October Expenses: ouch!

October was a good month of life, but the spending was a little out of this world. Here’s the spreadsheet, then some thoughts, then a table.

Well, that was embarrassing! As you might have noticed, my spending this month exceeded my regular paycheck. Not a great situation. Anyway, let’s break it down.

Income

I recently adjusted my tax withholding such that I would receive more money (because I’ve already had too much withheld), but instead the opposite happened. Apparently when they made the adjustments they also incorrectly took out FICA taxes, which we don’t pay as grad students. Kind of annoying, but it should be resolved this month. Additionally, I was able to make a little bit of side income, which ended up being the difference between having some money to invest this month and ending up with a balance of negative something. If you also have a relatively painless way to make a couple extra bucks each month, you should do it!

All the categories except the last two

Pretty standard month here. Grocery bill was a little high, but that included buying a whole brisket for a little get together, and both the brisket and the party were amazing so–worth it! It was also balanced by a more reasonable eating out bill, which I’m happy with.

Mistake #1

Earlier this month, I took a weekend trip to go to a wedding. I thought everything was booked, but I apparently was mistaken. I had only booked my return flight, but not my flight going there. Oops! So, a $64 flight that I would’ve easily covered with points turned into a nearly $300 flight. I almost debated just renting a car and driving, which would’ve saved $100 or so but cost a third of the weekend. So I just bit the bullet.

Lessons Learned

  1. Obviously, to make sure I have my travel booked and double check the reservations. At first, I was pretty annoyed about this, but…
  2. I realized I didn’t have to be. If I was living paycheck to paycheck and not saving anything, this would suck. But as it turns out, I save a nice chunk of my income each month and plan to continue this practice indefinitely. In the grand scheme1Even with the decades of compounding I’m missing out on, this is a drop in the bucket. Additionally, even though I’m not financially independent yet, I’ve got a nice stash being built up that provides a good sense of security. With those things in mind, I realized that this was actually the whole point: I don’t need to worry about little mistakes like this! That’s the benefit of this path; you don’t have to worry about money. So I stopped worrying, booked the flight, and had a great weekend.

Mistake #2/great investment?

I’ve already blogged about my new electric bike, which including accessories set me back close to $700 this month. Time will tell if these was a mistake or a wise purchase. So far, it’s saved me $19 of driving and cost me one spare tire tube. But I’ll keep you all posted.

Summary and Table

A little blip in the road, but it’s all gravy baby2Did I use that expression correctly?. This month was certainly an anomaly. It’s kind of interesting to think about how this month’s spending for a year would be about $31k, which is actually less than a lot of people spend in a year. This blows my mind! I mean, what would my life (and our apartment!) look like if I bought an electric bike every single month?! And booked a next day flight just for good measure. Seriously though, this is why documenting everything is a good practice. If you want to get your financial life in order, a good first step is to figure out where your money is going. Anyway, here are my numbers for this month, last month, and averages:

Categories  October September  Rolling 3 month Average 
Savings rate  10.5%  31.6%  22.5% 
Time to Financial Independence3Based on this. Assumes a starting net worth of $0, so actual numbers are a little better than what’s shown.  50.3 years  26.8 years  34.2 years 
Monthly Expenses  $2330.04 $1592.92 $1896.01 
$ Required to be Financially Independent4Multiply the above by 300 $699,012  $477,876  $568,804 

 

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