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Naked With Cash: Jake and Allie, January 2014

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Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs).

For more information, read this introduction.

This year, we have four participants who will share their financial reports, exposing the results of their financial choices. Each participant is paired with one of our Certified Financial Planners. The experts will provide insight and guidance that will help our participants take their finances to the next level by the end of 2014. Learn about this year’s participants and experts.

Jake and Allie are 47 and 42, respectively. They have no children, but they do have pets. The two make a combined $140,000 a year and hope to retire early when they are 55 and 50. They love to travel, and plan to move to the mountains upon retirement. Allie is interested in starting a photography business and Jake wants to start his own business as well. (Read their update from last month.)

After reading Jake and Allie’s comments, you can see a Google Hangout they participated in with Neal Frankle. Neal Frankle appears courtesy of Wealth Pilgrim and MCMHA.org.

Jake and Allie’s Net Worth Statement

Jake and Allie’s Income Statement

Comments and analysis from Jake and Allie

It’s hard to believe that January is over already. We are finding it very interesting to keep track of every dollar we spend to accurately spreadsheet our spending. Something I think everyone reading this can take away: small expenditures add up.

For this month, we specifically chose to track our vending machine expenses at work. We don’t use the machines a lot, and we still spent $43. That’s a trip to the grocery store or three meals at our favorite Mexican restaurant. Over a year, that’s $559. That’s something to think about when you’re trying to reach a goal of retiring early — or just trying to save a little money.

General expenses: Some of our expenses are a little higher than usual for January. We took a little weekend trip after New Year’s since we didn’t travel at Christmas (other than a one-day trip for riverboat gambling). That trip involved some dining, activities, shopping (accounts for higher clothing expense), and a few hours at the casino. No, there isn’t a pattern there. We don’t gamble a lot; we usually just gamble on vacation, depending on where we vacation.

Airfare expense: The airfare expense is for a flight to board our cruise. We paid for the cruise last year. Happy 19th-20th anniversary to us! (Our cruise falls between the two.) Allie spent some time watching the flights to get the best deal. There are not a lot of deals when flying over a holiday weekend, but waiting until within 30 days lowered our cost about $150. A holiday weekend also made it useless to try to use our airline miles.

Fuel expenses: These are a little higher with the weekend trip and a business trip that Allie took and tied to a side visit to her parents. Instead of taking the company car, she chose to use her own vehicle, pay for the fuel, and collect the mileage for private car use for the business portion of the trip. That will show as an income entry next in February.

Taxes: Housing property tax falls in January, so that’s an additional expense for January.

Pet fees: $180 of this was for lodging the pets during our weekend trip.

An added expense that Allie didn’t have before was for three prescriptions, none of which are generics, so they cost a little more. All are allergy-related, and she enjoys pointing out that moving from the South would alleviate both the allergies and the prescription costs.

In January, we spent 53% of our take home pay. This is higher than we want to make a habit of, but it does include the yearly housing property taxes and airfare. If you subtract those from the total, that brings our percentage down to 35% of our take home pay. Again, it’s interesting (and enlightening) to track these numbers.

Allie spent almost every day working this month (unfortunately for no extra income, since she’s salaried), so she has not made any progress starting her photography business.

Answer to question from last month: Allie was originally planning to pay off the SUV auto loan after a few months. The interest rate was dropped to almost nothing in exchange for extending the electronics warranty, so we decided to purchase the warranty. Given a recent electronics incident with the car Allie had before, we felt this to be a good idea. With the almost non-existent interest rate, Allie decided to keep the auto loan since it’s not really costing her anything. It also helps her credit score since its solely in her name.

February brings the cruise that we are excited about. It’s paid for, so our only expenses there will be for transportation, parking, tips, and anything extra (food upgrades, drinks, gambling, excursion at destination). There may also be a few clothing purchases for the trip. Beyond that, we expect the latter part of February to begin a more normal view of our spending.

We were asked to speak about tax preparation. We decided a while ago that we would rather get money back (and, yes, I know I’m giving the government an interest free loan), so we have extra money taken out of our check for both state and federal taxes. This hopefully covers any profits there maybe from stock sales. We won’t have all of our tax documents until the middle of February, and we normally don’t file taxes until some time in March.

Hangout with Neal Frankle, CFP

Neal Frankle helps Jake and Allie tackle their tax planning, and they talk about more effective financial planning in a short period of time. They also look into some of the revelations Jake and Allie have had after spending a little more time conscientiously tracking their spending.

Feedback from Luke Landes

Demanding day jobs, like Allie’s this month, can certainly get in the way of making progress towards entrepreneurial dreams. I can understand how progress towards personal projects can be slow. The day job, providing your steady income, is the urgent need, even if following your desire to start the photography business (and the animal boarding business) is more important from a life fulfillment perspective.

By the time this article will be posted, you’ll have most likely returned from your cruise. I hope it was enjoyable! You’re certainly in a financial place where you can enjoy travel and non-habitual gambling.

You’re not concerned about giving the government a tax-free loan through the process of paying so much income tax through withholding throughout the year that you get a check when you file your taxes. And that’s fine. If your spending was cutting close to your income, I’d be more concerned about keeping more of your money in your pocket and optimizing your withholding. Your cash flow doesn’t need the fine tuning. The choice regarding the auto loan seems to be the right decision for you, too.

Updated February 26, 2014 and originally published February 25, 2014. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 10 comments… read them below or add one }

avatar Donna Freedman ♦95 (Newbie)

Those vending machine expenses really DO add up — you just don’t notice it because it’s “only a dollar” and you’re really hungry.
Do you now take snacks and/or drinks to keep at your workplace?

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avatar Jake and Allie

There seems to be an issue with the data. I believe a few rows have the wrong headers.

Multiple rows have the wrong categories listed.

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avatar Luke Landes ♦127,550 (Platinum)

I’ll look into that. The template was set up with your first report and then if categories are different in subsequent reports — anything added or anything in a different order — the template no longer works and I have to look at it manually. And I probably missed something.

You also had a category listed and counted twice in your submission so the totals won’t match what you submitted.

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avatar Jake and Allie

Thanks Luke, Yes there was some movement, we added a couple things and sorted them alphabetically which may have caused the issue. We will most likely have the same issue with feb data as we added and resorted the rows again. We will try to stop that :)

Reply to this comment

avatar Luke Landes ♦127,550 (Platinum)

It’s OK — you can do what you have to do to get your reports the way you want them. I’ll just be more cognizant and triple check. The income report should be correct now.

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avatar Fred

Interesting reading. I’d like to review my finances in the manner shown, a nicely laid out Net Worth Statement and Income Statement – what app(s) are you using to gather and present this info?
Thanks.

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avatar Laura

I can’t speak for every participant in the NWC series, but we use Mint.com to collect all our data, then good old fashioned Excel to input all the categories manually. Google has a free spreadsheet program if you don’t have Microsoft Office.

Luke,
I think it might be neat if you made an Excel template available through your site. You really do have great formatting on your statements. Why not share with the world?

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avatar Luke Landes ♦127,550 (Platinum)

That’s a great idea, and I’ve had multiple requests for that this year. The last time I shared my templates was several years ago, and the Excel templates have gone through some improvements since then. I’ll have templates available for download next week, and I’ll have Excel and Google Doc versions ready to go.

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avatar Rick

Luke, did you post those templates or did I miss it? Please direct me to them if they are available. Thank you!

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avatar Jake and Allie

Hi Fred. We are keeping track of our data in spreadsheets on google docs. Jake is the one doing the spreadsheets. We are doing them on a daily basis which really doesn’t take that much time. We are just using the receipts and text messages/emails to keep track.

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