travel

Expense Analysis

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Back when I spent my days working in front of a computer, it was easy for me to analyze our spending. These days, with 3 kids in tow, I’m lucky to record our finances timely. There’s no time for analyzing. But over the past two years, I haven’t been happy with our spending total for the year, so it was time to look into it a bit more. It’s hard to know what has changed since I don’t have month over month, or year over year, trends to compare this data to, but it’s a start.

There are some caveats.

  • I don’t include any spending that isn’t on a credit card here. That means some of our rental property bills aren’t captured (they’re paid via Venmo or check), but I decided that’s ok because I can see that in a different way (a separate spreadsheet). Those expenses are reactive and a necessity to running the business, so it’s not like I can change a spending trend there. I’m more curious about our actual expenses and where our money is going for personal decisions. There will be some rental expenses captured here though.
  • I’m doing this analysis for the first half of the year. If this was for a month at a time (which is a goal), then I’d be able to dive deeper into spending at each place. For instance, at Walmart, those expenses aren’t always ‘grocery.’ However, I don’t have the time to go through all the purchases and siphon out non-food purchases. I did go through most of the Amazon purchases and categorize them.
  • If a purchase was made at Lowe’s or Home Depot, it’s classified as home improvement. It may have been rental property work, but generally it’s related to something we’re doing at our house.
  • If a purchase was made while on vacation (such as amusement park, tolls, hotels, dog sitting) , it’s categorized as ‘vacation.’ If we were on vacation and purchased food, it wasn’t labeled as vacation. All fast food or restaurant purchases for the first half of the year are categorized as ‘restaurant.’
  • If we did an activity from home, it’s labeled as ‘entertainment.’ If we did something related to sports (this includes swim lessons, ticket purchases for performances, etc.), then it’s labeled as ‘sports.’ The entertainment versus sports delineation is because something like a single tournament could be considered entertainment, but I kept all sports items as ‘sports.’
  • None of this includes whether we were reimbursed by someone else for a purchase. For example, we purchased tickets for 15 of us to go to an amusement park on vacation, but we only paid for 4 tickets of that personally. Mr. ODA is a personal shopper for restaurants, so much of our restaurant shopping around town is actually later reimbursed in that process (but not captured here because it’s not a credit card line item).

In the process of going line-by-line on my expenses, I discovered that I never received a refund for something. I placed an order on Etsy for a personalized gift for my niece’s birthday. A few days later, I went to check the status of the order, and I discovered that the shop I ordered from was no longer selling on Etsy. I was frustrated that I received no email that told me my order wouldn’t be fulfilled. I contacted Etsy customer service. At the time, I misunderstood Etsy’s billing process. I assumed it was charged when the item shipped. As I was just going through charges, I realized that the amount was charged on the date of purchase (e.g., not when shipped), and I had never received a response from Etsy. After another frustrating round of attempting to contact customer service this morning, I finally received a resolution. Now my ‘to do list’ has to keep track of this refund appearing. It’s $10.01, so it’s not the end of the world. However, it would be nice if Etsy shuts down a seller (their words), that they manage the outstanding orders without me having to take my time to get it corrected. Plus, if I let every “it’s just $10” go, it could add up quickly.

FIRST HALF OF THE YEAR SPENDING

By far, our largest slice of the pie up there is for rental expenses. Honestly, I’m happy to see that so much of our credit card expenses are taken up by rental expenses we had. I pay our insurance premiums (where they aren’t escrowed) via credit card, and I can pay our county taxes for one house with a credit card, which I do for the cash back rewards. There was flooring replaced at one house, which was a significant amount of that slice.

The ‘home improvement’ category includes new patio furniture we purchased, but were reimbursed by insurance (a tree fell on our deck). It also includes the electrician work and dirt fill purchases that we needed for the deck rebuild. Our house has a few more fairly large projects we want to complete, so I expect that to continue being a larger chunk.

I know that our “grocery” expense isn’t completely groceries. I’d like to focus on this category of spending more in the second half of the year. I want to quantify what’s purchased at Walmart that is actually grocery versus personal shopping type purchases. I think that our grocery purchases are higher than they should be, but I can’t put my finger on exactly why. Historically, I’ve blamed it on ‘bulk’ shopping; Mr. ODA will go to Kroger for the “buy 5” type sales. I’m not sure that’s it though.

We don’t eat at restaurants very often. We usually eat at fast food places while we travel or are away from home at an inopportune time. When we’re at home, we’re usually eating at a “personal shopper” experience where our food cost is mostly reimbursed (although that’s not captured in the chart).

Our health insurance deductible is $3,200 per year, so we expect slightly more than that each year in the medical expense category (and based on how deductibles work, that expense is front loaded in the year). I actually pre-paid a bill at a child’s urgent care visit. I paid them $50, but that visit, along with two more visits since then, came to a total of $12. I’m waiting for their reimbursement of that difference.

PERSONAL SPENDING

I’m going to dig deeper into the ‘personal’ category. I labeled a bunch of things as ‘personal’ as a means of not having too many small slivers of the overall spending pie. This includes all gifts, needs for kids (new shoes), clothing for kids, gym membership, sports, etc. It includes a ‘shopping’ category. I spent some time going through my Amazon orders and categorizing them, but the ‘shopping’ category was too daunting and difficult to parse out further. About a third of the ‘shopping’ category is Amazon orders through Mr. ODA’s account that I didn’t pull up to categorize. The rest is random purchases that were probably related to gifts or kids clothing.

