Welcome to another post in my Financial Independence Update series! If you don’t know what the purpose of this series is, please read this first. This month, I am covering July of 2018.
I want to follow this particular format in these posts:
- Main Goal(s). This will talk about my main financial goal(s) that I set out for the particular time period.
- Ups and Downs. This will be a general reflection of what went well, what did not go well, and some improvements I am looking to make.
- Financial Picture. This is not a net worth update. In this section, I will talk about how I deployed my cash in a way that improved my financial situation and why I did it the way that I did.
- Looking Forward. In this last section, I will talk about what I plan on doing going forward. This can include how I plan on deploying cash, any changes in my strategy, or any significant expected changes in my financial situation in general.
Before diving in, I just want to give you a heads up on what you are going to read. This month, the main focus was experiencing life a bit more than usual. My wife and I had some profound conversations about money and life, which was reflected in July’s overall spending. I’ll explain more below!
Primary Goal: Live More
The primary goal was this month was to live more. What do I mean by this? In late June, we determined that our budgets did not reflect how we wanted to live our lives. We had too many categories and felt like we were too constrained. With that, we refined our “experience life” budget, and cut out a few others. How exactly did we achieve this “live more” goal?
- We seriously evaluated what we derive pleasure from and what we could do without. One of the biggest changes we made was regarding going out to eat. We typically considered going out to eat an “experience life” expense.
- We still go out to eat, but do so less frequently. The memories gained from “living more” far outweigh the short term pleasure that good food brings. Therefore, we prioritized “living more”.
- We upped the “experience life” budget a little bit to allow room for more flexibility.
- We actually experienced life more!
Secondary Goal: Student Loan Paydown
If you recall the last post in this series, I mentioned how ferociously we attacked debt this year. Well, we are continuing to do so. It is not the most efficient way to deploy our money, but we want the peace of mind of having no debt. Not much more to go here!
Tertiary Goal: Emergency Fund
The last post in this series also mentioned the fact that we drained ourselves of all cash. I was not kidding. The reason this is a tertiary goal, and not a secondary or main goal, is simple. Both my wife and I have highly employable skills and are able to live off of one income. The likelihood that we both would lose our jobs at the exact same time is extremely unlikely. That being said, this is a very short term risk that we are taking. We expect to be out of this situation soon.
Ups and Downs
July had plenty of ups and downs. The ups and downs were mostly psychological, not financial. However, financial independence (hell, even personal finance in general) is mostly psychological. Just because I am working to achieve financial independence and happen to be good at personal finance, does not make it psychologically and emotionally easy.
We spent less money than budgeted and still had a fun, fulfilling month. Also, we spent about half as much money on eating out, which allowed us to focus on experiences, or “living more”. We went to the Ohio State Fair, spent a bit more time outdoors, and found an awesome video rental store on the cheap.
In lieu of going out to eat more, we decided to start getting creative in the kitchen. A lot of our eating out money was spent on Mexican food, so the easy decision was to start cooking more Mexican food at home. With that, Taco Tuesday was born! Every Tuesday, we are going to cook a different style taco. Maybe I’ll even write about some recipes.
Lastly, this month was the first month we felt like we nailed our budget – it only took 2 years! What do I mean by this? We reworked our budgets to fit our lifestyle with looser categories. We now use Mint as more of a tracking system than a budgeting system. This is not to say that we don’t set specific limits – we still do. The difference is that we allow for more flexibility in our lives without increasing our expenses by much.
By reworking our budgets, we are spending a bit more money per month. I consider this a “down” because it does slow progress towards financial independence. However, should I truly call this a “down”? The point of financial independence is not the money. Yes we are on our way to becoming wealthy, but what does that matter if we are not enjoying the journey? This is a realization that I had in July, and it’s why I am including it here. A lot of tough conversations were had this month that ultimately led to this.
I really want the above paragraph to resonate with you. While we do talk a lot about money on The FI Guys, it is truly not the end goal. This is not a “get rich” blog, and we actually do not care about money per se. Again, our purpose is to share our journey with you to help you.
To recap the ups and downs section with actual numbers, here is how my financial picture changed from July 1 to July 31. Keep in mind that these numbers are tracking changes, not the current values.
- Net Worth: Increased by $3,800
- Assets: Decreased by $650 (deployed even more of our cash to pay down debt than originally expected)
- Debt: Decreased by $4,450
July was a really great month. We stuck to our spending limits, continued to increase our net worth, and had a blast doing it. The realization that financial independence is more about living life than it is about the money was a very freeing feeling.
Looking to August, I suspect a similar update. One thing to keep in mind financially for August is employee stock options. I need to determine whether or not to execute and sell more of my options and then what to do with the money. The good news is that I have no idea what to do, so you will have to wait until the August update to find out!
I hope you are enjoying these posts. Again, I am not trying to brag or show off. The goal with this series is to give you more of the emotional side of my journey to financial independence. The point is to show you that while it may be simple, it is not easy. Let me know in the comments if you are finding this series helpful, and any similarities/differences you are encountering on your journey!