February Finances in Review

I've said it before and I'll say it again . . . I love YNAB because because it makes it really easy to visualize and track my progress. Here is my preferred report for reviewing my finances at the end of the month -- the income vs. expenses report. (Note: the version pictured is only available using the YNAB Toolkit, an awesome Chrome extension I highly recommend.)

This month, I've saved 35% of my after-tax income. Because it excludes my 401k contributions, which I max out every year (and divide equally across each paycheck), I have to add my 401k contributions to both the numerator and denominator to calculate my true savings ratio.


YNAB's original calculation, without considering 401k contributions.

Calculation after adding in 401k contributions.

So 48% ain't too shabby. I'm targeting, at least for now, a 50% monthly savings rate, and this is pretty damn close.


Even when I meet (or in this case, approach) my goals, I still like to review all my spending at the end of each month and note what went well and what could be improved on in the future. Of course, sometimes meeting my savings goal is just pure luck -- my car didn't break down and I didn't have a medical emergency. But I try to learn where I can.


Wins

  • Bringing in (a little) side income with Poshmark

  • I certainly don't intend for Poshmark to be a primary moneymaker. But I'm proud of myself for getting some money instead of just donating/hoarding/throwing out clothes I know I won't wear. I hope to get into a much more lucrative side hustle this year that doesn't require me to pay a commission to another company.

  • Booking my flight with credit card points

  • I've got a wedding in March on the other side of the country and was able to cover almost the entire flight my credit card points.

  • Reducing my utilities

  • Maybe not exactly a "win," but I reduced my utilities by about 20% because I was away for most of the month. Before I left, I made sure to turn off my heat (I live in a high-rise), turn off the lights, and unplug the appliances that I could.

  • Using Rent the Runway

  • Like I said, I have a wedding coming up in March that's "formal." I'm not a clothes person, and I never have been. Because of this and because I've put on some weight (more on that later), I don't have a dress that will work for this event. The last time I went to an event with a similar dress code was in, I kid you not, 2013. That dress is a little tight on me now. Normally, I would have begrudgingly ordered an expensive dress from Anthropologie mostly out of laziness and rationalized that I'll wear it one day in the future. This time, I scored a great deal with Rent the Runway and rented two dresses for $35 (a primary and a backup). This saved me probably $200, if not more, considering I'm unlikely to wear any purchased dress again in the future. Admittedly, the dresses haven't arrived yet, so maybe I shouldn't call it a "win" yet, but I celebrate where I can.

  • Significantly reducing grocery expenditures

  • The only grocery stores within walking distance are Whole Foods and Target. I've found delivery to not be cost-effective for me. That means despite the high prices, I mostly end up shopping at Whole Foods. Well, I think I've finally figured out how to make it work financially. Whole365 brand is actually quite cheap, even for their processed crap like frozen pizza and macaroni and cheese. On Whole365 brand items, the prices are competitive with Trader Joe's and Target. Whole Foods also seems to have relatively inexpensive conventional chicken. For once in my life, I got a week's worth of groceries at Whole Foods for only $60, and that included a few splurges on fancy ingredients.

  • Sticking $100 in my Roth IRA

  • I finally completed my tax returns for this year and thus could calculate my MAGI (which determines whether you are income-eligible to contribute to a Roth IRA). I found out that my MAGI this year is low enough since I only had a few months at my firm job, and I can make 2021 Roth IRA contributions through tax day. When I went through my most recent paycheck, I put $100 into my Roth IRA, which I subsequently invested into a crypto ETF. (Yes, I know crypto is highly risky and terrible for FIRE, but it's only $100? The vast majority of my investments are in blue chip stocks and index funds.)

  • Had an emergency fund to draw from in an actual emergency

  • I had an unexpected tragedy in my family that led me to have to drop everything, travel, and stay in a hotel, all at the last minute. The emergency fund I've built up over the last few months allowed me to fund that without screwing up any of my other savings goals or budget priorities.

Losses

  • Eating out

  • I spent $85 on Starbucks this month. That's a lot of money. However, Starbucks also honestly brings me great joy. (Venti Vanilla Sweet Cream Cold Brew w/ 2 pumps of vanilla anyone?) So while I have no intention of eliminating Starbucks, I would ideally like to keep this to a twice-a-week treat. That means ideally I'll shoot for $50 spent next month.

  • I also bought some food out of laziness, not because I wanted the experience of dining out or was particularly craving the food at issue. Because I wasn't organized enough on my long drive, I stopped for fast food at a rest stop that 1) didn't taste good; 2) made me feel physically awful for 24 hours; 3) slowed down my travel; and 4) cost like $16 (turns out they charge higher prices at rest stops. And on a few other occasions, I got bad take out when I really could've just made something easier and healthier at home.

  • Gas and tolls

  • This was a huge line item for me this month at $297.66. This was not necessarily something that was avoidable, since I really did have to make three cross-country drives during the month, and so it's not like it was frivolous spending. However, I'm really hoping to be able to establish a permanent remote work agreement such that these (fairly regular) trips in the future can become far less frequent by relocating to be with my partner and far from my physical office (which incidentally has a much lower cost of living).

  • Dog expenses

  • My dogs are my pride and joy, and I spare no expense on them. That said, they're both on a fancy prescription food, and one requires extremely expensive prescription supplements given twice daily. So just food and supplements for the month came out to $258.23. My resolution for next month is to research bulk options to see if there's any way I can cut back without compromising my guys' health.

  • Huge upcoming tax bill

  • When I did my tax return, I learned that I owe four figures in state income taxes :( I guess this was the result of living in three states (thanks pandemic), including one with a city wage tax. This was definitely not an expense I expected, and so I will have to sock away a lot of money over the next month that I otherwise would have put toward my general savings goals. Bummer.

Looking Ahead to Next Month

Now given what I've observed in February, I want to come up with a plan for addressing some of my deficiencies in March and also anticipate how I'm going to handle some of the more irregular expenses that I have coming up.


If all goes according to plan, I will have yet another cross-country road trip at the end of March, which will likely cost me around $100 in gas. I'm going to try to get as much gas as I can in the low-cost places where I'm coming from instead of the super high-cost place I'm going to. I'm also going to pack my lunch to save time, money, and my health.


The wedding coming up is a big expense, some of which I've already paid for. I'm saving some considerable money by splitting an Airbnb with my law school friends, rather than getting a hotel room. So that's a win. But I also want to make sure I don't blow my money on overpriced cocktails when I inevitably go out with my friends. Oh, and I have to board my dogs. Since I'm obsessed with them and their safety, they're going to an extremely expensive boarding facility with 24/7 video surveillance in a private room (yes, I'm crazy). This should end up setting me back at least $200. Not much can be done there other than to try really hard to make a trusted friend I can swap dog sitting for in the future to avoid this monstrous cost.


And I must stash away a lot of money to cover my tax liability when it comes due in April, even at the expense of contributing a bit more to Roth IRA while I still can.


Anything else I should be thinking about? Drop me a line below!



Hi, I'm Brigid Friedman

A young lawyer's honest journey to (hopefully) financial independence.

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