Life, death, and TAXES!

What happened this last month?

Our investments recovered a small bit this past month, but we’ve also been making contributions the entire month as well to offset losses.

From an expenses standpoint, there weren’t too many extreme ones. We paid the rest of the amount needed for our vacation in June. We also had some car repairs. Unfortunately, it was a large expense and in the end, didn’t solve the problem. We had a fuse that kept blowing in the truck. After some trial and error, I ended up finding out that the headliner becoming detached would cause something to short. I was able to come up with an inexpensive workaround to keep the headliner up. It doesn’t fix the root cause (which is still undetermined), but it keeps things working and should work long into the future.

We also finished a lighting project we had started back in the fall at the barn to allow riding outside when it gets dark out earlier. This involved renting an auger and putting the posts in concrete around the arena. In addition, our youngest is old enough to do drivers education. Fortunately, this is a one time cost that includes the teaching and driving instruction.

Finally, it’s tax time. We did our taxes a couple of months earlier, and we knew we owed a fortune, but we didn’t have them taken from our account until April. Several factors caused this:

• Not having enough taxes withheld throughout the year
  • Resolved by checking the Two Jobs box on my W4 which withholds a significantly larger amount from my paychecks
• Capital gains from moving some investments from an inheritance
  • Should be a one time occurrence
• Side business doing better than ever before
  • Set aside money for taxes earlier in the year

When we owe taxes, we don’t include those in our expenses because if we had the proper amount withheld through the year, they wouldn’t be considered an expense. It seemed out of place to categorize these as an expense since we don’t categorize our health insurance and other payroll deductions as expenses each month.

Where did we spend the most?

Our monthly expenses were down compared to last month. Annually, they’re also up quite a bit from last April, but working their way down annually.

• $1454 Vacation lodging
• $776 Car repairs
• $500 Arena lights
• $470 Drivers Ed

The Money Related Numbers

99.69% to target number (previously 99.23%)

This is our invested assets (401k, HSA, IRA, brokerage, etc.) divided by our target goal number.

39 months until original FI date (previously 40)

The number of months until my 45th birthday and our Financial Independence date.

0.21 months until calculated FI date (previously 0.51)

The number of expected months until we reach our target number. This is based on our current expected monthly contributions, assuming a 10% annual return.

The Expense Related Numbers

11.08 times annual spending (previously 11.19)

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

44.32% to minimum FIRE (previously 44.76%)

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

11.11 times annual spending at goal number (previously 11.28)

We’d like to save 25 times our annual spending. This is how many times our annual spending we’ll have saved when we reach our goal number. If it’s 25 or greater, than our goal number will be enough to cover our expenses. If it’s lower than 25, we’ll need to either cut our expenses or increase our goal number.

How Much We Invested

-16.88% Month to Month Change In How Much Saved (previously -57.31%)

This number shows the change in what we saved in our investment accounts this month compared to the prior month.

-18.63% Month to Month Change in How Much Saved With Employer Contributions (previously -53.58%)

Same as the prior number, but with employer contributions counted.

-0.44% Month to Month Change in 12 Month Savings Average (previously -0.88%)

This number shows the change in our 12 month rolling average. This helps to smooth out months over time.

-0.49% of 12 Month Average Net Income Invested With Employer Contributions (previously -1.22%)

Same as the prior number, but with employer contributions counted.

How we track the numbers

I’ve been using Empower (referral link) to track our numbers. I put them into a spreadsheet that calculates the numbers you see above.