August Budget Review
Monthly Review: August 2021 - 88.5% Savings Rate
Let’s quickly hit the notable moments from August:
Bought a house?
12 days in Los Angeles
Six Flags on a weekday!
Bday Party w/ Live Music
Fishing on Lady Bird Lake
Movie night at Brewery
River Float Trip
Local Dive / Live Music Spot
****As always, every category depicts what I spent, what I made, and how my net worth changed. Just me, not our household****
I remember writing as recently as July that I assumed we’d be living in our little apartment until at least the end of 2022.
Isn’t it funny how we make all these plans and then end up somewhere we could have never imagined?
When we got in this series of house sitting and needless to say, we loved having the space. If you don’t already know, me and Leslie both work from home in a 375 sq/ft apartment.
Leslie works 2ft from the bed and I take calls from inside a 30inch x 30inch 1960s phonebooth. We loved our location and mostly enjoyed living there but we could see our mental health improving by having that space.
The problem? Austin,TX had one of the largest increases in real estate prices in the country. It was a terrible time to buy a house or so I’m told. So why would I actually consider buying a house in such a bad market?
Reason 1: I had comfortably passed the Financial Independence mark and am still working which means that I can continue to save 75% of my income even with a decent size mortgage. Plus, my nest egg and reoccurring income outside of my W-2 could already support my lifestyle plus a mortgage even if I wasn’t working.
Reason 2: While real estate prices have gone up at a staggering rate, interest rates were historically low. I knew I could get a 2.6% interest rate with $0 down thanks to a Veterans Administration loan. Younger people may not realize how historically low these rates are. Take for instance a $500k house that was valued at $165k in 1985.
That means that housing is now 3x more expensive right? Not really.
In 1985 you may have paid 16% mortgage rates which means your mortgage payment (what really matters) would be $2,218. Today, that house which now has a 3x base price, would carry a mortgage payment of $2,000.
Wait…the house is cheaper now? Before you take into account property taxes, it is.
Obviously, those mortgage rates are extreme examples but what I do know is that I had an opportunity to get a historically low rate. At this point in my journey, it’s more important to lock in knowns and protect myself from unknowns.
Reason 3: It should make us a lot happier and can always be sold. As long as we’re working from home we want some space, when we’re not, who knows. Maybe we’ll sell then.
Reason 4: We believe in the future of Austin and want to try our hands at Air BnB’ing. These are the main reasons we decided to buy vs just rent a bigger place.
Now I’ll just leave you with a tease of a picture that got us excited and save the more thorough breakdown of our search for a little deeper in the breakdown.
Could this be home?
For a major portion of the month, we weren’t even in Texas much less Austin so there’s more to cover than just pondering about a house purchase.
As always, read on for the details.
After-Tax Income: $13,483.58
This month’s income came with over $1k of 401k match plus some variable compensation which made for a nice month.
On to the expenses
Expenses: $1,554.33
So twelve days in California, a trip to six flags, an Air BnB stay for a river tubing trip, and lots of local events, and I only spent $1,554.33. Let’s see how.
Let’s break down the expenses in detail.
Going Out: $152.12
I did a pretty terrible job of taking photos of our dining out while in California but I did get a photo of my most memorable meal.
This took place in a tiny unassuming strip mall but was one of the most delicious meals I’ve ever had. This Pakistani Cuisine jewel is called ZamZam market.
Stop what you’re doing, buy a ticket to LA, drive to Hawthorne and thank me later.
Night+Market was also a really solid meal, also had some good drinks with friends and of course some HEB (Texas grocery store) sushi.
The total break-down for eating out this month was:
Hotel Vegas: $8.00
Whistlers: $11.00
McDonald’s: $5.94
Mi Pandaria: $9.73
Ice Cream Sandwich Cookie: $2.75
ZamZam Market: $16.19
Terranea: $18.75
Night+Market: $30.00
Hotel Vegas: $3.08
St Elmo: $7.50
HEB Sushi: $13.78
Polvos: $10.40
Central Machine Works: $15.00
Groceries: $93.32
Another month of slightly higher grocery expenses thanks to being in Los Angeles and we also generally eat a little differently when traveling and you have no pantry to back you up.
Full grocery cost breakdown:
HEB:: $4.33
Randalls: $18.12
HEB: $30.40
Ralphs: $10.80
LA AFB Commisary: $29.67
Bills: $349
Yep, our rent is still crazy cheap. I’ve covered why this is in previous posts but basically, we put in a bunch of sweat equity to renovate the place that is family-owned, and in return, we cover all costs (insurance, HOA, utilities).
This is month ten in the little apartment and we’ll probably be here until the end of 2022.
The full set of bills were:
Rent - $275.00
Internet - $10
Spotify - $10
Car Insurance - $49
Netflix: $4.87
Travel & Entertainment: $103.50
Sorry if I sound like a broken record but I must always say, just in case it’s your first time reading, that this category is going to describe what I did that month and what I spent on like things this month.
I think it’s fair to say that you often pay for an event prior to the event actually happening. That means that I’m not saying I did all this for $103, but that is what I spent this month.
And even though it’s not really traveling, I’m going to give a little more info about the house search in this category as well.
Making Life-Changing Decisions on a Whim
For a few months, I had been studying this new truck coming out by Ford called the Maverick.
It’s a small truck that comes in a Hybrid variant that gets 42mpg. Thinking about buying a new vehicle was a bit of a shock for Leslie as I’m usually so….financially conservative we’ll say.
So when I then said, you know maybe I want an F-150 (more expensive) instead, she was even more shocked.
