FIRE Progress Report for December 2020 (Christmas Edition)

Christmas this year was quite a bit different than those of the past (for obvious reasons). However, we made the best of it and was able to enjoy a laid back time with our immediate family. Fortunately, I think everyone got what they were hoping for. We even had a visit from Santa on Christmas Eve.

One interesting piece of information is that even with a car purchase, our expenses for this year were almost the same as 2019. That just goes to show that things may be leveling off when it comes to our annual expenses. This will make calculating the amount we need for FIRE much easier.

Numbers greatly improved this month. That was boosted by the markets increasing even more, 3 paychecks in one month, and a nice income from the side business.

How did this affect us?

Christmas was an obvious expense this year. Honestly, we probably spent more than usual on gifts, but I think everyone was happy with what they got and didn’t get a lot of items they won’t use.

We did have a plumbing issue we needed to get taken care of this month. In addition to that, we bought floor mats for the new Prius, spark plugs, and had the fluids changed. It should be quite a while before any additional work is needed on it.

  • Christmas
  • Floor Mats & Spark Plugs – $216
  • Fluid Changes- $432 (after discounts and gift cards)
  • Plumbing – $225

The Money Related Numbers

Current and future value against Minimum FIRE Goal and 25x Expenses Goal

51.77% to target number (previously 48.83%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

91 months (previously 92)

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

53.09 months (previously 59.45)

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

The Expense Related Numbers

14.25 times annual spending (previously 13.19)

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.

56.99% to minimum FIRE (previously 52.78%)

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

27.52 times annual spending at goal number (previously 27.02)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

How Much We Invested

54.56% Month to Month Change In How Much Saved (previously 5.71%)

This number shows the change in what we saved this month compared to the prior month in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program.

54.56% Month to Month Change in How Much Saved With Employer Contributions (previously 3.47%)

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

12.61% Month to Month Change in 6 Month Savings Average (previously -7.75%)

This number show the change in what we saved this month compared to the prior month, but on a 6 month rolling average. This helps to smooth out months over time and shows a more general trend.

10.57% of 6 Month Average Net Income Invested With Employer Contributions (previously -8.96%)

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

FIRE Progress Report for November 2020 (New Car Edition)

Our 2006 Toyota Prius

The time has finally come. After 287k miles (not all of which were driven by us), the Prius has finally been replaced by… another Prius. Despite what the title says, this car is “new-to-us”. We were able to get a pretty good deal on a 2017 Prius with 152k miles on it. I know, a lot of you are probably panicking right now. You’re thinking “Why would you buy a car with 152k miles on it.”. Well, it’s not very old so it’s got all the safety features. It’s very clean for the mileage. And if it lasts as long as our last Prius, we’ve still got 130k or more miles we could drive on it.

You may notice that some of the numbers don’t match what was reported last month. There was an incorrect calculation that is resolved in this month’s numbers. I left the previous month’s numbers alone since they’ve already been reported and will update going forward. You can see the corrected numbers in this month’s “previous” numbers.

In addition to a new car, we also decided to replace our 7 year old MacBook Pro with a new MacBook Air. A lot of expenses this month, but life happens. Pursuing FIRE doesn’t mean you never buy anything.

We also had finally took our 5 year old dog to obedience classes, and had some repairs done around one of our windows after we found some damage.

Overall, this month’s numbers have had a vast improvement over previous months. Our monthly savings percentage keeps going down a bit as it levels off, but I think in the coming months, we’ll start to see the amount we’re putting away each month increase.

How did this affect us?

Last years expenses were pretty high, and this year they’re even higher with the replacement of a vehicle. However when you consider that we drove the previous one for 10 years and over 220k miles ourselves

  • 2017 Toyota Prius – $7950 (after selling our previous Prius)
  • Dog Obedience Class – $195
  • MacBook Air – $765 (after discounts and gift cards)
  • Window Repairs – $360

The Money Related Numbers

Current and future value against Minimum FIRE Goal and 25x Expenses Goal

48.83% to target number (previously 43.93%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

92 months (previously 93)

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

59.45 months (previously 65.28)

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

The Expense Related Numbers

13.19 times annual spending (previously 12.83)

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.

52.78% to minimum FIRE (previously 51.32%)

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

27.02 times annual spending at goal number (previously 29.21)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

How Much We Invested

5.71% Month to Month Change In How Much Saved (previously 31.15%)

This number shows the change in what we saved this month compared to the prior month in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program.

3.47% Month to Month Change in How Much Saved With Employer Contributions (previously 33.99%)

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

-7.75% Month to Month Change in 6 Month Savings Average (previously 1.12%)

This number show the change in what we saved this month compared to the prior month, but on a 6 month rolling average. This helps to smooth out months over time and shows a more general trend.

