Financial Freedom Blog Post #13

Dear Readers, It's me, Into the FIRE. How have you been? Well, I hope. Long time no see! We're going to revisit a little recalculation today to see if our numbers are still accurate! So, if we revisit the Financial Freedom book, let's go back to question #2! 2) What are your current annual expenses? 3) What is "your number"? (This is 25 times or 30 times your annual expenses.) 4) What is your annual, monthly, weekly and daily savings goal? Let's review the data for #2 and #3 for 2022! I am going to input the average for all 12 months for 2022: Average for 2022: $5,197.03 Here it is month by month: Month and Year Total Spent Jan 2022 $4,849.19 Feb 2022 $4,848.53 Mar 2022 $6,184.22 Apr 2022 $4,878.08 May 2022 $3,401.07 Jun 2022 $4,680.68 Jul 2022 $5,823.13 Aug 2022 $4,536.90 Sep 2022 $5,198.48 Oct 2022 $4,708.46 Nov 2022 $5,402.67 Dec 2022 $7,852.89 Average for 2022: $5,197.03 This number had increased significantly from 2018 and 2019. In 2022, our health insurance (medical premiums) cost $703 per month. I also increased the amount I spent on groceries every month. Other categories that were high were fast food, restraurants, entertainment, gifts and travel. So... the new number without further ado: Average Spending per month (for Jan 2022 to Dec 2022): $5,197.03 Average Spending extrapolated to a Year (Average): $62,364.36 My 'Number' (25x Average Yearly Expenses): $1,559,109 So now you can see due to the higher averages, my new number is $1,559,109, which is an increase of $554,154. Honestly, I am not exactly sure how to calculate my expenses going forward. This is because our medical premium has reduced from $703 monthly to $102.08 bi-weekly. If we multiply this out, it comes out to $8436 yearly versus $2654.08. Previously, our dental had been $75 per month. It has now increased to $148.27 per month. This means it's gone from $900 per year to $1779.24 per year. All things considered, it's an improvement from 2022. Another thing is that I have a new job, which I will be vested in a pension for in five years. However, I was advised to work for 10 years. After 10 years, I'll have discounted health insurance for life. The other item I saw is that I will only be allowed to access my retirement funds early as well as continue access to discounted health insurance is if I retire at 55. This throws a huge wrench in my plans to retire in 10 years. However, I am hopeful that they may offer an early retirement package in an effort to lower costs. So, my plan is to keep my head down and hope for a buyout (with amenable provisions for healthcare, of course). As it is currently, if I retire at 55 I will have to work 18 more years. I guess we'll see what happens. If Medicare for all is approved, that could be a total gamechanger. Thank you for reading, Into the FIRE

Working through my limiting beliefs

Dear Reader, 

I know it's been a while. Happy New Year! 

I read a great post recently on The Fioneers. Here is the link: https://thefioneers.com/self-limiting-beliefs/

I recently signed up for Jessica's course on Intentional Living.

I have to say, she got me.

She said the course was $97 but it was on sale only until Friday for $57 - $40 off! I was so intrigued by her hook of an email talking about the pointlessness of my life that I was convinced both Mr. ItF and I should sign up for it.

Here's the thing - Jessica ran this exact same course in August, and guess how much she was selling it for?

$57.

So here I was, convinced I was getting the deal of the century. That's a great price, I said to myself. I love getting a deal.

Turns out, the deal was in my mind the whole time! It just goes to show you - money psychology really works on people. There's a reason why it's $57 and not $60.

Update: I actually communicated with Jessica via email. She said the price really IS $97 (when she ran it in August, it was the first time she was running it and she has priced it at $57 as an introductory price). So I can rest assured I did indeed receive a deal. My point is though, she offered it for $57 and I wasn't compelled, but when I saw the $97 crossed out I felt much more convinced. It could also have been a question of timing, to be fair. But personally, I think that $97 crossed out really tipped the scales for me.

Anyway, back to the post. I read her post, "6 Strategies to Conquer Your Self-Limiting Beliefs."

So I was inspired to think about my own self-limiting beliefs.

Here are a few:

1) "I will not get hired by NYC, and I will never leave my current job."