For entertainment, this is small things like going to the movies (which we go for $2 per ticket), bowling, and aquarium. The largest chunk of this pie part here is actually 4 season pass lift tickets for our family’s future winter season. I put the ‘mom’ category to see what I’ve purchased for myself that wasn’t a necessity (e.g., a travel cosmetic bag, baseball shirts to wear to my son’s games), as well as my one hair cut and one pedicure that I’ve gotten this year so far. The ‘other’ category is boring stuff – utilities, car maintenance, professional fees, etc.

Had I gone through my Walmart orders in detail, I would have been able to identify some more purchases that could be removed from ‘shopping’ and put into other categories. For instance, the ‘dog’ category is actually higher because I order his glucosamine and tooth cleaning treats from Walmart most of the time, and that’s a monthly expense. His annual vet appointment is in the Fall, so this will be a larger slice of the pie for the end of the year.

SUMMARY

Our annual credit card payment total for the last three years have been about the same. While it’s a ‘win,’ that it isn’t increasing, it’s still at a number that I don’t like. Mr. ODA has been working towards a ‘retirement’ date. We’ve pushed it back just because his job hasn’t significantly impeded our lifestyle, but the day will eventually come. If it’s next year, I’d feel better if our credit card payments weren’t as high.

I went into this expecting my grocery category to be higher than I’d prefer. I didn’t identify much of what is causing that, so I’ll try to focus heavily on watching that expense each time it hits the credit card, rather than trying to remember what each purchase entailed six months later.

I was surprised to see the gas category such a small sliver of the pie. We’ve done a lot of trips (although, I suppose a majority were in July, which isn’t captured in this data). It appears living in a smaller city and doing things mostly on this side of town means we’re not having to fill up our tanks too often.

Overall, I didn’t notice any egregious spending. We don’t spend for the sake of spending. This year we traveled more than we had the previous two years, but mostly our spending is the same. Now that we’re two years into our house, there are less projects that we’re putting money towards. I’m encouraged that now that I’m looking at this, I’ll be able to identify areas to scale back.

Mentality, Consistency, Follow Through

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When I was little, we had friends come to our house a lot. When a certain crew came, they raided the candy drawer like they hadn’t eaten in a week. It was quite a binge. It’s because there was no candy in their house. They were fed 3 small meals each day, and that was it. They had the mentality that they needed to get everything they could in a small period of time. Because they hadn’t been taught self-regulation by having regular access to things, they didn’t understand moderation.

To me, I had access to the candy drawer in my house whenever I wanted. Therefore, it wasn’t exciting to me. It was there if I wanted something here and there, but it wasn’t something I felt the need to covet. I do the same with my kids. They have full access to the pantry. They know the things that are “good” for you, and they know they can take that without asking. They do ask if they can have any of the treats in there, and unless it’s close to a meal time, I try to give more “yes” responses than denials (and my denials always come with a reason).

I use this story regularly in my life it seems. It seems focused on a healthy relationship with food, but it’s really an overall concept of understanding the mentality it takes to make informed and beneficial decisions all day, everyday.

DELAYED GRATIFICATION

We did a stent with a multilevel marketing company. They preached “delayed gratification.” It was meant to say that you shouldn’t spend now because you’re going to produce a significant amount of income in the future, and you’ll be able to spend greatly at that point. Unfortunately, Mr. ODA and I are too cynical to watch that unfold. We took note of every “extra” our “upline” spent that wasn’t hitting that mark.

They who would go on a big trip with the statement, “well it’s ok because it’s for my birthday” or “it’s ok because it’s the last big trip that I’m going to take with my mom.” There was always another trip. Or the big, fancy, rent out a space, decorate to the nines, buy a new outfit, birthday party that happened almost annually. There were excuses to justify these actions that were clearly against their “delayed gratification” preaching, but they thought it was ok because they were “debt free.” They didn’t buy a house, continuing to throw money to rent year after year so that they wouldn’t have a mortgage.

There was a guise of having a “big picture” mentality, but the execution of the financials didn’t add up to us. If you were really in delayed gratification mode, the $3,000 you spent on a trip could have been saved towards a 20% down payment on a house at 2.5% interest rate. That’s what Mr. ODA and I did when we had to pay for a wedding and buy a house in the same year. We set a goal to spend no more than $5 per person, per day on food. We didn’t eat at restaurants. We didn’t go on huge trips (although we did do some weekend trips to visit family). Because of those years of ‘pain’ we went through, we bought a house with no mortgage insurance, and that house turned into 4 houses when we sold it.

I digressed. The point here was that creating a mentality of “delayed gratification” is setting yourself up for failure. If you created a habit of proper spending and a mentality of being able to discern whether the cost of something is worth it to you and your goals in real time, there wouldn’t be these “slip ups” of wanting to take that big trip or wanting to fill a void by throwing a lavish party.

In February, I started a diet. I was working out for a year at that point (after having our 3rd baby), and the number on the scale was exactly the same. I felt better, but I wanted that number to go down. I started reading up on diets, and this concept I found clicked with me. If you commit to a diet that is really restrictive, you’re going to fail. If you can’t have any carbs, then you end up having a binge day to make up for that desire. The concept of depriving yourself of something is more thought-consuming than if you had taught yourself moderation.

This diet concept was to alter your eating each day so that it keeps your metabolism on its toes. One day, eat a lot of protein. The next day, eat your carbs. Go back and forth. I was consistent on this for 3 months (see, best laid plans fail – between end of school things and travel, I haven’t put the effort in), and I lost 17 pounds with little effort. I haven’t been paying attention to this eating pattern, and I’ve been stagnant again. The whole point was that if you deprive yourself of something you want, then it’s going to consume you and make you unhappy. But if you eat in a thoughtful manner, then you’re happier and have an easier time reaching a goal and sticking with it.

