© 2017 Adam Gilbert Inc.

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Based in Wilmington, North Carolina

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Finances Under Construction: Mid-Year Review

July 3, 2018

We all have goals in life.  Whether we articulate those goals or not is another story.  I'm not sure what happened to me over the last two years, but I've started to experience some clarity in terms of my own goals.  Maybe it was that I was starting to creep through my 30's.  Or maybe it was the process of buying my first house and the financial scrutiny that encompassed the decision.  Like most major changes in life, it was likely a culmination of several avenues intersecting at once that caused me to take a keen interest in my finances.  Because I knew, like we probably all know, that proper money management was the way "out".  So I spent some time being honest with myself.  Not the easiest exercise and one I still struggle with -- It's hard to accept the truth of your actions, even if it's just to yourself.  And I had a lot of actions to come to terms with.  I'd been living a life of general carelessness.  And I'd been doing it for a long time.  Somehow, I'd managed to go to college, come away with a degree in the arts, actually use that arts degree to create a business, and even stayed in business (making art) for quite a while.  In fact, that's what I'm still doing.  I did all this IN SPITE of myself.  For whatever reason, I've always been able to focus on what I needed to get done in the present moment to achieve whatever that immediate goal was -- a test, a meeting, a shoot -- whatever it was, I could rally myself to get it done in that moment (and maybe extend that momentum to the day before/after).  But as soon as that moment and achievement had passed, I settled back into easy street.  Casual.  Callous.  Coasting.  I didn't have a defined direction.  Sure, I had a business and I wanted to keep that business open, but I didn't have a PLAN.  I didn't have intention or motivation.  And, eventually, I realized that.  Strike that.  I'm still realizing that.  Because I still allow myself to coast.  I still slip into my habit of getting things done when they need to get done.  I still find myself pushing the gas in one moment and then turning on cruise control in the next.  I need(ed) direction.  I need(ed) a reason.  And I need(ed) it to be long-term.  Something that will hold my attention.  Not just for a day or a week or a month.  But for years.  I need(ed) a passion project.  And, as it turns out, my passion project was me.  I needed to work on me.  I needed to take a long look in the mirror, to be honest about where I was at, what my actions said about my values, and where (if anywhere) I wanted to go.  Thank God for personal finance.  


Last September, I started tracking my spending.  I’d been tracking prior to that on a monthly basis via my budget, but it wasn’t until then that I started looking at the numbers every. single. day.  Initially, I wasn’t planning continuing on like this.  I just wanted to do an experiment, really.  And, honestly, it was more targeted at creating content for this blog.  A strange thing happened, though.  There was accountability.  Sure, I had to look at my numbers and accept my spending for what it was.  But it's easy to make up excuses to ourselves.  It's easy to rationalize our habits when we're only having the conversation in our heads.  This was different, though.  This was me putting that information on the INTERNET, a place not known for it's kindness and understanding.  A place where you can get ripped apart even if you're doing well, let alone if you're screwing up.  That one little factor, that fear of judgment, caused me to re-evaluate  And for that one month, I did pretty well.  Because I didn't want to be judged.  I changed my actions once I knew others may see them, and thereby, see the real me.  


It's not like I hadn't been working on my finances before that time.  I had learned up on investing and budgeting, savings rates, debt payoff -- you name it.  But it wasn't until I came face-to-face with my everyday spending habits, AND made those spending habits public, that I realized I needed to change some things in my life.  


Here's the funny thing, though.  I regressed.  It's hard to say exactly why.  To be sure, the largest factor was not having my actions documented daily online.  It was just me again.  And I can justify just about anything to myself if left unchecked.  And, yeah, some major life events happened in this time as well.  My father passed away.  Things like that can create havoc inside a person.  Trauma is unpredictable and effects everyone in different ways.  It's hard to say, exactly, what effect that has had on me because it's still too soon to know.  Grief, anger, resentment, bargaining.  Those are big emotions that ripple through you over the course of time, even when you're cognizant that it's actively occurring.  Then came the holidays.  And then our wedding in Costa Rica.  Kind of a lot of stuff.  Way more than I was prepared for.  But, as I mentioned earlier, I have a way of putting my head down and grinding through things.  Even hard, emotional things that you probably shouldn't be grinding through.  Time marches on and here I am on the other side of all those things, trying to figure out how it's changed me and how I can use that change as a force for purpose moving forward.