2) "I will die before retiring."

3) "I will not have enough time to enjoy my retirement."

4) "If I retire early, I will run out of money and have to find a job when I'm old and no one will want to hire me."

5) "If we move abroad or far from family, it will be difficult to see family and friends."

6) "I will be an inadequate mother and/or wife."

Here are Jessica's 6 strategies to conquer self-limiting beliefs.

Flip the Script
Look for Evidence
Ask Questions
Articulate an Empowering Belief
Test Your New Empowering Beliefs
Build a Supportive Community

So let's try each one!

First: flip the script.

1) "I will not get hired by NYC, and I will never leave my current job."

Flipped:

1) "I will get hired by NYC and I will leave my current job, and it will be a success. It may even be better than my current position."

--

2) "I will die before retiring."

Flipped:

2) "I will retire soon and be able to enjoy my retirement before I die, even if it's briefly."

--

3) "I will not have enough time to enjoy my retirement."

Flipped:

3) "I will have plenty of time to enjoy my retirement as well as my son's childhood."

--

4) "If I retire early, I will run out of money and have to find a job when I'm old and no one will want to hire me."

Flipped:

4) "I will be able to retire early and I will be able to choose whether or not I want to go back to work on my own terms."

--

5) "If we move abroad or far from family, it will be difficult to see family and friends."

Flipped:

5) "We can move abroad or to another place in the US. We will be able to see family and friends when we want to. With FaceTime we can stay in touch with family and friends easier now than we would have been able to in years prior."

--

6) "I will be an inadequate mother and/or wife."

Flipped:

6) "I will be the best mother and wife I can be. Everyday is a new chance and opportunity to be a kinder, more patient mother and wife."

The second strategy is looking for evidence.

1) "I will not get hired by NYC, and I will never leave my current job."

Evidence:

1) Many people possibly less competent than me are hired often by NYC.

2) No one knows what the future could hold. Even if I don't leave to work for NYC, I am not tied to my current job and I could work for some other company.

2) "I will die before retiring."

Evidence:

1) Although some people die before retiring, I may very well live past retirement.

2) Even if I do die before retiring, I have lived a fairly full, enjoyable and rich life. I cannot truly say I have many or any regrets except that I would like to see my son's wedding, and if my son wishes to have children, my future grandchildren.

3) "I will not have enough time to enjoy my retirement."

Evidence:

1) Although some people die early in retirement, if I have fulfillment and meaning in my life, it is possible and likely I will enjoy my retirement immensely, at least for a good amount of time.

4) "If I retire early, I will run out of money and have to find a job when I'm old and no one will want to hire me."

Evidence:

1) With careful planning, I will be able to live off my retirement funds until I die. I may be able to leave a bit of inheritance as well. 

2) There are many social programs to provide for seniors and elderly who do not have enough funds to live on.

5) "If we move abroad or far from family, it will be difficult to see family and friends."

Evidence:

1) Even if we regret moving abroad or far from family, we will still have the option to move closer to family. There is nothing stopping us from reversing our decision.

6) "I will be an inadequate mother and/or wife."

Evidence:

1) My child is still alive and smiles often. I can't be that bad of a mother.

2) My husband is still married to me and smiles and jokes occasionally. I should still make an effort to bring more joy to his life.

Third strategy: Ask questions.

Why do I believe this is true?
Why is this actually an issue?
What’s the worst that could happen?
If that happened, how would I handle it?
Would I still be okay?

1) "I will not get hired by NYC, and I will never leave my current job."

I believe this is true because I am coming from a place of fear that I am not good enough and I will never grow.

This is an issue because NYC is offering more money and I am afraid I will become stagnant.

The worst that could happen is that I don't get hired by NYC.

I would handle it by continuing in my current position until I cannot take working there anymore or until I retire.

If I cannot work there anymore, I will retire early.

In the worst case scenario I will move to a lower cost of living area.

2) "I will die before retiring."

I believe this is true because I am coming from a place of fear that I will not be able to enjoy the money I have saved up until now. There isn't actually any evidence I will die.

This is an issue because I could be spending all that money before I die.

