Sunday, July 3, 2016


Mrs. iFreebies having an OMG moment.

It's been a little over a month that I have been blogging and more importantly using the Personal Capital tool to keep track of all of our expenses.  I've had a budget in Excel that we loosely followed for quite some time now.  It does a good job of keeping track of all the main expenses that show up in the form of bills in our household but some of the other stuff such as groceries was always somewhat of an educated guess.  Overall I thought I was pretty close.

As I am now closing out June financials to prepare our monthly financial progress blog entry (still to come), I started to look at how the month ended for us in Personal Capital.   Going into the month I felt pretty good about June.  We had paid off some long standing debts in May and I felt we were slowly on our way to reducing our monthly spend to our future FIRE number.  You can imagine my shock when I saw that we went over our "Excel budget" by 84%!  Yes that's 184% of budget for June.  Just to clarify as an example if our budget was $10,000 we spent $18,400!  OMG!  Now we have a trip coming up and we spent on the airfare and hotel this month so that is out of the ordinary.  If I take out those expenses though we are still at 145% of our monthly budget.  So where did it all go wrong?

As I began to cross reference the "Excel budget" vs. Personal Capital results I could slowly start to see a pattern.  We had a good handle on the normal fixed type bills.  Mortgages, utilities, cable, etc were all reasonably close.  Where we went crazy is in the the categories I either didn't have or glossed over.  These include a much higher grocery bill, childcare, entertainment, general merchandise (Walmart killed us), clothing, gas station purchases and more.  These are the kind of things that you don't get a monthly bill for but a few trips to the store each week sure do add up.  This was sobering.  Here I was feeling good about a budget reduction and trying to find ways to march towards our FIRE budget (which is about 60% of my June "Excel budget") and these trips to the store were killing us.  Now that I had clarity on what happened I asked Mrs. iFreebies to go over the numbers with me.

Her reaction, well it looked the picture that accompanies this article.  OMG!!!  As I walked her through the monthly recap she was as shocked as I was.  We knew we went over as we prepared for our trip but didn't think we spent that much otherwise.  This has made us rethink our budget and how serious we have to get if we are going to get to FIRE.  Now that we are using Personal Capital we have a way to identify ALL of the expenses and reset our budget as we drive towards FIRE.  Now keep in mind FIRE is probably many years away but if we don't get this figured our we'll never reach it.

We have since sat down and worked out a true budget for July that we are going to try to stick to.  Once we knock down July we'll move to August and so on.  We have to get better at being more frugal or we will be slaves to the workforce forever.  That won't happen.  I'm still not sure how I will show these numbers on my monthly charts.  Maybe a separate line for each type of budget.  One for a fixed type budget and one for what we actually spent.  In time this should get to be close to the same.

Photo credit:  Gal Amar

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