Today, I want to dive deeper into my first year of FIRE, and see how things have been going since I began attempting FIRE in October, 2018.
Let’s take a look at debt, savings, and expenses for the past year. It was a bit frightening to write this post, to be honest. I’m spending much more and saving much less than most of the individuals I’ve been following on the various social medias. However I think one of the worst things I can do is compare myself to others in totally different situations. Learn from them? Definitely! But the fact is, I’m starting off late in life with a well-established family of sweet peas after lots of money missteps (at least in the eyes of me, a semi-average person attempting FI/RE). So, let’s get started and get the scare on, just in time for Halloween.
We had a pretty good run here. In our first month of FIRE, we spent almost 10k on our line of credit to purchase heat pumps & insulation in order to save on electricity costs. Note: “Heat pump year in review” post coming soon. Also, I had a sizable balance left on an RRSP loan I took out a few years prior.
Since Oct 2018, we’ve paid $26,614 to debt. This includes payments to the mortgage principal (also included in expense report below). It will be so nice to cut this way back in year 2. We still owe over 3k but it should be gone by early 2020.
Savings for the year
In the first year of FIRE, we saved about $4200. Blerg.
There are a few reasons our savings are so low.
- While paying the RRSP loan off, I actually planned to stop RRSP payments for 5 years. And that’s what I did. Fortunately I’m starting up again 2 years early.
- When I first decided to shoot for FI/RE, paying off debt was the top priority. All the extra cash was funneled there.
- Hubs will get a pension from the government when he reaches the typical retirement age. As a result he’s currently saving very little into RRSPs since he is planning to work to age 65. That said, I would like to convince him that he needs to retire early WITH me, and therefore increase savings and investments in registered accounts.
Plan for year 2: Jam cash in RRSP and TFSA once debt is finally paid, increase Hubs’ registered account deposits.
Expenses for the year
WELL. It was not as good as I was hoping for the first year of FIRE, but at least now I’m “aware”. We clearly aren’t Mustachians (correction: My family as a unit is not the least bit Mustachian. If in some alternate universe I was all alone, I would be hard-core. With exception to the travel budget. Alas, being in this family it will never happen, but it’s totally worth it :)).
In the past year, we spent $89,111.
Wowza! A couple of notes:
- This includes a $9500 purchase of 2 heat pumps and insulation for our home. That said, I wouldn’t want to remove that. There will be other big home costs in our future so it’s best if you expect to pay extra annually for maintenance. Going forward, I’m aiming to save 1% of the purchase price annually in order to cover future home maintenance costs.
- When we become FIRE, we anticipate about a $60,000 per year annual spend. If I subtract things like the mortgage payments and interest ($14,833), Child Care ($4850), Parking ($1250), more than half the fuel ($2000), insurance for one vehicle ($550), Life Insurance eventually ($1873) along with some other smaller categories, we’ll be pretty close to that number. So I think my predictions are pretty on the money. Pardon the pun.
That said, after looking at the final costs for some budget categories, there is most definitely room for improvement. Let us dive in, shall we?
Specific Expenses. (THANK YOU YNAB FOR YOUR KICK-ASS REPORTS!)
|Category||Average||Total||Relevant Notes of Noteyness|
|Mortgage Principal, Interest, Property Tax, Insurance||-1509||-18109|
|Interest & Banking Fees||-44||-525||This will go down once debt is paid and once I swear off the big 5 banks once and for all.|
|Parking||-102||-1227||We can get cheaper parking. It just won’t be in a covered garage directly next to the downtown building that Hubs works in. Can you say “cushy”?|
|Electric||-268||-3219||I’d like to check some of our appliances to see how many KWh they are consuming, replace a few baseboards with more efficient models, and reduce dryer usage.|
|Home Phone, ISP and 2 Mobile Phones||-301||-3618||In the process of switching to Public Mobile. Gotta check around for internet deals.|
|Life Insurance||-156||-1873||We’ve had this for a few years. Worth rate-checking.|
|Netflix||-13||-153||Honestly, still a deal, even after they jacked up my rate.|
|Water & Sewer||-76||-908|
|Home Insurance (pre-paid until June 2020)||-274||-3293|
|Groceries, Toiletries, Household Supplies||-985||-11826||This still seems ridiculous for 3 people. I believe some purchases may be wrongly categorized here. This is really the place I can get the biggest wins in Year 2.|
|Fuel||-320||-3835||Mr. Money Mustache tells me to “batch” my driving tasks so that I take less trips. I really try to do this…maybe there’s more I can do here. I could probably try a bit harder to car pool but there isn’t anyone I know well enough in my area. Might ask Hubs if he has options here.|
|Auto Repair, Maintenance, Renewals, License||-365||-4378||This is a fair chunk of change, but $365 a month on average for 2 cars is still less than a car payment on one car. Let’s see if they’ll last another year without totally falling apart!|
|Medical, Eyecare, Prescriptions,Vitamins||-46||-555|
|Home Improvement, Services, Supplies, Maintenance||-837||-10046||Most of this is heat pumps + insulation.|
|Health & Fitness, Sports||-79||-950|
|Haircuts||-84||-1004||REDONK. I’ve stopped colouring my hair as of 3 months ago. No one so far has called me an old hag. Fingers crossed it won’t happen for a few more years.|
|Gifts & Holiday Expenses||-255||-3059||INSANITY. Definitely room for improvement. Planning ahead is something I need to work on.|
|Clothing||-56||-674||This wasn’t as bad as I thought…things can be done to improve however. Footwear seems to be a big money sucker. Canadian winters are hard on footwear.|
|Annual Memberships & Subscriptions||-27||-326||Costco, YNAB, CAA, MLB Subscription. Might try for less expensive roadside assistance this coming year.|
|Heat (Wood & Propane)||-2||-22|
|Furniture & Decor||-20||-244|
|UNKNOWN EXPENSE||-66||-797||Need to tighten up this category. Where did this $800 go? I have no idea.|
|Allowance Hubs||-268||-3217||Some people need to stick to their allowances a bit better.|
|Allowance T||-182||-1487||$700 of my allowance went to my Questrade account in October. This has been deducted from the expenses.|
|Dining Out – Family||-140||-1676||We really don’t need to be doing this so often.|
|Entertainment – Family||-48||-571|
Ok if you made it this far, I’m IMPRESSED!
That’s our first year of FIRE. I’m very excited to start tracking Year 2 so that I can use this as my baseline for spending and saving. Over the next few weeks, I’m going to look at ways to tackle the most impactful areas on the spending list – starting with groceries, toiletries and household supplies.
Fortunately I’ve already bumped up my savings for October, but there’s more to be done. I plan to really tackle that once our final bit of debt is paid.
Thank you for sticking around, please leave a comment with your thoughts and suggestions for improvement! Sometimes the outside objective feedback is what’s missing in a lonely life of FI/RE.
I guess I should also try to find some FI/RE friends. HA!