-8.96% of 6 Month Average Net Income Invested With Employer Contributions (previously -0.14%)

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

FIRE Progress Report for October 2020 (Halloween Edition)

light landscape sky sunset

Nothing is more spooky that a month without a ton of surprises. We had to replace a wheel bearing on the Prius (286k miles and counting). Our neighbor also cut down a tree for us that may have fallen over on it’s own with the right weather and wind. It was a nice shade tree between our house and our neighbors. We wanted to do something for them since they cut it down and got a lot of the brush cleared away for us, even though they weren’t expecting anything in return.

Oh, did I mention there’s a new chart in the details. Now you can follow along visually to see how the numbers trend over time instead of just comparing the current month to the previous month. Not all the numbers are included, but the important ones are.

How did this affect us?

Just like last month, our expenses this month were almost identical to what they were the year before. This is excellent news as we’re starting to see our monthly expenses level off a bit.

  • Wheel Bearing – $450
  • Tree cut down – $300
  • Life Insurance – $200

The Money Related Numbers

Current and future value against Minimum FIRE Goal and 25x Expenses Goal

43.93% to target number (previously 43.36%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

93 months (previously 94)

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

65.39 months (previously 66.43)

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

The Expense Related Numbers

12.83 times annual spending (previously 12.63)

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.

51.32% to minimum FIRE (previously 50.51%)

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

29.21 times annual spending at goal number (previously 29.13)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

How Much We Invested

26.98% Month to Month Change In How Much Saved (previously -16.15%)

This number shows the change in what we saved this month compared to the prior month in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program.

29.82% Month to Month Change in How Much Saved With Employer Contributions (previously -16.15%)

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

0.63% Month to Month Change in 6 Month Savings Average (previously -2.32%)

This number show the change in what we saved this month compared to the prior month, but on a 6 month rolling average. This helps to smooth out months over time and shows a more general trend.

-0.62% of 6 Month Average Net Income Invested With Employer Contributions (previously -3.65%)

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

FIRE Progress Report through June 2020

Toyota Sienna

Progress Report through June 2020 (Auto Repair Edition)

What Happened and What Is Happening

Even though our investments grew this month, so did our expenses. We had several one-time and annual expenses due this month. One of those was a repair to our 2011 Toyota Sienna.

Some time in the winter, we noticed that the AC system would reset back to 75 degrees after we would turned it on. We waited until we needed an oil change before we had it checked out. Turns out that it was the Air Mix Damper Control Motor Circuit (or something like that) and was going to cost about $2000 to fix it. A lot of the cost was the labor because the dash would have be taken apart. At the time we didn’t think spending about 20% of the value of the vehicle to do a repair like this was worth it. Everything seemed to work fine other than the inconvenience of setting the temperature each time.

Then the 90+ degree summer days came along. We ended up realizing that the broken part controlled the cold air to the passenger side of the car. What was an inconvenience quickly became more of desirable thing. Besides, we thought it would be hard to sell the van in the future knowing that it would need $2000 in repairs to make everything right.

After thinking about our options, I ended up calling Toyota North America and telling them our story. I told them that we’ve owned several Toyotas and due to the way they helped us when our Prius battery died several years ago, we ended up buying the Sienna. In the end, with their assistance and the 15% off Costco Auto coupon (check it out if you’re a Costco member), the repair cost about half what it originally would have.

One other thing you’ll see has changed is in the “How Much We Invested” numbers. These numbers can swing wildly from month to month, so I’ve decided to change them to a 6 month average to help smooth them out and better see how we’re trending.

How did this affect us?

Because our expenses were higher this month, you’ll see the Expense Related numbers moving up less than our Money Related numbers. Below are some details related to our expenses. I don’t think we’ll see expense numbers this large until we replace the Prius later this year.

  • Internet (paid annually to save money) – $549
  • Homeowner’s Insurance – $829
  • Auto Insurance – $562
  • Pest Inspection – $155
  • Materials for a new Dining Room Table – $650
  • Marmon Valley Trail Ride – $297 (most of which we got back when family paid us back in July)
  • Toyota Sienna Repair – $1017

The Money Related Numbers

36.46% to target number (previously 34.80%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

97 months (previously 98)

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

74.86 months (previously 78.07)

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

The Expense Related Numbers

10.63 times annual spending (previously 10.54)

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.

42.52% to minimum FIRE (previously 42.16%)

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

29.16 times annual spending at goal number (previously 30.29)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

How Much We Invested

42.11% of 6 Month Average Gross Income Invested (previously 41.44%)

The amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

52.48% of 6 Month Average Net Income Invested (previously 51.59%)

The amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

46.10% of 6 Month Average Gross Income Invested with Employer Contributions (previously 45.43%)

The amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

57.45% of 6 Month Average Net Income Invested With Employer Contributions (previously 56.56%)

The amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

Savings at the pump with the GasBuddy card

GasBuddy Logo

I’m always a sucker for new ways to save some extra money without much effort on my part. That’s why when I found out about the GasBuddy card, I figured I’d give it a try.

