finances

No Spend September. Why am I doing this? What do I hope to accomplish from it? How am I starting?

No Spend September - debt chains

Dreams of not having to work a 9-5 job, being able to enjoy each and every day and do things we find interesting. That seems more American dream-like to me rather than going to a job we don’t like, working 40+ hours a week to pay for your mortgage, that new leased car, latest cellphone, that trip overseas you put on a credit card. Now don’t get me wrong, I love my job. I mean, I get to work from home, make great pay for a single guy in a very LCOL area, great benefits and perks and I like the people I work with even though I’ve never met them. However, that doesn’t mean I still shouldn’t strive to be able to do what I love and enjoy and to take some of that 40+ hours a week back for myself.

When I was in my early 20s, I had found this information and got excited to only work as long as I needed to and then be able to work part time and do things I enjoyed. Then I lost sight of it all and gave in to what so many others thought was normal. I racked up credit card debt, student loans when I was unmotivated and didn’t know what I wanted to do. I was told and believed early on that college is a necessity, you need to get that vehicle loan, credit cards can help build credit, and more that I believed. Now I’m not blaming anyone, my situation is my fault and not as bad or in as deep as others are. However, I’m still in the hole and slowly digging my way out more disciplined with a goal to be financially independent, semi-retire early and not have to work into my 60s until “normal retirement” age. I’ve found normal doesn’t work that well for me.

No Spend September

Why am I doing this?

Well, I’m pretty good at tracking and sticking to a budget. Not every month, but I don’t overspend yet still sometimes only have a couple hundred dollars left over. I go look at Mint to see what kind of transactions I’ve done and it’s dumb stuff. So I only want to spend my money on the necessities. My required bills, transportation to get from point A to point B and to continue paying down debt are all I want to spend my money on this month. I put my expenses, bills, etc in a table below and want to see how much I have left over on October 1st.

What do I hope to accomplish from it?

I want to see my debt decrease and my checking and savings account increase. I mentioned in my last post that I had paid off just over $3,000.00 in the last couple months on debt. I want to continue that trend so I’ll hang on to whatever money I have left over by October than apply it to debt to see those accounts decrease even more. The debt payments listed in the table below are just the minimum payments so what I have left over will be in addition to those. I’m utilizing Dave Ramsey’s Snowball method by paying off the cards with the smallest balances then take the minimum payment from the paid off card and putting it into the next one and just snowballing the payments one by one to get to 100% payoff and 0% credit utilization.

How am I starting?

I’ll be tracking all purchases as I go and then release a list at the end of the month. As of right now, I have $1,292.51 in my accounts I use for purchases. Any purchases will go into an Excel sheet and I’ll be subtracting them from my September checks so the money currently in my accounts will not count towards September “income” but I’ll include a total balance of my accounts at the end.

Setting a FI/RE date

For those who might not know, FI/RE is Financially Independent/Retired Early. It basically means that someone saved more than they spent, invested it in either stocks, mutual funds, or more tangible assets such as real estate. Those who are FI/RE may still work but not as much and it’s not out of necessity. They may get a payout from investments, have a few passive income streams setup, or collect rental income.

My FI/RE goal includes having rental properties, a small self-sufficient farm to provide my own food and energy, and stock/mutual fund investments. So my planned date is before I hit 45 so May 24th, 2034 or earlier. Real estate is my #1 priority after debt payoff so once I’m done with that, I’d like to find a fixer-upper or two for cheap and fix those up to rent out. Doing a No Spend September will be give an exact idea of how much each month I can put towards this and that will only increase as pay raises come in, bonuses, decreasing monthly bills, etc all go towards these goals.

Finances

As mentioned, I put my finances, monthly payments for debt, savings, income, retirement contributions, etc into a table to track better. If I stick to this all month then I should have just over $1,000.00 at the end of the month to put towards debt.

I currently make $55,200.00 a year salary so my checks come in on the 10th and 25th each month and gross$2300.01. After benefits, retirement contributions, savings, etc I have about $1339.00 from each check deposited to pay bills out of.I pay anything due between the 10th and 24th out of my paycheck on the 10th then anything from the 25th to the 9th out my 25th check. It makes things a lot easier to track and it’s fun to sit down and just pay all your bills, it’s hard to explain. Maybe a feeling of accomplishment or something, I don’t know anyone else who legitimately looks forward to paying bills as much as I do.

