My Frugal Miser - Reviewing My 2014 Goals.

I failed in 2014.  I set four goals, but I only achieved one of them.  I did make progress on each, and am glad that I lost weight last year, even if it was only 5 pounds.

• #1:  Lose 12 pounds.  I ended the year at 229 pounds, which means I only lost 5 pounds.
• #2:  Increase net worth by $75,000.  That was too lofty, but my net worth increased respectfully.
• #3:  Spend less than $20,000.  What I did not plan for was beginning a major remodel for the house I bought at the end of June.  Taking no exclusions for that, we spent more than $53,000.  If you leave out the remodeling costs, we were around $31,000 in spending last year.
• #4:  Take an international trip.  Accomplished.  We spent three weeks in Ecuador in September. 

Review My 2013 Goals Here.

Review My 2012 Goals Here.

Review My 2011 Goals Here.

What a $1,250 per month Budget Looks Like

My 2015 goal is to spend less than $1,250 on everything except vacations and home repairs.  In Florida, a person earning minimum wage at a full-time job would earn $16,100 ($1,342/month).  They would most likely quality for less expensive health insurance under the Affordable Care Act, as well as other assistance like food stamps, the earned income tax credit, etc.  My goal is to support two people on less than I would earn in a minimum wage job.

I don't track my spending against a fixed budget, but below is an estimate of how I will be spending my money.

Budget:  $1,250 per month

Auto, including gas, depreciation, insurance, and service:  $350
Bank Charges:  $25
Clothing:  $50 (2x what I have spent in the past, but it's time to replace some worn out clothes)
Entertainment:  $100
Food:  $270
Gifts Given:  $15
Health and Dental Insurance:  $150
Additional Spending on Health and Dental:  $25
Miscellaneous:  $65
Personal Care:  $10
Taxes:  $40
Utilities:  $150

2014 Expenses vs. 2013 Expenses

This is the fourth year (see last year's post) I've looked at how my spending by category compares from one year to another.  This is a critical exercise that helps me spot lifestyle creep and identify areas where more attention is needed.

In 2014 my total spending was $53,563.  This was 35.3% more than my 2013 spending.  It's never a good thing to increase spending by so much, but most of this is non-recurring spending on remodeling the foreclosure we moved into last year.  Here's an overview of how my spending changed year over year:

• I sold the 2002 S-10 and replaced it with a 2011 Chevrolet Aveo.  In 2013 I used the S-10 for a cross-country mystery shopping trip.  I did significantly less shopping in 2014, and used a more efficient vehicle.  The latter part of 2014 saw a decline in gas prices.  My 2014 vehicle expenses were half what they were in 2013, dropping from $10,954 to $5,579, a reduction of $5,375.
• Entertainment Expenses decreased by 33%.  I gambled less in 2014.
• I invested in the foreclosure we bought last summer.  I purposely say "invested" because we paid cash for the house.  Once we finish the repairs, my housing costs should drop significantly with the absence of a mortgage.
• The cost of utilities increased noticeably.  We bought two new smartphones ($649) and paid utility deposits for the new house.  I expect to pay less for utilities in 2015.
• Spending on Medical & Dental increased.  Insurance premiums went up, I replaced two root canals, and an emergency room visit in Las Vegas are all to blame.

My Frugal Miser's Spending By Category

Category	2012	2013	2014	YoY Difference
Auto	$3,099	$10,954	$5,579	-$5,375
Bank Charge	$33	$462	$849	$387
Clothing	$71	$361	$317	-$44
Computer	$0	$354	$437	$83
Entertainment	$2,543	$3,262	$2,188	-$1,074
Food	$2,598	$2,844	$3,719	$875
Gifts Given	$295	$430	$407	-$23
Home Expenses	$4,070	$6,898	$21,628	$14,730
Insurance	$2,269	$1,907	$3,740	$1,833
Investment Expense	$0	$295	$0	-$295
Medical	$154	$663	$2,280	$1,617
Misc	$52	-$80	$462	$543
Personal Care	$19	$110	$1,057	$947
Recreation	$0	$84	$4	-$80
Subscriptions	$0	$62	$7	-$55
Taxes	$198	$2,277	$790	-$1,486
Utilities	$2,760	$1,071	$2,435	$1,364
Vacation	$2,050	$2,563	$7,476	$4,914
OVERALL TOTAL	$20,291	$34,636	$53,563	$18,927

In 2015 my goal is to spend $1,250/month net of Vacations and Home Repairs.  Last year I averaged $2,038/month.  Here's how I will reduce spending:

• I changed health insurance plans effective 2/1/15.  Insurance costs and out of pocket expenses for treatment should drop considerably.
• Lower gas prices, coupled with less overall driving, will reduce auto expenses even further.
• I spent $10.19/day to feed the two of us in 2014.  I will reduce our food costs by eating at home more.

