Welcome to my May 2019 Expense Report. Above is a visual breakdown of my monthly expenses.

It’s fun to read my previous month’s expense report, and gander at my optimistic expectations for each coming month. Hopefully my optimistic expectations and future guidance begin to materialize, but each expense report has been a reality check for me.

As I look over my personal finance spreadsheets at the end of each month, I’m realizing how impactful my car purchase has been to my savings rate, lowering my savings ceiling due to fixed monthly payments and insurance costs. But that car has provided me a lot of freedom and fun, even if I’m only driving it once or twice a week.

Even more catastrophic to savings is needing to pay rent in a high cost of living area! As my lease term comes to a close, finding a more affordable place to live will be my top priority.

In all, May ended up being a significant rebound from the abysmal -24% savings rate in April, (which was only so low because of the down payment on my vehicle, but still). I ended May with a solid savings rate of 36%.

I spent more than usual this month, but that increased spending was countered by a third paycheck hitting my account in the month of May. My increased spending consisted of making an additional car payment, and paying the remaining 5 months of my 6 month auto insurance policy in full.

With no monthly auto insurance premiums to pay, I’m shooting for a feasible 40% savings rate for the next three months.

As of now, my savings rate is severely hampered by the financial commitments of monthly rent, utilities and vehicle related expenses. Given these items, and without accounting for food, my top possible average monthly savings rate is about 53%.

Impact on Savings: Having a Car

What if I didn’t have a car? All else the same, how little could I spend and how high would my “default” savings rate be, if I didn’t have to pay for the burden (and joy) of a vehicle?

Without my car purchase, my “default” non-discretionary non-food savings rate would be at about 66%. As shown in the blue cells, the decrease from 66% to 53% has a very measurable effect on years to financial independence. Looks like at my current rate of spending, having and paying for a car is increasing my time to retirement by about 5 years, extending my working career by 50%!

This is a bit oversimplified, as eventually the largest chunk of this car spending will disappear once your car is paid off and you own it outright. Additionally, there’s no requirement to spend $15,000+ buying and financing a vehicle. Regardless, more about this in my Years to FI article, inspired by Mr. Money Mustache’s “The Shockingly Simple Math Behind Early Retirement.”

Once the car is paid off, the effect on my “years to FI” number and my savings rate will be less drastic, but this is the cost of not only buying a vehicle and paying for it over time, but also monthly insurance and fuel costs. Still, as discussed in my april expense report and my general car purchasing post: financing vs paying in cash, I believe financing my vehicle was the correct choice, thanks to the low interest rate I received.

The even better choice would be to buy a much cheaper vehicle with cash.

With my new savings ceiling of about 53%, it’s gonna take some determination to hit my target savings rate of 40%. By minimizing unnecessary spending, and with a few weeks of smart and effective meal prep, I think 40% is easily achievable.

For now, back to May’s line items:

Home/Rent – $1228

Rent – $1083
Internet – $116
Other utilities – $29

Auto – $1505

Car Payments – $719
Auto Insurance – $478 (paid for 5 months of a 6 month policy in full)
Gasoline/Fuel – $53
Rental Car- $255 (about $150 reimbursed by my company)

Transit/Travel – $79

The only expense in my transit/travel (not auto related) categories for the month was the purchase of a $79 bike lock. I think it was overpriced, but damn the thing is functional! The lock folds up when not in use, and conveniently rests in a little case attached to my bike frame.

Health/Wellness – $19

Haircut – $19

Sustenance – $327

As for food, I spent just under $100 at Chipotle alone this month, literally $99! A personal record for me.

Daily Living – $0

From $209 in Amazon purchases in March, to $48 in April, to $0 in May.

Entertainment – $316

One of my favorite parts of May was a trip to Arizona I took for work. I spent three days at a conference, and then visited my brother over the weekend! Another miniature quick weekend vacation, made possible by attending a conference nearby for work! How lucky am I. And guess what I did in May… in Arizona…

Yea, my brother and I went skiing! If I have a day or two off, and skiing is a possibility, you can bet that skiing is going to be a part of my plan, ESPECIALLY somewhere where you absolutely wouldn’t expect to be able to, like fricken Arizona.

It’s quite a feeling, skiing in a T-shirt in 60 degree, sunny Arizona weather. I actually did take a tumble that hurt pretty darn bad. It turns out falling onto ice crystals at 25 mph is a bit unpleasant. In future spring skiing endeavors, I plan on wearing a long sleeve shirt, no matter how warm it gets!

Misc Expenses – $3

My miscellaneous expenses came to a grand total of $3 for the month of May, thanks to a recurring monthly donation to the Pete Buttigieg campaign.

Total Savings – $1818

So that’s it! A high spend month offset by a third paycheck.

As for my final savings rate, I clocked in at 36% for the month of May. As for June? I’m predicting a 40% or greater savings rate. Reasonable guidance, or foolishly optimistic? We will see…

May Purchase of the Month:

Rental car and company flights for weekend fun – Thanks to the flexibility and generosity of my company, along with the timing of the conference I was attending, I was able to stay in Arizona for a few extra days for fun, with little additional cost to me. I changed my flight from Phoenix from Friday night to Sunday night. Prices were slightly cheaper on Sunday, so my company didn’t mind!

Nothing wrong with courteously bending the rules a little bit (ask permission from your boss first), especially as this saved both myself and my company money (the daily rental car rates were so expensive that booking weekly made more sense.

The three day car rental during my business trip cost $255 in total. This was a weekly rental rate.  I cut into that by using that same rental car an additional 2 days for personal use. The final result? I paid $100 for my personal use of the car, and my company paid $150 for my business use of the vehicle.

That rental car allowed me to visit my brother and stay at his place (no paying for an expensive hotel) and also allowed me to go skiing! My favorite activity in the world.