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Reevaluating My Expenses

If you want to improve at something you constantly have to scrutinize what you’re doing, rethink it, change it and discuss it with others, and read books on the subject.

When I was drag racing I didn’t know shit. I didn’t grow up street racing and the fastest car I owned was a 6 cylinder Ford Maverick with a 0-60 of 18 seconds.

I started racing and learned a lot. Couldn’t get my race car to launch at 5k RPM no matter how hard I tried. I thought it was damn near impossible. Then Bryant took my car out for a race… wow. Not only was it capable but Bryant kicked ass with my car.

Knowing that something is possible may be all that’s needed if the motivation is there. From then on my numbers kept improving. Like the nerd that I am I kept detailed 60′ times, reaction times and top speed and 1/4 mi times.

My expenses went through a similar evolution. I decided on the goal after figuring out what I wanted out of my life. At first I just tried to cut out all the unnecessary shit. For me that meant cutting out the stuff I was spending money on which wasn’t necessarily bringing me closer to my goal.

The money I was spending on myself I would have much rather have spent on a more worthwhile cause.

When I started YNAB-ing I had to create multiple categories. And of course with time I discovered that I was spending on far more shit than I was even aware of.

As new expense transactions would get downloaded by the software from my bank account I’d discover the monthly subscriptions I had, the shit I had to buy for my car, the dentist expenses, the magazine subscription (it was 2012, they existed).

So, I got into the habit of reevaluating my recurring expenses regularly to see if they are worthwhile, if they are keeping me on path to reach my goals and whether I can optimize them in any way.

Housing ($320/mo)

I bought the condo for $142k out the door, cash.
I pay $167/mo for HOA dues which includes water, building insurance and a security system.
I owe around $175/mo for property taxes, 33% of which I can write off against my taxes.
Utilities (electricity) is around $22/mo. I don’t use A/C but use the heater in the colder months (Nov-Mar).
I spent right around $3k to furnish my place. I’m happy with the result and I think my woman liked it too.

I’m happy with these expenses, for around $300/mo I have safe and convenient housing. I don’t think I will have any more decorating expenses. There is always maintenance to be done so I figure I’ll have a few hundred dollars every year which I’ll spend on that. That’s quite negligible.

Speaking of housing. I have the ability to generate income (short-term rental) when I’m away visiting my lady, that’s something I need to capitalize on. Before doing so there are a few things I would like to fix, but it’s in the near future.

The alternative here would be to free up that $142k by selling the property and going back to renting. I would get rid of some monthly expenses and be able to invest my $142k. In return I would have to start renting again, which means having to pay $900/mo at the very least. Not a good trade-off at this time.

Home WiFi ($50/mo)

I pay $50/mo for this service through a carrier¬†that I’m quite happy with. It isn’t cheap but it’s reliable and it doesn’t cause me any headaches. I could try to bum off a neighbor and I don’t care much about the legalities of it quite honestly but saving $25/mo wouldn’t be worth the headache of doing so. I also have a secured connection device that I use to access the intranet at work, it would be tricky to do without that.

Financial Adviser ($125/mo)

I work with Andrew from Modern Dollar Planning. My fee currently is $125/mo. I look at this expense as a way to insure my investments. If and when the markets eats shit or changes in an unpredictable manner it’s good to have an expert who can keep me from making very costly mistakes.

I have $420k invested and adding over $10k to my stash every month. Paying 0.35% to insure my money seems like a fucking bargain. That’s $1,500/yr. I have gotten far excess of that in return.

I don’t pay $125/mo to Andrew’s business so that he makes my money grow. That’s not his job. He is here to guide me through my asset accumulation, investing and eventual draw-down. I run my major financial decisions by him and he makes the right financial decision while I can veto by making the right emotional decision for myself.

The alternative would be for me to manage my own money. Take the risk of making a mistake and losing that objective outside perspective. It’s not something I see myself doing.

Gym Membership ($77/mo)

Exercise is my exogenous serotonin. The first few times that I get back into it the routine can get monotonous. When my muscle mass builds up, when my energy surged and my sleep improves I start taking the healthy conditions for granted.

Subconsciously I think that because I start feeling so well I just start slacking off and quit my routine. Other times a small life upset will make me lose my will to exercise.

