The next ep of Game of Thrones is airing in T-minus three hours so I can’t afford to beat around the bush:
Our Q1 numbers really sucked.
April is a popular time for bloggers to reflect on their quarterly spending, and I love reading about other people’s frugal wins. Especially ones that are along the lines of “Hello, I spent only $8 this month.” Because that’s not us. We had so much money flying out of our wallets I couldn’t log into Mint without seeing the dreaded ‘high spend alert’ warning pop up on the screen.
Some of the money we spent was planned and some of it was totally unexpected. While our spending isn’t average or relatable for lots of people, I hope there are still some money lessons to be gleaned.
I knew this was coming, but seeing the dollar amount still hit me hard. This was the first time I owed the IRS money, EVER. There were tax changes for 2018 that most of us didn’t pay attention to (including me), but there were two specific events that didn’t help the situation:
- I earned side hustle income.
- I sold stocks after holding them for less than a year. Remember when I talked about capital gains?
But I knew all that.
Still, there were two things I could have done to minimize the tax bill:
Opened up a SEP IRA or Solo 401k (tax advantaged accounts for the self-employed), which I’m looking into now. And for the capital gains I could have offset those by selling a losing stock. But I didn’t have any that were down at the time.
If you didn’t like your tax bill or refund, it’s worth checking out whether you should revise your withholdings on your W-4. If you want a big refund, you claim 0, and you increase that number if you want to hold more money in your paycheck throughout the year. I found this simple calculator that can help you figure out what to do.
We were able to cash flow the tax bill, but if I was a freelancer without much cushion, I’d get into the habit of setting aside the taxes I’d eventually owe, 30-40% of the earnings. You can pay them on a quarterly basis, too.
I bought what I hope is my forever watch, so that’s old news.
I’m also steadily putting away $30 a week to potentially buy a pair of Chanel slingbacks, and I’m 75% of the way there. With two exorbitantly-priced items either already purchased or planned, it’s going to be an expensive shopping year, full stop. But I feel really good about both of these purchases.
If you can’t cash-flow what you want right now, you can plan for it ahead of time, little by little. And it doesn’t have to be shopping. It could be a trip or a mountain bike or a home renovation. It’s actually fun to build anticipation and wait to buy something instead of buying it immediately! I swear it makes me appreciate the purchase much more.
Travel is my #1 Problem Category right now. The Asia trip was more spendy than I had planned, because like newbs, we don’t budget for travel.
Q1 spending accounts for prepaying the lodging for a friend’s wedding in England this summer, and the Italy lodging and car rentals. I didn’t mean to go to Europe twice this year, but we already booked the Italy trip before we even found out about the wedding. But yeah, doing two full trips to Europe adds up.
I’d always been conservative about saving my points for big trips, but now I’m lax about it so I can make these costs go away 🙂 I used our Chase Sapphire points for the wedding flights and then we are going to Portugal right after, so the points took care of the hotel costs, as well.
Now I have 0 Chase points left.
But I’m going to build them up again. I just got the Chase Business Ink Preferred card, and after that I’ll get the Chase Business Ink Cash. So, there is a plan!
Other than that, the only other big-ish trip this year is FinCon in September–which yes, I almost forgot about until I heard people talking about it on Twitter. I have four months to figure it out how I’m going to pay for the hotel, which is plenty of time.
When my husband and I were in Japan, we got a phone call from our cat sitter in the middle of the night.
Our cat had an eye problem, she said.
It didn’t seem serious until she sent a picture. One pupil was five times bigger than the other one.
I did the thing that you’re not supposed to do, which is consult Dr. Google. All the articles said something like this was an urgent issue. We gave the sitter the go-ahead to take the cat to his vet for an evaluation.
Since we’ve returned from the trip, we’ve taken him to get checked out two more times.
His eye is now clouded over and a bluish hue–kind of like what human glaucoma looks like.
It seems like we should have an answer. But no one knows exactly what’s wrong with him. The only sure bet we have is over $1,200 in vet bills.
And don’t get me started on how hard it was to book an appointment with a Cat Ophthalmologist. Turns out there are only about five in the country.
The last vet we saw said that he could do a test for pancreatitis, but the test was unreliable.
So that was a hard no.
It’s hard to not feel like we got bamboozled by the vet industry. With such visible symptoms it seems like we should have a definitive diagnosis.
For now, our cat is just as cuddly as ever, and as enthusiastic about eating like he always is, so we’re leaving it be until we see behavioral changes.
As for the money, I find it hard to put a dollar limit on pets, so we don’t have an emergency fund set aside for the cats per se. But obviously these types of costs are going to hit any pet owner at some point. That’s why it’s always good to have some sort of savings, even if it isn’t earmarked for a specific purpose.
I’m continually surprised by how much we spend on healthcare. But I think that’s also because I never used to go to the doctor unless I thought something was wrong.
My husband sees an out-of-network doctor four times a year, which adds up.
And I’m notoriously bad at staying on top of preventative appointments, so I tend to chunk them all in one go. In a span of a few weeks, I went to the doctor almost every day to get all my appointments in.
Instead of going to the dentist I always went to, I decided to start a new life at a different dentist. I was embarrassed that so much time had passed since the last appointment, because I had ignored all their follow-up calls. Life just got in the way.
New dentist equals startup costs. I agreed to get X-rays, which meant I paid $312 for the initial visit (including $100 for a deductible). Although future check-ups this year shouldn’t cost me anything extra at all.
But then the dentist said that I need to get my wisdom teeth removed. They aren’t bothering me at all, so I want to get a second opinion before I go ahead with a fairly invasive surgery.
My favorite cousin in Asia would give me the shirt off his back, even though he has almost nothing and I want for nothing. So when he asked me to help him buy a keyboard for his musical pursuits, of course I said yes without considering how that would affect the rest of our budget. Well, that’s not entirely true; I asked my husband what he thought and he agreed that we should send him the money. And I would rearrange our finances to make it happen.
The only problem is our gift budget is $600 per year, as it’s always been. We still have my mom’s birthday left, and then a wedding in the summer. We’ll probably gift the couple $250, the same amount they gave us for our wedding.
That’s $750 already, so the math doesn’t work. The good thing about budgets is that they’re living documents, and you can adapt them to suit your needs. So we’ll borrow from another category.
All in all, we’ve spent $10,367.49 in just a handful of categories through March this year. And that doesn’t even include basic survival categories like a roof over our heads and groceries! DAMN.
We’re Actually Budgeting for Real
I feel lucky that we can handle all these types of expenses, and it confirms to me that living below our means, in our old rental, is worth it.
But still, I wondered if maybe we DO need a little more fidelity in our budget.
I signed up for You Need a Budget (YNAB) months ago, but it sat there collecting cobwebs until just last week when I decided to give it the old college try.
I severely underestimated the learning curve. Because I would enter in a number, and then a new number would come back at me. A number that I had no idea how it came to be. With any piece of software I’ve always been able to figure them out by pressing buttons and seeing what happens.
But YNAB has a methodology you need to learn.
You don’t budget money you don’t have. Every dollar has a job. And you budget every single dollar down to zero. The ‘not budgeting for money you don’t have’ concept is new to me since we’re in the habit of prepaying for things 1-2 paychecks ahead of time.
After wrestling with it for hours, I finally thought I figured it out and felt like this:
I’ve been testing it for the rest of April, and every time I use it I seem to get the hang of it more and more. Now I’m so excited to plan out our spending for May!
How did your spending go in Q1? Any surprises?
Feature Image: Unsplash