RIPPLES

The decisions you make today affect tomorrow. The habit formed by thinking you had a hard day and deserve a “treat,” or that “it’s vacation so we should each have a $10 ice cream at the amusement park,” have ripple effects. I have another post about how people make fun of those who say don’t spend $5 on coffee everyday if you want a better life. Most people see it as a literal $5 per day (granted, it’s more like $7 or $8 at this point), do the math, and then say sarcastically “wow I’m a millionaire.” No, it’s the mentality. It’s the concept of teaching yourself that you don’t need to purchase an expensive coffee everyday, or you don’t need to buy lunch everyday at work, or you don’t need to overspend on treats once per week.

Someone once made fun of us because we like to go exploring new towns and find hikes, while his family goes to Disney at least once per year. I’d venture to say that our trips, where we spend time with our family and learn about new places and things, are more stimulating. I don’t hate Disney (Mr. ODA does though 😉 ), but I don’t see it as something to go to every year with no other experiences. But our trips that end up costing about $1,000 allow us to go do more things. We can do more activities when home, we can go on more trips, we can put money into savings accounts for our kids.

This summer, we have plans to be in 7 states outside of our home state. My kids are extremely happy with just the concept of staying in a hotel or “vacation house.” Add in swimming in a pool somewhere, and they’re ecstatic. I don’t have a desire to teach them that vacation is when you get to eat everything you see and buy whatever trinket you want. If you intentionally spend throughout the year, you end up with things that are more valuable to you than if you buy several trinkets just because you’re on vacation (really – when was the last time your kid played with that light up spinny stick from Disney on Ice). I want to teach them the value of their time, their money, and their family. I want to try my hardest to set them up for success because they understand the value of things in the big picture, and not just the instant gratification that lasts for a couple of days because they go that little toy we walked by.

2023 in Review: Personal Spending

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I’ve been working on the ‘year in review’ posts for 3 months. I really want to be consistent on tracking our spending and making sure I’m being intentional in our spending. Our main credit card had the nerve to tell me that it was exporting 461 line items for me to categorize and manipulate in Excel. We have 8 credit cards. So that wasn’t a fun realization.

Additionally, if I track it more than once every two years, I may be able to better categorize our spending. For example, a Walgreens purchase may be pictures that I printed, or it could be a prescription. My Amazon purchase may be clothes for the kids they needed, a gift for someone, something in the home improvement category, etc. The entertainment category can include exercise that we’ve paid for (e.g., 5K, ultimate frisbee, kids’ activities) or a trip we went on.

There’s also no direct way that I’m tracking where a credit card expense has been offset by someone paying us back. For instance, I put $980 on my credit card for a trip, but someone paid me $480 for it via Venmo. That offset is in my year’s total transactions, but not in a manner where I can capture it for this year-long-view of expenses. Additionally, we go out to eat at restaurants, but Mr. ODA gets paid for some of those as a secret shopper.

EXPENSES

This doesn’t identify the actual money spent in each category, but it shows how categories align with each other. To simplify this graph (and to allow all bars to even be seen), I combined several smaller categories into an overarching category. For example, the entertainment category includes anything from doing a brewery tour to traveling to another state. Home Improvement includes $10,000 worth of new carpeting, so it’s an outlier. This also doesn’t include expenses that were paid for out of our checking account(s); although nearly all of our expenses are paid via credit card to gain the rewards.

MEDICAL: We spent the first half of the year managing doctor appointments. They were mostly for the baby, and then halfway through the year, I started having serious vertigo issues. The baby was born a little early, had jaundice, diagnosed with reflux and put on medication, and then had trouble gaining weight. My 3rd baby then needed to have formula supplemented, after I nursed two kids and had extra milk to donate to NICU babies. That was an unexpected psychological and financial change. Once he started to become healthier, I hit a wall. After a week of wondering why I kept feeling lightheaded and dizzy, I woke up one morning not able to walk a straight line, and if I even attempted to, I’d throw up. I was diagnosed with an ear infection, which seemed to make sense, but the antibiotics didn’t stop the vertigo episodes. After several specialists, I was given the same thing that I always am: “your symptoms don’t fit neatly into any one category, and I don’t know what’s wrong with you.” Luckily, most of my symptoms have died down at this point. And thankfully, outside of random viruses and a bout of pink eye through 3/5 of us, the others were healthy.

SPORTS: We joined the Y and were really strong for the first 3 months. Once my mom died, I didn’t have it in me to go exercise, and then I got sick for most of the summer with that vertigo issue. Mr. ODA played softball, vintage baseball, and ultimate frisbee; I was able to play some ultimate frisbee and run a 5K. The kids did swim lessons at the Y (and was quite a terrible experience). Our oldest attempted soccer for the second time, and then cried through all practices and games. Our middle thrived in ‘acro’ for the second half of the year. I plan to finish our this semester with her in acro, but I think she’s going to love gymnastics after that.

TRAVEL: We traveled to NY for my mom’s funeral. I took 3 flights in a few days with the baby, all with points (which American Airlines was super easy to work with for last minute flights and using points). We went to the middle of nowhere Tennessee with Mr. ODA’s family, to NY two more times, a short family camping trip, to Indy for some kid-related fun, and a trip to Cincinnati to see Christmas lights and take the kids skiing for the first time. I bought myself new skis (I had been snowboarding for the last 13 years), which led to buying the kids ski equipment (although, it’s noteworthy that we bought them second hand and their skis and boots totaled $100 for two kids). That then led to buying mid-week season passes at our local ski resort. On top of our family trips, Mr. ODA took two work trips, a golf trip, and a mountain biking trip.

