Here’s the fourth (and final?) installment of my 2017 project to document my actual spending habits. After returning home from our year-long RV adventure, I wanted to get a feel for how much I spend each month. It doesn’t feel like I spend a lot — but is that feeling accurate? This project is an attempt to document how Kim and I actually live. Once we have some real numbers, then we can start to make changes for the better.
After four months of diligent tracking, it’s likely this will be the final update for 2017. I’ll continue to track all of my data, but I’m pausing the reports for a few months — possibly until early 2018. Why? Because (a) I’ve gathered enough info to know what areas need work and (b) we’re moving.
Clarification: I’m not abandoning my quest to track how much I’m walking, biking, spending, and eating. I’m pausing public reporting temporarily. My goal with this endeavor is to document normal life. For the next few months, life will be abnormal.
Why I’m Pausing This Project
Let’s get the big news out of the way: Kim and I have sold the condo.
We listed the place for $497,000 on Friday, April 28th. Our agent held an open house on Sunday, April 30th. On Tuesday, May 2nd, we received four offers — all over asking price. In the end, we accepted the second-highest offer for $530,000.
The highest offer had an escalation clause that went up to $550,000 in increments of $2500. We could have accepted it at $532,500, but that offer was contingent upon the sale of an expensive home that wasn’t yet on the market. We gave up the $2500 for an offer that seemed much more secure in almost every regard. (We were also swayed by the personal letter from the prospective buyers.)
The inspection period for our home ends this afternoon. Now it’s a matter of tying up loose ends before we close the transaction on June 6th. The buyers are allowing us to do a “rent-back” until the end of June, which is good because that’s when we’re scheduled to close on the home we want to purchase.
With a secure offer in hand for the condo, we felt comfortable pursuing our plans to buy a place with space for us and our animals. Kim and I made a full-price ($449,000) offer that was accepted for the 1948 English cottage I mentioned in my article about our quest for a not-so-big house. Monday morning, I’ll be present for a variety of inspections. That process will reveal whether or not we move forward with the transaction or go back to the drawing board, searching for another smallish home with land in the Portland area.
Now let’s look at the stats for last month.
Here are my transportation numbers for April. As you probably know, I’ve been tracking every mile I move in and around Portland. (I haven’t been logging mileage for out-of-state vacations or business trips; that’d be too complicated.) Here’s the spreadsheet:
April’s numbers are way different than any of the previous months in 2017. I logged personal highs for every mode of transportation except using my Mini Cooper. And I drove a ton — over 500 miles. This number is high for me, and it’s almost entirely because Kim and I spent our weekends hunting for houses. As you can see, I still walked and biked on a daily basis. The driving miles were in addition to my regular routine, not in place of it.
Next up, let’s look at my personal finances.
During the first four months of 2017, I tracked every penny that entered and left my life. I have plenty saved. That’s the good news. The bad news is I have almost no income (although I’m taking steps to change that). I want my stash to last another 30 years or so, allowing me to live a modest lifestyle while resisting the slow, silent killer called inflation.
When I run my numbers through my favorite retirement calculators, most of them indicate that my current level of spending — about $5000 per month — is just on the edge of sustainable. It’s highly probably that I can maintain this standard of living for the rest of my life given the nest egg I have. But I’d love to spend less.
Here’s a summary of my personal spending during the month of April:
My net worth grew for the fourth consecutive month.
- My net worth on 31 Dec 2016 was $1,577,014.27
- My net worth on 31 Jan 2017 was $1,591,985.32
- My net worth on 28 Feb 2017 was $1,618,656.45
- My net worth on 31 Mar 2017 was $1,623,087.29
- My net worth on 30 Apr 2017 was $1,634,070.53
In April, my net worth increased by $10,983.24 (or about 0.68%). For the year, my net worth has grown $57,056.26 (or about 3.62%). About $15,000 of that increase has come from hot Portland housing prices, but most of the gain is due to the roaring bull market.
On paper, my net worth jumped another $60,000 when we accepted the offer on the condo. But that’s only on paper. In reality, $28,000 of that sales price will go to fees and expenses. Then there’ll be more “friction” during the move: a new fridge, a new range, etcetera. In the end, I’ll probably see some increase in net worth by moving — but not a lot.
The real news in April was my spending. Look! I managed to cut it in half from March. In fact, I spent less in April than I have during any other month in 2017 — just $142.63 per day. That’s still over the $100 per day I believed I was spending, but it’s a move in the right direction. I’m particularly proud of cutting my grocery bill to under $400. (And I have high hopes that this will drop even lower after we move.)
It’s not all good news, however. My restaurant spending wasn’t much lower in April than it was in March. But once again, my hope is that this number will drop after we move away from our current neighborhood. (It’s a great neighborhood, but apparently Kim and I are too quick to take advantage of the many bars and restaurants.)
Another cost that should drop with the move? My housing expenses. Counting utilities, I’m spending about $1250 per month for housing — on a place that I ostensibly own free and clear. (This number is actually closer to $1750 per month because I pay $6000 in property taxes each November.)
On paper — which isn’t always the same as real life — I’m going to realize a net savings of $1320 per month on housing expenses by moving: $570 from HOA fees, $250 from decreased property taxes, and $500 because Kim will be paying me a “faux mortgage payment” (about which, more in the future).
Taking everything together, I’m hopeful that my expenses will have dropped significantly by the end of this year. When I resume these monthly reports, we’ll see how well reality has met my expectations!
The End — for Now
I’m pleased with the results of this project. It’s not that I’m pleased with how much I’ve been spending. But I’m happy to have learned where my financial weaknesses are, and I’m happy to be taking steps to remedy the problems.
I know some folks might think I’m crazy to be taking such drastic steps. After all, hasn’t my net worth increased by nearly $60,000 this year despite my more than $23,000 in spending? Yes, it has. But these gains are due to a bull market for stocks and a hot housing market here in Portland. When the economy crashes — and it will crash — my net worth is going to drop. I want to have my spending at sustainable levels before this happens, not after.
In the end, this is all a part of me managing my money as if I were managing a business. I really am trying to act as the Chief Financial Officer of my own life. I’m trying to be a money boss — just like you are.