food costs challenge – june 2019 report

It’s time for the first full month report for our Food Costs Challenge! June was just about spot on for our target restaurant/fast food spend!

Our goal was $350, and so at $352.40, we were right there! You can also see that our frequency was one of the lowest of the previous year.

So how did it feel? With the exception of being tired a couple nights when we cooked (where we would have previously gone out to eat at a restaurant), it felt pretty okay. We had just a couple of additional conversations where we were deciding when to go out to eat and when to stay home. It didn’t feel hard to me really, probably because…

…we spent significantly more on groceries. We spent $906.48 on groceries, which is so absolutely insane for 3 adults and a child! Our total food costs for the month of June was $1,298.88. So. Much.

I know that we are going to need to address our food costs as a whole. We tent to buy bulk, so I’m hoping that our monthly average goes down over time. We have also had some conversations about making larger quantity, lower cost meals. With an Instant Pot, crockpot, and someone here in the day to start something if we need it, we really shouldn’t have any problems making 2-3 large meals (with 8-10 servings) throughout the week.

I’d love to be between $750-$850 per month for food costs for our family. I think that is a really reasonable goal to aim for. And wow, that’s $500 less than this month. Imagine what we could be doing with the additional $500/month! It’s time to reign it in!

So tell me reader, how was your June? What amazing meal did you eat? What do you think of our June report?

Cheers!
Mel

smashing FIRE goals

Hey reader, we achieved big FIRE goals this week!

Al and I both found out what our salaries are going to be for the new biennium at the GovJobs, and we maxed out our 457b deferred compensation contributions! We had been talking about doing slower increases for the contributions, but ultimately we decided to do it now. Short term pain, long term gain, right?

When we started with the GovJobs, neither of us knew the details of the 457’s and what they could do for us in the long-run. Let’s look at some numbers about the contributions:

  • We are contributing $791/paycheck, which is $3,166 (pre-tax) for our household.
  • Although we won’t hit the limit for 2019, we will hit the $38k limit for the following year and plan to continue those contributions.
  • The software application says that I am contributing 215% toward my goal and would make $105k/year in retirement if I retire at 65. Little does it know…
  • It also says that for my age range (30-39), gender (female), and salary range ($75-$100k), my average peer is contributing 6%, the “Top Peers” (whatever that means) are at 15%, and I am at 28%.

It’s going to be a little painful this summer, because we have some big expenses coming up. Since our whole HVAC system needed to be replaced, we’ll be financing the replacement with a 0% 12-month loan, which I’m estimating will cost us over $1k/month (estimating around $15k for total replacement).

And now our paychecks will be smaller. But I’m pretty sure we can swing it because we don’t have any other major plans in the works for things like major trips/vacations, large expenses, etc. Honestly, we just need to start living within our (new) means.

What FIRE goals are you working on, reader?

Cheers!
Mel

personal finance structuring

Hi again reader,

Before Al and I got married, our accounts were totally separate. We had a number of conversations about whether or not to combine our finances, and to what extent. At the time, we ultimately decided to keep one or more accounts in our individual names, and then open joint accounts from which we would pay bills.

Since we’ve recently started digging into our finances, I’ve become increasingly frustrated with the way that we’ve been managing our accounts, so we decided to make some changes, and things are now structured like this (some of this has changed, and other parts have remained the same over a long period of time):

  • Joint credit card: This is the card we use the most, where we get our cash back, etc. We pay off all of our credit cards every month. We also have a Lowe’s card (only ever used at Lowe’s) and will soon be closing another credit card.
  • Joint checking: This is where we pay our bills from, including the joint credit card. Auto-payments for recurring expenses come out of this account. We both contribute to it from our personal checking/savings (see below).
  • Joint emergency savings: This is for true emergencies. We are establishing a goal that’ll allow us to pay at least 3 months of our mortgage plus a bit more. We may up it in the future to include more expenses, but for the short term (and because we have the next account), we’re not going to include all monthly expenses.
  • Joint house savings: This account allows us to save for house projects. In the past, we’ve just waited to do larger projects until our joint checking filled up enough, but we wanted to be much more intentional about the way that we do these projects. We will contribute to this account regularly, and when we have a project that we want to tackle, we’ll deplete it (by using our joint credit card and paying it off with this account so that we get the cash back) and then rebuild it.
  • Personal/individual checking and savings accounts: My paycheck gets deposited into my personal checking account, and then I divvy up the money for the above-listed accounts. After each paycheck, I keep a few hundred dollars in both my personal checking account and also my savings. If I use my Target debit card to save 5%, it comes out of my checking, and I use my personal savings for things like buying gifts for my husband. I honestly don’t keep track of the intention of his personal accounts, because he’s very diligent about transferring the money and never misses paying bills; however, I can see these on Mint if I need to.

