Happy Easter!

This is my first financial update. I imagine the format will be similar to so many other FIRE blogs out there, but I may change things as time goes on. This first post will have a little more than usual because I started this blog 3 months into the year. I’ll play catch up with the spending and income, as I’d like to document what things looked like for us just before FIRE and set up the ability to capture our finances for the entire year. Afterwards, I’ll document some failure and happiness indicators. Okay. Here we go.

Monthly Spending and Income

January 2021

Primary Residence – Property Tax+Assoc. Fees $2367
Rental – Property Tax+Assoc. Fees $215
Internet $56
Cell Phone $59
Gas + Electric $152
Water/Sewer $0
Food (Groceries) $927
Food (Eating Out) $456
Gas (driving) $37
Car Insurance $0
Life/Home/Umbrella Insurance $90
Health Insurance $0
Misc/Buffer [Bookshelves, Tax Prep, Clothes, Netflix/Hulu] $618
Total Monthly Spending [January] $4,977

In January, we paid the quarterly property tax on our primary home, as well as association fees on both our home and rental. We own two condos. We live in one and rent out the other. The cell phone payment is from Mr. FD’s AT&T pre-paid plan. I tend to purchase refill cards from Target every few months to pay for my T-mobile plan, and I didn’t need to purchase this month. We paid our monthly $90 term life insurance premium for myself and Mr. FD. We bought two rather large, sturdy bookshelves this month, which takes up the bulk of our Misc/Buffer section. Additionally, we paid for some clothes for the kids, TurboTax software, and Netflix/Hulu for entertainment.

Our food spending is pretty extravagant, especially compared to most other FIRE-minded folks I read about. Food is what we tend to spend on. When there’s something to celebrate, we go out to eat (or do take-out more recently). I think this mind-set of spending on food started in college for me. During that time, I had less to spend, but I always enjoyed grocery shopping because I had to eat anyway. As time went on, lifestyle inflation didn’t hit me in terms of cars or homes. However, my grocery bill just continued to grow, and I was okay with it. When Mr. FD and I got married, the heavy food spending got married along with us and became something we both enjoyed. I can see us bringing this expense down eventually, but not too much.

Stimulus #2 $2400
Rent $1400
Hobby Site $411
Mr. FD Salary $5060
Total Monthly Income [January] $9,271

We received the second stimulus check from the government in January due to the ongoing pandemic. We didn’t need it, but we were glad to receive it. Rent, hobby income, and Mr. FireDesired’s salary make up the bulk of the income this month.

401k Contributions [January] HSA Contributions [January]
$1478 $487

Also in January, we contributed to Mr. FD’s 401k + HSA.

January Savings: $9,271 – $4,977 + $1,478 + $487 = $6,259


February 2021

Primary Residence – Property Tax+Assoc. Fees $290
Rental – Property Tax+Assoc. Fees $1958
Internet $56
Cell Phone $101
Gas + Electric $161
Water/Sewer $0
Food (Groceries) $1351
Food (Eating Out) $268
Gas (driving) $0
Car Insurance $0
Life/Home/Umbrella Insurance $90
Health Insurance $0
Misc/Buffer [Netflix/Hulu] $13
Total Monthly Spending [February] $4,288

In February, we paid the quarterly property tax on our rental home, as well as association fees on both our home and rental. I refilled my T-mobile pre-paid balance because Target was having a BOGO 10% off deal at the time. And, we continued to eat… a lot.

Rent $500
Hobby Site $394
Mr. FD Salary $5060
Total Monthly Income [February] $5,954

The rent we collected in February was lower this month because it was offset by an emergency repair. It goes along with the territory of being landlords. We’ve been lucky that our tenants have been able to pay rent during the pandemic. On the whole, they’re great tenants, and we do what we can to keep them happy.