The worst that could happen is that I die and Mr. ItF and Baby ItF inherit my money.

I wouldn't theoretically care since I would be dead. Or perhaps I would be grateful they have the money to inherit and contribute to their wealth.

3) "I will not have enough time to enjoy my retirement."

I believe this is true because I am coming from a place of fear that I will die soon after retiring. There isn't actually any evidence I will die.

This isn't actually an issue. I have already lived a very rich and full life.

The worst that could happen is that I die soon after retiring.

I wouldn't theoretically care since I would be dead. 

4) "If I retire early, I will run out of money and have to find a job when I'm old and no one will want to hire me."

I believe this is true because I am coming from a place of fear that I will run out of money after retiring. I am worrying that I haven't saved up enough money for retirement, or that the market will crash and I will not be able to survive.

This is an issue since I may have to go back to work and it may be difficult to get a job (think Nomadland).

The worst that could happen is that I live off social services.

I would handle it by trying to get hired by someone or living off social services or a combination of both.

5) "If we move abroad or far from family, it will be difficult to see family and friends."

I believe this is true because I am worried we will not be able to afford expensive plane trips back. I also worry my family will not be able to afford expensive plane trips to visit abroad.

This is an issue since I value seeing my family and friends.

The worst that could happen is that I never see my family and friends in person again.

I would handle it by using FaceTime when appropriate. Perhaps focusing on Mr. ItF and Baby ItF as well as making new friends.

6) "I will be an inadequate mother and/or wife."

I believe this is true because I am worried we will not be able to afford expensive plane trips back. I also worry my family will not be able to afford expensive plane trips to visit abroad.

This is an issue since I value seeing my family and friends.

The worst that could happen is that I never see my family and friends in person again.

I would handle it by using FaceTime when appropriate. Perhaps I would also handle it by focusing on Mr. ItF and Baby ItF as well as making new friends.

The fourth strategy is empowering beliefs. I think I may have slightly mixed this up with the earlier strategies.

1) "I will not get hired by NYC, and I will never leave my current job."

Empowering Beliefs:

1) I can do a few mock interviews with friends and family to prepare for interviewing for NYC.

2) No one knows what the future could hold. Even if I don't leave to work for NYC, I am not tied to my current job and I could work for some other company (repeat of Evidence 1-2).

2) "I will die before retiring."

Empowering Beliefs:

1) If I live a happy and healthy life, tempered with common sense and being careful, I can live a full and rich life after retirement.

2) Even if I do die before retiring, I have already lived a fairly full, enjoyable and rich life. I cannot truly say I have many or any regrets except that I would like to see my son's wedding, and if my son wishes to have children, my future grandchildren. I should continually be grateful for all the experiences I have had thus far and those I continue to enjoy. (Evidence 2-2 modified).

3) "I will not have enough time to enjoy my retirement."

Empowering Belief:

1) Although some people die early in retirement, if I have fulfillment and meaning in my life, it is possible and likely I will enjoy my retirement immensely, at least for a good amount of time. (Repeat of Evidence 3-1).

4) "If I retire early, I will run out of money and have to find a job when I'm old and no one will want to hire me."

Empowering Belief:

1) With careful planning, I will be able to live off my retirement funds until I die. I may be able to leave a bit of inheritance as well. (Repeat of Evidence 4-1).

2) There are many social programs to provide for seniors and elderly who do not have enough funds to live on. Even if I do not have enough money, I should be able to find enough social programs in order to live an adequate and enjoyable life (Evidence 4-2 modified).

5) "If we move abroad or far from family, it will be difficult to see family and friends."

Empowering Belief:

1) Even if we regret moving abroad or far from family, we will still have the option to move closer to family. There is nothing stopping us from reversing our decision. (Repeat of Evidence 5-1).

6) "I will be an inadequate mother and/or wife."

Evidence:

1) My child is still alive and smiles often. I am a good mother. I love my baby. I do my best by my baby. (Evidence 6-1 modified).

2) My husband is still married to me and smiles and jokes occasionally. I can and will make efforts to respect my husband's wishes and be a better wife. (Evidence 6-2 modified).

Strategy Five: Testing New Empowering Beliefs.