We can see everything on Mint.com, with the exception of Bo’s 529, since that’s not money for us. All of our accounts (checking, savings, credit cards), debts (just our mortgage right now), investments (our 457b deferred compensation), property/assets, etc. can be seen by both of us. I think it works really well for us.

Do you manage your own finances, share responsibilities, or split the responsibilities? I am always curious as to how others manage their personal finances! Do you have questions or suggestions for us? Drop a comment below, reader!

Cheers,
Mel

thrifting

Hi reader,

I typically get pretty overwhelmed by shopping in actual stores, but I’ve had a hard time with quality and fit while shopping online (duh). After the garage sale, I wanted to try to get a few pieces to add to my wardrobe at a thrift boutique. I cannot say that I filled very many holes, but having a few more things for summer will be awesome! The items are brands that I am familiar/comfortable with (J. Crew, Loft, and Lou & Grey), while not breaking the bank. With a $10 off coupon, I spent $32 total (incl. tax) on 3 clothing items, which is not bad at all!

I also found a tray for my dining table, which can either stand up on legs or will lay flat. This is not at all a necessity, but I’ve been looking for one that fit (to hold my plants) for a long while! It was $22 total.

Overall, I’m counting it as a success! I’m loving the colorful shorts especially.. Stretchy waistband with pockets? Count me in! I’m excited to go back in the future, since they add new items every weekday.

Where do you go for deals, reader? What have you scored lately?

Cheers,
Mel

more about ‘retire’

Hi reader,

I want to talk more about the 4th ‘R’. I started at the GovJob in my 20’s, which was a startling experience. After my previous non-GovJob where the oldest person was in their 50’s, but most people (in the 20-something person company) were in their 20’s, fresh out of college. I was very aware that I was young and inexperienced, but also knew that I had climbed the ladder quickly at my old company. I intended to do the same at the GovJob.

A couple years after I started the GovJob I got a promotion into a different division. And this division’s average age was much, much older. It was a very noticeable change as I was the youngest person in my area by more than 10 years. It was during the time in that position that the GovJob sent out an article that gave some statistics about my agency: 55% of employees were eligible to retire in 5 or less years. Whoa, that’s more than half of the people I see around me every day! I started imagining a ton of opportunity ahead, due to vacant positions.

And then I started noticing the retirements… one, after another, after another. And I really started noticing the people retiring. They talked about their career and their friends, who felt like family, because they have spent so much time with them. One gentleman from my team retired at 72 with 47 years at his GovJobs. I started being bothered by the fact that, at that time, I would have to more than double my whole life to retire. And it was not uncommon for those who were retiring to be old, exhausted, and plagued with physical issues. Some people limping, people in chronic pain, and people who had taken long stretches of unpaid time off (delaying their retirement) to take care of their medical issues or their family’s medical issues.

And now I am 31. My goal to reach financial independence and to retire is between 45 and 55. Because if I were to retire when I was set to, I would retire in exactly twice my current age. And I already have some (minor, thankfully) chronic health issues. Issues that the doctor’s aren’t able to diagnose. And I think about where Bo will be in 15-20 years. Going to college? Starting a family? I want to be able to be there with her for these things! And our major retirement goal is to go to every major college football stadium and rivalry that we can. I want to do that in my 40’s or 50’s, not my mid-60’s.

So now, reader, you see how the retirement seed was planted. And why it sprouted when I found the FIRE community.

What is your motivation for making financial changes?

Cheers,
Mel

reducing expenses – small changes

Happy Tuesday, readers!

In the personal finance realm, I often read that people should reduce their expenses. Obviously that means spend less money. Especially on things that are not important to you. I’ve been looking for ways to reduce recurring expenses (in addition to reducing my food costs, of course). I like seeing real examples so here are three small changes we made recently that will reduce our spending.

