I’m going to try something new and get really transparent with my personal finances. Below you can see a complete breakdown of what I spent this month.
If you’ve been following me for a little bit, you know I ask my readers to choose the topics and articles they want me to write. The results have surprised me. Personal finance as a topic was voted for just as highly as content about making physical products. The two topics were nearly tied at the time of this writing.
So I got to thinking: what could I write that would be interesting to readers on the topic of personal finance? I have several posts planned about particular stories and investments of mine, but I want to do something more regular as well.
Welcome to the first in a regular series where I break down my expenses. I plan to do these monthly going forward.
Why I’m sharing these numbers
I considered doing a monthly report of income, but I think what we spend each month is more interesting and useful.
Incomes vary greatly, but most people require similar things to live well. What we spend on those things dictates a lot. I don’t share these numbers to brag or anything like that.
I’m doing this for two reasons:
- Transparency is helpful. Seeing real numbers from other people has helped me learn a ton over the years.
- It keeps me in check. Tracking something over time is the best way to manage it. “What gets measured gets managed”. I want to be intentional about my money.
You build wealth by hanging on to more than you spend. It’s as simple as that. You grow the wealth you’ve hung onto by making wise investments that compound over time.
What you spend dictates two things
- Your lifestyle (this is what most people focus on)
- How much you get to keep of your income… which ultimately translates to wealth.
While most people focus on #1, the inverse (#2) is often overlooked. It’s the only way you save for retirement
You don’t buy freedom with stuff. You buy freedom with investments that work for you. Wealth = the money you have. The way you lose wealth is to spend it. Spending money is easy. Hanging onto it is much harder.
Keeping the two in check is my goal. This is both useful for me and hopefully useful for readers interested in personal finance.
This isn’t about penny-pinching
I’m not trying to be cheap or nix avocado toast and latte’s from my life just to one day retire a little bit richer. No, I also want to live well! Doing this allows me to make sure my money is going to things I actually care about. I want to be intentional about spending. The key is to crank up the money dial on things I love to do and crank it down on areas I just don’t care much about. That’s part of being intentional with money.
A quick primer on my situation
I’m 29 years old, married, and make my living through a company I co-own and operate. My income is made up of salary, dividends, real estate cash flow, and investments.
My personal income is currently in the low to mid 6-figure range annually (depending on a lot of business performance factors each year). My goal is to invest a large portion of our household income. Ever since my income hit 6-figures I promised myself I wouldn’t level up our lifestyle proportionate to the money. Maybe my income drops significantly one day. Maybe it keeps going up. Who knows what could happen. Either way, I’m investing now for the future.
Last year my wife and I were living in St. Louis where the cost of living is low relative to major cities in the USA. This year we’re “digital nomads” living outside the USA for a minimum of 1 year. We began our travels on January 4th this year.
We let go of our apartment back home and now live out of Airbnb’s (and sometimes hotels) each month, traveling and working outside of the USA. I work from my laptop.
My wife Jaimie just finished school with her bachelor’s degree in interior design. With us traveling, she currently doesn’t work. Instead, she’s focused on learning new skills around e-commerce, design, and writing. Our goal is to build an income source that she runs to continue working remotely instead of taking a job when we decide to move home. We currently don’t have kids but plan to in the future.
Do I have debt?
We currently don’t have any consumer debt like car loans or credit card debt. I use credit cards for the majority of our expenses but pay the balance every month. The only debt we have is a student loan for my wife’s degree. I’m debating if we should pay off her loan in full when the bill comes, or continue using the cash for investments and only pay the minimum for a while.
In about 6 months we’ll need to begin paying on her student loan. The bill will be around $35,000 when it comes.
I co-own a building in downtown St. Louis with a mortgage of $1.4m that I’m on the hook for with 2 other partners. However, it’s an investment property where the cash flow more than covers the mortgage payments. The extra cash then flows to us as owners. For this reason, those debt payments are not reflected in my expenses below.
I also own a condo in St. Louis that I’ve had as a rental property for 4 years. It’s currently pending a sale though. Once that sells the mortgage will be paid off.
We had 1 car last year – a Nissan Versa with 160k miles. It was paid off so when we left the country we donated it to my wife’s sister. Other than that Jaimie had a scooter and I had a small motorcycle. Both are owned outright like our car. I sold my motorcycle last week and Jaimie is hanging onto her scooter.
My Monthly Expenses Breakdown for January 2019
As the title suggests, Jaimie and I spent the month living in Lisbon, Portugal. We rented a beautiful apartment on Airbnb for the month. This was our
Spending by category
- Business Services: $466
- Miscellaneous: $18
- Clothing: $89
- Eating Out: $1,849
- Entertainment & Media: $852
- General Shopping: -$22 (we had a return from a previous month)
- Travel: $1,578
- Auto & Transportation: $581
- Groceries: $303
- Phone & Internet: $140
- Rent: $0
- Services (Dr. Repairs, haircuts, etc): $581
- Utilities: $0
This is for everything we spent in January for a household of two adults (my wife and I).
Note: all expenses for any business I have are run through those businesses directly and do not reflect on my personal spending.