GAS: Typically, our gas usage can correlate to our travel because we usually drive somewhere instead of fly with 3 little kids and all the gear they come with. In June and November, we drove to NY, so those have bigger spikes in the graph below (June also included a trip about 4 hours away). In the beginning of the year, we were more interested in staying home because we had a new little baby, but we ventured out more towards the end of the summer.

RESTAURANTS: I was pleasantly surprised to see the amount spent each month in this category. I didn’t feel like we ate at restaurants all that much in the last year, but I was concerned with whether the numbers who support that. There’s an outlier in March because we spent a lot at one restaurant during the week of my mom’s funeral. On Long Island, food is a big deal; while every one else was paying for meals, I felt it was our turn. We don’t need to actually mention how much that meal was. May’s spike was simply the volume of times we went out to eat, and the majority of them being related to Mr. ODA’s secret shopper gig.

HOME: In July, we had a storm come through that wrecked our neighborhood. No one reported the damage to the National Weather Service, which makes me sad because I wanted to know if it was a tornado! We had several trees fall. One took out our deck, another took out our fence, and another cracked our driveway, but missed Mr. ODA’s car by centimeters. We fought insurance for 5 months, and now we’re in the queue to have it replaced some time late Spring.

CAR: We bought a car. That’s $6,000 worth of the “Home Bills” category. Since most of our bills actually can’t be paid by credit card, it’s surprising to have such a high category for that on the graph, but that’s why. They allowed us to do two $3,000 transactions on a credit card so we could get the points, and then we paid the balance by personal check.

GROCERIES: I’d like to watch this spending more in the future. A purchase at Walmart may include non-grocery items (e.g., shoes), but that is being lumped in with the groceries because I can’t possibly siphon out individual transaction expenses for an entire year in one sitting. So here’s a graph of our “grocery” spending per month, but noting such a caveat.

SUMMARY

While I know we’ve had some larger one-time expenses, I’m still not happy to see the amount spent in each category. I feel we’re diligent in our food spending, but I think we can reduce that amount.

I removed rental information, any rewards received, the $6,000 car purchase, and the $10,000 worth of carpet purchase to try to show that our spending is consistent month-to-month. Again, the baby kept us home in January and February, but we’re generally consistent in spending. I hope that I can review our expenses more often going forward so that I can more accurately categorize our spending.

March Financial Update

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We’re just going to cut to the chase – $4 million net worth! I mentioned that this was a goal for this year. Unlike other years worth of large jumps because of purchasing houses, this was less in our control (granted, our market allocation decisions are what’s driving it…. and by “our,” I absolutely mean only Mr. ODA’s because I don’t do anything in that realm).

RENTALS

Well, we’ve had a quiet month. What’s going to be funny is, I’m going to list the things that we did. Quiet doesn’t mean silent or without effort, but we’ve had a rough go of it over the last year, so this was a welcomed break.

We had termites at a property. We pay $98 annually for their termite warranty program, since we found extensive termite damage and live termites when we bought the house. We’ve had to treat the house several times, so this $98 is a steal. However, I’m wondering why we keep needing to treat the house.

We paid $125 for a plumber to go out to a clogged sink. When we received the invoice, it was for 2 plumbers to go. Between the phone call that they were on their way and the tenant saying they were great, only 35 minutes had elapsed. The company charged us almost $300. Mr. ODA called to ask why they choose to send two plumbers to do a one-man job, while also charging us for it. The owner said it was for liability purposes, which Mr. ODA fought back on. They agreed to a reduced rate, but we were only charged $125, which was less than agreed upon.

We had our third tenant move in, after we unexpectedly had to turnover three houses in the middle of winter. We also were given notice by another tenant that she’s vacating by the end of March. We handled increases for two houses (one handled by a property manager to increase $50/month, and one handled by me to increase by $25/month).

We had one tenant pay on the morning of the 6th with no communication, so I did have our property manager let them know that’s not going to be ok. We also had a usual suspect pay late, with the late fee. However, their communication was frustrating. They said they’d pay on the 6th. At the end of the 6th, they said the money hadn’t cleared like they expected. No communication on the 7th. I asked for an updated on the morning of the 8th, and they said it would be that day. At 11 pm, I hadn’t received anything and reached out. I was then told that money was going into the ATM right then so that she could pay. Sometimes I wish I could do a deep dive into tenant finances so that I could help them out.

PERSONAL

Mr. ODA has a trip in July where a group of guys will hike in the Rockies. Our family is going out before that trip is scheduled to do our own exploring. We booked 4 round trip plane tickets, and Mr. ODA handled the lodging booking for the guys’ portion. That’s almost $3,000 worth of purchases, so our credit cards are higher than usual.

Speaking of the plane tickets. We purchased gift cards from Costco for Southwest. The gift cards are essentially $450 for $500 worth of purchasing power at Southwest. We bought two, therefore saving $100 on the tickets. For an extra few clicks on the computer, and the 15 minutes waiting time before the e-gift cards were delivered to my email, that’s $100 that can be used somewhere else.

We bought a new vanity for our bathroom. That was about $700 for the vanity, faucet, toilet flusher, and mirror. I sold the old vanity (in rough shape) for $30. And because I’m proud that I did most of it on my own, here’s a picture. I needed Mr. ODA’s help with the supply lines because I lost patience with how tightly they were screwed on and my lack of progress. I cut the baseboards down to size, except I somehow measured wrong on one quarter round cut (I was cutting while it was on the wall). Mr. ODA cut and installed the replacement piece for me.

