[DISCLAIMER: This is a catch-up post, documenting our financials from the third quarter of 2022. It’s 2023, but I’m trying to organize and document our financial history so that I can have this record to look back on.]
Onward to Q3 (July-September) of 2022. The above picture was from our first ever paddle boating trip with our kids. Mr. FD and I gave our legs a workout to paddle across this little pond while the kids sat in the back. I think we had a great summer in 2022, but our massive overspending in the “miscellaneous buffer” category continued from the previous quarter into this one.
I’m really torn about this spending. On the one hand, I wish we didn’t spend so frivolously. If we don’t cut back, our current assets won’t be enough to support us in retirement. Our FI goal posts will be pushed higher and higher. Then again, it was a lot of fun to go out on trips and eat out. Perhaps, my original FI projected spending plan was unrealistic, but I don’t know if we really need to go this high.
In any case, here’s how we looked financially during Q3 of 2022.
Monthly Spending and Income
July 2022 Spending
|Primary Residence – Property Tax+Assoc. Fees||$2,630|
|Rental – Property Tax+Assoc. Fees||$737|
|Gas + Electric||$121|
|Water + Sewer||$0|
|Food [Groceries/ Household]||$1,454|
|Food [Eating Out]||$716|
|Transportation [Gas/ Oil Change/ Gas]||$265|
|Life/ Home/ Umbrella Insurance||$90|
|Health + Dental [Dentist/ Meds]||$144|
|Misc Buffer [Babysitting/ Boating/ Mini Golf/ Netflix/ Hulu/ Peacock/ Amazon Kids+/ Science Center Membership]||$1,505|
|Total Monthly Spending||$7,733|
August 2022 Spending
|Primary Residence – Property Tax+Assoc. Fees||$300|
|Rental – Property Tax+Assoc. Fees||$1,974|
|Gas + Electric||$81|
|Water + Sewer||$119|
|Food [Groceries/ Household]||$1,049|
|Food [Eating Out]||$703|
|Transportation [Gas/ Parking/ Tolls]||$339|
|Life/ Home/ Umbrella Insurance||$90|
|Health + Dental [Vision/ Dentist]||$400|
|Misc Buffer [Babysitting/ Disney / Netflix/ Hulu/ Amazon Kids+/ Art Class/ Philly Zoo Membership/ Beach/ Grad School]||$3,273|
|Total Monthly Spending||$8,400|
September 2022 Spending
|Primary Residence – Property Tax + Assoc. Fees||$300|
|Rental – Property Tax + Assoc. Fees + Repairs||$2,170|
|Gas + Electric||$176|
|Water + Sewer||$71|
|Food [Groceries/ Household]||$1,313|
|Food [Eating Out]||$872|
|Transportation [Gas/ Parking/ Tolls/ Repair]||$461|
|Life/ Home/ Umbrella Insurance||$90|
|Health + Dental||$250|
|Misc Buffer [Language School/ Netflix/ Hulu/ Amazon Kids+/ Gifts/ Aquarium/ Disney/ Clothes/ Legoland/ Grad School Refund]||$1,239|
|Total Monthly Spending||$7,204|
Spending. Out. Of. Control.
There is such a huge contrast in our spending in 2022 compared to 2021. We spent a lot on things that I didn’t really expect before 2022 started. I need to be better for 2023 about incorporating these into our projections. Our “Misc Buffer” section really needs to be broken down further. I think maybe separate sections for excursions, childcare, streaming entertainment, extracurriculars, and clothes might be a good start. [Mental note: Try to work these in for 2023.]
With the pandemic winding down, we were starting to sign the kids up for extracurricular activities. For the fall, we prepaid for enrollment into a Chinese language school. This cost roughly $1k for both kids combined, which I think is reasonable. They meet on weekends for much of the regular school year. I don’t know how much they’ll actually learn and retain, since we speak English at home. Still, some exposure to non-American cultures is something Mr. FD and I value. In addition to language school, we also signed the kids up for an 8-week art class.