1) "I will not get hired by NYC, and I will never leave my current job."

Steps I can take:

1) This Saturday, I will look up interview questions and prepare and practice answers to them.

2) After my interview date is scheduled, I will ask friends and family to help me do mock interviews.

2) "I will die before retiring."

Steps I can take:

1) I will try to eat healthier and in moderation.

2) I will try to eat less sugar.

3) I will try to drink more water.

4) I plan to walk for at least 15 minutes a day, everyday after work.

3) "I will not have enough time to enjoy my retirement."

Steps I can take:

1) When I am close to retirement, I will plan out my day every hour to give structure to my day and week. I will set up a routine and also make a conscious effort to volunteer.

4) "If I retire early, I will run out of money and have to find a job when I'm old and no one will want to hire me."

Steps I can take:

1) I should carefully examine past spending and make sure I retire with enough money to cover future projected expenses.

5) "If we move abroad or far from family, it will be difficult to see family and friends."

Steps I can take:

1) Consider discussing with my family how they feel about moving abroad or to another lower cost of living area.

6) "I will be an inadequate mother and/or wife."

Steps I can take:

1) I will read to my baby everyday for 15 minutes.

2) This Saturday, I will look up resources on how to be more patient, more loving and more kind. I must learn how to be of better service. I also should ask Mr. ItF to take the love language test so I can know what type of love language he values the most.

Strategy Six: Building a Supportive Community

1) "I will not get hired by NYC, and I will never leave my current job."

Supportive Community:

1) This Saturday, I will look up interview questions and prepare and practice answers to them - identify an accountability partner to help me with this. Maybe work on this Friday instead.

2) After my interview date is scheduled, I will ask friends and family to help me do mock interviews - I have family and friends in mind to assist with these mock interviews.

2) "I will die before retiring."

Supportive Community:

I have an accountability group on Signal in place to assist me with the below:

1) I will try to eat healthier and in moderation.

2) I will try to eat less sugar.

3) I will try to drink more water.

4) I plan to walk for at least 15 minutes a day, everyday after work.

3) "I will not have enough time to enjoy my retirement."

Supportive Community.

1) When I am close to retirement, I will plan out my day every hour to give structure to my day and week. I will set up a routine and also make a conscious effort to volunteer - when I am close to retirement, I can look for Facebook groups in the area I am moving to to help with planning activities.

4) "If I retire early, I will run out of money and have to find a job when I'm old and no one will want to hire me."

Supportive Community:

1) I should carefully examine past spending and make sure I retire with enough money to cover future projected expenses - this is another item I can review with my TrustPlus coach (they're free!). I have an appointment scheduled on Friday for this.

5) "If we move abroad or far from family, it will be difficult to see family and friends."

Supportive Community:

1) Consider discussing with my family how they feel about moving abroad or to another lower cost of living area. I can ask in appropriate Facebook groups how other people handled moving away from friends and family.

6) "I will be an inadequate mother and/or wife."

Steps I can take:

1) Look online for resources on how to be a good mother.

2) This Saturday, I will look up resources on how to be more patient, more loving and more kind. I must learn how to be of better service. I also should ask Mr. ItF to take the love language test so I can know what type of love language he values the most - the best accountability partner is Mr. ItF. I need to recognize when I am not being supportive, and take steps on how to change my behavior.

Phew! That was intense!!!

Well, I'm glad that's over. This was a really good exercise but I still feel like I should revisit this post and review it.

I heartily recommend these steps for working through your limiting beliefs.

Good bye for now.

I remain,

Your Faithful,

Into the FIRE

14-day Plan to Improve Your Finances! (Days 12-14)

 Hello Dear Reader, 

We are continuing the 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly)! 

Again, please note this was originally published January 4, 2016 at 12 pm. 

Last day of posting about this!!

Day 12: Gather your finances and passwords.

I don't actually recommend you do this unless you have children and/or significant assets.

I don't think it's very secure to do this.

However, if you DO have children and/or significant assets, you may want to gather all your financials and passwords and keep them in a safe place that you alert your (trusted) loved ones about in the event that you pass.

Day 13: Insurance! 

