I’m going to try something new and get really transparent with my personal finances. Each month I’m sharing a complete breakdown of what I spent. Here’s why:
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.
Why I’m sharing these numbers
I considered doing a monthly report of income, but I think what my wife and I 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. 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 financial situation
I’m 29 years old, married, and make my living through a company I co-own and operate.
Annually, my personal income is currently in the low to
Living as a “digital nomad”
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. Extra cash then flows to us as owners. For this reason, those debt payments are not reflected in my personal monthly expenses.
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 owned one car last year, a paid off Nissan Versa with 160k miles. When we left the country we donated it to Jaimie’s sister. Other than that Jaimie has a scooter and I had a motorcycle. Both are owned outright like our car. I sold my motorcycle last week and Jaimie is hanging onto her scooter in storage.
I hope it was helpful to first get an overview of our financial situation before diving into our monthly expense reports. To read those next, go here.