

That all changed early Tuesday morning. 

I still felt the tenderness, but it didn’t seem any different when I went to bed. However, I woke up around 2:30 in the morning and ran to the bathroom. I sank to the floor in front of the toilet, seat up, trying to breathe deeply to control the nausea that had hit me like a wave. But the breathing just seemed to push the uneasiness elsewhere, and I transitioned to sitting on the toilet, to see if whatever ailed me would come out that way. I was covered in a cold, clammy sweat. It got even worse when I started to feel light headed. I stood up and walked over to the mirror. My vision was going in and out, and black spots were appearing in front of my eyes. I couldn’t see straight.

Something was terribly wrong. 

This is it, I thought. One of my greatest fears was coming true: I was going to die alone on the floor of my apartment, with no one to find me until I didn’t show up for work for the rest of the week, in my very oldest and most ragged pair of underpants

Even just thinking about it now makes my heart beat faster, and I feel a little sick. (Yay, anxiety!)

I sat back down on the floor and tried to get my breathing and pulse under control. The intense nausea I felt when I woke up subsided a bit. I found my phone and dialed the 24/7 nurse line for my insurance and was quickly connected with an advice nurse. 

How long had I been exhibiting symptoms? Did I still feel like I needed to vomit? Did I still feel dizzy and lightheaded? Was I bleeding from any orifice? Did my eyes have a yellow tinge? Was I experiencing any sharp, stabbing pains? 

Since I didn’t have any sharp pains, wasn’t shooting blood out from anywhere, and was starting to feel better, the nurse on the phone assured me that I probably wasn’t going to die in the night. She did, however, schedule me for an appointment with my GP for later that day, since I had been having those weird abdominal feelings for a few days. Slightly reassured, I hung up the phone. At first I intended to camp out on the floor of the bathroom just in case, but no matter how many pillows and cushions I gathered around me, the hard floor and side of the tub still made my ass go numb and my spine feel sore. So, I trudged back to bed, and tried to go back to sleep sitting up, legs stretched out straight in front of me, trying to position myself so zero pressure was exerted on my guts. 

After a restless rest of the night, I went to the hospital, where my GP listened to me describe my symptoms again and then felt around in my guts to see if she could figure out what was wrong. Hernia? Nope. Enlarged spleen? Nope, that seemed normal too. From this external exam, she concluded that none of my internal organs seemed enlarged or out of place. I left her office with the reassurance that my organs did not appear to be in imminent danger of exploding inside of me. However, we did schedule a pelvic ultrasound to see if there might be something like an ovarian cyst hanging out and causing trouble. 

I still don’t know exactly what happened that night. There’s been another huge heatwave where I live, and I don’t have air conditioning, so it’s possible that I was experiencing symptoms of extreme dehydration. However, the symptoms I exhibited were also symptoms of shock–but from what? 

So what the hell does this have to do with financial independence? 

Financial independence buys time–but it also buys freedom. The freedom to live where we want to with the people we love. The freedom to slow down and take care of ourselves if we need it. 

Financial independence would mean that, after I had received my external exam from my GP, I could have stayed at the hospital and gotten my ultrasound on the same day without having to fret about returning to work. Instead, it is scheduled for Monday–and I have been spending the last three days wondering if there is something inside of me. 

My partner is currently finishing his master’s degree in Germany. If I was financially independent, I could stay for a while over there with him. Financial independence would mean being able to stay with the person I love, as opposed to living alone. It would mean having someone be able to drive me to the hospital in the middle of the night if I desperately needed it. It would mean not dying on my floor alone because I have some fucked up idea that I am taking an ambulance away from someone who truly needs it. It would mean having someone there to reassure me that all would be okay–and what I can’t seem to communicate through this post is how terribly alone I felt in that moment

Financial independence would also give me the freedom to enjoy the things I like most in life–my family, my partner, spending time in the outdoors, cooking, creating–without having to spend half of my waking life at a job where I don’t even know if I have a meaningful impact. A job where everyone comes in for a certain amount of time each day, regardless of what actually does or does not need to be done. 

Reading this back, the Tuesday morning episode doesn’t seem like that big of a deal. People experience medical issues all the time (my bowels and I are no exception). But in that moment, when I couldn’t even see my face in the mirror, all I felt was a primordial panic. This can’t be it. 

This can’t be it. 

