Andy Hough

Car Repairs and Hike Plans

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Although I’ve had plenty of time, I have hardly written at all the past couple of weeks. I just haven’t felt like writing. I do have some stuff I want to share though so I’m just going to put everything in this post.

I had been having pretty good luck with my cars for the past year. I never needed a major repair on my van while I owned it and hadn’t needed a repair on my Focus since I bought it in November. My luck didn’t last. My car broke down last Saturday. Luckily, it was near home and right by a car repair shop so we were able to push it into the repair shop parking lot. The repair bill came to $443 for a new ignition coil and spark plugs. That seems high to me but I don’t really know what it should cost. The car had been running rough every once in a while for the past month or so and I had been planning to have it looked at but hadn’t done so. Procrastination might have cost me a little extra money on this repair.

My car cost me even more money the next day. I renewed my tags online and had received my tags in the mail. When I went to put the tags on though I noticed they did not match my license plate. After calling the license bureau and being told I was number 55 in line, I went to visit the local fee license office. The people there were very helpful and determined that the office that had issued my plates prior had screwed up. Apparently, I have been driving around for the last six months with plates that don’t match my registration. In order to get this fixed I had to buy new license plates at a cost of $25. I will be applying for a refund since the license office screwed up and I don’t believe I should have been stuck with the cost of new plates. I will admit I was partially at fault since I never checked to see that my registration paperwork actually matched my plates.

There was one final repair to cap the car costs for the week. The fan in my car has never worked properly. It only worked on the highest setting and when I tried to use the A/C the fan wouldn’t work at all. I decided I might as well get that fixed too since the A/C would be nice to have during the summer. It cost $122 to get the fan fixed. Unfortunately, now that the fan is fixed I find out my A/C doesn’t actually work. It has been cool this week and I’m going hiking the beginning of July so I’m not going to fix the A/C. I feel like I’ve spent more than enough on the car this week. I don’t think I’ll ever be able to get the cost of this car down to 17 cents a mile like I had with my Camry. At least my cars costs are a lot less than what a new car would cost.

I’m not sure if I have announced this before but I will be going on a long hike on the Appalachian Trail starting on July 1. My job hours are being cut way back next month so I’m taking that as a sign to go hiking. I’m taking a plane to Harrisburg, PA, taking a city bus to the trail from there and then hiking north. I will hike until I don’t feel like hiking any more. That is usually only 2 or 3 weeks but I’m hoping I’ll hike further this time. I need to lose weight and a long hike will help with that. Also, since I’ll be giving up my apartment and quitting my job it would seem kinda silly to have all that upheaval and only hike a couple weeks. We will see.

The next month will be spent getting ready for the trail. I don’t need to do much planning for the actual hike. I already have all the equipment I need and since I have done several other hikes I am pretty comfortable with just showing up and hiking. Most of my preparation will be getting rid of stuff in my apartment and getting my finances in order. I plan to sell some stuff, donate some stuff, throw away some stuff, and store the rest. I’ll be paying my bills ahead of time, canceling what can be canceled, and trying to spend as little money as possible. There will be more updates as the hike date draws closer.

April Savings Rate – 52.41%

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April was another good month on my progress towards financial independence. My SWR went down to 49.50% from 54.50% the month before. My goal is to get my SWR down to 4% at which point I’ll consider myself financially independent. The safe withdrawal rate isn’t decreasing quite as fast as it was.  Now that I will be making much less money the decreases will be even smaller but I’m hoping I can still decrease the SWR every month.

My goal is to save 50% of my income each month and I met that goal in April. I made $3815.80 and managed to save $2000. That amounted to a 52.41% savings rate.  I didn’t put quite as much money in savings in April as I could have because I wanted to leave myself a little bit of a cash cushion with the tax job ending and my part-time job not being quite enough to cover my bills.  My part-time job has turned into a full-time job so I will be able to decrease my cash a little and move that cash to savings.

The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. I have 24.24 months of living expenses saved now. It is nice to have two years of living expenses in savings.  Most of the money is in retirement accounts so it isn’t easily accessible, but it is still nice to know it is there.

The way I am determining my SWR is by tracking my trailing 12 months expenses divided by the amount of my investments. Since I don’t think the preceding 12 months accurately reflect my expenses going forward I am using my monthly expenses starting in November 2012 to set the average so every low month of expenses makes a big change in the average right now.

2013 Sample $1000 Monthly Budget

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One of the most popular posts on this site is the “Sample $1000 Monthly Budget.” That post is over five years old now so I’ve decided to do a new $1000 budget for 2013. There has been some inflation in the last five years but I’m still easily able to live on a $1000 monthly budget.