How it works

This card works similar to the Target REDCard debit card. Essentially you link the card to your checking account and they give you a discount by processing the transactions. Unlike the REDCard’s 5% discount, GasBuddy gives you $0.05 off per gallon automatically when you use it at the pump.

After signing up, you’ll receive your card in the mail, set up a driver ID (which is essentially a PIN). Then when you go the pump, you just swipe your card and enter your driver ID and pump away. You can ignore the price at the pump and skip the receipt. GasBuddy will email you your final receipt and it will pop up in the GasBuddy app if you have it installed on your phone.

They’ll then deduct the final amount out of your checking account a couple of days later.

It’s easy!

I love how easy it is. It does require carrying another card around, but it’s not difficult to use. It’s worked at every gas station I’ve tried it at so far.

I’ve used cash back credit cards, but honestly, those tend to over complicate things in the budget and just don’t seem worth the effort. If I could find a cash back debit card, then we’d have a winner.

They also track your lifetime savings and tell you how much you’ve saved.

Final note

It appears that GasBuddy is now offering points through Shop Your Way OR the discount per gallon. I’ll continue taking the discount since it’s an immediate savings versus piling up points to buy something that I don’t really need.

220k and counting

car dashboard

No, that’s not our current net worth. That’s how many miles we have on our 2006 Toyota Prius, and we have no plans on replacing it. We could replace it if we wanted to and go buy a newer vehicle with all the bells and whistles…

…but we won’t

When you start to look at a vehicle as a tool to get you from point A to point B, you realize that any tool will do. Any car will fit the bill and any newer car we might purchase will do pretty much the same thing as our Prius.

The joy from a newer car (or new anything) will wears off in time and you’re left with the realization that the money is gone, never to come back. We’re not going to magically get better gas mileage or lower cost of ownership by buying a newer car and the fun will wear off in about 6 months or so.

 

Benefits of driving our current car

You may be thinking, “new cars have these great features that make driving so much better!” But really, driving our existing car has a ton of great “features”.

  • We’re no longer losing much, if anything, in depreciation
  • When we get a dent or scratch, we don’t fret over it
  • Newer cars have issues too, but over the course of having ours, we’ve put in a relatively small amount into repairs
  • Car payments are a thing of the past
  • Money saved from not buying a newer car is worth a lot more later
    • $10,000 invested at 10% is worth over $16,000 after 5 years! That’s an extra $6000 we can make by not buying a newer car.

But what should you do?

I’m not sure what your car situation is. Maybe you’ve got car payments or have been without car payments for a long time. We made a decision several years ago that we were never going to have car payments ever again and so far we’ve stuck to that.

The best place to start is decide what you want your future to look like and then take the necessary steps that will move you in that direction. If you want to retire early or save more money, you should ask yourself if purchasing something moves you in that direction. “Stuff” will fade away, but relationships and special experiences that create memories can last a lifetime.

Final note

If you look above, I didn’t say “new” car very often, but instead used “newer”. That’s because we plan on only purchasing used cars in the future after they’ve lost a large portion of their value in depreciation. We also purchase vehicles know for reliability which ensures they’ll be problem free well into the future.

That being said, you don’t need to be like us. Someone needs to purchase the new cars that we will buy a couple of years later at a discount on the used car lot.

You Budget How Much For Restaurants and Dining Out?

In this post, I’ll be discussing how much we spend on restaurants and dining out. Depending on where you live, the cost to eat out probably varies a bit. However, there is one way to make sure you stay under budget – eat at home! It’s healthier anyway.

Get to the point already!

Just like the fuel budget, we budget $200 for restaurants and dining out. This amount has been pretty consistent what we’ve used for this category.

How do you stick to it?

The short answer – we don’t. We oftentimes go over. That wasn’t always the case until about a year ago. Before then we’d sometimes go over, but could stay under more easily.

What happened a year ago that made us start going over? Volunteering at church. The group we volunteer with oftentimes gathers at Chick-fil-a for lunch and/or dinner various times on the weekend. That can eat up our restaurant budget pretty quickly with a family of four.

Under normal circumstances this amount is enough for us to eat out at a nice restaurant a couple of times a month, fast food 4-5 times, and maybe a date night.

What all does it cover?

Just like the grocery budget, the dining out budget can cover some items outside of just going to a restaurant. Whether it’s a sit down or fast food restaurant, it’s covered. It also covers quick visits to get some ice cream or frozen yogurt. Finally, it covers things we might buy while for immediate consumption. For example, if we were to go get a slush or pick up a bag of chips at a convenience store to eat right then, those would count towards the restaurant budget.