Here is the insurance Business Insider recommends:

Starting in your 20s: health, auto, renter's and disability insurance

Starting in your 30s: life, homeowner's and pet insurance

Starting in your 40s: long-term care insurance

So, here is my editorializing: life insurance should really start whenever you have kids (or a spouse who doesn't work). Life insurance is designed to take care of your family in the event you pass. So, if you have a parent or other relative who is dependent on you, you may want life insurance even if you don't have kids or a spouse.

Term life insurance is the way to go. Never get whole. This is my personal opinion.

Homeowner's insurance should start when you own a home. Renter's insurance should start when you rent.

Similarly, don't get auto or pet insurance if you don't have a car or a pet.

End of advice.

Day 14: Plan out your calendar. 

Evaluate your budget once a month (this can be done weekly if you really feel the need).

Check your credit score once a month (again, free through Credit Karma).

Get your credit report, once every four months (or all three once a year if you prefer).

Check the balance on your retirement account(s), once every six months (I actually do this once a month, personally).

Adjust your savings goals, once every six months (this seems fine).

Evaluate your investment accounts, once a year (I check my investments once a month).

Once a year - go through this two-week process again!

They suggest setting reminders on Google Calendar. I don't know about you, but I have enough stuff on my Google Calendar. Instead, I check my finances on the first of every month. That is also the day I use to pay my credit card bill, etc etc.

I hope this was helpful for you!

Warmly, 

Into the FIRE

14-day Plan to Improve Your Finances! (Days 9-11)

Hello Dear Reader, 

We are continuing the 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly)! 

Again, please note this was originally published January 4, 2016 at 12 pm. 

Day 9: Your investment accounts. 

First, please take a look at this image:

It is from https://am.jpmorgan.com/us/en/asset-management/adv/ (JP Morgan Asset Management). 

As you can see, due to the magic of compounding, the earlier you invest, the more money you will end up with in the long run - even if you invest less in the beginning. So what is the moral of the story? Invest early, invest consistently. Do not stop investing. But, if you must stop investing - do it later. 

Personally, I recommend you invest in SWPPX. I know some people like SPY. Other people tout Vanguard funds. That's all okay. 

Any index fund will pretty much be good for you (I think). I am not an investment professional, and I do not claim any responsibility if you invest in SWPPX and lose all your money. One note about investing - let's say you put your money in SWPPX (pretend it's $5k) and it goes to $1. In a flash you now have $1. That loss isn't actually locked in until you sell those funds. So, if you don't sell them, and the S and P 500 goes back up, higher than before (which has happened in the past), you will now have "made money". Again, the profit will not be locked in until you actually sell. 

Day 10: Find out your credit score and credit report. 

To find out your credit score, you can use Credit Karma. That is what I use. Please note I ignore all those credit card offers, but it's a good way to check in and see what your number is roughly around. Also - if you haven't gotten your credit report in over a year, you should get your credit report! 

You are entitled to one report from each of the three credit bureaus once a year. Some people like to spread them out throughout the year and some people like to get them all at once so they can see if any one bureau has errors that the other two don't. AnnualCreditReport.com is the ONLY place to get a free credit report. 

Please - if any other website says your "credit report" is free, it's probably a scam. So be careful! 

Day 11: Look at your bank(s) and subscriptions. 

Remember Day 6 when you looked at bills? Do you have any subscriptions you have been paying for that you forgot about? Maybe you don't really need that snack box subscription anymore? Or that makeup box subscription? 

You don't have to cut everything. I like to think of it like Marie Kondo does - does this subscription bring you joy? If so, maybe you should keep it (but only if you can afford it). 

Next, look at your bank. Is your bank charging you fees every month? Are those fees worth it? 

Personally I like TD Bank. I think they have great hours and great customer service. Why not look around for a bank that you can be satisfied with too? Also - set up a system to avoid fees. Make sure your checking account has no minimum balance, or if it does, set up an alert to make sure you don't go under that balance. 

You can also have multiple bank accounts. Make sure to look over your statements and that have multiple bank accounts is only helping you, not hurting you. 

