# Mystery of the Mustache



## FU-MONEY (Feb 17, 2015)

Hey guys,

This might run a little long as I've been a lurker for awhile and felt that a money diary would help me stay on track. first a little history...

My money Diary I believe will be a little different than most of what I read on here which is "track net worth, detail spending/saving", etc, etc" I'm looking for something deeper and perhaps longer lasting. I hope to accomplish a complete lifestyle change that lets my wife and I get by on less and be happier doing it. I came to this realization that there must be a better way back at the beginning of December 2014 (not so long ago), you see I'm currently 30 years old and throughout my 20's I did the typical "save 10%" of your income and play with the rest, even though I was working in low paying jobs (retail, restaurants, etc) My wife and I ended up saving enough for a meager down payment on a 1 bedroom condo in BC by the time we were 26, having done this we felt we were on the right track so we started to slack on our already minimum savings and indulge in extra luxuries, as before the point of savings was to buy a place to live and now we didn't have an immediate goal. Long story short we spent the next 3 years living "high on the hog" as they say.... dinners out 3-4 times a week, fancy vacations (Maui, Oahu, Cuba, Disneyland, Las Vegas). Then the unthinkable happened I got out of retail, found a grown up job and just this last year I found myself making $60,000 gross for the year. Combined with my wife's pay we all of a sudden had an income which was 2500/month and ballooned up to $5500.00 per month (after tax) and we just kept spending more....

If the trips and constant nights out weren't enough, I bought a used car with 0 money down and financed it over 8 years @ 7% interest. Then in November 2014 we decided our Kitchen needed sprucing up, and we "needed" a new fridge and washer/dryer, this was all right before Christmas which already comes with a high price tag of it's own. Feeling out of control and constantly with a zero in my savings account I decided we need to snap out of this and find a better way. That's when I started reading online forums about the subject and found you lovely people, since reading old posts I feel like I've had a 3 month crash course in Finances... It also led me to a site written by an interesting man in Colorado

http://www.mrmoneymustache.com/

I quickly became obsessed and read every article and got my wife on board too... he likes to call people who blame everyone else for their problems "complainypants" which admittedly I was/am, he also had a posting about how to change it, and the first step is admitting "you suck" which I'm here to proclaim that I do in fact suck so far(now time for a change)

So now that I have a little history about what led me to post here let me look to the future and what I will make this thread about, I will be detailing my monthly budget (saving, spending, investing etc...) But I will also be getting into detail with what my wife and I are doing for entertainment or vacations or things that seem small but are big wins in our life. Our goal currently is to buy a detached home in BC with at least a 20% down payment, where we live and will continue to live we can reasonably expect to pay $500,000 (high side - low end probably around $450,000 but everything will have worst case scenario built into it) for a detached single family home, which makes our goal $100,000 liquid cash/equity in condo. Longer term goal Early retirement/FI

Onto the numbers (Keep in mind I'm not going down to exact pennies here as a little rough math will be enough to keep me honest)

Wife's take home pay
$1100 - Bi Weekly

My take home pay (job includes a commission component)
15th - $1350.00
30th - $1350.00 + approx. $600 commission after tax(this is based on the lowest commission I have earned in a month to date spanning 16 months)

Total income = $5500.00/month (again most months it is higher but with commission based jobs best to go with a low number and save the rest)

Consumer Debt
LOC - $2200.00 (Paying off $200/month)

Housing
Mortgage - $652.00/month ($147,600 owing - assessed value $174,000)
property tax - $1200 / year
strata - $260/ month
Cable/internet etc - $84.00/month
hydro - $35.00 / month

Transportation
Vehicles 
2007 Nissan Versa paid off
2012 Chrysler 200 LTD - $14500 left on loan
Combined insurance - $330 / month
car payment $132.00 bi-weekly
Gas - $150.00 / month

Lifestyle
Groceries - $400.00/ month
wife allowance - $150.00 / month
My allowance - $150.00 / month
Cell phones - $130.00 / month

Investments 
RRSP - $200/month


So our short term goal is $100,000 in 2 years time to buy a house, we will use assessed value as our target sale price of the condo and minus approx. $8000.00 in realtor fee's when we sell meaning we currently have $18,400 in equity which means a shortfall of $81,600 to be saved over 2 years.

