FIRE Progress: After Tracking Every Dollar for 18 Months

Photo by Kelly Sikkema on Unsplash

A year has passed since my first post about tracking expenses. It was hard at times, especially at the beginning of COVID lockdown in March 2020 where the stock market tanked for a few weeks. It was difficult to see my “networth” plummet 40% all in one night. In this year, I’ve continued tracking my expenses on google sheet (click here to get a template) and learned a couple of lessons from tracking my expenses.

1. I changed from habitually eating out everyday to eating out only once a week and KEPT this habit.

It has been a year since I have limited my dining-out-habit, so I don’t quite remember what it was like when I ate out almost every single day anymore. I now have a budget of $150 a month for restaurant bills. I would like to reduce it down to under $100 in the next 6 months. But it is nice to eat out on Saturday after cutting two lawns with Mr. Code Junkie. Saturdays become more of an exciting ritual of hard labor followed by our favorite food.

I originally started by making my favorite coffee drink at home (lavender latte with oat milk). Then, I stopped drinking coffee altogether because it affected my sleep & appetite. Slowly, I started realizing alcohol also affects my sleep & next morning’s energy. So I quit drinking as well. I still enjoy going to coffee shops or bars with friends, but I would have some seltzer water instead.

I realized it was hard for me to change a habit (or almost an obsession, like coffee and chocolate), but it was REALLY hard only for the first 3-5 times I say “no” to that habit/obsession. The more I say no every time the option presents itself (like friends asking me to go to coffee, or walking by the chocolate aisle in a shop), the easier it is next time to control my cravings & dependencies on the habit/obsession.  

2. Reflect on the money spent and evaluate whether it was worth it

Having tracked every single expense, I was able to go back at the end of the year to see what I’ve spent my money on for the whole year. I found that I bought some stupid stuff this past year: reserved a van for Vegas (I really thought we could pull off living the Van-Life ) and ended up not using it, bought a work-out program and only used maybe once, bought more garden seeds than i can plant. Admitting making mistakes is part of the journey. It is also helpful for me to make better decisions in the future.

3. Budget for Incidentals (on top of emergency funds)

There are some expenses I did not budget for. In 2020, I had some health issues that ran up the medical bills. Even though I saved money for emergencies, I realized that these incidentals were not emergencies. There should always be a budgeted item for incidentals (whether it’s medical last year or home improvement this year). Since then, I have adjusted my budget to include about $3,000 – $5,000 incidentals a year. This has also been added to my retirement calculation so that I will have enough money in retirement if something breaks.

4. Able to make bigger decisions about finances (e.g., buying an investment property)

Earlier this year, I bought my very own first rental property because I had saved up enough portfolio to justify taking out a portion of it as down payment for a rental house. I wouldn’t have been able to confidently pull the trigger had I not track all my income & expenses to know I have the capacity. Here’s a short video on how to calculate rental property investments from my favorite real estate podcast. 

5. Having more meaningful money conversations with friends and family

Some of my friends are very supportive of my FIRE plans, but others think it’s a bit luxurious to be able to think retirement in general (let alone in 5 years). Regardless, sometimes we talk about prices of vaccums and rice cookers, sometimes we talk about buying/selling houses, and I can see from their point of view a lot better now. I can see both ways, one way of wanting to spend money and buying the best thing, and another way of saving money and finding alternative solutions to the problem. For example, you can buy a $150 rice cooker, or you could just use a pot to make rice. Same goes for coffee!

6. Having a constraint (budget) makes you more creative

Earlier this year, I had to furnish the tiny barn after spending a lot of money on the construction already. So I was trying to find creative ways to furnish it. I found these two chairs from our neighbor’s lawn for free while walking my dog, and I carried them both home (looking like a weirdo). They were two very old wooden chairs and one of them was a little unstable, but I Youtube’ed how to refurbish old chairs. I repaired, spray painted, and re-upholstered them with Riflepaper fabric. 

Another example – I had some leftover wall paint from renovating the barn. I really wanted to use them to paint the cabinets in my rental house, but I realized that the finish for these paint were eggshell (they are not shiny & smooth) and that might make the cabinets hard to clean. Instead of buying new paint, I found some polyurethane to apply to the top of the cabinets to give them a shinny & smooth protective coat. They came out great and I saved some $$$. Here’s a before & after photo for your enjoyment!

7. I enjoy the things I purchase more

Because I realized that every dollar I spent is earned with my own time, I am more careful with spending. I am spending less on things I love to buy but do not bring me as much joy: clothing, entertainment, drinks, candles, fancy arts & crafts tools, and decorations. The only  thing I bought relating to arts & crafts were some watercolor trays (with colors) and cold-pressed paper which brought me a lot of joy to learn how to do watercolor.

8. Getting closer to financial freedom

As I sent my friend hillsandhigher off to her retirement in Italy this July, I am truly envious! Although, fairly speaking my friend has been saving up for years for this moment and seeing her success makes me feel that it is possible to retire early.  I am making small but steady progresses here and there: renting out the barn, the house, and becoming a real estate agent. I’ve been watching my networth grow after recovering from the ecnomic down caused by COVID and steadily climbing. It encourages me to work harder towards my financial independence.

9. No-buy days

I now try to schedule no-spend days where I don’t buy anything. I find it an easy hobby to just log onto Amazon and buy something small, like a $10 charger, a $50 blender, or a nice little alarm clock! When Mr. Code Junkie took a business trip for a few days, I decided to not buy anything (including groceries) and see what I can make out of things I have at home. I discovered so much food in plain sight that I did not eat before! I am planning on implementing this in the next 12 months of FIRE journey.

10. Buy less, use less, waste less

Sounds more like a “Live, Love, Laugh” banner. 

Buy less: I strive to be a minimalist, mainly because clutter stresses me out. There are some side benefits for being a minimalist. When I started gathering things I don’t need around the house, I know I should not by stuff I don’t truly NEED because I will be donating them 3 months down the line. I try to save items I want to buy for at least a month and see if I actually need it before purchasing. However, this does not apply for things like: AC filters. You really should change your filters every 3 months!

The other day, we were having 4th of July cook out with greyhound parents, and for some reason we were talking about what temperature we leave our AC on. The AC for our house is always set around 78, if we turn it on at all. I grew up without AC so it is not as difficult to sit in the heat.  One of the greyhound parents K said they leave their AC on 72 during the day and 68 at night because they like to sleep in the cool. When I said I only turn it on occassionally and it stays at 78, our friends were all shocked. Although, after hearing this, K’s bf would not allow her to turn the AC lower than 77, to save their utility bills. Sorry K… Alas, sometimes it is wonderful to have AC, especially after you cut grass on a hot day!

What are some of your discoveries, tricks, and tips on tracking expenses and living frugally?

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