Were you charged a fee and you feel like a fool? Why not try calling the bank and asking if they will waive the fee this time (and then next time, make sure you don't run up that fee again!)? 

Okay, I think that's a lot for today! Further days to come in a following blog post! 

Warmly, 

Into the FIRE

14-day Plan to Improve Your Finances! (Days 5-8)

Hello Dear Reader, 

We are continuing the 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly)! 

Again, please note this was originally published January 4, 2016 at 12 pm. 

Day 5: Visualize your goals, and solidify them! 

Figure out your 5-year, 10-year and 30-year goals. Or any time frame you want! 

Maybe you want to save up for a great vacation, and you know you can do it this year. Try putting a financial number to your goals. Maybe your goal has nothing to do with finances and it doesn't cost anything at all. That's great too! 

Some goals that do include costs would be buying a house or apartment, taking a trip, building an emergency fund, buying a car, having a baby, sending your child(ren) to college and retiring early. 

Day 6: Find those savings! 

1: Negotiate your bills like phone, cable, utilities and gym memberships. 

2: Reduce bills like groceries, restaurant spending and clothing. 

The things you really want to focus on saving are your rent/mortgage, your commute (transportation) and your food. Those big three expenses will save you the most money in the long run. 

However, I don't want to dismiss Business Insider's advice. Saving money on recurring bills can be helpful, and it's true that groceries and restaurant spending are included in the food categories. Try meal planning your week, or going through your pantry, refrigerator and freezer to see what food you can eat before buying more food (don't forget to leave reserves for one to three meals in cases of emergencies). 

Day 7: Pay yourself first. 

Make savings automatic. This means setting aside an allocated amount to deduct from your paycheck on the days you get paid. Their theory is that you don't see this money, you won't spend it. This is good and I agree with it. 

However, you will never truly become wealthy unless you invest this money. The steps should go like this: 1) create emergency savings 2) pay off debt 3) invest your extra savings. Ideally, you want to do steps 1 and 2 as soon as possible so you can get to #3! The more time you have in the market, the better it will be for you! 

Day 8: Can you improve your income? 

There are two ways you can improve your savings rate. 

1: Spend less money. 

2: Earn more money. 

This day tackles number 2. 

Here are some ways Business Insider recommends: 

1: Negotiate for a raise. 

2: Look for a higher-paying job. 

3: Freelance through Upwork. 

4: Create a course on Udemy. 

5: Sell your things on eBay, Craigslist, etc. 

6: Sell your services through TaskRabbit or Fiverr. 

Use my Fiverr referral link to get 20% off your first task order (note this is an affiliate link, so I may get some credits if you use this, but your price will actually be lower!): https://tiny.cc/babybbbbfiverr 

Okay, I think that's a lot for today! Further days to come in a following blog post! 

Warmly, 

Into the FIRE

14-day Plan to Improve Your Finances! (Days 1-4)

Hello Dear Reader, 

Back in May I posted some budgeting tips from GreenPath debt solutions. 

Now I have a 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly). Note this was originally published January 4, 2016 at 12 pm. 

Day 1: Get your 90-day number. This means recording all the money you earned (and spent) in the past 90 days (three months). This will help you figure out if you are over-spending and also where your money is going. 

Step 1: Add up your income for the past 90 days. 

Step 2: Add up your expenses for the past 90 days. 

If the number is negative, you are overspending! You should be careful. 

If the number is around zero, you are probably living paycheck to paycheck, which isn't ideal. 

If the number is positive (and not close to zero), congratulations! You are already ahead of the game. 

Day 2: Choose your tracking system. Some people use Mint (I used to, but I don't anymore). Some people use YNAB (You Need A Budget). Some people use Microsoft Excel (expensive, unless you have it through work). Some people use Google Sheets (this is what I use). 

I do not track my spending everyday. Some people do and they find it works for them. Instead, what I do is I record the spending monthly after it has occurred. If I'm worried about spending more than I can afford, I will plug in my expenses and see if it is less or more than my anticipated pay for the next month. 

Day 3: Add up your debt. Debt means anything you owe to anyone else. Some people think there is good debt (low interest rates, mortgage or student loan debt) and bad debt (high interest rates, credit card debt or car loans). The way I look at it is you want to organize it by interest rate. 

