We were $668.22 over budget this month at a 4.59% annualized withdrawal rate. Our kids return to school in August, and there are always associated costs. We know these are coming, but we never know how much they will be. This year they totaled $539.82, and $334.33 of that landed in the budget. That’s normally the kind of thing the uncategorized sinking fund is meant for, but it ran dry and now there’s no buffer left for September. Other categories ran over as well to a lesser degree – groceries, SimpliSafe, phones, and water.
Income
4% Withdrawal: $4,511.08
Expenses
Total: $5,179.30 Withdrawal Rate: 4.59%
| Grocery Store | $1,073.28 | Long term we expect this to settle out closer to $927/month. We were still reestablishing some grocery items this month. |
| Uncategorized | $834.33 Total Spending: $956.58 Starting Sinking Fund Balance: $122.25 Ending Sinking Fund Balance: $0.00 | This is normally a $500 deposit to the uncategorized sinking fund, and then the uncategorized spending is paid out of that fund. This month the sinking fund didn’t have enough to cover the spending, so we had to put $834.33 in the budget. Major spending groupings are: $539.82 – school supplies, fees, and activities. $286.57 – kid money movement through our accounts. |
| Discretionary | $500.00 Total Spending: $949.25 Starting Sinking Fund Balance: $4,719.12 Ending Sinking Fund Balance: $4,269.87 | The major groupings are: $364.55 – house stuff (comforter, pictures, universal remote, wall calendar, mini vacuum) $260 – passport renewals $157.99 – AC games pass and high school sports TV streaming for the year |
| House Escrow | $450.39 | Sinking fund: property taxes $3,428.62/year, insurance $1,976/year |
| Auto/Umbrella Escrow | $269.96 | Sinking fund: $2,335/yr auto ins, $455/yr umbrella, $350/yr registration, $99.50/yr AAA |
| Health/Dental Ins. Premium | $253.78 | $165.78 health, $79 dental, $9 vision |
| Water/HOA | $310.43 | This was far higher than normal due to heavy watering to restore our lawn after the sprinkler issues leading up to our arrival |
| Clothes | $200.00 | Sinking fund |
| Taxes including Roth Conversion | $134.33 | Virtual sinking fund. $6,012 total taxes, minus $4,400 child tax credit |
| Gifts | $120.00 | Sinking fund |
| Car Replacement | $115.55 | Sinking fund: Allows a $20K inflation adjusted purchase every 10 years. That plus the trade-in value will get a decent new car. |
| Natural Gas | $27.62 | |
| Electric | $192.40 | |
| Life Insurance | $99.81 | |
| Phone (Google FI) | $105.91 | Our data usage ran pretty high for unknown reasons |
| Internet | $60.00 | |
| Gym Fund | $54.16 | Sinking fund: Peloton + Rec Center |
| Giving | $183.00 | Sponsored kid and school donations |
| Gas | $64.55 | This is one tank in our Crosstrek, which lasted exactly one month |
| SimpliSafe | $72.99 | System registration fee of $40 on top of normal cost |
| Amazon Prime | $12.17 | Sinking fund |
| Cloud Storage | $2.99 | |
| Virtual mailbox | $31.45 | We haven’t cancelled this yet, and still had things arriving at this mailbox that we’re working to redirect back to our house |
| Kids invest | $10.20 | Portion of the kids’ earnings we force them to invest. This is from chore money that we pay them. |
| Medical Spending (out-of-pocket) | $0 because paid with HSA HSA ending balance: $48,289.90 | $334.66 – AC eye appointment at an expensive place we will not return to |
Methodology Tightening
Sinking Funds – I’ve been showing the uncategorized and discretionary sinking funds differently from every other sinking fund, and it was making my own numbers harder to read. They will now show the consistent $500 deposit amount each month unless our spending exceeds the fund. Any time we overrun the available funds, you will see a full breakdown of what was pulled from the fund, and how much of that overage is absorbed in the budget.
HSA – We have an HSA fund that pays for out-of-pocket medical expenses. We do not count it as part of our FIRE investments, and it does not contribute to our 4% withdrawal amount. Any time we have medical spending I will be including that in the expenses section. Next month this will be important because AC is getting braces.
Analysis
With the return to school in August, it’s always a time to brace ourselves and absorb the punches. The withdrawal rate was fine, but the more tangible cost was zeroing the uncategorized fund, and September starts with no buffer. Any spending over $500 in that category will hit the budget dollar-for-dollar.
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