Then when I said, why don’t we buy a house… I think she was worried I might have cancer.
I already gave the reasons as to why I decided to buy a house up earlier such as my financial position, happiness, interest rates, etc earlier but now let’s talk about the hunt.
In Austin, people strike out at purchasing a home for months and months. So we knew that this might be nothing more than a thought experiment.
We spent a lot, like A LOT, of time on Zillow in the afternoons while house sitting Mr. Hugo in Los Angeles. We weren’t seeing much that excited us. Plenty of stuff that was fine, but nothing unique or that felt like us.
We finally come across one that is really neat and decide we’ll get a walkthrough remotely and try to put an offer in, the realtor agrees and then changes their mind. We were crushed.
For days we searched and searched and just never saw anything exciting, so I started to accept the fact that maybe it just wasn’t going to happen.
We return to Austin and have dinner with a family friend who is a realtor on a Wednesday. Then on a Friday, we head to Six Flags and decide to check out neighborhoods that night. Leslie finds a house with a beautiful-looking kitchen (but we had been trained to distrust the photos based on prior experience) and we put it on the list to drive by.
After driving by a few houses that were fine (again, not inspired), we drive by this one in South Austin. We walk up to the front door and sure enough, the key is in the door. We assume the realtor is doing a showing and open the door.
It’s beautiful, it’s the exact layout we’d been hoping for, and…no one is there. So after a quick look, we talk about it and decide, we gotta make a run at it.
After a deeper look, it also had the only part of a garage I had found that could fit a 4-door F-150. Nice bonus.
Oh and that shower…
Whooo I could see myself cooking up some mean meals and hosting some great parties in that kitchen.
So after the house opened up for offers on a Friday, we submitted our best and final offer on Monday….and THEY ACCEPTED THE OFFER
Now you’ll see some expenses in the miscellaneous category that deal with getting this bad boy inspected. Getting an offer accepted is certainly a major milestone, but it isn’t the finish line.
Stay tuned for that
12 Beautiful Days in LA
We had a great little trip in early July and decided to come back for another 12 days to help out our friend Mike with house-sitting little Hugo.
It further pushed us to look for more space as we fell in love with being able to work in two separate rooms.
It was also just nice to kind of slow down. Being out of town meant that we weren’t being invited to a lot of things and could just enjoy hanging out, hiking, and working out without a lot of distractions.
Who wouldn’t travel across the country for this little nugget? Well, I would for either of the two beauts pictured here.
It was great weather, but isn’t it always in Los Angeles? I can see why people love it there but I will say the Taxes mean that I’ll have to leave it to trips and not a full on move.
Left the Ocean for more Water
It seems every month comes with live music and some activity on the water.
The first was for my buddy George’s bday where we went and floated a river between Austin and San Antonio. The water was chilly but it felt great out in the sun.
It was a slow float but we had about 10 people tied together and had some fun more sporty spots towards the end.
Then I got to try out my buddi’s new fishing rig. This little two-person jewel can be loaded by one person and the little trolling motor takes you wherever you need to go.
Unfortunately, we didn’t catch anything. I’ll be honest, I’m used to ponds that I grew up with and just hadn’t figured out the fish here just yet.
Living Life like the Kid I am
I freakin’ love roller coasters. I would legit go to six flags multiple times a week if I lived closer and have had a blast with this annual pass I got.
The annual pass comes with unlimited admission, free parking, and even food.
You get one “snack” and one dinner each day. That snack, can be a massive funnel cake or something simple like popcorn.
The dinner we normally go with is the double burger from Johny Rockets. I’m not going to pretend this looks like the greatest burger but it’s actually pretty solid.
What else did I love as a kid? F-150s.
While I was obsessed with the new Maverick for a bit, I made a mistake. I test drove a 2021 F-150 and fell in love.
This is the exact truck I plan on getting. It’s a 2021 F-150 with STX package, 360 camera, safety package, and some towing tech.
I have rationalized this purchase because the used car market went nuts. Also, the pandemic has caused supply issues with new vehicles and you’re seeing mark-ups upwards of $5k because inventory was so low.
That coupled with finding a dealer who can get me the truck for 3% below invoice and the fact that the truck can get 26mpg has me convinced that it’s not the worst decision I’ll ever make.
Lastly, what kid doesn’t ever dream of being a rockstar. I know I have nowhere near enough talent to make music but I consume as much live music as possible.
The first stop was at the recently reopened Continental for a great house band.
The next bands we saw were a few local bands that were playing for my buddies birthday party.
The full list of expenses for travel and entertainment were:
George’s Bday AirBnB: $60
Tube Rental: $18
Breland Concert: $25.50
If Old Town Road got stuck in your head, check this guy out
Miscellaneous: $841.47
Welp…. We’re trying to fall into the house owner trap of poverty as fast as possible.
We haven’t even gotten the offer accepted yet and we’re already shedding money thanks to these inspections.
Here’s the complete list of random purchases this month:
Home Depot: $5.44
Sams Membership: $22.50
Marshalls: $32.45
Navy Federal Union: $12.37
Realtor Class: $232
Fabletics: $65.21
Sunscreen: $4.50
Going Away Gift: $10
Plumbing Inspection: $187
House Inspection: $225
Termite Inspection: $45
Gas: $14.74
We were barely home so not a ton of driving.
Big Picture: Net Worth Increase $43,885 to $974,682
Another solid jump this month. This time the market gave another solid push of $31,956.
On top of that, I saved $11,929 for a total net-worth increase of $43,885.
So wild to see two years’ worth of expenses being covered in one month of net-worth increase.