401k Contributions [February] HSA Contributions [February]
$1478 $487

February Savings: $5,954 – $4,288 + $1,478 + $487 = $3,632


March 2021

Primary Residence – Property Tax+Assoc. Fees $290
Rental – Property Tax+Assoc. Fees $215
Internet $56
Cell Phone $59
Gas + Electric $179
Water/Sewer $84
Food (Groceries) $863
Food (Eating Out) $325
Gas (driving) [EZ-Pass + Gas] $73
Car Insurance $0
Life/Home/Umbrella Insurance $90
Health Insurance $200
Misc/Buffer [Tax Prep, Clothes, Netflix/Hulu] $133
Total Monthly Spending [March] $2,440

March spending was pretty low, but that’s mainly because we didn’t have any of our bigger expenses this month. No property taxes. No big insurance premiums. No unexpected expenses. April should be much higher.

Stimulus #3 $5600
Rent $1400
Hobby Site $343
Mr. FD Salary $5060
Total Monthly Income [March] $12,403

Again, the stimulus wasn’t needed but was definitely welcomed in March. In many ways, the pandemic hastened our decision to FIRE. Had Mr. FD’s workplace not decided to bring workers back into the office before vaccinations were available, it’s possible that Mr. FD would have stayed employed. The stimulus was an added buffer for our savings.

401k Contributions [March] HSA Contributions [March]
$1478 $487

March Savings: $12,403 – $2,567 + $1,478 + $487 = $11,802

Spending and Savings Summary for the year

To summarize, this is what our spending and savings have looked like for us this year.

  Spending Saving
January 2021 -$4,977 $6,259
February 2021 -$4,288 $3,632
March 2021 -$2,567 $11,802

Going forward, we expect the spending to be about the same, while the savings will go down significantly and most likely into negative territory. I’m not sure if this summary format will stay as is in the coming months, but the “Saving” column in the table above will be one threshold for us to watch as we attempt FIRE. We need the “Saving” column to not dip below -$3,777 on average, which is our monthly projected spending for 2021.

Net Worth for the year

For net worth, here’s how we’ve been doing. I’m calculating net worth near the end of the month, but not always on the final day of the month. Most of our net worth increases or decreases are heavily dependent on the stock market. I’m also including our total FIRE assets, which are arguably more important.

  Net Worth FIRE Assets
January 2021 $2.15 M $1.55 M
February 2021 $2.18 M $1.59 M
March 2021 $2.23 M $1.63 M

FIRE Failure Indicators

I’m starting to put together a list of indicators to signal if we’re failing at FIRE. I mentioned some of them earlier, but I’ll summarize them here:

  1. According to our plan, we expect that we’ll spend $5,440 on average for monthly expenses and have $1,663 in side income every month, which translates to a deficit of $3,777 per month. However, if we eat up more than $3,777 on average every month, then we need to stop and re-evaluate. Since Mr. FD was still working in March, we’ll start looking at this more carefully in April. For now, we’re fine and the first three months of this year have given us a nice buffer.
  2. For now, we’ve decided on a withdrawal rate of about 3% from our FIRE assets. If our FIRE Assets and annual expenses bring us above a 3% withdrawal rate, then this is another red flag for us. Since we’ve only just started with our transition to FIRE, we’re good here.

We’ll probably need more indicators in the future, but this is what we have now.

Happiness Indicators

I know it’s important to make sure we’re happy, but I’m not sure how to track happiness. So, I’m taking an approach from Joe Udo at retireby40.org by simply rating it for now.

On a scale of 1-10, how would we rate our happiness?

From Mr. FireDesired:

“An 8, I guess. I don’t have to go into work without a vaccine.
I’m not stressed. If I’d win the lottery, I’d be even happier.”

From Mrs. FireDesired:

“A 7.”

A 7 is pretty good for me. Mr. FD is more optimistic, while I generally tend to swing the other way and stress easily. I’m a little behind on one of my grad school projects because I started this blog and spear-headed the FIRE transition planning while Mr. FD finished up work. Other than that, things look good. It’s exciting to see all the planning come together. I’m grateful we even have the option to FIRE. Mr. FD has been really good about helping more with the kids these days. And, it’s EASTER! It’s a good time to reflect on the good things going on in our lives.

Until Next time

Our finances in the first three months this year have been good. It’s given us extra buffer for our transition and helped us solidify our decision to FIRE. We’re feeling good and so grateful for what we have. April’s financial update will be more interesting because it’ll be the first one without Mr. FD’s full paycheck and 401k/HSA contributions. So, until next time.

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