The highest interest rates, you want to pay off first. Let's say you have $10k in mortgage loan debt at 3% interest, $10k in student loan debt at 2% interest, a car loan of $5k at 20% interest, and credit card debt of $5k at 30% interest. In this case, you would want to pay off the credit card debt off first since it has the highest interest rate. You would still need to make all the minimum payments on your other debt. Personally, I think good debt and bad debt should be differentiated by interest rates. 

Student loan debt is an investment in your future, but some types of schooling are more lucrative than others (software engineering vs. studio art, anyone?). Before getting into student loan debt, see if you can get your degree for less (AP credits, summer classes, community college, working for a university and receiving tuition remission, having your employer pay for part or all of your schooling, scholarships, the list goes on and on). 

Don't forget to include any money/loans from friends or family members! 

Day 4: Create a budget. 

How do we do this? Remember that 90-day number? You will take the items you spent money on and categorize it. 

Don't forget expenses like health insurance! After you categorize it, you will want to assign a number you think it reasonable to spend on that category per week, month or year. 

Just remember whichever time frame you choose, you want to be consistent. Let's say I spend $600 on vacations every year, but my budget is monthly. Then I would divide $600 by 12. Or let's say I have a weekly budget. Then it would be $600/52. You get the picture. All units of measurements must match, or it won't work. 

Okay, I think that's a lot for today!!! Further days to come in a following blog post! 

Warmly, 

Into the FIRE

Budgeting Tips

Hello Dear Reader, 

Back in March I posted a Monthly Budget Template. 

Now I have some budgeting tips from GreenPath debt solutions (with some editorializing by yours truly):

1) Estimate each monthly expense (be as accurate as you can, since this will help you later!) 

If you are unable to do accurate estimates of your monthly expenses, try tracking your expenses for as long as you can (a year is good). Then you can use the previous year's expenses to set up your monthly budget. 

2) Put in how much money you get each month (if this is variable, try tracking your income for a year as well. 

Do you see a pattern? Do you get paid more consistently in certain months? If you have variable income, it's even more important to have a savings fund to help you cover those lean months so you don't go into credit card debt!). 

3) Add up your total monthly expenses. 

4) Subtract that from your total income. 

5) If you have a surplus - great! You can build up those savings, invest, or pay off debt. 

6) If you have a deficit - you either need to cut back on spending or get more income. Your goal is that you want to have a surplus. They call this "living within your means". They advise you to "pay yourself first" by saving 10% (or more, I think!) of your income. You should prioritize and consider what your family's most important goals are (Food? Safer/better living conditions? Education?) 

Think about what you want versus what you need. Could this be considered a business expense or investment? Savings play an important role to cover you when your expenses are too high. However, you won't build real wealth without investing/paying down debt - especially if your debt has a high interest rate. So please, be aware. 

I keep track of my actual spending by recording the previous month's spending in a Google Sheet. They advise you to hold meetings with your family and talk about adjusting the spending so you're still living within your means. 

Some advice they give for saving money: turning off lights, using energystar appliances, unplugging appliances when not in use (I think that's dumb), turning down heat (impossible in our apartment), turning up air conditioning (I think it's cheaper to just not use air conditioning in the first place) and insulating. 

More advice: shop around for vehicle insurance (does your work offer vehicle insurance or telephone/cell phone discounts?), keep proper air pressure in tires, car pooling, public transportation, combining errands, walking, and (I don't do this but I know it's popular in the FIRE community) biking? 

Third round: keep your debt low (or non-existent), make arrangements to pay off old debt, carefully evaluate taking on new debt. Finally, buy sale items (but do you need them? 

If you don't need them in the first place, you will save much more money by not even buying them!), take your lunch to work, limit entertainment and dining out expenses (I would advise thinking about what you want to splurge on. Whatever's important to you, save up for that and then spend on it! Don't be afraid to spend, but only if you can afford it!). 

Honestly, you should think about saving on the big three expenses: food, rent/mortgage and transportation. 

Well, thank you for reading! :) 

Warmly, 

Into the FIRE