What a month! Between moving, closing on the sale of our house, reaching debt freedom, celebrating our nine-year anniversary, and kicking off a one-year mini-retirement, we’ve flipped a good chunk of our life over! We’ve got our road trip coming up this month and then the school year starts. At that point, everything should settle down a bit. For now, let’s take a look at how our nothing new year challenge is going and give the details of our final mortgage payment.
Let’s start with an overview of our spending for this month.
We track our spending using a little tool I made called Thrifty. It’s free and you can use it on any device with an internet connection and a modern web browser. I really recommend you check it out.
Here’s our spending summary from Thrifty for July 2017:
Let’s tackle the elephant in the room first - we spent almost $28,000!?!? No, we didn’t go buy a new car or something crazy like that.
Our spending this month includes all of the closing costs in here (including the agent fees for our agent and the buyers’ agent). When we take those out, the number drops back to a more realistic level (albeit a high one) - $6,092.97.
We have a few “double payments” this month as the July expenses for our apartment life came on July 1st but we prefer to pay our August expenses a few days ahead. Rent and health insurance are the two big culprits here, which together bring our totals up by over $1,000. It’ll all balance out in the end, so we’ll have to see what normal spending looks like in the future.
If you’ve been following along on these updates, you might notice a few new categories. As Jaime and I have entered our one-year mini-retirement, we’ve been developing a new budgeting system to replace our old one and part of this has been creating new categories in Thrifty for certain expenses that we’re budgeting separately.
A couple good examples of this are the new categories for date night and pizza/movie night. These are an important part of the values and dreams we want to live out on a regular basis - time together as a couple and time together as a family. Because this is good spending, we want to separate it from our other Eating Out expenses, which tend to be more convenience-based unplanned spending. In all cases, we’ll have a budget for each and work to stick within those limits.
In the meantime, here’s a detailed category-by-category look at what we spent this month:
|Charity||$100.00||We continued our regular contributions to our church and to The Hope Effect, one of our favorite charities.|
|Clothing/Shoes||$223.53||My wife needed some replacement unmentionables but thankfully those are on the exceptions list. Outside of this, we treated our girls each to a new dress and an accessory as well as shorts, a shirt, a pair of sunglasses and a headband for my wife. All told, we got 10 new items, totaling $93.78.|
|Date Night||$94.09||We set a budget of $70 every two weeks for date night to cover the cost of childcare and our food. We hope to come well below this, but we recognize how important it is to plan out spending this time together. We were mindful of our meal costs and we got free childcare for the second date night as our girls stayed with Grandma and Grandpa, end up $45 under budget.|
|Eating Out||$58.18||We’re now separating our Eating Out expenses into “planned” (date night and pizza/movie night) and “unplanned” (last-minute meals and treats). This month, we got treats a few different times for the whole family, no convenience meals, and one dinner out with a friend.|
|Fitness||$0.00||Our gym memberships were prepaid, so no ongoing expenses this month|
|Gifts & Celebrations||$143.03||We set a $100 budget for our anniversary celebration, which included a movie from Redbox on the night of our anniversary and a fun day the following weekend. For $70.00, we toured a winery, got samples and snacks, rented two movies, got pizza, ice cream, and kayaked in our favorite state park. Outside of this, we spent $70 on presents for our daughter’s birthday in August and bought a birthday card for my wife’s grandmother.|
|Groceries||$888.84||Our target is $200 a week and we generally shop on Saturdays, so our budget this month was $1000. We kept under budget and managed to stock ahead on beef that was on sale. We built a consistent meal plan this month and it seems to really be paying off!|
|Healthcare||$779.31||I had to pay premiums for my last month of work (retrospective), this month, and next month (proactive). In addition, we had one office visit this month.|
|Hobbies||$39.19||We bought two coloring books and new markers. In addition, we renewed the domain registration for my wife’s blog, Jaime Declutters|
|Home Updates||$0.00||Now that we’re out of our house, this should be $0 for the future. Anything wrong with the apartment is our landlord’s problem :)|
|Household Care||$302.53||We had a bunch of the regulars: Aleve, overnight pull-ups, toothpaste, air freshener, duct tape, corn syrup (for making bubble mix), toilet paper, band aids, bug spray, shampoo, conditioner, hand soap, dish soap, laundry soap, foundation makeup, and sunscreen. In addition, we got a few pieces of furniture for our apartment - all used or borrowed: a chair with ottoman and a sit/stand desk. We did have to get one new thing - replacement ice packs for our kids’ lunch boxes in preparation for school in the fall (the prior ice packs had leaked).|
|Pizza & Movie Night||$118.50||Pizza and ice cream three times - sub sandwiches for a change one night.|
|Services||$195.43||Similar to health insurance, I had to pay for life insurance for my last month of work, this month, and next month. We also paid $5 for a pack of checks for our checking account. Finally, my wife and I each got haircuts; we tend to take quite a bit of time between cuts - her last one was in September 2016 and my last one was in February 2017.|
|Shelter||$23,936.89||Yowza! Most of this was for closing on our house: $16,560 in agent fees, $3100 in accrued property tax, and $2000 to the title company. Beyond this, we paid for July and August rent and the remainder of our renter’s insurance premiums.|
|Thrifty||$28.67||Hosting fees and source code storage for Thrifty this month plus registering a domain name for a side-project I’m working on. I’ll be sure to give details when I get closer.|
|Transportation||$265.89||Oil change, tire rotation, five tanks of gas, vacuuming of the interior, and the cost of parking in Madison at the public library for an afternoon.|
|Travel||$156.54||We renewed our AAA membership ahead of our upcoming road trip, reserved parking by Central Park ahead of time, and bought some replacement sand toys for our time at the beach. We’re really excited to explore the northeast this month!|
|Utilities||$383.99||Gas, electric, water, and sewer service, and internet.|
|Total||$27,714.21||(without house closing: $6,092.97)|
Did We Buy Anything New?
