Sunday, July 10, 2016

June 2016 Financials

Jumping the gap in our budgeted expenses.

Welcome to month two of our financial updates.  It's actually a reset of month one and brought about some realizations about the limitations of our previous budget. After our OMG moment we realized we were way overspending what we thought our budget was.  We missed lots of miscellaneous expenses.  Thanks to what is now becoming our religious use of Personal Capital we are seeing things clearly, probably for the first time in our lives.

The bad news is we have a lot more work to do.  The good news is we now know where we stand and the iFreebies family is committed to getting to work.  As a result of our awakening we have changed our monthly chart.  Keep in mind all numbers are based off our April 2016 Projected Expenses.  We used this as a 1.0 starting point.  All numbers are relative to this.  We have added a line called Actual Expenses.  This is our new spending number thanks to Personal Capital.  Projected Expenses are based off our our Excel spreadsheet (now updated and corrected) and is what we thought our budget was / is and will be our budget going forward. Passive Income is what our portfolio at 4% will provide and any other passive income we have.  Let's take a look at the chart.

You can see the blue line Actual Expenses is significantly north of the red Projected Expenses.  While this is alarming, we again now know where we are and will plan to bring it down.  The green line, Passive Income went down ever so slightly this month but not too much.  Considering the Brexit scare we will take it.  Now comparing our Passive Income to Projected Expenses we are only at 22%. When compared to Actual Expenses we could only replace 13%.  The clear message... we have a long way to go.  Starting in July we have adjusted our Projected Expenses to a monthly budget Mrs. iFreebies and I have discussed and agreed to.  You will see this line go up in July and come back down in time as we get a handle on reality and work to bring it lower.

So all in all a sobering update but hey half the reason we started this blog was to get serious about FIRE and get committed to it.  Mission accomplished.  On to a better July.

Photo credit:  Oleksii Olkin

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