We finished up the ski season. The kids did great. I was really proud of them for sticking with it. We used our season pass well (i.e., exceeding the cost had we bought individual tickets for each visit). I took two of the three kids to the aquarium, and we took the baby for a procedure at a local children’s hospital. We’ve started tee ball for our oldest. Our March is very full and busy, so we’re getting into the swing of things and keeping track of the schedule.

NET WORTH

Well, we far exceeded that $4 million goal. The market went up big, with our biggest changes being in our retirement account, IRAs, and cash. Our cash increase is offset by the lower amount in our Treasury account. Some of the short term bonds were transferred back into our savings account, and we’ve kept that money in savings since our deck replacement is slated to begin.

February Financial Update

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RENTALS

The rentals were expensive this month with $4600 paid out. This doesn’t include work that’s currently under way, but not paid for yet.

I paid for a water heater replacement, which was $1,904. I had to pay insurance on a larger property ($793). I paid the balance of the window replacement at one property, which was $1,064. I also paid for a plumber to address a leaking toilet and a rotted faucet ($325). We had a new tenant move into a vacant property, so we had that cleaned before her arrival ($165).

I had to pay for a plumber’s service call ($95) for clogged drains, for them to refer me to a rooter company ($250). I emailed that tenant that preventive measures need to be taken because I’ve not had so many calls to one property. She assured me they have taken appropriate measures and it’s just old pipes. The only problem being that we have several other properties with old pipes that never call for clogs.

We’ve turned over two properties and are about to turnover another property in the dead of winter. It’s so frustrating to be in such a position. All of those stories will be elaborated on in future posts.
– On one property, we charged a lease break fee of one month’s rent to cover our losses (the fee was different based on the month in which they broke the lease). Luckily, that covered our entire month of January being vacant, but we found someone for 2/1.
– Another tenant asked to leave a property because he lost his job. That was handled a bit different because we didn’t know in advance that this tenant would want to leave mid-lease. We told them there’s a fee of $250 (which is what it costs us to pay the property manager to find a new tenant), and that they had to pay rent until we found a new tenant. We didn’t lose any rent on that property.
– Now, we have a newly vacant property because the tenant can no longer afford it. I’m not expecting to recover her unpaid rent at this point. We approved a tenant to start 2/28, leaving us with 27 days of lost rent. However, we sent a lease over for them to sign. They’re currently dragging their feet on signing because they want to pay with their tax return. I don’t love that idea. They’ve been easy to communicate with up until this point, just slow. I’m hoping this gamble works out.

PERSONAL FINANCES

I had to transfer money to Mr. ODA’s account to cover the purchase of our new back door and a new treadmill (although that was only $400). This is an interesting concept for us. Mr. ODA had an account before we met. His account was grandfathered in to new terms and conditions at this bank. He’s kept his checking account and credit card for the rewards (I have access to the account; my name just isn’t on it). Any online purchases go on that credit card. However, that account only receives $250 every other week from Mr. ODA’s pay check (occasionally it’ll receive rent via Zelle). So sometimes, we need to transfer money from our main checking account to cover that credit card payment. All our security deposit accounts are with that bank too. So I had to then transfer from a security deposit account into his checking account, and then have him send that money to our main account. It wasn’t our finest money management moment.

Not much else happened this past month. We’ve gone skiing with the kids some more, I went on a moms’ cruise (which was amazing), took a small trip to piggyback Mr. ODA’s work trip, and have done activities around town. We’re gearing up for a procedure at a local children’s hospital next week, which I’m expecting will wipe out our deductible. Luckily that’s only $3,000, but I’m sure we’ll hit it. We’ll actually be late hitting it this year; it’s usually done in January.

NET WORTH

One of this year’s goal is to hit $4 million net worth. I thought it was going to be a ways away, but the market has been up big recently. We’re only about $14k away from that goal now!

“Cheap” Flights

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I recently went on a trip. We booked one of those “cheap” airlines, where you pay a la carte. Our round trip flight was about $50. In the process, I was amazed at the number of people who were frustrated by the rules, as if you don’t have ample opportunity to learn the rules in the process. So I wanted to go through a booking, to show you that there are plenty of warnings, and that it may or may not be cheapest to go this route.

I’m going to pretend to book a flight. From Cincinnati to Orlando, round trip, I found a flight for $87.96. The next page asks for my personal information. They then offer me a few options.

The price highlighted is for one way, and in smaller font, it indicates the round trip price. This could be a bit more straight forward, since my selection is for a round trip flight, so one way worth of baggage isn’t the expectation. I decide to ‘continue and customize.’ The next page is seat selection.

Every single seat has a price associated with it. Again, this could be more straight forward. Nowhere on the page does it clearly indicate that you don’t have to pick a seat. I click “continue.” There is a link below continue that says “what if I don’t pick,” but I didn’t check that. The next page causes me to pause and lets me know I should rethink my options.

I select no thanks. The next page provides my carry on and checked bag costs. I can select that I want to carry on and board first, just carry on, or have no carry on. I select no carry on and no checked bag. As I scroll down, it lets me know that I can have a personal item for free, and it lets me know the size restriction for this personal item. It tells me multiple times on this page that bags will be more expensive at the airport.

I click continue, without selecting any baggage, and it halts me again.

I then get asked a few questions about the check in process and any other add-ons. I decline everything, and I’m sent to the payment page. At the end of the page, I have to agree to several things, including baggage requirements, before booking.