  1. Downsized our garbage service: Saving $20/mo. When we started garbage service after we moved in to our house, we got the second smallest garbage can, a standard huge recycle bin, and a yard waste bin. After we had Bo, we needed to increase the size of the garbage can. Now, we rarely fill it up, and almost never fill up our yard waste. Downsizing our garbage can and stopping yard waste service all together is saving us quite a bit of money for making pretty much no change in our lives. Our yard waste goes into the compost bin anyway, and if it doesn’t belong in there, we can take it to the dump or, better yet, see if a neighbor has space in their bin!
  2. Stopped getting my eyebrows done: Saving $20 every other month. I used to get my (very unruly) brows done every other week, but when I got my GovJob (6+ years ago), the brow salon proved too far to go regularly so I was down to once every couple months. Last time I went I thought to myself “I could have done them better anyway”, which would save time AND money. So I did, and they look great and from now on I will spend $0 getting my brows shaped.
  3. Bought cloth napkins: Will start saving us money if we use them for more than a year (and then will save about $20/year). We buy the $9.99 Costco 4-pack of 260 napkins (1,040 napkins total) and since there are 4 of us in the house, we probably go through them pretty fast by using more than 1 per day (we do have a toddler, after all). The cloth napkins were right around $20 on Amazon. We used to use cloth napkins but for a couple years, we’ve been buying paper/disposable napkins. The environmental guilt definitely got to me more than the money on this one.

Those are my examples of small ways that we’ve reduced expenses lately. What other small changes have you made that lower your expenses or impact on the environment?

Cheers,
Mel

multigenerational home

Hello reader,

When Al and I moved into this home, we intended on having 1-2 children. It didn’t take us long to have Bo, but her delivery was much worse than expected. Physically, I would not recover for a full year after her birth. My GovJob gave me more time off than required by allowing me to take off 6 months (they do not offer paid maternity leave, so this was without pay, though I had saved about $8k for this period of time). After 6 months, I came back to work half time and we paid my aunt to watch Bo. That first day it was heart-wrenching to leave her, but I knew she was in great hands.

After a few months, I knew I would need to return to work full time, and my aunt had different plans for work in the fall. I started looking at daycares, and was shocked by the terrible reviews. Though I did expect the high price. Because of her age, it would have been over $1,000/mo for her to go. Al asked me if I wanted his mom, my MIL, to move in temporarily to our house to watch Bo, before finding her own place nearby. My response was “Hell no!

Al had grown up with both sets of grandparents nearby and they had been instrumental to his young life and to his later success. At the time we were considering daycare, his mom was living with his sister to take care of her future children, but they had recently decided to remain childless. His sister and her husband were moving often at the time for work.

We decided to have my MIL come up to watch Bo while my aunt was on vacation. Increasingly frustrated and discouraged by the daycare search, we decided that this could be a trial run for watching baby. At this point, we had not yet talked to her about watching Bo full time. I didn’t want to say it until I felt comfortable with the idea. I was still nervous to leave Bo with anyone at this point (I’m pretty sure that up until this time, only my aunt had watched her).

The week went well! It felt good to have someone watch Bo because they loved her, not because of money. And it was wonderful to be able to get up and go to work without waking the baby up and shoving her into a car seat as she screamed to slow down and cuddle. It was amazing not to have to transport bottles and milk and just leave instructions. I definitely saw the benefits of having a grandma watch her.

When we made the offer for her to move up to watch Bo, she responded “YES!” before we could even get the question out.

A few weeks later, late July, my MIL drove up with her things. She got settled in one of our 4 rooms, and began watching baby. The original goal was to have her find a place nearby by September. Because she had no savings, a small amount of debt, and only Al’s late father’s Social Security, it would be up to us to find a place for her. And apartments were as expensive as daycare, or more.

I’ll be honest in saying that a permanent living situation scared me. I am a private person who sees my living space as a sanctuary. I didn’t want to censor or adjust much. Fortunately, my MIL fits into our living situation and family dynamics well. We’ve had our fair share of “figuring this all out”. It hasn’t been seamless. But ultimately we decided that her staying with us permanently is the best thing for everyone.

Having a multigenerational home allows us to share costs for things like food, heat, and home supplies. It allows us to be close and build a more solid family unit. We are fortunate that we bought a split-bedroom home (the master bedroom is on one side of the house, and the other bedrooms on the other) so that everyone has some privacy. I don’t feel like I’ve lost my sanctuary. In fact, there’s nothing better than going directly home (no stopping at daycare) to a well-rested child, an empty dishwasher, and a happy pup (he’s not alone all day).

Now, I feel very fortunate to have my MIL live with us. My peers are often shocked about this. I initially looked at it as “high risk, high reward”, and though there are challenges, the reward far outweighs the adjustments that we’ve made. Amongst our peers in this area, our living situation seems unusual. But the culture of siloed family units is historically unusual in itself.

Who comprises your cherished community (whether it be family, friends, coworkers)? How have you built and strengthened community?

Cheers,
Mel