And that’s why I am pursuing FI–so that at the moment when the earth decides to shuck me off of its surface and send me spinning into the great unknown, I will know that I have led a fulfilling life.
And I won’t be left thinking this can’t be it.

The Thing About Money, Part 5: Budgets, or, Knowing where every penny goes

(This is the fifth post in a six-post series titled The Thing About Money. Click to read The Thing About Money, Part I.)

I have tracked every monetary transaction I have made since January 2018.

I had just started grad school and, while not struggling, per se, was stretching to pay the bills. My three jobs covered my living expenses, but I was taking out (a lot of) loans to pay for tuition. I started tracking my spending as an exercise in self-control and to get a more accurate view of what my financial situation was. I wanted to see the cold, hard numbers. Money has always made me uncomfortable, and I have been forever anxious that it would eventually run out. 

Tracking where every dang cent goes. Image from pexels.com.

I also wanted to hold myself more accountable–if I knew I had to put my spending on a spreadsheet, to immortalize my shopping numbers on screen forever and stare at it day in and day out, it would make it a lot harder to drop $50 at Uniqlo every time I felt like I “needed” a new pair of pants to fit in with the full time workers at the corporate office at which I was interning. 

What I expected was to feel trapped. Money has always made me nervous, so having to really stare it down on a day to day basis made me feel a bit… well, queasy. And it did take a while to get into the habit–every time I bought something, I reminded myself to write it down. I tried pen and paper at first and wrote all my sums down in a tiny notebook, but eventually just switched to a google sheet. I made the switch because (a) 99% of my spending is with credit or debit cards, so all the transactions automatically show up in my account and (b) I could use formulas to do the math heavy lifting for me. 

Despite my apprehensions, what surprised me most about tracking my spending was the feeling of relief and freedom it gave me. 

Knowledge is power, y’all. 

Knowing exactly how much I had in the bank lifted the ever-present sense of anxiety that would swoop down even more fiercely when I was in a situation that involved spending money. Every time I was invited to dinner with a friend, I didn’t have to skip drinks entirely, order the cheapest thing on the menu while explaining that I wasn’t that hungry anyway, and spend the whole time praying they wouldn’t suggest that we split the check evenly. I’ve been the last person to get the check on more than one occasion–and, as such, the person who somehow pays $20 more than everyone else despite having the least to eat. This was especially bad when I was still living in New York and a lot of my friends made more money than me. I honestly don’t think it ever occurred to them that I couldn’t keep up with their lifestyle on my nonprofit salary.  

I don’t have to worry about that now* (or at least, not as much). With the power of spreadsheets, my entire financial situation is freely available at my fingertips. Honestly, I don’t even need to look any more–at this juncture in my life, I have a pretty good idea of how much money I have at any given time and in which accounts, in addition to knowing my current net worth (in the negative $20,000 range, y’all. Woo student loans!). I know whether or not I can go out to lunch with a friend. I know how much will be leftover at the end of the  month and how much I can afford to throw at my student loans. 

I know how much every bill costs and have accounted for it. I’ve also been able to start accounting for my future–last year I opened my first retirement account (a little late to the party, but better late than never) and this year I started saving to visit my partner in Germany. Having a budget and recording every single transaction empowered me with the knowledge of when to slow down on my spending and when I can feel good about taking a trip to see a loved one. I also like to spend my time making sample budgets–what would my spending look like if I made two student loan payments in one month?, for instance. 

These days, when I get really anxious and wonder how I will ever be able to pay off my student loans, retire, own a home if I so desire, etc., I take a deep breath and open up my spreadsheets. The numbers are there–numbers that tell me I am not spending more than I earn, and that I’m going to be ok. And yes, my car is twelve years old and over 125,000 miles, but in the event it decides to break down, I can manage it. And yes, my stomach hurts all the time and my joints hurt and I’m getting older and everything hurts, but I have the privilege of affording a doctor**, damn it. Which is actually quite a timely statement, as a medical issue the other night required me to make a doctor visit yesterday morning***. In the past, I would have fretted over whether or not I could afford the co-pay, or, in times I didn’t have insurance, if I could afford even a visit to Urgent Care. Because of my budget, I knew I could afford the co-pay–and it was money well spent to be assured that my spleen isn’t in imminent danger of exploding. 