For the summer, we spent A LOT on trips and excursions. We visited the aquarium again. This was cheaper because we paid for an annual membership last quarter, but we still paid extra for food, gas, tolls, and parking. We went to Legoland (again). That was not through a membership, so we paid full price. We somehow got sucked into even more memberships. In Q3, we added an annual Philly Zoo Membership. The kids somehow hated this. We only went once, and that was enough. We purchased a membership to the Liberty Science Center too. This was better received by our kids. We went back at least twice. Add in a few beach trips, and one day at the annual NJ balloon festival. Wow. I don’t know how we did all of that in one summer.
Oh yeah. We also managed to squeeze in a week at Disney. My goodness. We spent so much money there. We drove from NJ instead of flying, so that added to our gas and toll expenses. I don’t have a good breakdown of how much it cost for our trip to Disney. In addition to our prepayment in Q2, it’s also kind of built into our transportation, eating out expenses, and miscellaneous spending this quarter. I do know it was substantial. (I’d guess a ball park number of ~$9k?) I may try to go back and hunt down all of the expenses for a separate blog post, but I can’t guarantee I’ll do it. I’m curious about it, but I’m also a tad bit afraid. The funny thing is, I don’t regret what we spent at Disney. We visited 4 different parks, and each one gave us unique experiences. Our family made plenty of good memories.
We continued to need babysitters for the summer so that both Mr. FD and I could keep working during the week. This spending is actually understandable. For the entire summer, we spent about $2,600 on babysitters. We had hoped to spend more, but we had trouble finding reliable ones. On the days we couldn’t find one, Mr. FD somehow managed to watch the kids and still be productive at work. Without this, I don’t know how we would have managed. Major Kudos to Mr. FD.
Now for the more ordinary spending. Generally, our home expenses (property tax, association fees, utilities, etc.) were pretty normal. I did end up needing a root canal, along with a bunch of additional dentist trips to follow-up for other issues that stemmed from not visiting a dentist during the pandemic (e.g., cavities.. sigh). Mr. FD and I also started to resume more of the annual (preventative care) doctors visits. We spent more than expected on groceries and eating out. [Reminder: We were expecting $1,100/month for groceries + household expenses and $500 for eating out — 2022 Expectations.] I think we underestimated in our planning how much more we’d spend for these when we’re both working. In addition to inflation, we also increased our spending on more prepared or semi-prepared foods. For example, we used to wash and clean our fruits and vegetables ourselves. In Q3, we switched to more expensive pre-cut and pre-washed versions. This is only one example, but it illustrates how we inflated our lifestyle to compensate for lack of time.
To sum up, I knew at the time that we were spending more. However, going through these numbers for this blog really shines a light on them.
July 2022 InCOME
|Total Monthly Income||$16,586|
August 2022 InCOME
|Total Monthly Income||$16,055|
September 2022 InCOME
|Mr. FD Freelance||$2,166|
|Mrs. FD Full-time||$7,120|
|Total Monthly Income||$11,041|
Income was pretty steady this quarter. Thank goodness. Rent and the hobby site were pretty consistent. Mr. FD and I had pretty stable income as well. September income was reduced primarily due to federal and state pre-paid tax payments on Mr. FD’s side, but that’s pretty normal for us now. Mr. FD and I have worked hard to get where we are, but I still feel privileged to have this steady income.
Q3 RETIREMENT CONTRIBUTIONS + HSA
We made pretty consistent retirement and HSA contributions this quarter as well. Over $16k in these tax sheltered savings for a single quarter is something I feel good about.
|Month||Mr. FD’s Solo 401k||Mrs. FD’s 401k (w/ company match)||HSA||Monthly Total|
By subtracting our expenses from our income and retirement/HSA contributions, we saved more than $36k this quarter.
