June was a very busy month, which inadvertently helped our budget a little. Turns out that when you don’t have time to shop, you spend less money 🙂 Mr. Saverdink had an awesome 4-day work trip this month which contributed to a weeklong “spending freeze” – all of his expenses were covered while traveling and the absence from home meant lower groceries and gas for the week. I was swamped at my job for the first 3 weeks in June and didn’t even have time to go grocery shopping that week. Leaving the office at 8pm multiple nights in a row is no fun and I may or may not have eaten a chocolate bar for dinner one evening… By the time the weekend rolled around, Mr. Saverdink was exhausted from traveling and I was exhausted from working crazy hours, so we laid low and relaxed at home that weekend.
Despite the one-week spending reprieve, June spending totals were a bit higher than May, but still well within the normal realm. We did have some splurges in the home appliance and vacation department. Summary chart courtesy of Personal Capital’s Free Budget Tracking Tool.
Once you’ve achieved a solid financial foundation and are committed to a lifestyle of living below your means, you’ll have extra money available each month to fund your financial priorities and build long-term wealth. The question becomes where should you be focusing that surplus of cash to maximize your returns? There are a lot of considerations to take into account. The emotional aspects of having enough cash available for emergencies. Understanding the tax advantages or disadvantages of various types of retirement, health care savings and non-retirement accounts. Making the best use of employer retirement account matches and other benefits.
The list below is a guide on where to focus investments across a variety of accounts to maximize returns and improve the tax efficiency of your portfolio. As you fully fund each recommended step, move onto the next step and continue to grow wealth. Everyone’s personal situation is different, so use this as a guide, but modify it to meet your own needs and take advantage of options that may be unique to your situation.
Once you have a budget established, start taking small (and large!) steps to cut down unnecessary expenses. Today’s money saving edition: Online Shopping.
If you already do a lot of shopping online, it’s time to re-evaluate and see how many of those items are needs versus wants. The easiest way to save money is to simply not spend it on unnecessary items, however, online shopping is a staple in most households nowadays. If you’re going to shop online, be sure to do it wisely. I’m a huge fan of the convenience online shopping offers, paired with the ability to “find deals” from the comfort of my couch. Over the years, I’ve developed a few habits to ensure I’m getting the best deal possible and to also temper impulse purchases.
Financial Security. We all need it. Whether you are trying to break away from the cycle of living paycheck-to-paycheck or focusing on building long-term wealth, there are a few key steps that will allow you to achieve a solid financial foundation. Once you establish (and automate!) good money management habits, future financial gains will come much much easier.
Ready to get started on the journey to financial well-being? These steps will help get you pointed in the right direction.
May spending totals are in! It was another strong month for the Saverdink household finances. We came in under budget, which has helped even out our higher than average expenses earlier in the year. Personal Capital (where we track all of our income and expenses for free) revamped their interface this month and I’m definitely a fan of some of the new features. They now have a graph that compares the current month’s spending against the prior month’s spending. Nothing like a quick visual to get your spending back on track 🙂 My only complaint is that the tool truncates partial dollars instead of rounding up or down. The engineer in me really needs to account for that 78 cents in the summary roll-up!
Happy Memorial Day, everyone! Mr. Saverdink and I just returned from a fantastic long-weekend camping trip at Acadia National Park on Maine’s Mount Desert Island. We love Acadia for a number of reasons and try to visit at least once a year. Luckily for us, it’s only a 4.5-hour drive away. Coupled with the fact that we already own camping gear and sporting equipment, it makes for a very inexpensive vacation away from the hustle and bustle of everyday life. On top of the gorgeous scenery and plethora of outdoor activities, the nearby town of Bar Harbor, Maine has a number of quaint stores, ice cream shops and microbreweries. Even though we’ve visited Acadia a number of times over the past decade, there is always something new to do and see.
We, Mr. and Mrs. Saverdink, are a pretty nondescript couple on the outside. We both have engineering degrees and have spent the past 10 years working standard Monday – Friday jobs. We own a moderately sized 3-bedroom house in a residential area. No kids, just two little cats. No fancy cars. We travel a few times a year (to some pretty awesome destinations!) and prefer to spend our free time hanging out with friends and exploring the great outdoors.
In 2016, we reached a major milestone. Our net worth hit $1 million dollars when we were only 32 years old. We’ve never benefited from a financial windfall and do not hold exceptionally high paying jobs. Slowly, but surely, we amassed almost a million dollars across our retirement, savings and investment accounts over our first 10 years as working professionals. Combined with $100k in equity in our house, we tip-toed over the millionaire net worth threshold and our savings have continued to grow.
What got us pointed in the right direction? Below are some of the major contributing factors that launched us on our journey towards financial independence and early retirement.
Financial stability is about more than just the money. It’s about peace of mind and knowing that if an unexpected event occurs, you are prepared to handle it. A study in December 2015 showed that 63% of Americans do not have enough savings to cover a single $500 unexpected expense. $500 is a moderate car repair. An emergency trip to the vet. Repairing a broken furnace in the middle of winter.
April was a fantastic month from both a financial and a traveling-to-new-places-and-having-lots-of-fun standpoint. We came in almost $2,000 under budget this month!
As an April Fool’s joke, we left Boston in the middle of a major snowstorm (gotta love New England!) and headed south for our much anticipated week-long scuba diving trip in Belize. This trip was pre-paid back in January, but a few additional travel expenses hit our back account in April. Core expenses remained low thanks to being away for 1/4 of the month and warmer temperatures resulted in lower heating costs. Spring was in full swing by the time returned to New England, so we hung up the skis and kicked off our summertime outdoors activities.
It’s hard to believe it’s May already. Even though this blog just came into existence in April, I want to keep us accountable for our monthly spending throughout the entire year. Our 2017 monthly budget is already planned, so let’s see how our first quarter spending compared.
Spoiler Alert: Winter 2017 was full of skiing, skiing and more skiing… until there wasn’t any more snow!