Here’s the real kicker–I call myself poor. I grew up poor. I identify as poor. I generally believe myself to be poor. But according to the numbers, I’m fine. I’m quite alright. I’m actually doing quite better than a lot of people in the world right now, so what am I bitching about? I am a white, able-bodied, hetero-, cis-gender woman, which means I have a lot more privilege than others. I was born in the United States and have never had anyone question my right to work or even just be here****. I landed a job with insurance, which means I was able to go to the doctor–which means I don’t have to carry the anxiety and mental burden of wondering whether or not I’m going to wake up with organ failure and die alone on the bathroom floor of my apartment. I just need to take a deep breath and trust in the numbers. 

Are you interested in tracking your spending? I encourage you to give it a try–as I said above, confronting my financial situation has made me more prepared to move through life’s monetary obstacles with confidence (or at least knowledge). I’ve made a basic google sheet that provides spaces for expenditures on the left and income on the right. A few simple formulas calculate your totals and subtract your expenses from your income, so you have an up-to-date view of your monthly cash flow. The one I use is very similar, except I also have calculations that show the exact amounts I spend on categories such as groceries, gas, student loans, retirement, and savings (I get a bit extra with my personal spreadsheets, as previously mentioned on this blog).

In theory, you should be able to view this google sheet and make a copy of it. Please feel free to let me know if you have any questions or issues!

Are you already tracking your expenditures? How’s it going for you? Please feel free to leave a comment and share your experience. 

* I actually got a good tip about this the other day. If you can afford it, pay whatever the split is in the moment. Then never go out to dinner with those people again, ha ha. 

** In network, of course. America!

*** Hence why this post is a day late. 

**** There’s a recent debate going around in the FI world about whether or not FI is a “political issue” and whether or not we should be discussing politics when discussing FI. Spoiler alert: IT IS and WE SHOULD BE.

I Met with a Financial Advisor

Image from pexels.com.

Last week I met with a financial advisor.

It was one of the benefits of my job. I work at a large organization that runs a number of “wellness” programs through the HR department. While I ignore a lot of them — house buying workshops, financing your child’s education, etc. etc. — I was intrigued by the one-on-one appointments with an independent financial consultant. So I signed up. Because, hey, it was free, and maybe I would learn something new!

I came prepared and sailed into the tiny conference room with my laptop filled with files and files of conspiracy-theorist level spreadsheets. We’re talking budgets, account totals, and lists of everything I have bought/spent for the last 18 months. As soon as I showed the advisor my screen, his eyes lit up with joy. “I’ve never had anyone come into the first meeting as prepared as you,” he said.

Which, honestly, makes we worry for my coworkers. But I digress.

Before getting really down and dirty with the numbers, he asked me a few background questions. What have I been doing with my finances? What are my goals? Am I married? Do I have student loans? Etc. etc. etc. After getting a handle on my situation, he asked me what my goals were. I said I had two main goals: (1) pay off my student loans and (2) be able to completely retire at 59.5, if I choose to.

One is a truth and one is a lie. 

Frankly, I would like to FIOR (be financially independent and optionally retire–in my case, semi-retire) by 50. Of course, that’s a lie too. I’d like to FIOR by 45. Saying it out loud makes me feel foolish, though, as if it is an impossible dream, and not wanting to have the dream squashed, I told him 59.5, when I can start taking money from my retirement accounts. I’m 32 right now, and thirteen years just doesn’t seem that doable, given my current HCOL area and student loan debt. But it’s there, in my heart (and no longer a secret, since I’m putting it in my blog, I guess). 

We looked at my student loans first. I have two big direct unsubsidized loans from the federal government. Each loan is approximately $20,000, and because I took them out in two different years, one has an interest rate of 6% and the other 6.6%. I’m currently in my grace period, so I don’t have an exact monthly payment amount yet, but I’ve calculated them to be a little less than $500 a month. Of course, like, a full $200 of that is just interest. He suggested refinancing, but here’s where my anxiety creeps in–keeping my federal loans comes with perks, such as hardship deferments and things like that, which I would lose if I refinanced. However, I plan on paying my loans off as quickly as possible anyway, so does deferment availability matter anyway? 

(I’m still looking into this. If I can find somewhere that will refinance me at like 3.5% or less and allows for early pay-offs, I might do it. But that’s for future S to figure out.)

Then, we looked at the amounts I was putting away for retirement and where. I have a traditional IRA, but was advised to switch to a Roth. This is something I have been thinking of for a while anyway, mainly since I learned that you can take out what you’ve put into a Roth* at any time, since it’s already been taxed. This is something that I have worried about–I know it’s sensible to put as much into retirement as possible, but there’s a nagging ‘what-if’ worry in the back of my mind that makes me hesitate. 