The entire point here is that this airline has warned the consumer several times, through multiple pages and “clicks” that there are fees outside of the ticket price. So even if you didn’t know that the reason you found such cheap flights was because their pricing is a la carte, they’ve told you multiple times through the booking process. Similarly, you know going in, on any airline, that a bag over 40 or 50 lbs is going to be considered overweight.

It was frustrating to watch so many people get mad that they checked your bag size as you boarded the plane. You signed up for that. You could have checked the size. I read the wrong section when I packed my bag, so I had verified it as a carry-on size, which I didn’t pay for. I was able to move things around in my bag for it to be able to fit. If it didn’t fit, I knew that mistake was on me, and I’d pay the fee. The fee in the airport was $99. Yes, it seems astronomical to pay that fee for something that you can walk on with if you’re flying Delta or American, but it’s the rules for this airline, and I know that going in. I could have adjusted things for the flight home, so my total for this roundtrip would have been $150, still cheaper than roundtrips on other airlines.

For the pretend flight I went through above, if I had selected The Perks bundle, my total would have been $279. I’d get a carry on, checked bag, and the ability to select my seat at that price. Had I selected just a carryon each direction, my total would have been about $225. For the same dates, I could fly more inconvenient schedules (e.g., midnight arrival) for $209 through American.

When comparing the prices, you need to see what the best options are for what you need. If you can’t get by with just a personal item, then you need to factor that into the flight cost when comparing to other airlines. If you can’t handle the psyche of having your bag checked for size when you board the plane, then stick with the traditional airlines.

Be an informed traveler. Know the fees associated with your airline. Know the restrictions for each item. Plan in advance instead of having to move things around at the airport where you’re going to feel the stress.

Family Trip

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We went on a trip to Indianapolis last month. We did more activities than we typically would have, so our spending was more than average.

The reason behind the trip was the Children’s Museum. We like visiting zoos around the country, so we used that to fill our other day there. The zoo was $91 for entry for 2 adults and 2 children, while our youngest was free. We had to pay for parking, bought lunch at the cafeteria, two kids rode the carousel, and we all rode the train; that came to $66.70 spent the day of our visit. The Children’s Museum was $90 for entry for the same group of us. It also had a carousel that we let the kids ride, I let them get a flattened penny (they used “their” $1 for it), and we bought lunch (parking in a parking garage was free); that came to an additional $35.88 spent on that day. The zoo’s meals were very reasonably priced, but the Children’s Museum’s meals were ridiculously expensive, so that free parking wasn’t exactly free.

We placed a grocery pick up order when we arrived, and that covered our breakfasts and dinners ($39.10, but we didn’t even use everything we purchased, so that’s inflated). We stopped at McDonald’s on the way there and as we left the city on the last day ($17.68). McDonald’s and Qdoba are sure fire ways to get our kids to eat and eat quickly, so they’re nice when we’re on the road.

On the first day, we went exploring the city. We had to pay to park in a parking garage, which was $5. On the last day, we did a Capitol tour and visited another museum (both of which were free), but we had to pay to park twice ($2.50).

We had booked an AirBnB for the trip. A series of events I won’t get into meant that we received a full refund from the originally booked location, had a coupon code for our inconvenience, and booked a new location right away. We ended up spending $574.32 for our lodging of 3 nights. We specifically didn’t book the cheapest place available because we wanted the comfort of multiple bedrooms for the kids. The two oldest can sleep together, but the youngest needs his own space so that it can be without a night light. We could have managed with two bedrooms because the youngest slept in the master closet, but I can never guarantee that there’s a closet big enough for a pack and play. This place had 4 bedrooms, but we didn’t use one of them. We also wanted a hot tub available, so Mr. ODA and I could hang out and watch tv after the kids went to bed. It’s an amenity we’ve grown fond of, and we even plan to purchase one for ourselves if our deck ever gets replaced.

In total, this trip cost us $922.18 (plus gas) for 3 nights away. This is a higher than normal 3-night trip for us, but we were ok with it since we hadn’t taken our usual amount of trips (newborn life). We could have planned ahead on our two big days to pack a lunch instead of buying there, but we chose the convenience of purchasing the meals over the potential savings, especially knowing that we weren’t spending anything outside the normal realm for our breakfasts (cereal) and dinners (easy, quick pasta meals). Although this wasn’t known at the time of booking, but it was once we started the activities, the concession from AirBnB more than covered our meals and extra activities on each day.

Our kids are 5, 3, and 10 months. The Children’s Museum was great for their ages. There were some exhibits for older kids that we bypassed. I thought the St Louis Science Museum was better at having interactive exhibits throughout (and is free!), but it didn’t mean that this place was bad. The zoo was nice too. There’s a lot of shade, which was appreciated on a very hot day, even in October. It felt smaller than the Cincinnati Zoo, which is where we usually go, but it was clean and the animal exhibits were nice. They had a lot of shows and “ranger talks” included with your admission too. There was a dolphin show that was included with admission that was significantly more than I would have ever expected as a free attraction!

The city of Indianapolis wasn’t great. We didn’t encounter a really nice area of the city; most of it is run down, and there was a lot of homeless downtown. It’s clear that there is a lot of updating underway, and that it’ll probably be a really cool place in a few years. I never felt unsafe, but it was noteworthy that we haven’t visited a city like this since Detroit (although we did find a nice place there, ironically).

All in all, we spent less than we originally projected. A 3 night trip where we were sufficiently entertained, but not overly exhausted (the kids got to bed on time!) for under $1000 was great.