Expenses covered with credit card points
Airbnb in Lisbon: I paid for our Airbnb with credit card points I’ve saved up. The total for the Airbnb was $2,423.89 but I covered the charge with 242,389 points on my Bank of America rewards card.
Flights from Dallas to Lisbon, Portugal: I booked our flights with Delta Sky Miles back in June. Our flights cost 62,500 points per person (125,000 points in total). I don’t know exactly what the cost would have been if I paid with $, but roughly the points are worth 1 cent each, so lets say ~$1,250.
Flights from Lisbon to Madeira Island (roundtrip): We flew to Madeira island and back via EasyJet. It was booked last minute and cost us $284.36 for 2 seats. Those charges were covered with 28,436 Bank of America rewards points at a rate of 1 cent per point.
Hotel in Madeira: For our 3 night trip to Madeira Island, I booked a room at The Vine Hotel using my Chase Sapphire Reserve points. We redeemed 31,986 points to cover a $479.79 booking charge. Those points are worth a bit more at 1.5 cents each.
Total value received for free from credit card points: $4,438.04
Optimizing credit card point redemption and accumulation has become a bit of a hobby for me. We’re lucky to rack up a lot of points with our personal and business credit cards. I spend a lot of time optimizing for the maximum amount of value from those points though.
Thoughts on this month’s spending
Rent expense was $0? This is because we nixed our apartment and are living out of
We didn’t have any utility costs like an electric bill, water, trash, or internet. This has previously cost us about $200 – $400 per month. By staying in Airbnbs, those costs are now included in that expense (or lackthereof).
Higher spending than usual: Spending on “services” were higher than usual this month. Jaimie got an ear infection so we tracked down a private hospital in Lisbon. The appointment and meds really added up. I also got a haircut in Lisbon for 40 euros, and then we had some expenses prepping to leave our dog with my parents in Texas. I expect that category of spending to be down in future months.
Business Services were higher than usual too. We paid for a year of blog hosting, a year of VPN services, and a blog theme for Jaimie’s website.
Our “Auto” category was high due to two rental car bookings this month. Gas and rentals add up! Had we not booked cars for both of our weekend trips, it would have been a cheap “Auto” month. We only used Uber 3 times. Lots of walking!
Outlier Expenses: This months spending would have actually only been $5,016 had we not upgraded to first class lay flat seats on our long 7hr flight to Lisbon. Our original tickets were booked with Delta points. Before leaving, Delta offered an upgrade for their first class lay flat seat tier for $859 per person. We had never flown internationally with lay-flat seats so I purchased it and surprised Jaimie. This was a real treat and not something we normally spend money on. We slept like babies. The total was about $1,718 after taxes.
My Chase Sapphire Reserve card reimburses $300 per year of travel charges so $300 of those tickets were immediately reimbursed. All in it cost us about $1,418 after that. The other expenses in the travel category were our room in Algarve for 2 nights booked cheaply via Hotel Tonight.
For food spending (eating out & groceries), I wanted to see if we just didn’t think too much about the costs what it would add up to. Food is our way of experiencing different cities, so I’m pleased this was around $2,000 in total. This is definitely higher than we historically spend, but it’s to be expected this year. We’re saving in other areas now that we’re nomads.
Comparing to previous months
- +/- last month: we spent $2,468 less this month than in December 2018.
- +/- monthly average last year: we spent $1,982.92 less this month than we did on average last year.
- +/- this month last year: we spent $457 less than January 2018
Where we lived, worked, & traveled
During the week I worked from three different spots – our Airbnb living room, a hotel rooftop down the street, and a coffee shop called
On our first weekend, we visited Pena Palace which was only 20 minutes away via Uber. I was so impressed with how much “access” you get to the place. We could essentially wander our way up to any lookout point. Nothing was blocked off.
I even got a fun drone shot with my DJI Spark and nobody seemed to care. Entry for the day was $32.32 USD for the two of us.
For our 2nd weekend, we visited the
At the recommendation of a friend, we packed in a long weekend to Madeira Island – an island owned by Portugal. We went there for 2 reasons:
- Hike Pico do Arieiro to Pico Ruivo above the clouds
- Toboggan down the hillside through town.
The hike was the best view both of us have ever experienced. It was 6 hours and 8 miles of trails. I don’t think I can over-hype how amazing the view on the trail was. If you’re ever in Portugal, take advantage of a cheap weekend flight to Madeira island. You won’t regret it.
We’re spending next month (February) in Marbella, Spain. I’m looking forward to a much quieter month. As much as I loved our time in Portugal, we definitely packed in too much. I’m pretty exhausted from all the fun!
My cousin and his wife will be coming out to visit and explore, so we’ll check out Madrid for a few days with them too. I expect our grocery and restaurant expenses in Marbella to be higher than in Lisbon. The cost of living is much higher. Otherwise, I think we’ll continue to live relatively cheaply other than food. No major purchases planned for February!
All in, our first month of being nomads was incredible. We ended up spending less this month than when we lived back in St. Louis. We had some amazing experiences for relatively little money. If you have any questions or comments, reach me on Twitter or Instagram.
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