When we kicked off the year, we defined our boundaries:
Used, refurbished, reclaimed, are all fair game, but “new” is to be avoided wherever possible.
Food and household consumable items (baking soda & vinegar for cleaning, soap, art supplies, etc.) are allowed new for obvious reasons.
Other than this, we only have a short list of exceptions we allow:
- Socks and shoes
- Photo prints (school pictures and for our road trip map)
- Stainless steel baking sheet (though we’ll look for used options if we can find them)
- Car maintenance parts (we know we need new tires next year)
- Home remodeling
As you saw above, we had an additional twelve items this month - no small amount, but still an improvement from July of 2016, where we bought twenty-one.
Through the first seven months of the year, we’ve purchased nineteen things new that weren’t on the exception list:
- In month one, we purchased replacement carbon monoxide detectors
- In month four, we purchased a replacement power cord for my wife’s laptop and a costume for one of our kids as a birthday present
- In month five, we purchased stainless steel straws and a dress/cover-up
- In month six, we purchased a stuffed animal, recycled plastic food storage containers, and car games for our road trip
- In month seven, we purchased four new dresses, four accessories, a pair of sunglasses, shorts, a shirt, replacement sand toys for our beach time on our road trip, and replacement ice packs.
For this month, everything was a replacement with the exception of the accessories. We looked for used replacements for the sand toys and ice packs but couldn’t find anything that worked.
We’ve missed our goal in a good portion of the months but we are still purchasing a lot fewer new items this year. By way of comparison, I looked at our spending from January through July of last year and we had purchased 73 new items!
With that, let’s move on to our final mortgage payoff update.
Mortgage Payoff Update
After all the checks were written and accounts updated, we logged into our lender’s website and saw this amazing, awesome sight:
It’s time to celebrate folks because we closed on our house and are officially 100% debt-free!
I’d say drinks are on the house, but we don’t have one anymore so I guess you’re on your own. (Sorry, I couldn’t resist a terrible “dad joke”)
In our prior updates, I had listed how much we were saving in interest through refinancing and prepayments but those numbers only applied if we were going to stay in our house. Since we sold our house, I’ve updated the number to show how much we saved in the last 10 years through refinancing and aggressive prepayments.
Here’s the result of our efforts:
Over the last ten years, we saved over $70,000. That’s just enough to fund a one-year mini-retirement.
We didn’t set out 10 years ago with that benefit in mind, but keeping mindful of the cost of interest helped us keep disciplined so we could build up a nest egg. We didn’t know what that nest egg would ultimately be for, but our discipline bought us options.
Over the Hump
One thing I was reminded of this month was the importance of progress over perfection.
When we have months like this, I have a tendency to look at things too black-and-white and feel like we failed because we weren’t perfect at buying nothing new. Thankfully, my wife is here to keep me balanced :)
Compared to last year, we made some great progress - cutting our new items by almost 75%. Go a few years before that and we were shopping at Target twice a week and constantly cycling items in and out of our house.
The reality is that we’re doing significantly better now than ever before - we’re much more conscious of what we’re spending on and making more deliberate, thrifty decisions about when and what to buy.
So, we’ll soldier on, working to keep our new purchases to a minimum. With no known income during our mini-retirement, controlling our budget is going to be a big driver of more mindful spending going forward!