2013: A Year Of Adjustments

Although I enjoy being back home, it has not come without its share of adjustments.  May-October was pretty much an extended vacation.  My days were filled with rock climbing, wakeboarding, motorcycle riding, camping and basically enjoying life with no responsibilities.  That little taste of owning my time has me thinking of early retirement or semi-retirement much more so than I once did.  Work isn’t horrible, but having some place I have to be five days out of the week, well, it sucks.

Although I started back to work in November, things didn’t really start to fall into place until January which is when I moved into my apartment.   I’ve experienced a rough patch with work and the process of finding a new routine lately.  Being that it is winter doesn’t help much.  I feel ashamed for having complained last year when the low dropped to 65 one night.  Last week it dropped to 12 degrees here at home, my bones ache and I long for 65 degree nights.

Managing my expenses takes a little more effort as well.  Things are expensive here in the U.S. and I am reminded of how quickly money can disappear.  I’ve started to aggressively track my expenses again with the intent of cutting expenditures where they are excessive.  Before this was no more than an interesting exercise; when you’re saving 80% plus of you income and your expenses are crazy low it really doesn’t matter.  These days it’s a necessity since everything seems to cost something.  Here are just a couple of differences:

  • Movies: Before—1.33 (includes popcorn and a drink) Now– 15.50
  • Electric: Before—zero  Now—84.70 (for a small 1BR apt!)
  • Rent: Before—171.00 (included all utilities even phone and internet)  Now—675.00 (no internet or phone)

These are a few examples, but in pretty much every category the trend is the same, increased expenses across the board.  Compound that with a 2/3 reduction in income and you see how controlling expenses becomes crucial.

Some of this is within my control, actually all of it is, and this is where learning to adjust is coming into play.  The biggest change at the end of the year will be getting rid of this overpriced apartment.  I settled on this because I was burning up the same amount for gas commuting as I would be paying in rent.  They also made it easy to move in which was nice.  Some places gave me grief over not having a previous rental history from being overseas for the past few years.  It also has me continuing to think about buying a place of my own.  In this area I could buy a place with cash and avoid the rent or mortgage payment which would be great.

Food is another category I want to cut down.  The last couple of months I’ve spent just over 400.00 month in food.  This includes eating out and groceries.  This is unacceptable for two reasons:

  1. I’m a single guy.  It doesn’t take $400.00 to sustain me.
  2. I have the benefit of eating at work for free five days out of the week.  It really is a nice benefit.

My goal for this month is keeping food expenses around the $100.00 mark.  I think this is easily doable if I just change my behavior a little bit.

Cutting expenses is very important to me because that is where the money to invest comes from.  I still like to spend, but these days I like spending on investments that give me a return.  Since I no longer have the luxury of having several thousands of dollars extra in my account to invest with, cutting expenses is where the extra funds come from.  This is why guys like Dividend Mantra are so inspiring.  Here is a guy who is not making tons of money, but yet has managed to build a portfolio rapidly approaching the 100k mark in just a few years!  That is impressive in my book…

Don’t get me wrong, I don’t regret coming back, nor do I dislike my new life.  I’m merely stating that these days I have to think a little more about my finances and what is really important to me and what isn’t.  These are questions that I’m sure millions of other people are asking as well as they navigate through life attempting to make money work for them and not just them working for money.  2013 will be full of adjustments, but they are adjustments I am glad to be making.

You are likely to see more posts than usual dealing with cutting expenses over the course of this year due to reasons I’ve stated above and to the fact that the market just isn’t presenting me with stock prices I’m willing to buy at so there is not much buying/selling going on in the Stoic portfolio, (I am really upset that I didn’t have a limit order in on Monday for the dip below 60.00 that YUM! had).   There will be other opportunities, of that I’m sure…

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9 thoughts on “2013: A Year Of Adjustments

  1. Stoic,

    What a difference in expenses!I would love to be able to see a movie for $1.33 with a drink & popcorn! Good luck cutting expenses. I’m sure you can do it, with a little bit of effort and experimenting.

    • Headed Home– There is big a difference, but a lot of it has to do with choices I’m making. In Saudi I decided not to have a car, here it seems more of a “need”. Is it really? That is what I’m also trying to figure out. I’m seriously thinking of getting rid of the truck and going to my motrocycle full time. Towards the end of the year I will have a better idea…

      • Stoic,

        One of the best financial moves I’ve made yet was getting rid of my car. Even a cheap car comes with ongoing fuel, insurance, depreciation and maintenance costs.

        I don’t know how realistic a motorcycle would be up north where you’re at…but I’m definitely rocking the scooter/bus combo down here.

        Best wishes.

      • DM…. The winter would be a bit rough. They do have the cold weather gear that is heated so that could be an option. I will test the waters spring through fall and see what I think. That won’t prepare me for the cold, but it will let me know how feasible this is. The truck is paid for, but as you say the gas, insurance, and maint. add up. It’s an option I’m going to seriously consider.

  2. $1.33 for a movie?!?! That’s amazing. It’s definitely easier to cut expenses when your income is lower, which is something I’m feeling as well. The trick that I’m using is to look at the non-mortgage expenses only, which are a lot lower and then somehow that gives me the motivation to cut out some fat. I in fact have a post lined up about that for next week 🙂

    $675 for rent is still pretty cheap! I was paying about three times that after utilities before I bought my place.

  3. Stoic,

    Thanks so much for the kind compliment. I’m so appreciative of you following my journey, and I very much enjoy following yours.

    I imagine the adjustment to such higher expenses must be a bit frustrating, especially considering the lower income.

    But I know first hand it doesn’t take a ton of income to become financially independent. Just stay persistent and keep your eye on the target. A little dash of luck and some patience will get you there.

    It sounds like you’re on the right track with the lowered food expenses and the low rent. Spending only $675 in rent isn’t bad at all. Keep it up!

    Best wishes.

    • DM you’re welcome. You deserve kudos. I think you have inspired a lot of people in a lot of ways. I will work through the process of getting the expenses where I want them to be. This is an exciting year as it will be the first year back home with no debt and a very different money management style. I’m looking forward to it.

      Perhaps the rent isn’t that bad, but I hate it! This year will give me a chance to learn the area as well. This is a new city for me and finding a “good” area was also a challenge.

  4. Hi Stoic,

    all the best for your cutting-experience. It is not a simple task, I know it so well. Always so many things to do, always so little money to spend…

    The car point is very much to think about. If we wouldn´t live on the country-side (were it is almost impossible without) we would consider to spare one.

    And with all the sound reduction of expenses don´t forget that you only live once!

    I can contribute nothing to the question what expenses are unavoidable in the U.S.; please let these thoughts finally not totally distract you from your good thoughts regarding investing. Because they are!

    Allow the time to enlarge your portfolio with dividends. Over the years it will work, you know it. And as you have for the time being something else that requires attention, you can´t concentrate that much on investing. Beware of making too quick decisions – regarding investing I did earlier!

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