“What if my car blows up, and I have to spend my whole emergency fund, and then I get fired?”

“What if my mom’s house gets blown away in the next hurricane and she needs some liquid cash to get back on her feet?”

“What if I get some rare cancer not covered by my insurance and it costs ten million dollars?”

“What if Godzilla comes and smashes my apartment and I have nowhere to live?”

Knowing that this money isn’t necessarily 100% tied up until 59.5 does put me a bit more at ease. Even though I don’t plan on needing it until I am eligible to receive dividends, viewing it as a super catastrophic kablammo emergency fund that supplements my own, normal, less life-or-death emergency fund makes me feel better about putting so much of my cash into it. 

After retirement plans, we spoke briefly about other types of investing. He beamed at me, eyes twinkling. “I usually don’t even talk about this kind of thing in these consultations, but I think you can handle it,” he said, while reaching for an investment brochure. We talked about the different types of funds and asset diversification, and picked out a few things to try–some REITs, Index Funds, Emerging Market funds, etc. 

(I have a list of exact funds**, but this leads us to another issue–how to get my money to these funds. I’ve been trying to get some things set up through Fidelity and Vanguard, but both processes have been mildly frustrating, to say the least. Looks like I’ll have to actually call a human…) 

Overall, I enjoyed the experience, although he was a little pushy in emphasizing “unexpected surprises” like accidently having a kid (“My partner and I don’t plan on having any,” I said. “Well, you never know what nature has planned for you!” he replied. And I bit my tongue, saying to myself “That’s why birth control and termination options exist.” BUT THAT’S A WHOLE ‘NOTHER ISSUE.)

While I didn’t necessary learn anything new in the appointment (I’ve done a LOT of googling, reading financial blogs, etc.), I found it valuable in that it gave me some assurance that I’m already doing some things right. It clarified a few things about my own finances that I still found fuzzy, and it also gave me a little push to pursue some opportunities that I had been thinking about, but that my own risk-aversion (and generally change-resistant nature) had prevented me from already doing. 

All in all, it was pretty fun! I would say if you have the opportunity to take place in a meeting like this, do it. Even if you don’t necessarily learn anything that will make you change your financial goals and methods, it’s always nice to have a second (and hopefully, more experienced or knowledgable?) set of eyes go over your numbers and assure you that you won’t be eating cat food at seventy

* Contributions, not earnings

** I signed a paper that said he and/or the university and/or his company was not to be held legally responsible if I lost all my money, FYI

The Thing About Money, Part 4: Retirement, or, I don’t want to be old and poor

(This is the fourth post in a six-post series titled The Thing About Money. Click to read The Thing About Money, Part I.)

As mentioned in Part 3 of this series, one of the things that scares me about my current debt load/financial situation in general is not having enough money to retire on. 

This worry isn’t without warrant. According to this 2018 survey, 42% of Americans have “less than $10,000 saved” for retirement. 42%. So, pretty much half of us (assuming this excludes children–Why haven’t you opened an IRA yet, little Timmy?). This is especially true of millennials; 57% of us have less than $10,000 saved (GUESS WHO HAS TWO THUMBS AND IS IN THE CLUB? THIS GIRL!!!!). 14% don’t have any retirement savings at all.

Nothing. Zero. Nada. 

This is a problem.

As per the National Council on Aging, “over 25 million Americans aged 60+ are economically insecure—living at or below 250% of the federal poverty level.” A full third of senior households don’t have any money left over by the end of the month, and some have to go into debt just to meet their basic living expenses. And even if they get social security, on average, women get $4500 less a year because they paid less into the system (and this number is even worse for women of color). Many elderly people are working well into their seventies, but eventually, there comes a time when their bodies just can’t do it anymore. 

There’s a big joke about having to eat cat food into one’s retirement, but it seems like there are people who are actually out there doing it. Frankly, I don’t want to be one of those people. 

You bet your ass I will push Mittens right out of line to get to that Fancy Feast. Photo from pexels.com.

This is a multigenerational issue. In a previously-mentioned episode of Bad with Money with Gaby Dunn, Gaby talks to her parents about their retirement plans. Her mom laughs and says “You’re my retirement plan.” She includes something along the lines of how they’ve invested so much in Gaby and pretty much that they expect her to help support her parents in their retirement. This is an incredible amount of stress to place on one’s child. And some parents live longer than we expect, which means we could be taking care of them after our own retirement*. 

