Andy Hough

The Problem of Not Wanting Anything

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The fact that I have almost no desire for stuff makes it easy for me to be frugal. It isn’t a sacrifice to not buy stuff that you don’t want in the first place. An example of my lack of desire for stuff is being unable to spend Kohl’s Cash. Last month I had $10 in Kohl’s Cash to spend from buying stuff to resell. The Kohl’s Cash was expiring soon and I couldn’t find anything to resell so I decided I would just buy something for myself. I couldn’t find anything in the store I wanted and ended up letting the Kohl’s Cash expire unused. This month I received another $10 in Kohl’s Cash for my birthday.  There still wasn’t anything I wanted to buy. I ended up buying a pair of pants even though I already had enough pants. I have very little closet place so when I get something new I need to get rid of something old. I did have one pair of pants that are over 10 years old and looking kinda grungy. They weren’t acceptable to wear to work, but I could wear them when I wasn’t concerned about my appearance. (Which is most of the time.) Since I got the new pants, I retired the old pants. Even though the pants were over 10 years old and I only paid about $10 for them it still seemed wasteful to get rid of them.

Although this lack of desire is a positive when it comes to spending money it is a negative when it comes to earning money. Making more money doesn’t seem to have much benefit for me. Last year I made about $20k and this year I will make about $40k. Doubling my income seems like it should lead to a better lifestyle, but I can’t think of anything I can buy now that I wanted to buy before and couldn’t afford.  Most of the additional money I’ve made this year has gone towards paying down my student loans or retirement savings. Those are both things that should benefit me in the future, but they don’t improve my life right now.

I actually think my quality of life was better last year with the lower income. Although I had less money I had a lot more time. Perhaps I put too much value on my time. It isn’t like I am doing much with my free time. Yet, once I have made enough money to pay for what I consider my necessities I have almost no desire to work for more money. During tax season there are plenty of opportunities for overtime and I rarely work overtime since I’d rather have the time off then the extra money. That is basically like paying $30 an hour for my extra free time. Since there isn’t anything I want to buy with that $30 an hour though, using it for more free time seems like a reasonable deal.

I’ve been trying to think of things to spend my additional money on that would improve my quality of life. The additional money has led to me spending a lot more money on restaurants and fast food.  That isn’t really leading to an increase in my quality of life. In fact, eating all of the fast food contributes to health problems that could end up killing me. And once I’m dead my quality of life will be nil. I need to find something else to spend my money on. If you have any ideas I would love to hear them.

 

September 2017 Net Worth Update

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penniesIn order to keep track of my financial progress or lack of progress I have decided to calculate my net worth a few times a year.

My net worth as of 09/3/2017 is as follows.

 

Assets
Cash – $3897
IRA – $27,177
Roth IRA – $1665
Solo 401k – $2825
Car/Stuff – $3300

Liabilities
Student Loan – $115,268
Credit Card – $0

Net Worth = $- 76,404

My net worth improved almost $2000  last month.   This was mainly due to receiving two paychecks from my full-time job. My student loan balance increased over $600 despite making a $450 payment during the month. That doesn’t seem correct, but every time I check their calculations for the year they’ve been correct.  The student loan is my only liability. With the way it accrues interest, it might be a liability forever. I’d like to get it refinanced, but I can’t get it done since my debt is so much bigger than my income.

I’ve been using Personal Capital (affiliate link) to help track my net worth. It keeps track of all of my financial accounts and my student loan making it pretty easy to calculate my net worth each month. It is free to sign up. If you would like to sign up I’d appreciate you using my link. All blog income, including affiliate income, goes to paying down my student loan.

Personal Capital

August Income – $2969.99

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Here is a breakdown of my income for August.