We currently have sitting in cash or TFSA investment accounts a total of $4431.94 (all saved since the end of December I think this money mustache guy is onto something - this doesn't include a trip which was paid for to Scotland two weeks ago I know stupid luxury we shouldn't have bought but the wife's grandpa is 86 and we have limited time to see him statically speaking, also I hope to make this trip a future post about how to enjoy a destination for not much money).

Our plan to achieve this goal is to develop hobbies/interests that don't include spending money, a few success stories from the last month include...

Fitness - I've never been one for the gym, blessed with a metabolism I suppose however begging of December found myself weighing in at 205lbs (6 foot tall) and is was basically all belly fat, my wife and I have started walking, combined with no more eating at restaurants, and pulling some dumbells out of the closet I'm proud to report I'm at an optimal 185lbs, not only do I feel better but I have more energy to want to cook at home saving money on restaurants, and I fit back into much of my work clothes saving me money on wardrobe.

Cooking/Baking - My wife and I have started a sunday crock pot tradition where we pick a crockpot meal to cook for dinner that lasts some of the week for work lunches (pulled pork, vegetable and chick pea curry, buffalo chicken breasts) Much healthier tasty and way cheaper than eating out.

Using the Public library - We have went there to rent dvd's instead of using the on demand service from Telus - just by going there we noticed books we like and my wife has now read 3 books in the last month (hours of free entertainment)

I hope to make this an ever expanding list as we start to get back to basics and enjoy little things which we all used to enjoy as kids.

The real hard numbers to achieve our goal- We technically started this for ourselves at the beginning of January so it will be January 2017 when we hope to reach our goal, by my calculations (and I'm terrible at math) not taking into account any interest gains on investments....

Current equity - $18,400
Equity gains from paying mortgage - $7800.00 ($325.00 principle paid off over 24 months)
Current Savings - $4400.00
Equals - $30,600

We need to save $69,400 divided by 22.5 months (since January and half of February are included in the savings above)

Which means a monthly savings of $3080.00 roughly.

Currently our savings is everything leftover from our budget above so $2395.00/ month (which doesn't include the equity we are getting each month by paying the mortgage) so our savings rate should get us there in at least 2 years (or maybe just short)- I do have unexpected windfalls coming which I don't want to count on (potential bonus at work and Income tax return) which will all go to this savings as well.

So for those of you who actually read through all this drivel I thank you, if anyone notices anything major missing from my plan or has any other simple living tips or tricks you would care to share by all means, I hope my posts in the future aren't quite this long but it was a lot of topic to cover.


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## BoringInvestor (Sep 12, 2013)

Congrats on recognizing a need for a change, taking responsibility to make the change happen, and for starting a thread to keep yourself honest, on track, and to act upon advice!

First question - your wife gets paid bi-weekly, so she gets paid 26 times per year. Shouldn't your monthly take home pay be ~$5,680 (($1,100 x 26 / 12) + $1,350 + $1,350 + 600)?
Next - your expenses add up to ~$3,900 / month. Where does the rest go?


Your post is a little unorganized, I'd suggest reformatting it (to make it easier for others to read and comment upon) by breaking it down into:
a) who you are, and what you want to accomplish
b) income and expenses (accounting for all your income)
c) your net worth calculations, including investments
d) goals, and your plan to achieve them


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## FU-MONEY (Feb 17, 2015)

BoringInvestor said:


> Congrats on recognizing a need for a change, taking responsibility to make the change happen, and for starting a thread to keep yourself honest, on track, and to act upon advice!
> 
> First question - your wife gets paid bi-weekly, so she gets paid 26 times per year. Shouldn't your monthly take home pay be ~$5,680 (($1,100 x 26 / 12) + $1,350 + $1,350 + 600)?
> Next - your expenses add up to ~$3,900 / month. Where does the rest go?
> ...