Here’s the breakdown by month:
July Savings: $16,586 – $7,733 + $5,448 = $14,300 in total
August Savings: $16,055 – $8,400 + $5,477 = $13,132 in total
September Savings: $11,041 – $7,204 + $5,448= $9,284 in total
Here’s the total for the quarter:
Q3 Savings: $43,681 – $23,338 + $16,373 = $36,716 in total
Spending and Savings Summary for the year
Here’s a table of our spending and savings for 2022. When I started this blog, I thought that I could keep our spending under $60k easily for a single year. I was wrong. For 2022, we basically spent that much in only 3 quarters.
Net Worth for the year
I calculate net worth near the end of the month, but not always on the final day of the month. Most of our net worth changes are heavily dependent on the stock market. I’m also including our total FIRE assets, which are invested and expected to grow in our retirement.
Even though we had saved over $36k by the end of Q3, our net worth DROPPED by roughly $20k this quarter. Our FIRE assets followed by about the same amount. For July and August, it looked like the stock market might have started a rebound, but it came down even further in September. The silver lining is that our net worth dropped by less in Q3 compared to Q2, but that’s a thin lining.
|Net Worth||FIRE Assets|
|December 2021||$2.53 M||$1.92 M|
|January 2022||$2.44 M||$1.83 M|
|February 2022||$2.45 M||$1.84 M|
|March 2022||$2.48 M||$1.88 M|
|April 2022||$2.40 M||$1.80 M|
|May 2022||$2.43 M||$1.83 M|
|June 2022||$2.38 M||$1.78 M|
|July 2022||$2.46 M||$1.86 M|
|August 2022||$2.46 M||$1.86 M|
|September 2022||$2.36 M||$1.76 M|
[Star Wars Tie Fighter @ Galaxy’s Edge, Disney World 2022.]
FIRE Failure Indicators
Here’s our sanity check for the month.
- Is our spending on track? NOPE! We projected in a previous post that we’re expecting to spend about $73k this year. We’ve already spent more than $58k. If we continue at this rate of spending, we’ll approach $77k by the end of the year and maybe even exceed that since our spending seems to be accelerating.
- Is our withdrawal rate okay? We’re even more behind than Q2. Currently, we’re on track to spend about $77k, which is WAY MORE than 4%. We basically spent our 4% using only 75% of the year. Yay. Go us. Ultimately, we want our spending to be at or below 3%. I can’t say it enough, we are way over. Because I wasn’t tracking regularly in this format, I didn’t even see how badly we went over. I need to start tracking above a 4% withdrawal rate in my charts going forward.
Withdrawal Rate Withdrawal Amount 4.00% $68,157 3.75% $63,897 3.50% $59,637 3.25% $55,378 3.00% $51,118 2.75% $46,858
On a scale of 1-10, how would I rate my happiness?
I think I was happy and burnt out at the same time. I remember feeling happy about all of the trips as a family, all of those new memories and experiences. At the same time, I was starting to feel more and more burnout from work. I was working probably close to 50-60 hours per week. I wasn’t sleeping or eating well. I was delivering some value, but somehow not as much as was expected of me.
I didn’t mention it above, but I signed up for yet another grad school course for Fall 2022, but I dropped it pretty early on. I somehow managed to pass two courses while working again, but these were relatively easy courses. I was totally drained. I only had hard courses left, and I didn’t think I had time to take them if I actually wanted to pass. I’m still technically enrolled in the masters program, but it’s looking less likely that I’ll actually complete it.
From this post, I’m glad we didn’t actually retire early. We weren’t ready. I underestimated our spending by a lot in my early plans. I’m sure we’ve easily passed our LeanFIRE threshold. If Mr. FD and I were to find ourselves without employment starting from the end of this quarter, we’d tighten our belts, and we’d manage to have more than our basic needs covered. However, we’d miss out on opportunities to spend on experiences. We need to work longer and save more to be able to cover the experiences we want for our family. This is probably the biggest takeaway for me from the past few blog posts. We definitely desire FIRE, but we’re not there yet.