A common criticism of the budget is that it isn’t realistic. This budget is based on my actual expenses and I’m real (I’m not the Easter Bunny) so the budget is realistic. Not everyone can live on this budget but many people can. If you’re single, in good health, live in a low cost of living area, and don’t have any debt payments this should be an achievable budget. I currently live in Kansas City, MO but have also lived on a similar budget in Reno, Las Vegas, Dallas, Austin and rural Virginia.

Rent (actual)

$365

Electric

$20

Phone (actual)

$26.81

Food

$120

Health Insurance (actual)

$64.83

Car Insurance (actual)

$37.87

Savings for irregular expenses

$100

Entertainment

$100

Gasoline

$110
Internet (actual)

$15.96

Miscellaneous

$39.53

Total

$1000

The rent, health insurance, car insurance, and phone are all my actual, fixed monthly totals.

My rent, utilities, phone, and health insurance are lower than they were five years ago.  The rent is cheaper because I found a really good deal in a small apartment complex. The utilities are cheaper because I have an all electric apartment and no longer have to pay a gas bill.  My actual electric bills have always been smaller than $20 so far since I live in a third floor apartment with south facing windows that rarely requires me to use heat.  I probably will have to use the A/C this summer but based on my past electric bills a $20 average monthly electric bill is realistic.  My health insurance is slightly cheaper than it was five years ago but only because I raised my deductible from $5000 to $10,000.  I purchase my health insurance through eHealthInsurance which has lots of relatively low cost plans available. My phone is with Virgin Mobile and I get 300 anytime minutes, unlimited texts, and unlimited data. That is plenty for me.

The food, car insurance, gasoline, and miscellaneous expenses all went up. Although I think I should still be able to eat for $100 a month I usually spend about $120 a month so I’m using the higher amount.  Food prices have definitely been affected by inflation over the past five years.  My car insurance is quite a bit higher.  Most of that is probably because I had an at-fault accident a couple of years ago. Otherwise, I think there would have only been a modest increase in my insurance premium.  Gasoline costs about the same now as it did in  May 2008 but I drive a little more and increased the expense amount to reflect that.  I also increased the miscellaneous expense a little to account for other small items that may have been affected by inflation.

I’ve kept the budget amount for irregular expense savings and entertainment the same. The savings for irregular expenses covers car registration, maintenance, and any other predictable but irregular expenses.  I’ve yet to spend $100 on entertainment this year and generally spend much less than that. I’m keeping the entertainment amount at $100 since I’ll probably take a couple of trips this year that will be covered by the entertainment budget.

My monthly expenses so far this year have ranged from a low of $822.34 to a high of $1075.78. That shows that a $1000 monthly budget is realistic for me.  I think it is an easily achievable budget for people in similar circumstances as me.

April Income – $3815.80

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Here is a breakdown of my income for April.

Online Income

 $392.75

Interest

$1.15

Dividends

$35.16

Cash Back

$112.66

Class Action

$49.10

Jobs

$3224.98

Total

$3815.80

My April income was great.  Since my tax job ended in April my future monthly income totals are going to be a lot smaller.  I am at least making a decent amount of income from my alternative and  passive income sources.  I didn’t receive any mystery shop income in April because I didn’t do any mystery shops in March and most of the mystery shopping companies pay the following month.  I will have a little mystery shopping income this month. I also received a surprise check from a class actions suit against Chase credit cards that I didn’t even know about.  I really don’t think my Chase credit card ever ripped me off but I’ll still cash the check.

My part-time job is converting to full-time this week.  That will help my income a little bit.  It is a low paying job so it really will be just a small help.  I’m going to need to increase my online income if I’m going to maintain my over 50% savings rate.

April Expenses – $1075.78

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Here is a breakdown of my expenses for April.

Household

$495.64
Entertainment

$76.97

Transportation

 $179.76

Food

$138.57
Debt $5.00
Phone

$26.81
Health

$120.97
Electric

$16.10
Internet

$15.96

Total

 $1075.78

My April expenses were higher than I’d prefer . I missed my goal of keeping my monthly expenses under $1000 for the first time this year. I did at least meet my main goal of keeping my expenses under the minimum wage level of $1274 a month.

I once again spent too much money on food.  The total was lower than in March but still too high.  Food is my biggest weakness right now.  I’m eating way too much fast food and junk food.  I’ve complained about my eating habits a lot but haven’t changed them.  Eating better needs to be a priority this month.

Household expenses were a little higher because my cell phone stopped working and I purchased a new one. There isn’t much room for things to go wrong in a $1000 budget.

My transportation expense was also a little higher than I’d like.  The expense was all for gas. I did have one trip to SW Missouri but I should have spent less on gas.  I need to cut back on the unnecessary driving.

All other expenses should be about the same this month.  If there are no unexpected expenses I should get back under the $1000 mark again.