Thank you for taking the time to read and offer some feedback, I'll leave up the original post in it's unedited glory as I'll want to come back and look at it sometime in the future but here's the point form basics

Intro

We are a couple that's been married 3 years, I'm 30, she's 31 neither of us have post secondary education. Our goals in order are first to save up 20% down payment to upgrade from our condo to a detached family home. The second goal is early retirement as defined by the Mr. money mustache blog.

Income and Expenses (I'm going to break it down a little simpler than I have it on the original post)

As a married couple we still keep a fair amount of our finances separate so it may be a bit confusing but I'll try my best to explain it.

Joint accounts
"House account" (we each contribute to this and it pays for mortgage, strata, property tax, cable internet phone)
Savings (just good old cash savings usually use this to fund trips, or kitchen reno's, appliances, in the past, now it'll actually be as the name implies savings)
LOC - currently minus $2455
Mortgage - $147,760

My budget paid bi-monthly

15th Paycheque - $1390

House account - $300.00
Joint savings - $275.00
Car payment - $131.00
car insurance - $200.00
spending allowance - $65.00
Line of credit payment - $50.00
RRSP - $50.00
Cash savings (personal HISA)- $250 

30th Paycheque - ($1390 + 600 commissions)

House account - $300.00
Joint savings - $275.00
Car payment - $131.00
Cell phone - $40.00
Spending allowance - $65.00
Groceries - $200.00
RRSP - $50.00
Line of credit payment - $50.00
Cash Savings (personal HISA) - $800.00

again since some of my pay is commission based I used my worst month to date as my baseline any extra commission and any extra money within my budget goes right into savings. Also as an outside sales person my gas is covered for work I haven't purchased gas in over a year which is why it's not in my portion of the budget.

Wife's budget Bi-weekly

She's new to biweekly (been at her new job 4 months) so we are still kind of on the bi-monthly schedule the two extra pay cheques she gets a year will go entirely to savings.

she makes $1167.00 per pay cheque

1st paycheque of the month

House account - $300.00
Joint savings - $275.00
Groceries - $200.00
Line of credit payment - $50.00
Gas - $60.00
Spending allowance - $75.00
RRSP - $50.00
Cash Savings (personal HISA) - $150.00

2nd pay cheque of the month

House account - $300.00
Joint savings - $275.00
cell phone - $72.80
Car insurance - $130.00
Line of credit payment - $50.00
Gas - $60.00
Spending allowance - $75.00
Cash savings (personal HISA) - $150.00
RRSP - $50.00

Current account balances
Liabilities
Mortgage - $147760.00 (home value $174,000)
LOC - $2455.00
Car Loan - $14516.00

Assets
Joint savings - $329 (cash)
Wife personal savings - $1130 (cash)
Wife RRSP $1100 (mutual fund)
My TFSA - $2171 (half cash half mutual fund)
My RRSP - $3300 ($500 cash/ the rest mutual fund)
My HISA - $800.00

Also I have a DCP which is fully vested and I'm maxing out for employer contributions (my 3.25% gets their 5.25%).
Currently have $9200.00 (I'm not sure if this counts towards net worth?
Also with work, is an employee share purchase plan which I signed up for the minimum and currently have $250 which is not really anything.

