Hello, friends. Hope the new year has been treating you well.
*Cries into bowl of ramen* Just kidding, almost.
Bad news first. My trial separation is becoming a permanent one. After lots of thinking, time apart, and therapy, the differences in our life dreams might be deal breakers. There have been some devastating conversations to work to that realization, but overall we’re still on good terms. I can only hope it stays that way– this breaking apart is not for lack of love. I adore the man. I don’t want to do any of this separating and moving towards divorce– I just don’t see a way to resolve it together. I’d be fine staying together and living my dream vision of life, and he is in the same boat, but those visions have become vastly different. It’s a weird place to be when every option seems like the wrong one.
Some hours have been spent planning on my part. There may be people who would roll their eyes at my focus on planning versus the emotional stuff, but doing this helps me sleep at night (although, the Excel file name is “F*ck This Sh*t, I kid you not). Full transparency, I started running numbers probably 1-2 weeks after the word “separation” even came up. I don’t like to be caught off guard, and I wanted to be sure I could support myself if the time came. Even though I was having an emotional breakdown, this gave me one little bit of comfort. I should be ok, even though I don’t know how expensive divorce would be in our situation. I think we’re so far pretty much on the same page and aren’t already fighting over who gets what.
FIRE is still something I’d like to pursue, but it probably won’t be the priority in 2023, so I’m changing my strategy a bit. What I don’t want to do is sock away so much money into investments that I don’t have anything left to live life a little. I’m already depressed and hiding in a basement most of the time– I don’t want money to be an excuse to keep doing that.
What I’ll try this year is Ramit Sethi’s Conscious Spending Plan. Is it going to be life-changing as far as investments go? Not really, but I went ALL IN in 2021 (read: 50% of DINK combined gross income), and I feel like those accounts are in good shape.
Ramit’s Conscious Spending Plan is a lot like the 60% Solution, which I believe was the first budgeting method I used when I first become aware of personal finance as a life skill back in 2011. 60% fixed expenses, 10% long term savings, 10% short term savings, and 10% investing (all based on gross income). And that was a great place to start.
The Conscious Spending Plan allows a little more wiggle room to customize. For instance, Fixed Costs are 50-60% (calculated from take-home pay). Depending on your income, that can be a big variance. Here’s how mine are broken out (mind you, I’ve never had to do this as a single person, so I may be missing some expenses for an “oops” moment later):
50% Fixed Costs (The Essentials: housing, transportation, groceries)
25% Guilt-Free Spending/Wants (I’d like to have some fun this year and get out of aforementioned basement)
15% Investing (I bumped this up myself to align more closely to my priorities– I LOVE investing)
10% Savings (Emergency fund this year, and I’ll probably add in a car fund next year)
A lot of these are estimates– I don’t know for sure what rent/utilities will be, but I think I’m probably close. Also, again, I don’t know what I’ll end up with when I split assets with my husband.
For Guilt-Free Spending, a lot of those things are not consistent monthly expenses, so I’ll probably utilize a sinking fund for those amounts. Some might say this overcomplicates things, but I’m used to having one already, and I can put the $16.67 for clothes (amongst other Wants) in the fund to wait until I need it for, say, $100 running shoes or something. Travel is another good example. While I’d LOVE to jet off somewhere each month, that won’t be happening, so it can sit outside of the checking account until I actually can use it.
Investing will be my 401(k) to the match, Roth IRA maxed out, and brokerage account (leftovers). Done.
So that’s where things are. I’ll plan to update monthly budgets like I did before and share what I learn about creative ways to save in a high cost-of-living area as SINK (*continues to cry into ramen*). My grocery bill, for one, has seen a huge shift. Sadly, the nearest Aldis are in iffy neighborhoods or far enough to use more gas than makes sense. My gym membership was $35/month in my hometown….. it’s now $147/month… But I’ll figure these things out and where priority really lies.
All in due time. I’ve been doing my yoga, talking with friends, and trying to take time to rest and not put pressure on myself to think too far ahead. Again, one day at a time.
Have your financial organization methods changed at all this year?
-K