Interest $1.35
Amazon FBA $213.58
Cash Back $10.68
Online $0
Bank Bonus $200
Other Bonus $30.91
Job $2539.5
Total $2996.02

 

August’s income was pretty good. Most of the income was from my full-time job.  I made about $450 from my non-job sources of income. That isn’t too bad, but it is much less than I’d like it to be. I’m going to work on getting those numbers higher. September is a three paycheck month for me so the overall income total for this month will be up quite a bit.

 

August Expenses – $1661.87

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Here is a breakdown of my expenses for August.

Household $1240.81
Entertainment $13.03
Transportation $53.84
Food $238.25
Travel $0
Phone $29.97
Health $85.97
Total $1661.87

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August was not a great month for expenses. My expenses were way higher than normal and way over my $1000 target. The high expenses were due to my moving into a new apartment. Rent was high this month since there was some overlapping of rent for my new apartment and shared expenses I paid at my GF’s house. There was also about $300 spent on furniture and other stuff for the apartment.  For that $300 I got a futon, twin innerspring mattress , shelves, wi-fi router, pot and pan set, toaster oven, hot plate, plastic storage containers. cleaning supplies, paper towels, toilet paper, laundry detergent, hamper, dish towels, towel rack, toilet paper holder, shower massage, shelf liner, fabric storage drawers, and probably a few more items I can’t think of right now. I think I got pretty good value for my money.

I also spent $300 to have internet installed. This will allow me to have free internet for as long as I live in this apartment. That is a great deal. Electric and water are included in my apartment rent, so $435 a month will pay my rent and all utilities including internet.

Food was another bad expense category in August.  I ate out all but three days during the month. Some days I ate out more than once so I had about 30 restaurant meals for the month. That is bad for my budget and terrible for my health. I’ll be cutting way back on that this month.

This month food and household expense will be a lot lower. Health will be a bit higher since I have a dentist appointment and I’m getting new health insurance from work. Getting health insurance from work is supposed to be a benefit, but it is a detriment for me this year. The cost will be more than my marketplace insurance  and the deductible is considerably higher. Plus, I’d already met my deductible for my marketplace insurance and now have to start over meeting the deductible for my employer insurance. That will cost me some money. How much it costs me depends on how much health care I need the rest of the year.

I expect my other expense categories to remain roughly the same. I should at least get close to meeting my $1000 target this month.

 

How was your month?

114/132 Student Loan Strategy Shift

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My student loan payoff has stalled out the last few months. Due to the lack of income during my eight weeks off from my job I was unable to make any big payments on my student loan. I’ve made a couple of payments in the last couple of months, but they were just enough to cover the interest. Now that I’m back to work, I can finally start making progress on the loans again.

However, I’ve decided to hold off on making big payments towards the student loan for the rest of the year. The reason for that is I want to put as much money as possible in my retirement accounts. Doing that will reduce the amount of my taxable income. That should keep me from having to repay any of the advance premium tax credit I received and hopefully result in a large tax refund. Since tax is currently being withheld from my paychecks based on me making $48,000 a year, I’ll get most of that tax back if I manage to reduce my income to about $20,000.

Based on my calculations, I’ll be eligible for the company 401k starting the next pay period. Since I turn 50 next month I’m eligible to contribute 100% of my pay to the 401k. My allowed employee contribution would be $24,000. I can also put $6500 in an IRA. There is no way I’ll be able to max both of those out, but I’m going to put in as much as possible. I’ll also be eligible to open a Health Savings Account next month. Since I’ve already got more savings capacity than I can use I’m going to put off opening an HSA until next year.

In 2018 I’ll switch my 401k contribution percentage to 4%. Just enough to get the full company match. That will leave me plenty of money to use towards paying my student loan.

I’m considering not re-certifying my income based repayment plan which will result in my student loan switching to the standard 10-year repayment plan. I think my monthly payment on the 10-year plan would be about $1300 which is about the same amount as my paycheck. That would give me one paycheck for the student loan and one paycheck for everything else. That might motivate me to make more money and figure out a way to pay the loan off faster. I’m not sure if that is a good idea or not. What do you think?