Required ExpensesAmount DueDue Date
Groceries$400.00Every Saturday
Bald Eagle Barns$200.0025th of the month
Gas$120.00As needed
Cellphone$80.0010th of the month
Auto Insurance$70.0010th of the month
Electric$50.0010th of the month
Internet$40.0010th of the month
Total Required Expenses$960.00
Entertainment Expenses
Misc.$50.00As needed
Netflix$10.911st of the month
OneDrive$1.991st of the month
Total Entertainment Expenses$63.00
Debt Payments
Credit Card #1$140.0010th of the month
Credit Card #2$105.0025th of the month
Credit Card #3$70.0025th of the month
Credit Card #4PAID OFF
Credit Card #5PAID OFF
Credit Card #6PAID OFF
Total Debt Payments$315.00
Savings Payments
Backup Checking$100.00$50 on the 10th and 25th
Emergency Fund$100.00$50 on the 10th and 25th
High Interest Savings$100.00$50 on the 10th and 25th
Total Savings Amount$300.00
Total Expenses$1638.00
Total Income (bring home after taxes, 401k, benefits, etc)$2700.00$1349.77 (Paid on the 10th and 25th)
Contributions to retirement$460.00 + $115.00 (Emp match)

 

I may do a post halfway through showing progress but if not then I’ll be back in a month. Thanks for stopping by and reading!
-Seth

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Paying off debt is fun. It’s hard but it’s actually fun watching those numbers go down. It’s been a couple months since the last update so wanted to give a quick update on thing. I had mentioned a few things such as paying off debt, wanting to get in to real estate and rentals and all that jazz. So I decided to get started right away on a couple of things with the biggest one being debt payoff and this is a small update on those.

The tiny house is still going, my platform is done and I’ve started on the ceiling. I was going to need to some help and still will on a few spots but I’ve been able to knock out some of the insulation and putting up ceiling supports for where I’ll be installing my tin. Still have a ways to go on that but it’s slowly coming along. Once I get everything done that I cant reach, I’ll be starting on the rest of the floors and getting the kitchen laid out. The plan is to do my own storage and cabinets, or at least trying, and I’ll be able to do that before the plumbing goes in and then move stuff where it needs to go once that is done.

I found a company that purchases delinquent land from the state after they’ve been seized for not paying taxes. I was able to get a half acre in Highland, AR about a mile from the school. It’s a wooded lot but utilities are already in the area so will just have to have the service lines ran a few yards. It was only $1200 so I decided to jump on it.I don’t plan on doing anything with it right away and after talking with an attorney, I have a couple options to be sure I own it outright. The company I’m purchasing it from has a limited warranty so technically the last person who owned that the State of Arkansas took it from after non-payment could come back and take it from me.

Given the location, price and the fact it had already went to auction a couple years ago and was only recently transferred from the State of Arkansas to the company I’m purchasing it from, it felt like a risk worth taking. So once the deed is transferred to me, I can try to mail details to the last owner on the land to issue a quit claim deed basically saying they have no interest in this property and waive all rights to it to make it mine. If I don’t get a response then I can wait a year and file an action to quiet title. This will involve getting the lawyer to submit the request and then the court handles it to waive the past owners rights and make it mine. It’s also within a mile of two lakes and no neighbors around so it’s basically country living with city conveniences.

As for the debt, I don’t think I had mentioned how much debt I had accrued because of stupid decisions. I started to focus 100% on my finances to meet my financial and real estate goals so in June update, I was $12,797.00 in just Credit Card debt. Like I said, stupid, stupid, stupid decisions. Since June and as of today – August 26th, I’ve paid this down to $9,754.00. I still have a bit to go and want to have it all gone by March 2018 but may push it back to May 2018  Last year, I had taken advantage of the Workforce Improvement Grant which paid ~$750.00 for each semester. The college informed me that this year that the Department of Education was not funding this so for three classes, I’m paying $1,300 out of pocket. This doesn’t include books but those weren’t too bad since I rented through Chegg.

It’s currently 1am here so going to wrap this up. I’ve been considering making my finances more public, showing what I spend each month on things to make me more transparent with having to keep things updated and trying to decrease spending every month. Right now, every little bit is going towards debt so I stopped my $1000 a month minimum savings and putting that towards it right away. I found some information on credit card churning and I have a couple cards that offer rewards so once I get my debt down to ~$4000 or so, I may look at using those cards to pay my bills every month, rack up rewards, pay the cards off every month and then use the rewards on things like gifts or something, I don’t know. I don’t plan on doing anything until debt is paid down so that’ll be a couple months away.

I’m including a couple links below of a few other blogs I’ve located in the last month or so that have lit the fire under me even more to focus on FI/RE so maybe they’ll help others too. I use EveryDollar to track expenses and then Mint to track net worth and assets.

The Retirement Manifesto – http://www.theretirementmanifesto.com/
Fiery Millennials – http://www.fierymillennials.com/
Root of Good – http://rootofgood.com/

Thanks for following along,
-Seth

 