Exercise has a healthy place in my life. I have an optimum muscle mass and body weight at which I am more alert, feel more rested, have more energy and makes me feel really at peace.

I get attached to certain sports. Used to be basketball. Then tennis. Then requet ball. Then surfing and now bouldering.

Netflix ($8/mo)

What can I say… it’s my crack. I’ve gone a few days without watching it. Mentally I’ve gotten used to that mindless state I achieve with Netflix.

I try to watch things that are a bit healthier for my subconscious mind though I don’t always succeed.

I don’t think I will be cutting this out anytime soon but secretly I think it would make for an interesting experiment.

Books/Audible ($50/mo)

Listening to audio books is perhaps more entertainment to some but I view it more as an investment. I wonder if it’s more a cultural thing but in this society we tend to view buying books, spending on sports and socializing with friends as an expense. Yet if we transfer $4k into our Vanguard account it’s an investment.

I’m trying to retrain my mind to recognize such expenses more as investments rather than a line item in my budget.

I like taking notes in my technical books, writing while holding the paper and smelling the fiber of the book is something really pleasant to my senses.

I buy my books usually used and so don’t spend too much on them, but over the year it adds up, I figure $35/mo.

My Audible subscription has been wonderful. On this platform I like to purchase books which are more inspirational or meditative. It costs me $15/mo and so far I’ve found every book I ever wanted.

Entrepreneurship ($550/mo)

I have a shared office space at $495/mo, a podcast subscription at $25/mo and some fees that I pay to maintain my website.

The shared office space is still up in the air for me. I am justifying the cost by making sure that every month I pick up enough extra shifts at work to cover the overhead. It’s a good place for me to meet other entrepreneurs and it’s just an interesting vibe, hard to put it into words.

The podcast which I subscribe to is Radical Personal Finance which has taught me a lot so far, much like my FA fees, above and beyond the ongoing cost. I’m learning a lot from this platform, and like anything in life, as long as it brings me value I will continue with it.

The website is a way for me to express my thoughts, forces me to do research about what I’m writing and it’s a good place to refer anyone who is interested in what I’m doing with my life. It serves as a tool to brand myself in case I want to do something with the expertise which I’m gaining writing about this shit.

Alternatively, I could give up the office space, create a more formal space in my condo or go back to writing and reading at coffee shops. I could take my writing offline and create something more formal for myself, such as writing a book.

Groceries ($400/mo)

I’m always caught between buying organic, non-organic, non-GMO and all the other labels and categories that make me think too much.

For now I’m buying mostly organic, just like I’m mostly vegan. I feel better and though a whole plant-based diet is a little more expensive it’s worth it for how it makes me feel.

I’ll be honest for 1 person this is quite a bit of money to be spending on groceries.

I could forego organic, buy less ready-made shit and make simpler dishes. I could probably save $200/mo tops, again, don’t think it’s worth it, the savings would be 0.1% of my annual take-home pay.

Entertainment/Dining Out ($700/mo)

This is one varies a good amount month to month. Entertainment is watching a movie, going to a show or spending on some other experience.

Eating out is not something I plan for, it happens when I’ve been stressed out, starving and didn’t have time to pack grub. Some of the food I end up buying is quite fucking disgusting but for the sake of not getting irritable I end up spending money on the said crap.

This is the one category where I think I can save a lot of money. I don’t mind the entertainment stuff, maybe $200/mo which would even be enough for me to socialize with friends – that’s a $500/mo saving.

I’ve been used to thinking like this: “If I do xyz I could save $x which after 30 years would be worth $y in my bank account.” And now I’m trying to train my mind to think something like this: “If I save $x a month then that’s $x that I could give to a good cause.”

Commuting ($20/mo)

I’ve cut this down quite a bit. I will take some credit for not owning a car.

Just a month ago my expenses in this category were far higher because I had to go to Vancouver, WA a few times a month for work. I had a busted knee at the time as well so I was renting a car often to get up there.

Now I mostly ride my bike to the further away urgent care sites and combine it with riding the Max Train which is $5 for a day pass.

I could ride more and use less public transport but some nights I’m so beat after a shift that I just don’t have it in me.

 

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