Our Money Management

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I manage all our income and expenses (at a high level, like credit card payments, not individual line items). I have a spreadsheet that I set up in 2012 and have used religiously since then. I’ve shared how I set it up in the past, but we’ve entered a new phase that makes my spreadsheet even more important to me.

BACKGROUND

FIRE. Financial Independence, Retire Early. This isn’t a post about FIRE specifically, although it’s the movement that sparked Mr. ODA to go down our financial path.

The purpose of our rental portfolio was always for both Mr. ODA and I to quit working. We had covered my income before any kids were born, but I kept working because there was no reason to not be working. Once our son was born, I took 14 weeks maternity leave (not a separate bucket for Federal employees back in 2018; it came out of my own accumulated sick leave), then I worked about every other day for 8 months while Mr. ODA and I swapped child care roles, and I burned down my leave.

While we don’t plan to work full time, we do plan on keeping part time positions. We’ll work on things that bring us joy, rather than an office job with office politics. Since I stopped working, I’ve done odd jobs, part time. For example, I worked as a census taker and served beer at a local race track over the last 4 years. These were all seasonal, part time positions, with no long term commitment.

Now that I quit working, it’s Mr. ODA’s turn. We hardly skipped a beat when we left my six-figure salary behind (although a pandemic probably helped curtail spending on our behalf!). However, the thought of losing his salary as a safety net and losing insurance are two items that have caused some pause.

THE SPREADSHEET

For you to understand my panic that I’ll get into here, I thought a quick reminder was necessary. This is how I manage our money. It’s nothing fancy, but it works. I don’t miss payments. I can allocate expenses to a specific 2-week period against what income is brought in at that time.

There are two parts to the spreadsheet. Well, there are about 10 tabs, but this first tab, with two sections, is what’s pertinent.

Part 1 is this section. This image is a very scaled down version of the section. We have 13 houses, 6 mortgages that get paid, 6 credit cards that get paid regularly, and a few other lines that I removed.

All numbers are made up place holders, except the investments. I deleted my IRA contribution line because it’s wonky (but I will max out IRA contributions), but I wanted to show how much we’re investing regularly. There’s $75, per kid, per month, going into their investment accounts. Then there’s general investing happening with one $1000 transaction and two $800 transactions per month. Mr. ODA is investing into his IRA to max it out ($6500/12=$541 per month..sort of).

You can see that I’ve listed Mr. ODA’s pay dates at the top, and then his salary income on the next line. The gray section accounts for all rental income. I’ve allocated the income into the salary two-week period that makes the most sense (about half pay me on the 1st or 2nd, and the rest pay on the 5th). The green section shows routine rental property expenses. The entire next section are our personal expenses. The blue is left over from when I was managing two personal homes last summer (but kept it to differentiate our house bills versus other bills). The next gray section (which I’m only just realizing is a second gray and should be a different color as to not conflate the two grays.. what a rookie mistake) accounts for expense that come out of Mr. ODA’s bank account. Finally, I have an “other” section. This is where I capture large expenses that don’t need their own line item because they only happen once or twice a year. Here I’ve put tax payouts that will be due in October (that’s 4 houses worth, and it’s last year’s numbers – because I want to know how this year’s amount owed, when it comes in, changed from last year’s to discern if it’s reasonable or if I need to dig into it).

This is part 2. Now, part 1 accounts for the general timing of income and expenses, but it doesn’t perfectly capture the due dates, scheduled payments, or whether I’ve paid it and it’s hit the account.

The top line is linked to the section that I update our checking and savings account balances. Then I transfer all the items per pay period into this list format. In this example, let’s say I’ve already scheduled the gas payment. So I mark it as gray and put the date in the left column. Similarly, our investments are automatic, so I mark them in gray as we get to that two-week period.

At each border lined, I put the total for that section. You can see that at the end of the 9/2/23 pay period, I project a negative balance. Truly, we seem to have more income than I project (rewards cashed out, someone paying partial rent a little early, etc.), so I don’t take any action until I need to. There are Federal regulations regarding savings accounts; so we can only make 6 withdrawals from the savings account before fees apply. I manage these projects to know whether I need to make a withdrawal. If I need to, then I project what other expenses I may have and transfer a little more than I deem necessary.

THE PLAN

So our first step to him leaving is to pretend we don’t have his salary. Mr. ODA set up a new bank account. The majority of his paycheck goes into that account. We still have $250 going into another account, and about $400 going into a third account because we need to meet the requirements of direct deposits to prevent any account maintenance fees.

Our general principals in account management was always to take money into our main checking account, pay out bills for that two week period, and put the balance into savings. However, that wasn’t creating any forced feeling of managing without Mr. ODA’s salary. I’m more of a visual learner, so I appreciated this concept of having the money automatically transferred to a completely separate account.

EXECUTION OF THE PLAN

The first month of this plan had me on edge. The accounting in the checking account meant I was constantly back down to a balance of about $500. When I worked in an office, I was at the computer everyday checking our money. Now that I’m responsible for 3 tiny humans, I’m rarely on the computer. I project out our routine expenses, but there have been plenty of times where a $100 or $500 charge goes through that I didn’t have listed in my expense column for that period. Therefore, I like to keep at least $1000 as a buffer in the checking account to cover those little expense that can add up. So keeping the projection to less than $500 in the checking account panicked me.