So to summarize our immediate goal is to have $100,000 by January 1st 2017 to use as a down payment for a single family detached home. This means I will be tracking liquid investments/cash and existing equity to get to $100,000. My net worth isn't as important to me as I'll focus on that more once my first goal (home ownership) is met. so currently and the chart I'll be updating throughout this to track progress is this

Condo equity 
$147760 owed
$174000 low end estimated sale price
$26240 equity before Realtor fees (estimated @ $8000.00)
$18240 - equity after paying realtor

Total liquid savings 
$4432.00

TOTAL SAVINGS SO FAR
$22,672


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## nobleea (Oct 11, 2013)

FU-MONEY said:


> Also I have a DCP which is fully vested and I'm maxing out for employer contributions (my 3.25% gets their 5.25%).
> Currently have $9200.00 (I'm not sure if this counts towards net worth?


I would include the termination benefit of the DCP. They usually provide it on the yearly or biannual statements. It's the amount that you would get (and would transfer to an RRSP or LIRA) if you were to leave tomorrow.

Are there any land transfer taxes you need to take in to account on the sale of your condo? Are you located in GVRD which could see a 10% drop over the next 2 years (and totally wipe out your equity)?


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## FU-MONEY (Feb 17, 2015)

Thanks for the tip on the DCP I believe in reading the terms if I quit/get fired I'm now entitled to put the full amount into a LIRA im fully vested so the entire amount is now in my name but definitely something to consider looking into.

as for location I don't see value going down that drastically units in my building/area (GVRD yes, however in the fraser valley) have been consistantly selling in the 170,000 - 185,000 range for the past 6 years that I've been watching. Land transfer taxes will be something to consider closer to our goal but as I've said I have underestimated most calculations (savings rate, income, selling price, didnt include windfalls such as potential bonuses, and tax returns). I will do some research on what exactly to expect for selling costs as I went with the standard % the bank tells you to expect to payout in closing costs (roughly $8000 in my case)


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## PrairieGal (Apr 2, 2011)

There is a Journal section on the MMM message board also. Not saying you aren't welcome to journal here, but that forum is also good.

Congrats on getting your finances turned around, and getting your wife onboard.


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## My Own Advisor (Sep 24, 2012)

Also, another congrats here, focusing on your finances. 

Your goal to have $100,000 by January 1st 2017 seems aggressive but I figure you always need these types of goals to have some focus and discipline. Just don't forget to have some fun in life along the way.

Good luck and I look forward to reading about your progress!


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## brad (May 22, 2009)

PrairieGal said:


> There is a Journal section on the MMM message board also. Not saying you aren't welcome to journal here, but that forum is also good.


Based on my previous trawls through the MMM forum, I think it's safe to say that most of the people posting there take MMM's "badassity" too literally, and it mostly ends up being a pissing match of "more frugal than thou" machismo. MMM is a cartoon character; the real man behind it (who happens to be Canadian) is much more reasonable and less dogmatic than the character he created. Unfortunately most of the people on the MMM forum don't seem to understand that. "What, you're carrying $5,000 in credit card debt? Sell your car immediately and start using a bike! What, you can't bike to work? Get a different job!" That kind of thing. It's not helpful.


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## My Own Advisor (Sep 24, 2012)

100% agree Brad. I don't think many people realize he's having some fun with what he does. I'm not saying some MMM principles aren't worth listening to but some folks treat this frugality stuff like a cult. To each their own I guess!


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## Jon_Snow (May 20, 2009)

I post a fair bit on the MMM forums - as someone who "walked the walk" on my way to a fairly early retirement, I try to encourage those who are following me. It IS possible to retire early, but for many on the MMM forums, most don't bring in enough income to crank up their savings rates to levels to allow for retirements in the 40's - there are a lot of impressive examples of VERY frugal folks there - luckily, I was extremely well paid and was as frugal as can be for a ten year period. That was my recipe for ER...


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## My Own Advisor (Sep 24, 2012)

I think things have worked out for you Jon  Well done.


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## Tawcan (Aug 3, 2012)

Congrats on focusing on your finances and realizing what you need to do. I love hearing that you're taking care of your health as well. Good job! What kind of investment are you doing for the TFSA?


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