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As we come upon the half way mark of 2017, I’m disappointed with progress so far. This year I had made my goals of paying off all debt except student loans, keto and weight loss, visiting Colorado, going to see the ocean and finishing a tiny house to live in as my priority. While I’ve made some progress, I’m still far from reaching any of them and it’s disappointing. The most progress on anything has been the tiny house and it was #1 but I’m not as far along as I want to be. I thought I’d be able to move in by mid-May but here we are in mid-June and I still don’t have it to where I can comfortably stay in it. I wasted away most of the days I had off a couple weeks back and didn’t get near as much done as I thought I could. I’ll admit, I can be lazy so I think it stems from #1. Being Lazy, #2. No clue what I’m doing so spend a decent chunk of my time in the house thinking of what I need to do next instead of focusing on the project I started. This can probably be said for all my goals I had originally set. It’s a lot easier to sit in front of my computer and look at all these great ideas for tiny houses, trying to live more self sufficiently, etc then it is to go outside and put it into practice to reach the goals. As sad as that sounds, I think that has a big part to do with why I haven’t made it as far as I wanted to be by now on things and why I make excuses for not just going to do things like Colorado and the ocean. I’ve got complacent in life, with my work, with my certification stuff for work, relationships and friendships, just everything.It’s easier to just watch it all than it is to put forth the effort and get things done.

I’m writing this on June 11th, not exactly sure when I’ll post it but I think maybe I need to rethink what goals I set out to do this year. Not give up on them, just actively work toward them and be more mindful of the effort I do put towards them or any effort that doesn’t bring me closer to reaching them. I’m not saying I plan on having no free or down time but more conscious of having free time and using free time as long as a decent amount of effort has gone to other things I’ve prioritized.

So starting today, it may have already been in place for a week or longer depending on when I post this, but today June 11th I want to make some effort every day towards the goals I have set. The financial goals I’ll do semi-monthly but everything else, every day :). Maybe I need to come up with a schedule and allot a period of time towards each activity. Lets see how this goes:

Week Days:
I work 8a-5p, usually try to be in bed around 9-10 and then spend time on my phone for another hour or more. I want to try this for a couple weeks:
5a-7a : Study time. Mainly for certifications, I still have two tests I need to knock out by September so a couple hours a day of studying and labs will help.
7a-8a : Get ready for work. I still have the habit of every day getting a shower, getting dressed so I don’t get lazy working from home so that’s what I’ll do with this hour.
8a-5p : Work. I get an hour lunch which previously I was using as a nap since I would go to sleep late (12a-1a), wake up early(330a-5) then try to get more sleep. But I may use it to do housework like laundry, dishes, make my bed, etc.
5p-7p : Go work on the tiny house.
7p-9p : Read. There’s tons of things I want to do and learn about like composting, rain water collection, gardening, etc. So I’d like to do some research during this time on those kinds of things. However, I’ve also read that not using electronics an hour or so before bed can help with sleep so I may do things the old fashioned way and buy a book here and there or go get a library card.

Weekend Days:
No clue yet. the last couple weekends I wouldn’t roll out of bad until 11a or later and I felt like I lost so much time. June 12th will be Day 1 of Keto…..for the 3rd or 4th time? So meal planning and prepping will definitely be one one of these days and then I’ll probably go do some work on the tiny house. I’d like to anything that needs done outside done early in the day so may still wake up early and make use of the cool part of the day.

 

On to this keto thing. I first read and started it in August 2016 and remember thinking, man a year from now I’ll be even sexier than I am now. Then I fell off of it, got back on it again for a bit and fell off and just have done it 3 or 4 times now. It’s been almost a year and while I’ve lost some, it’s nothing significant to make any big difference. I need to get back on it though so done my meal prep this week and got everything situated.

 

As for the financial aspect of the goals, that will be handled semi-monthly on paydays. I received a raise and went to salary a few weeks back so trying not to let lifestyle creep become a big thing but it’s been inching in and I’ve been justifying it. I won’t divulge my exact income and total expenses but my required bills(not including debt) total about $940 a month right now with debt payments around$450. My employer announced a match to our 401k so I’ve increased my pre-tax and ROTH contributions to 5% each. I have a minimum of $1600 taken out and put in my savings accounts then whatever is left over has been spent on things here and there like eating out, a soda or energy drink while I’m going somewhere, things I’ve deemed necessary for the tiny house build, just dumb stuff so it’s been adding up. Aside from the septic system and appliances, I believe I need to spend another $400-$500 on insulation and material to get the ceiling finished so that’ll be the last big expense before I can start living in it. Then after that my money I’m putting into savings now will be going towards paying off debt and should be able to be done with that by end of the year. So right now I’m not sure if I’ll also put some aside to do the Colorado and ocean thing or if I just want to get the debt out of the way and done with and postpone those. Ideally, I’d like to do one of them and I wanted to visit Colorado in the summer so we’ll see how that pans out. So to sum up financial goals:
Debt Free – I’m setting March 2018 to be completely debt free.
Real Estate – I’d like to own at least one rental property by 30. If I stick my budget, live at my current expenses each month, avoid taking on more debt and no big emergencies or job loss then I should be able to save a minimum of $30,000 a year. I may also look at changing my current investments to include REITs but I’d prefer to have my own property.

So that’s a goals update for 2017. As mentioned previously, I have such a long way to go but I’m hoping being more mindful of my time and having a schedule put together will help me realize how much time I’ve been wasting while getting more work done.

 

-Seth

 

 

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