Checkup

How much do you spend on restaurants and dining out each month? Do you have a hard time staying under budget? Let me know in the comments below.

Photo by Sean MacEntee

You Budget How Much For Gasoline/Fuel?

I’ll be continue covering our budget this month. In this post, I’ll be discussing our fuel or gasoline budget. This one is a little tricky because it can vary a bit depending on a number of factors, such as the types of cars you drive and the number of miles driven each month.

Get to the point already!

Here it is – each month we budget $200 for gasoline or fuel. There have been periods of time where it has been more or less depending on what gasoline prices are. On average, $200 seems to cover it every month.

What do you drive?

We drive two different vehicles in our home, and they’re somewhat opposites when it comes to miles per gallon. Our first car, and the one driven the most, is a 2006 Toyota Prius and gets almost 50 MPG depending on the weather. It has over 200k miles at this point and continues to run well. I commute about 50 miles each day to work, not counting additional driving on the weekend.

Our second vehicle is a 2011 Toyota Sienna. It averages anywhere from 19-23 MPG depending on the type of driving that we’re doing. My wife drives it a varying number of miles each day. Some days that might be a lot, and other days it may sit in the garage.

What all does it cover?

Unlike the grocery budget, the gasoline category is pretty simple. It covers gasoline and fuel for our cars and lawn mower. There is one minor exception to this – vacation. If we’re driving somewhere for vacation, we tend to not use the fuel budget, but instead use whatever we’ve got budgeted for vacation instead.

Checkup

How much do you spend on gasoline each month? Do we spend more or less than you do? I’d love to see in the comments below.

Photo by Adam Hinett

Buying a Used Car

used car

I’ve heard a lot of excuses about why people won’t buy a used car. They range anywhere from “I need something reliable” or “I got 0% financing so it’s not costing me anything extra.” There are a lot of good reasons to get a used car over a new car though.

  • Borrowing money at 0% is not free. When you buy a new car, it begins losing value as soon as you drive it off the lot. So, if you factor in the value you’re losing, 0% doesn’t look much like zero anymore. When you buy a used car, someone else has already lost a bunch of the value for you.
  • Used cars can be just as reliable as a new car. If you buy a car that is a few years old, you have the advantage of being able to check how reliable that model of car has been across the entire fleet. Consumer Reports does an annual automobile issue that goes back about 6 or 7 years for just about every model to tell you what areas have been good and what areas there have been issues. They also tell you what the best used car is in each segment and whether or not a particular year or a specific model would be a good used car to buy.
  • Getting a used car inspection can keep you from buying someone else’s headache. It shouldn’t normally cost very much to get one (probably less than $100). They can check to see if there are any recalls and look it over to tell if there are issues or if things haven’t been maintained. When we purchased our used Prius, we took it from the dealer we were buying it from to another Toyota dealer to have it inspected. Since Prius cars are kind of unique, we wanted to make sure a certified professional gave us a clean bill of health.
  • Buying a used car could save you a TON of money. Our last two cars we purchased were used. I felt like we didn’t get a great deal on the first one, but we did get it used with only 2300 miles on it. I feel like we almost stole the second one, so that more than makes up for it. (See the story below.)
  • Buying from an individual and paying cash can save you even more. If someone is selling a car for $8000 and you walk up with $7000 cash, you could find yourself driving home in a “new” used car. Cash tells the seller that you’re serious and all they have to do is say yes and the money is theirs.

I want to close with a little story about our last car purchase. We were kind of in a bind when purchasing our last car because we were in an accident that totaled our Corolla. We shopped around and my wife really wanted a Prius. We looked around a bit and decided we didn’t want to spend much over what we were getting from the insurance company since we weren’t planning on buying a car at that time. We found a Prius at a dealer that was originally listed for $16,900, but had been marked down to $13,900 since it had sat on the lot for a while. We drove it and liked it but wanted to try to negotiate a better deal. We weren’t willing to pay $13,900. Anyhow, we left and told the guy we would think about it. We decided that we weren’t willing to pay that much and it had to be cheaper to buy it. The salesman called us a few days later and asked if we were interested and “what it would take to get us to buy it.” I called up my wife and she said she wasn’t willing to pay more than $13,000 and it had to include tax, title, and fees. I called him back and after a little while he returned my call and said that we had a deal. That means that our actual purchase price was around $11,800 before taxes and fees. So the last tip:

  • Have patience when looking for a used car. Our great deal happened because my wife had patience and wasn’t willing to make a decision quickly or sacrifice more money just to close the deal. Our waiting told the dealer that we weren’t desperate, and desperate buyers or buyers with car fever are the ones they love.