Month: May 2017

Financing a 3-6 month mini retirement – Step 1

I have this idea that I want to take 3-6 months off of work beginning early 2018. I anticipation of this, I have been taking a deep dive into my current monthly spending and what I can do to cut back. I typically charge all my monthly expenses to my American Express card because there website has great features that lets you track your spend by category, etc. See below. To start the analysis I pulled all my transactions from Jan 1, 2017 – April 30, 2017. Amex automatically categorizes my transactions into their predetermined categories.

This is great for a quick glance, but I wanted to do the categorization myself. One – to re-review of all my historical transactions and also to make sure they were properly categorized as I would view them. For example, I wanted to separate my “Grocery” expenses (need) from my Restaurant purchase which are more of a want (not necessary). I want to understand my true monthly “survival” expense vs. what is a luxury and could be cut out on a limited budget. The Amex website allowed me to easily do this by downloading the individual transactions for my selected time period into an Excel file.

Results:

My 4 month avg. trend data showed that I am spending approximately $1,500/month excluding my rent. My spend by category is displayed below. The biggest component of my monthly spend is Groceries (~$300/month). This is fine, this is a need. What was alarming to me is how much I am spending per month on Clothes, Entertainment and Restaurants! Approximately $500 when you add them together. To me, this was shocking. I didn’t believe it as first, but this is why I downloaded the individual transaction data. That way I can go back and see which purchases I assigned to the individual categories. This allows me to answer questions like, Is the $200/month in clothes due to multiple individual purchases/items? Or did I make one big purchase (i.e. perhaps a winter coat) that may be skewing the true monthly average?

Also, I can get a high level idea of what an average monthly spend would be should I cut out a lot of my wants. If I cut out Clothes, Entertainment and Restaurants completely, I would be closer to $900K in monthly spend.

Action:

By analyzing my historical spend, I am able to benchmark where my monthly trend has been. This exercise has also allowed me to be more conscious of each and every transaction I make. Ultimately, the goal of this exercise is to understand where I am at, so that I can reduce my monthly expenses go forward. My goal in my monthly reduction will be the subject of a future post as it will correlate to my new monthly savings goal that will allow me to take this 3-6 month retirement.

Follow along to see what my goal is!

Waiting 2 days to make an online purchase saved me $34.20

Patience and non-emotional buying can save you money!

This week I was trying to purchase some sheets from Brooklinen.com and I became frustrated when they wanted to charge me ~$7.99 for shipping when I was already going to spend over $200 on their product ($228 to be exact). So I began googling “Brooklinen discount codes” and “Brooklinen free shipping codes”. There were a few floating out there via a google search but none of them worked for me at checkout.

So, I left my items in my online cart and continued on with my day. Then the next day I get an email from Brooklinen saying that I can get free shipping when I checkout.

I was too busy at work to go to back to the website to complete my checkout, so again, I ignored the email and put off my purchase.

Then, the following day (2 days later from when I had everything in my online cart ready to go but didn’t hit purchase) I get another email from Brooklinen for $15 off my order. This peaked my interest so I clicked on the email which took me to the Brooklinen webpage where my items were still in my cart.

However, to my surprise, it appears that the site was having a 15% off sale (+ free shipping). I am not sure if the 15% is due to the “reminder” email from Brooklinen or just happened to be a coincidence. But, it suckered me in and I finally completed my purchase with 15% off and free shipping.

 

Moral of the story is, if you can wait to make your purchase, discounts may come your way.  Disclaimer that the savings and this savings tactic may vary by site. I suspect the company got my email, etc, when I placed my items in my cart and that they were able to track that I had items waiting but did not make a purchase. Waiting 2 days saved me $34.20!