Now wait. It’s not that we only had $500. We have a savings account linked to that checking account. We have this online account that’s taking Mr. ODA’s salary and just building the balance because we don’t use that account for anything. We have Mr. ODA’s old personal checking account. And last but not least (as my adorable 3 year old says all day long), we have plenty of investments that can be liquidated within 24 hours. We have the money. It’s just the panic of having the money in the spot where the bills are being paid.

SUMMARY

I’m sure there are easier ways or “better” ways to account for this. I don’t like automatic payments for bills because I like scheduling them against our cash flow. I’ve used this exact set up since 2012, and it hasn’t failed me. Taking full responsibility to pay bills means I am very scared to miss a payment and cause a negative hit on either of our credit reports.

Now that we’ve eliminated about $5,000 per month of income, without changing our spending in any way, I’m interested to see how things go. We have a great spending mentality – we’re not spending on frivolous items and we weigh the cost benefit of a purchase to us. That’s not to say we can’t do better. I’m sure we can be more diligent about our grocery spending or at least cooking what we already have in the house (we don’t spend much at restaurants in a month). I’ve already started tracking our expenses month to be sure we can watch our trends and re-evaluate our spending if needed.

Now that we have this account growing with no need for it to pay the bills, we will use it for fun things. We’re not very good about doing fun things. Two summers ago, we wanted to buy a vacation home at a nearby lake. We decided that instead of spending $1200 per month on a mortgage to go to the same place all the time, we’d plan vacations each month and spend up to $1200 without “guilt.” It was great. We had so much fun. But it lasted 3 months. Having a newborn put a damper on activities, but we’re ready to do the same again.

Hiatus Update

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Over the past year, I tried really hard to stay on top of sharing content here, until I finally had to throw in the towel. It started because we were renovating a house while I was pregnant and had two kids to take care of, so my posts dwindled down to just the net worth updates. Then Mr. ODA started investing in treasury accounts. There was so much movement of money in so many different accounts, that I couldn’t quickly update our net worth anymore. Other than updates of the net worth and rental property work, my last post was August 2022. I feel like I have the bandwidth to finish several posts that I’ve started, so I’m back.

NEW HOME

In May 2022, a house went on the market in our desired area of town. We weren’t ready to leave our house since we hadn’t owned it for two years yet, but this was an opportunity that was hard to pass up. We closed on the new house in June 2022. We floated the down payment through a Home Equity Line of Credit that was paid off through the sale of our house.

We spent the whole summer traveling back and forth between our then-current house and the new house because we had a lot of work to do on the new house. We demolished the master bathroom and started rebuilding that. I painted almost the entire house. We did a lot of little projects. It was a tiring time that culminated in having to do the physical move in the Fall and get the new house organized and set up.

NEW BABY

I was pregnant through all of the home renovations and move. Our son came 3 weeks early on Thanksgiving day. He was generally healthy, but he required extra medical attention than we weren’t used to with the first two. On top of that, he wanted to be held to be asleep; babies sleep a lot. Mr. ODA and I were taking turns holding the baby and sleeping. The two older kids basically survived on tv shows and chicken nuggets during this blur of life. Going from 0 to 1, and from 1 to 2 kids was pretty easy, but this 3rd kid was a new ballgame. Once he was 5 months old, I started working on getting him to sleep independently. Now that he’s 7 months old, he sleeps well in his crib for his naps and through the night; he’s happy during the day and plays well; and now I feel like a new person for actually getting rest and not being tied to a couch all day everyday. Mr. ODA took a lot of time off to help me through that phase. As he started working again, it was an adjustment for me to learn how to manage all 3 kids and the household.

PERSONAL

We had several trips last summer on top of the renovations that we were working on. Those created delays in us having the house ready for us to move. Then our oldest got sick and it turned into an issue in his leg so he couldn’t walk at all for about 2 weeks and couldn’t walk right for about 8 weeks. It was a rough time. He got better just as I was about to have the baby.

As we started to get into the swing of things with all 3 kids and coming out of winter, my mom got sick. She went downhill quickly in March and ended up passing away on my birthday this year. That was unexpected and emotionally draining. We just got back from a trip to see my family, and I feel like I’m more put together than I had been over the last 3 months.

In April, we had to submit our taxes. This is always a several hour process. I had documented in the past, but I just didn’t have time to juggle it this year. I have to verify that I’ve recorded all expenses, that I haven’t recorded expenses that aren’t supported by documentation (e.g., receipt), that my summaries are logical, and then it takes Mr. ODA and I 5-6 hours worth of entering data to actually submit.

Then we added swim lessons and soccer for the kids. We quit soccer early because it just wasn’t fun for our oldest (or us), and 3 months of swim lessons are over. Now our only commitment is whether or not we want to attend library story time for a half hour each week, and I’m appreciating the open schedule.

BUSINESS

The rentals have required a lot more than usual attention from us in the past year. We had a house flood from a burst pipe, so that had to be cleaned out, renovated, and re-rented. We had several plumbing and HVAC issues among multiple houses, as well as a raccoon removal issue. We had roof damage to a house, a tree fall on a house, and another tree fall in the yard of three different houses, all because of storms. We had to turnover a house, where the tenant had lived there for several years, had made changes that were not appropriate, and would not communicate effectively on her status of leaving. It has been a lot more than usual, requiring a lot of time to manage.

On top of the maintenance requests and the usual management of the properties, I also took over the management of the properties that are in Central KY in February. I was spending so much time managing the property manager, that it was finally time for me to just handle it.

Not that you needed all this background, but I felt weird just jumping back into content. We’ve been very busy in general, but adding a 3rd kid into the mix was the straw that broke the camel’s back. I finally feel like I can manage everything again, and I’ve had more and more thoughts for things to share.