Week in Review and Looking Ahead

It's been cold across America this last week, and even in Florida temperatures dipped into the low 40s on Thursday.  Fortunately it never stays cold for long here!

Last week we worked four days in Orlando at an Aerospace conference.  It was 32 hours in all and we kept our expenses low.  We only spent $98 for three nights in a hotel and a little on food.  This conference we were provided no meals (most of the time they feed us).  Also last week I shopped nine gas stations, a college bookstore and a movie theater.

This week I am shopping four college bookstores and doing a takeout shop at a Mexican restaurant.  On Tuesday I have jury duty.  It's the first time to serve here in Florida, but I think I only have to be there one day unless I am on an actual jury for a trial that lasts longer than that.  When I last did jury duty in Alabama I was on two trials that consumed four days.

The next couple of weeks appear to be really slow.  We are working another four day conference on the 26th, but until then there are many empty days on the calendar.  In February it looks like we will have to travel to Birmingham.  A long-time tenant is planning to move out on the 14th so we will visit to make repairs.  I am leaning towards selling this property instead of re-renting it.

My Frugal Miser - December Expenses: $2,777

In December my spending was okay but it could be better. I drove to Alabama for Christmas, so the depreciation category (which is based on how many miles I drive) is high.  Fortunately, I only spent $15 on gas thanks to cheaper gas, reserves from mystery shopping, and Shell Fuel Rewards from the gift cards I bought on Black Friday.

 The highest category was Entertainment.  I spent $332 in the casino during my cruise.  I bought more gift cards in December (to prepay Netflix) and we drank a lot of alcohol last month. Next up was Vacation spending.  I paid $250 for my April flight to New York to attend the Biglari Holdings shareholder meeting.  I also spent $168 on tips during the cruise.  

Food was a bit high, but I purchased a $50 Chili's gift card that I haven't used yet.  Finally, I changed health insurance plans.  While the new plan doesn't take effect until February, I paid that month's premium when I signed up for the new plan.

As planned, we eased off on home repairs last month and plan to do the same in January.  I had to pay property taxes and now am replenishing the bank account before we resume the remodeling project.  It's a welcome break from the chaos!

December Expenses:  $2,777

$566 Auto ($15 for gas, $489 for depreciation, $62 to renew tags)

$0 Bank Fees

$13 Clothing

($19) Computer (income from selling old computer)

$664 Entertainment (movies, gambling, alcohol)

$269 Food

$152 Gifts Given

$35 Household/Housing/Home Repair
$0 Home Insurance

$362 Health and Dental Insurance

$0 Investment Expenses

$0 Medical/Dental

$39 Miscellaneous

$2 Personal Care

$2 Subscriptions

$0 Taxes

$183 Utilities

$509 Vacation and Recreation

My Frugal Miser - December Income: $6,529

My income was average in December.  Because one tenant paid early and the management company paid late, there are three rent checks missing from my normal monthly rental income.  I barely passed $1,000 for mystery shopping and hospitality work, which isn't too bad considering we were on a cruise for a week and I took a week off for Christmas.

December Income $6,529

$1,057 Mystery Shopping
$5,352 Rental Income

$121 Other Sources

Notes:.  

• I don't include transactions in my retirement accounts.  This includes rental income, dividends and capital gains and losses.
• I include merchandising and hospitality work in the mystery shopping category since the companies that I shop for provide this extra side work. 

Debt be Damned

I have a love-hate relationship with debt.  On the one hand, responsibly using debt as leverage to make investments can be really smart.  Most everyone takes a mortgage when they buy a house.  What a great use of debt since you get to live in a house you otherwise wouldn't be able to afford.

It's been nearly three years since I last posted about my total debt.  I've come a long way since then:

My Frugal Miser's Trail of Debts

• 2009:  $507,000
• 2010:  $469,000
• 2011:  $446,000
• 2012:  $397,000
• 2013:  $351,000
• 2014:  $299,000

I'm getting closer to what I think is a healthy level of debt.  There comes a point when it makes more sense to invest available cash rather than use it to pay down debt.  I'm not there yet, as both of my rental property mortgages have interest rates higher than 5%.  I'd rather pocket a guaranteed 5% return (somewhat less with tax benefits) than hope for something better in the stock market.  For now, I'll continue to grind away at this (now smaller!) mountain of debt.