Back to getting my regular financial updates in, starting with income and expenses before updating my net worth. This update contains the past two months separately as I did not do an update in October for September. Overall I feel that the months went well and I am very happy with our overall spending while maintaining a great lifestyle.
Expense
The Most Important Personal Finance Concept?
There are many important factors to consider in personal finance. Opportunity cost, rate of return, interest on loans or investments. But if you asked me to select the single most important factor in making decisions, what would my answer be?
My answer would be cash flow.
This is really what all of our efforts boil down to. Generating the largest amount of free cash flow so that we can retire when we want to. Now there are really three ways to increase your cash flow, assuming you have debt. One is to decrease reoccurring expenses, another way is to invest, and lastly pay off your debts. So lets go over some of these areas and talk about the advantages and disadvantages of these things when trying to increase the spread in cash flow. Continue reading
Income and Expense for August 14
I did things in inverse order this month where I updated my Net Worth before my savings rates. To me the savings rates is the most important battle, I have even created a new page to track my progress over time. Every dollar I don’t spend can either be invested in the future, used to pay down debt, or help bolster one of the layers of my emergency fund. I may track my income and expenses different than other bloggers, mainly because I use this as a purpose of updating my Net Worth. So any action that will increase my Net Worth, such as paying down the principle on a loan, or savings into a HSA, is savings in my mind as those actions will increase my net worth.
August overall was a grand month with extra paychecks from the daily grind. I had expected to pay $2,500 more for my house due to storm damage in April, however that hasn’t happened as of yet. I guess I will need to double check my paperwork to see where I stand on this, but I am holding those funds aside for now as I plan on paying it at the present time. Continue reading
Can a Nissan Leaf Save Me Money?
Photo Credit: Kārlis Dambrāns
Electric cars are the way of the future and here in America and you can even get a tax credit for buying an electric car as well as possibly some great state benefits as well depending on where you live. So buying one sounds like a no brainer, right? Continue reading
Save Over $25.00 a Hour Making Your Own Laundry Soap
During the last couple of months I have been looking for a large stock pot casually as I went to thrift stores to make my own laundry soap. Well now that I found one for $6.00 at Goodwill, I figured it was time to do it.
I have only ever used liquid laundry soap, which takes a bit more preparation than making a dry laundry soap. I used a recipe I found at Wellness Mama after doing a google search.
So, yea you can make your own laundry soap, but is it really worth your time?
To be frank… it is definitely worth your time.
Continue reading
Income and Expense for July 2014
It is time to update my income and expenses. As I previously noted when I first started tracking that I consider everything that contributes towards growing my net worth as savings. So this would include the principle portions of debt repayments, while not including the interest, or insurance and taxes on my home. With that said there was a point made that I do not depreciate my vehicles or amortize them in some fashion other than an adjustment to net worth. This is true… but I am also not including dividends inside my retirement accounts as income, maybe it is currently more skewed that depreciation is greater than that income, but I would hope in the future that this will change. Anyways, this is a system that works for me and you need to determine a system that works for yourself and helps keep you on track, that is the main goal in my opinion. Continue reading
Life Insurance – A Penalty of Debt
You may have noticed that on my income and expenses that I pay for Life Insurance. Its not that I expect to die, but if I did, I don’t wish that my wife or I would be burdened with debts that one salary cannot repay. Now once our accessible funds passes our debts I would feel safe in cancelling our policy. This is one of the many ways that past financial decisions can haunt you and even though we pay about $44 a month for the policy, it is $528 every year that can be cut from the budget… eventually.
Now, what do I mean by “accessible funds”? To me, my accessible fund’s is money in a brokerage account, checking, savings, and contributions or conversions to a ROTH IRA that you can withdraw. Once these amount exceed the debt levels I will feel safe about cancelling the life insurance policy because I know worst-case scenario that my wife can kill off all debt and be able to get by financially. Continue reading
Income and Expense for 1/2 of 2014
Since I am starting this blog in July, I figured I will get everything caught up income and expense for the first half of the year in a single post. So this one might be longer than normal. At the beginning of the year, I wanted to see if I could save at least 50% of our net income. Now, by savings I mean anything that will increase my net worth. So contributions to retirement accounts, HSA, brokerage account, principle amount towards debt, and any increases in my checking account.
Now I haven’t stated my goals yet for the remainder of the year and I feel like this is an area in which can be revised upwards. I am striving to make each month better and to try to eliminate unnecessary expenses. Now between my wife and I we don’t even gross six-figures in income. In fact, I would be THRILLED if we got that high before we are financially independent. Not because the income matters, but because we will be able to get financially independent that much quicker! Really, I am just a bit above the median household income level in the US. So if anyone wants to argue you can’t save on the median income, send them my way. I am not here to prove someone wrong, I am here to prove it is possible. Continue reading