Author Topic: Reader Case Study: Am I a big fat liar?  (Read 15917 times)

BlueHouse

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Re: Reader Case Study: Am I a big fat liar?
« Reply #50 on: March 18, 2014, 12:54:49 PM »
If I'm reading this right, you make $300,000/year and you spend $275,000/year.  By yourself.
Not quite - I think my expense breakout was a little confusing because I played around with the order in which they are listed, so there are a few embedded savings items that look like they contribute to my massive spending hemorrhage. 

It's still bad though.  :(

It makes me realize that I still need to simplify the way I track cash flow and expenses.  I really don't have a handle on what goes out the door each month.  I'll work on streamlining a new budget.  Thanks for your review. 

yahui168

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Re: Reader Case Study: Am I a big fat liar?
« Reply #51 on: March 18, 2014, 03:58:46 PM »
Hi BlueHouse,

Welcome to Spendytown, population "Me and You." I also bought a house "recently" in 2011 and spent at least $70k in the last two years in furnishings and home expenses. I still have one room that is completely empty and my office only has a desk and chair. I don't feel bad about it, but it's never ever done so you just choose to stop somewhere or hold off. My household spending was $195k in 2012, $155k in 2013 and the target is $130k in 2014. It shouldn't be too hard to turn off the spigot, I just focused on buying investments instead. I've put in $50k into the stock market since the start of 2014. You really should invest your cash. We keep $30k in cash and any disposable income goes directly into the market.


LisaCO

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Re: Reader Case Study: Am I a big fat liar?
« Reply #52 on: March 18, 2014, 05:12:54 PM »
BlueHouse -
Thank you so much for posting your case study.  I discovered the MMM blog a few months ago and joined the forum recently.  I'm still working through my husband's and my expenses and savings, but there are definitely similarities in our financial pictures.  I have learned a lot from your posts and the responses from the forum regulars.  Thank you for sharing and being so receptive to suggestions and feedback.

kmm

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Re: Reader Case Study: Am I a big fat liar?
« Reply #53 on: March 19, 2014, 07:08:28 AM »
Hi BlueHouse,

I find your posts really interesting. I'm the same age as you, single, have similar income/spending patterns (though both are lower in my case), and my big expenditure is my wonderful house in a vibrant urban neighborhood, which I LOVE. I have a bit more in savings (just over $1M split evenly between retirement and taxable). I also have an investment condo, although mine makes a small profit ($5K last year after all expenses) and has a lot of equity, about $200K (terrible return on that money compared to what it would have done in the stock market, I know...)

I recently learned that my cushy six-figure job is going away in six weeks and it's forced me to re-evaluate a lot of things. I have the opportunity to take a similar job, which would allow me to maintain the status quo. I'm also thinking about doing some independent contracting, which MIGHT some day make close to what I can as an office worker, but probably not anytime soon.

One of the things I am musing about is the fact that, if I had never bought this house, and used that down payment to pay off the mortgage on my condo instead, I'd pretty much be FI now. I'd have saved a ton in the two years since I bought the house, so would have even more in savings, and my expenses would be low. This job loss wouldn't be so nerve-wracking, and I wouldn't feel the need to jump into another office job right away. I could pursue consulting with no fear. Or do nothing at all for awhile.

I could still do it by selling the big house and moving back into the condo. But I'm just not sure I want to go back to living in 900 square feet. And I have a child who adores this house, our neighborhood, his finished playroom etc. But I know these are all excuses: "we can't live without X!" Of course we could. I'm just not making that choice just yet. But I think about it all the time.

So I understand your struggles, and appreciate your perspective. By being here and embracing the concept of this site, you and I are different from many others in our position. We're not just overspending mindlessly. But we ARE overspending, and need to examine why we're prioritizing that over financial freedom. Good luck with all your decisions!

BlueHouse

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Re: Reader Case Study: Am I a big fat liar?
« Reply #54 on: March 19, 2014, 08:23:29 AM »
But we ARE overspending, and need to examine why we're prioritizing that over financial freedom.
That's really the crux of the matter, isn't it?  I'm grateful to be in a position where there is so much low-hanging fruit.  I'm going to concentrate on a few changes at a time.  It's bizarre to me that I'm still struggling with some of these things.   

Here's what I've done so far:

Moved $70k from online savings account.  This will take a few days to move to checking, then into my Vanguard account.  I'm embarrassed to add that in my 401k, I had $100K of the money parked in cash since I transitioned 401k administrators last year, so I effectively had $300K in cash with $100k less in investments than originally reported.  I'll allocate that to existing index funds too.   
 
Cancelled Satellite Radio (car) for $208/year  (I really like the RawDog comedy channel.  any idea how if I can get that for free anywhere?)

Nixed the fence.   That's about $2500 not spent and another $125/year forever that I won't have to pay to maintain it (in either time or money of painting it so it doesn't rust). 

Nixed California Closets.  I already had 2 closets redone last year, I had planned to get my master BR closet done this year.  I can live with the wire closets.  (that's part of the "furniture" budget.) 

Nixed fancy pantry roll-out drawers.  I'm building a cheaper alternative and will install one pull-out drawer myself.  (savings - about $3000) -- (okay, I'm taking credit for this as a save, but in reality there's no way I would have ever agreed to a $3000 pantry system.  So I probably can't count that as a win against the budget posted)

Nixed flooring tiles for roof-terrace.   (Savings of $2800) Sandals will do the job of protecting feet from hot surfaces.   And I'll hang the solar sail that I bought 2 years ago that has been collecting dust in a closet. 

And those were the easy things. 

Thanks again to all of you!





MDM

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Re: Reader Case Study: Am I a big fat liar?
« Reply #55 on: March 19, 2014, 08:42:35 AM »
Wow!  You have been busy.  Nice work.


aj_yooper

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Re: Reader Case Study: Am I a big fat liar?
« Reply #56 on: March 19, 2014, 09:09:00 AM »
Good movement!

How about tracking your spending as a next step?