A Revelation

It’s been about a year since my last update, truth be told PF had fallen to the wayside over the past year. However, today I opened an account at wesabe.com to try and get a clearer snapshot of our financial situation. It’s a pretty neat tool, but it took me for ever to tag all of our transactions. However, it was worth it to get a better picture of our spending. For example we spend a lot less eating out than I figured we did. Interestingly enough we have about 25% more money saved than I thought, but save 20% less than I thought we were saving. I thought we were saving close to 45%, but it turns out that our YTD is closer to 25%. Granted that I was jobless for 2 months of the year so had I been working that figure would probably be higher. 25% is a good amount, but it’s not amazing considering how hard we work at saving!

Basically, I realized that no matter how frugal we are or how much we save we just aren’t going to get ahead unless our income increases significantly.

And that is where I need to focus my efforts.

Why financial independence?

Some people call it retirement, but I call it financial independence because people look at me funny when I say I want to retire ASAP. I am after all only in my late 20s and haven’t even started on a career path. Retirement also has connotations of sitting around doing nothing and that’s the last thing I want to do. In fact I have a ton of things I love to do, but I just don’t find I have enough hours in the day because I spend the bulk of my time at work.

When I’m feeling cheeky and someone asks me what my career aspirations are, I say “Retirement.” And they laugh, but don’t take me very seriously.

In fact, I haven’t taken that goal super seriously because I had other things I wanted to do, like travel the world and live in other countries. But for the past year or so I have been back in Canada and putting a lot of serious thought into identifying a career path for myself. And still no dice.

Actually, I’ve been trying to figure out a career path in some capacity for the past 10 years ever since we had to start mapping out career plans and taking aptitude tests in early high school. I don’t feel much closer to figuring it out than I did 10 years ago and I’ve finally decided it’s time for a new game plan and that game plan is definitively financial independence. So let’s see if I can make it happen in a timely fashion.

Fast track to early retirement inspiration

I randomly came across the blog Early Retirement Extreme today while not even looking for anything to do with the topic, but wow is it ever a good extra push for me!

The points on maximizing savings are good ones. I always thought my 15%+ guideline was good enough, but I can definitely push it higher if that means reaching financial independence sooner! I worked with my numbers and while I can’t do the 75% without some major life changes (moving would be one big one, I do after all live in downtown Vancouver and rents are what they are), I figure I should be able to easily do 41%. If my math is right, that means I should be able to reach financial independence by 50. Not quite the 37 I’m aiming for but better than 65.

That is a good start and I am happy with that. If I were willing to spend the next 19 years without leaving Vancouver, I could do 51%, but life is for living and I’m willing to postpone financial independence another 4 years for a vacation once in a while.

So this is how I’m going to be dividing my pay cheques:

• 45% on all monthly spending – including regular expenses and splurging (previously it was 60%)
• 10% on long term savings – vacations and other life enhancing goodness (previously 20%, half of which was supposed to be for education and other knowledge enhancing activities)
• 4% on gifts – could be readjusted but i want to see how this goes (down from 5%)
• 41% savings and investments – (previously 15%)

Let’s see how this rolls!

Reflections

I think another reason why I have been neglecting this blog is because the state of my finances has been a bit depressing. I just don’t feel like I have been building any kind of savings and that bums me out. It’s like everything that comes in goes back out.

It’s been a little tough because I had a huge expense a couple of months ago (a once in a lifetime thing) so that wiped out what little savings I had. And next month I am moving and that’s never cheap.

I also feel a little frustrated with my income. I need to find a better paying job or a way to gain additional income.

Sunshine and lollipops

The weather has just been so nice lately and I have been taking full advantage of it. And also neglecting this blog.

I’ll be riding my bike to work tomorrow and will have met my goal of riding to work at least 3 times a week, exceeding it even because it will have been the 4th time this week. I’m actually a little bit surprised at how much I am enjoying riding my bike to work. The bike ride involves a bit of a hill right before getting to the office, and a whole lot of uphill on the way home. But I’ve actually kind of grown to like it because it really makes me feel like I am getting some exercise.

July Goal

I started off the month by riding my bike to work and then decided that I can do this and not buy a bus pass. So my goal for the month will be to ride my bike at least 3 times a week.  If I do this I will have saved about $40 on bus fare and gotten some good exercise!

My main challenges with riding my bike to work are being scared off by a forecast of rain and trying to figure out what can be office appropriate but still work on the bike. Thankfully Fridays are casual days so that will help a bit.

Grocery update

My new grocery total is $422.28. I think it may be a little bit off though because I feel like I recently bought some groceries and paid cash but the receipt didn’t turn up. It would have been minor anyway since I paid cash. So at week 11, my weekly average works out to about $39. I wish I could say it was because I’ve been on top of my expenses, but really actually it’s just that I’ve been eating out a little more the last couple of weeks and was also away last week-end.

That said, I have been making a conscious effort to use up the food in my cupboards in anticipation of my move later this summer.

Communication solutions

I’m going to be moving into my own place in the summer. I lucked out and am able to take over a friends place. It seems too good to be true so I can’t help but worry that something will go wrong and the landlords will raise the rent on me, but my friend seems pretty confident that they won’t be able to do that (if anyone has any knowledge of BC rental rules or tenant protection on the topic, I’d love to hear about it).

Anyway, in order to prepare I need to research some internet provider options so that I can have it all ready to go when I move in.

Shaw

• High speed lite: 29.95/month
• High speed lite and digital phone basic bundle: 42.95/month

Telus

• High speed lite: 16.95/month
• Home phone: 26.95/month

Cybersurf

• 3web High Speed Cable 24.95 + 4.95 (Rentals)

Those are all the ISPs I know of. If anyone knows of any others, please let me know!

Grocery total update

Week 8 my grocery total is up to $353.44. Like I said, I wasn’t going to spend much on groceries this past week and I didn’t!

Funny thing happened to me at the Buy Low though. I was only buying one thing, some egg roll wrappers to make spring rolls, and the check out lady looked at them and said “Oh! I didn’t know we had these.” she rang them through and then said “Oh. They’re expensive!”. Then I was trying to ask her where she went to buy them and what a reasonable price to pay is (I have no idea) but I guess she realized she maybe shouldn’t be telling customers that products were over priced so she didn’t really give me a straight answer. Oh well. I probably would have been better to go down to T & T or some place like that but it’s a bit of a trek out and I want to get these made today. Anyway, apparently $3.48 is expensive for spring roll wrappers.

Groooceries

I’ve been sloppy about updating my grocery total, so I just sat down and went through all of my receipts. I’m up to $347.41 at week 7, which works out to about $50 a week. I think that’s a little high. But the good news is I’m probably not going to spend much on groceries this week so if my total stays about the same it should average out to about $40 a week which I’m happy with.