We spent $4,404 in October which is pretty well in line with our recent history. We were pretty high in Home, Other Services, and Miscellaneous. But this was offset by lower than average spending on Merchandise and Entertainment. Let’s take a closer look.
Travel – $1,546: we had three quick weekend trips in October that were all pretty inexpensive. One was a driving trip to visit a friend from college (always cheaper travelling by car). Another was flying out to visit family. The third trip was to check off a new state! We have a goal to visit all 50 and are well on our way.
The rest was paying for seats on an international flight we have planned for next year (gotta have that exit row). We also bought some pretty pricey concert tickets and some crazy cheap flights for a weekend get-a-way in 2018. Our travel this month was heavily subsidized by the $1,314 worth of free flights and hotels we got by redeeming points & miles on our two trips.
Home – $701: this is pretty high for us. We are hosting my family for the Holidays and have been spending our way to a more beautiful house. It’s a little frustrating, but it’s hard to be mad when your home costs don’t include a mortgage payment 🙂
Food – $700: not much to say, this is a pretty typical month.
Other Services – $471: our cable/internet got doubled up for this month. I got a new credit card and was setting it up to pay bills in order to meet the minimum spend requirements. It happened that this particular bill got paid by both the new card and the old one. No worries though, just means it’ll be low in November.
Vehicle – $150: the maintenance costs are for the supplies to do an oil change on both our cars. Changing my own oil is about the only old-school man style thing I am capable of doing so I hang on to that chore. I like doing it because I feel like I can spring for better products since I’m not paying for labor. Gas is always that low, having two small cars is great. The gas from our road trip counts toward Travel spending and not Vehicle.
Merchandise – $137: we crushed it! We basically had a shopping free month except for a small Amazon order. The Personal Care costs are a couple of haircuts and makeup. Seriously, makeup is so expensive. I know a lot of frugal gurus advocate things like cutting your own hair to save money. It’s a great idea, do it if you want to. Personally I really enjoy getting my haircut, I like the person who does it and I like the way it makes me look and feel. I’m a guy so I only spend about $150/year on haircuts, or roughly 1/3 of what most people pay on their monthly car note. For me I’d rather have bomb hair 365 days a year than a bomb car for 10. #mentalaccounting
Entertainment – $63: this is depressingly low. Things are really picking up for me at work and I’ve been putting in some long days. When I did have some spare time I spent it working on this site. Maybe I should include W2BZ in hobby expenses…
Waiting To Be Zapped – $338: this is a lot more than I’m hoping to spend each month on the site. Hopefully now I have all the start up expenses out of the way and we’ll see this drop next month. For a detailed breakdown of how Waiting To Be Zapped performed in October check out my separate W2BZ monthly update.
Miscellaneous – $298: I despise “miscellaneous” categories in expense statements, but I just really didn’t know where else to put these one-off items. $210 was for non-reimbursed work expenses which is pretty rare. $78 was for our cat’s annual vet visit – happy to report she is in perfect health 🙂 And the last $10 was ordering transcripts from college to apply for a little side hustle I’m trying out. I might be too old to say “side hustle” it feels wrong. Part-time job. That’s what I’m after.
I like to update an annual estimate of our expenses every month (much like a company would do). This helps me get a good picture of how our spending is trending. It’s a little more analytical than just pro-rating YTD expenses – I adjust for past expenses that are one-offs and future costs (e.g. property taxes) that I haven’t paid yet. Our projected annual total moved down slightly after October, suggesting we had a marginally lower spending month.
Up first is a chart from Personal Capital showing our Net Worth growth for October. This look uses Zillow values for our house, so it’s probably a little overstated.
Our Net Worth climbed $19,722 in October – Yowza! The largest contributor is $7,658 of market growth. This is simply how much the value of our investments increased, the stock market has been en fuego.
Equally responsible for our increase in net worth is our actual savings – $7,429. We manage to sock away about 50% of our income and also got a boost from the $1,129 in employer match that went into our 401k’s, my wife’s HSA, and my employee stock purchase plan (“ESPP”).
The final contributing factor to our Net Worth growth is Zillow’s proclamation that our house is worth $4,635 more. I don’t put much stock in this. Firstly, our house is not a liquid asset, so we can’t easily get any increased value out of it. Secondly, rising home prices are not good for you!
I like to look at the increase in just our investments. This is the most useful information as it shows money we’ll actually access in the future (unlike home equity).
Our portfolio had a nice $14,464 jump in October. $7,658 is owed to market growth and the other $6,806 to investment contributions (money we saved). Of the $6,806 contributed, $5,677 came from us and the remaining $1,129 from employer match.
I actually have mixed feelings about the steady rise in our portfolio balance. Currently we are buyers, we don’t take any money out of investments we only pile money in. A rising market looks great for our Net Worth and gives us the good feels, but really it just means what we’re buying is getting more and more expensive.
Income & Savings Rate
As I’ve mentioned before, all of our income comes from our jobs (we have no side hustles). My wife and I both have professional jobs and have been medium successful at them leading to very nice salaries. We don’t particularly care for these jobs though, so we’re trying to take advantage of the surplus they create by saving. This way if we ever get zapped we will have the financial flexibility to leave our careers. A 50% savings rate is sort of our unofficial goal, and we hit it in October 🙂
Our net pay was a little lower in October because I had to increase our income tax withholding. We under-withhold throughout the year and usually have to catch-up at the end of the year. Tax withholding is treated as being done evenly throughout the year, it doesn’t matter when you actually have it taken out. So if you were to withhold $0 for income taxes January – October, and then have all of your paycheck go to taxes in November and December, the IRS would treat you as having made in equal payments over the whole year. In this way you would avoid underpayment penalties even though you were in fact underpaid most the year. I don’t recommend doing this, but it’s how it works.
Well there you have it. October was another strong month for our finances. Updating our expense report is something I do every month. We don’t have a budget, I’m very anti-budgeting which I’ll discuss in a future post.
I also check our Net Worth every month, but this doesn’t require any work on my part. Personal Capital automatically updates all the charts posted above. It’s a great tool for staying on top of your finances, is completely free to sign up for, and gives a lot of valuable information. If you sign up for an account through this link you can help support W2BZ and begin tracking your finances today. If you do sign up through my link I may receive a small commission but the service remains completely free for you.
Well that’s all. Have a great one. Live in a small house and drive small used cars.