Luckily, I don’t have to worry about my mom. She’s about to retire from the military, so she has a guaranteed paycheck and affordable medical care for the rest of her life. The knowledge that she’ll be taken care of takes a great weight off of me; she’s too proud to ever ask for help, but I would have given it to her, had she needed it. But she doesn’t. And I’m super grateful, because now I have the freedom to only worry about myself.

Unfortunately, the reverse of this situation is the reality for people as well. Many parents of adult children are having to delay or are not adequately saving for retirement because their children still need support, either with general expenses or, often, student loans. It’s completely understandable why someone would want to help their children, especially if they’re struggling; however, this seems like a good time to remind everyone of what they tell you on planes–put your own oxygen mask on before helping others. 

I don’t want this to be my future, for myself or my mother. 

Like my mother, I am also too proud to ask for help if I need it, unless I’m in an incredibly desperate situation. There was one–exactly one–situation when I had to call my step-dad for emergency support, and it still ranks as one of the most shameful moments of my life. After I graduated college, I was trying to support myself on the only job I could get at the time–minimum wage at a local bagel shop. Parking was notoriously hard in my neighborhood, so I often played roulette with spaces in random apartment buildings. One morning I walked to my car to find it booted. The cost to remove the boot? $200. 

I did not have $200.

So I cried. I called the number on the boot and cried on the phone with the company, cried when some random man showed up to take the boot off, cried when he ran my almost-maxed-out credit card, and cried on my way to work, wondering how I was going to pay rent the next week. After work, I did the unthinkable–

I called my step-dad and asked for help. 

And cried some more. And he, sweet man–full of remorse from years of alcoholism and still feeling like he needed to buy my love to make up for it–he transferred some money into my high school savings account so I could write a rent check without it bouncing and get a few groceries for the week. I felt like shit. I felt like the smallest, most pathetic, most useless human on the face of the earth. I felt manipulative for calling him, because I knew he would help me, because I was too embarrassed to talk to my own mother. 

I am still embarrassed when I think of this story. 

However, I tell this story to remind myself of why saving is so important. I don’t ever want to rely on anyone else again for my support. Additionally, I have no children to care for me and currently no intention to have any, nor, if I do, would I expect them to care for me. That’s not their job. As such, I need to make efforts now to ensure that my finances are ok later. 

I currently have a tiny bit of money stashed away for retirement. As in, like, less than $5000. Additionally, I worked overseas for a full three and a half years, so that’s three and a half years I didn’t pay into social security. I’m in my thirties, and even though retirement seems like it’s a long way away, I don’t think I’m going to make it into old age gracefully if I don’t drastically change things now. 

However, there is a part of me that wonders if it’s even worth the effort. Should I worry about “the market” when climate change is going to cause “Human Civilization to crumble” by the time 2050 rolls around (aka when I’m 63)? Should I instead be stockpiling clean water, bullets, and sunscreen? (I talked about this a bit in my first post, so I’m stopping my existential ramble… now.)

Assuming we are still alive in 2050 and not slaves to our computers or in a war against an army of machines, I will need some retirement savings. 

It’s not easy. Since starting my new job, I’ve budgeted a pretty good chunk–about $500/month–to go into an IRA. Even with the rest of my expenses and my student loan payments, I should be able to keep this up at least through June. But then I might get kicked out of my employer-owned housing, and that $500/month might have to be added to my rent just so I can find a place to live (three cheers for the south bay). 

I recently cancelled my cell phone insurance and photoshop monthly plan, in an effort to save some more money. I tell myself that if I keep playing with my spreadsheets and adjusting my numbers by five dollars here, ten dollars there, I will somehow feel like I am not going to end up old and destitute, only to have my body tossed in a pauper’s field with the gravel barely covering my bones, where on windy days the dirt blows away and you can see my skull (Oh Milat—why did you stare at the mayor?)

But this is why I need to start now. As the oft-quoted Einstein supposedly said, compound interest is the most powerful force in the universe. I have about thirty years to get this powerful force to work for, and not against, me. So, next week, let’s take a good hard look at my budget. 

* This may be behind a paywall. I’ll work on posting more sources that are open access, but your local library may have a subscription through which you can access this article.