I never stopped tracking my spending, though.  I wanted to.  Especially over the holidays.  The last thing I cared about was watching my spending, let alone making note of it every day.  After the new year, I had a new reason to stop paying attention:  The wedding.  Again, the last thing I wanted to do was meticulously watch my spending while trying to cover the costs of an international destination wedding.  For some reason, I kept with it.  I think, maybe, somewhere in the back of my mind, I knew this was only a season.  That this wasn't a normal time in my life.  It sure didn't feel normal.  In fact, it was completely confusing.  Managing grief and loss while trying to balance joy and adventure is a 100% mindf*ck.  And I think somewhere I knew that if I could keep going through all of those feelings of joy and depression, it would eventually get easier.  Kind of like swinging a bat with a weight on it before you step inside the batter's box.  


So I did.  And now I have a pretty large set of data to analyze.  And, with analyzation, I can make changes for the better.  And those changes are easier to see now because I have a goal.  Not a goal for the short-term, though I think smaller goals are extremely important too, but a long-term goal that can keep me focused even when life gets super weird.  


Here are my numbers from the last eight months.  Imperfect, but improving.  Just like me.  


Fixed Expenses


Mortgage:  $7,032.02 (AVERAGE = $879)

Health Insurance:  $1,332.77 (AVERAGE = $166.60)

Car Insurance:  $611.44 (AVERAGE = $76.43)

Sewer/Water/Trash:  $437.19 (AVERAGE = $54.65)

Power:  $355.78 (AVERAGE = $44.47)

Natural Gas:  $243 (AVERAGE = $30.38)

Internet:  $148.48 (AVERAGE = $18.56)


***Nearly all of these expenses should include an asterisk, as a good portion of our fixed expenses are paid via my wife and I's businesses.  We both work from a home office, so we're able to write off certain percentages of our mortgage, power, and internet.  Our businesses also gobble up costs like phone plans, healthcare, and vehicle insurance.  (You'll notice there are still categories for health/car insurance.  Part of examining your expenses mean you make changes to your system.  For example, I began paying my healthcare premium and car insurance through my business within the last few months.)  


Variable Expenses


Entertainment:  $4,386.64 (AVERAGE = $548.33)

Gifts/Charity:  $2,067.31 (AVERAGE = $258.41)

Groceries:  $1,732.05 (AVERAGE = $216.51)

Travel:  $1,689.98 (AVERAGE = $211.25)

Dining Out:  $1,383.70 (AVERAGE = $172.96)

Miscellaneous:  $1,290.95 (AVERAGE = $161.37)

Clothing:  $1,183.87 (AVERAGE = $148)

Household Items:  $892.08 (AVERAGE = $111.51)

Health Products:  $412.69 (AVERAGE = $51.59)

Pets:  $50.22 (AVERAGE = $6.28)


Total Average Cost Per Month:  $3,156.27

Yearly Cost Of Living:  $37,875.26


When you look at your financial numbers like this, it illuminates your values, as noted in the Variable Expenses.  And while I'm not super pleased with our Entertainment number (proof that personal finance does not equal deprivation), I was pleasantly surprised to see how high Gifts/Charity and Travel ranked among our discretionary spending.  


These numbers give us a lot to think about and a lot to work on.  And it goes to show that there is always more work to be done to eliminate excess.  We all have our “trouble” categories and those will be different for each person.  By meticulously tracking your expenditures, though, you at least arm yourself with the knowledge to make changes.  I’m no longer guessing anymore about what I spend in a certain category.  I know.  And sometimes that’s a hard pill to swallow, especially in the categories that are frivolous.  But it’s very hard, if not impossible, to make changes to your financial life without first knowing where you’re at, currently.  


We can always do better in all facets of our spending.  We are currently taking aim at our two largest monthly costs:  Housing Costs and Entertainment.  One is significantly easier to make changes to than the other (entertainment).  It's a matter of buckling down, re-evaluating our day-to-day, and making some lifestyle changes.  And it really is a day-to-day solution.  Housing costs present a larger issue to work on, but it's also an issue that can become a reward.  We're very interested in real estate investing and we've started to take steps toward figuring out the best course of action.  More to come on that front, I'm sure.


Personally, I’m taking solace in knowing that these last eight months have been a financial and emotional roller coaster.  And, even though unexpected expenses come up (that’s life), I’m confident that this has been a pretty extreme stretch.  I know we can reduce a lot of these costs and we are highly motivated to get an even tighter grip on our financial lives.  I know our (not too distant) future selves will thank us.  

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