Sunday, February 5, 2012

January 2012 post mortem

Another month is behind us. That means, for those of us following the path of Mr. Money Mustache, we're one month closer to financial independence. I feel like I'm still on track. Let's look at some numbers.

January 2012 spending

  • Total - $5894
  • Student loans (prepayments) - $1100
  • Total w/o student loan prepayment - $4794
  • Student loans (required payments) - $263
  • Car insurance (6mo) - $506
  • Mortgage - $2805
  • Verizon - $25
  • Gas bill - $98
  • Electric bill - $94
  • Gasoline - $167
  • Groceries - $209
  • Restaurants - $288
  • Costco trip - $207
  • Cruise spending - $247
  • Amazon prime - $79
  • Yankee Candle - $83

I think this month went really well. That $4794 number is still higher than I'd like, but there are a number of annual and semi-annual charges which skew the total upward. I bought very few things this month and I think it shows on my balance sheet. We still spent quite a bit on some luxuries, like eating out and a trip to the candle shop, but this month it was in the context of a principled approach toward spending. While I surely have room to improve, January's numbers show much improvement already.

My student loan prepayment of $1100 was a little less than the average monthly amount to vanquish all my student loan debt by December 31, 2013. The current total balance on my loans is $28,674.88, down from $29,790.23 a month ago. That feels pretty good.

Last month we paid car insurance of $506 on our two cars, which means we're paid for the next six months. Going forward we're switching to a monthly payment schedule just to keep things more even. If you average it out, that would put our monthly non-student-loan-prepayment spending at around $4400 a month, which is pretty good for us. (Of course, that would also raise our spending over the next five months by around $90/month.)

Verizon was much lower this month because of a credit from last month's bill. Mid-way through December we cut our services after the bill was issued, so the difference was applied to this month's bill. Next month will be higher — I'm expecting it to be $75 with taxes.

The gas and electric bills were about average, I guess. I really can't tell what average is for them, though. I feel like I can do better with efficiency around the house. I'm not planning on focusing on that until I rein in some other spending, per the Theory of Constraints.

Groceries were below average ($209 compared to about $300), and restaurant spending was above average ($288 compared to $200). Together they averaged out at just under $500, which is my monthly target. My girlfriend and I went with our friends to this fancy six-course wine pairing that was positively delectable. That was most of our restaurant budget. Truth be told, I was anxious beforehand about spending so much money on a dinner, but it was really awesome and totally worth it. That said, we both understand that we can't afford such extravagance very often, at least not until we're financially independent.

The last items are straightforward. This month we made a trip to Costco where we stocked up on basically everything. That $207 is half of what we spent, split between me and my girlfriend. Then there was our cruise spending, our yearly Amazon Prime subscription at about $79 (totally worth it by the way, I can elaborate if necessary), and a minor splurge purchase at Yankee Candle. I used a bunch of coupons and stocked up on candles that will probably last all year.

January was a good month. After December, it's good to see that I'm moving in the right direction. My frugality exercise really had a positive impact on my spending. If I can keep posting numbers like this, I'll be on track to meet my student loan payoff goal.


  1. Another month toward financial independence! A lot of your expenses are pretty well in line, but I'm wondering why such a high mortgage? Do you have a really nice home, or do you just pay extra on the payment? I've thought about purchasing a condo a few times, but I'm paying $450 in rent right now and renting has been kind to me.

    Best wishes for your journey!

  2. Yes, it is a high mortgage, and unfortunately no we aren't sending in extra payments (yet). Basically we live in one of the more expensive areas for where we live. That plus PMI plus escrow for taxes and insurance makes it a pretty hefty amount each month. Mr. Money Mustache wasn't on my radar when we were buying, though I'm not sure that would have changed my decision ultimately.

    By all means, if I had a $450/month rent payment I wouldn't change a thing. Renting and banking the difference is a great financial move.