yosemite_mountain wrote: ↑Sat Nov 19, 2022 11:33 am
CyclingDuo wrote: ↑Sat Nov 19, 2022 7:46 am
If you are down $50K in your annual savings this year, your option to increase that amount going forward will most likely include one or all of the following...
•Cut current expenses
•Lower annual savings goal and work a few years longer before you FIRE
Your new-new may be a lower rate of savings, and a more extended work career to reach your goals. To be honest, there is nothing wrong with that. You adjust to your new-new.
I started working at 25 after grad school so I only have 9 years of savings.
I'd like to focus on cutting current expenses and increasing annual income.
Right, but I thought I read in some of your other posts that your goal was something like age 40-45 to hit your FI goal. Are you willing to work beyond age 40-45 if that goal is not reached by that age range? I was just suggesting it is an option.
You could cut $19.5K of expenses by eliminating the car loan, facial care products, parent expense fund, travel/vacation fund.
Car Loan: $3,000 (12 X $250)
Facial Care Products: $2856 (12 X $238)
Vacation Fund: $6492 (12 X $541)
Parent Expense Fund: $7,200 (12 X $600)
-Contribution to parent’s expenses: 600
-Insurance (auto,umbrella,renters, Long Term Disability): 149 + 344 = 493
-Food (groceries, restaurants, work lunch): =480+200+150 = 830
-Transportation (gas, car payment)
-Utilities (water, electricity, gas, internet): (100+25+120+60) = 305
-Cleaning supplies (body wash, liquid hand soap, laundry detergent, dishwasher soap, toilet bowl cleaner, swiffer wipes) =50
-Facial care (squalane oil, cotton rounds, cleanser, curology, facial moisturizer, hydrating mask, sunscreen, vitamin C serum): 55+5+25+45+0+0+11+7+0+90+0 =238
-Household items (toilet paper, trash bags, paper towels, deodrant, body lotion, toothpaste+toothbrush, lip balms): 40+5+10+10+40+20+10+10 =145
-Haircare (Shampoo, conditioner, hair moisturizer): 23+0+0+0+9 =32
-Online payments (amazon prime, skype): 14+20+0+0+0+0 =34
-Healthcare (medications, doctor co-pays + out of pocket expenses): 0+(10+7+15)+0+0 = 32
-Vacation fund: 541
I am assuming cutting all of those 100% is probably not realistic. However, they are the larger items that could be pared back to some level. How willing are you to visit each of those items?
The only other large item is your rent, and as you mentioned, you are in a lease for your own place at the moment. COL in the Bay Area is high, so unless you go back to the multiple roommate scenario like you had before to drop that rent cost down (weren't you paying around $1000 when Covid led you to moving out on your own?), then there just isn't much fat to trim from your budget without some cuts that might seem dramatic. Your prior rent with multiple roommates + some cuts to the items mentioned above could net you nearly half of the way to fill the $50K savings gap.
Combined with an increase in salary to fill more of the gap along with cuts, and the $50K savings gap starts to lessen.
That being said, you have an amazing level of savings that is to be commended. I also commend you for going through a difficult situation with your former job and boss. In addition, condolences on the loss of your mother. You've been through a tough stretch the past few years. No doubt about it. Because of all of that, I think you owe yourself to not stress too much about your current budget at the moment. How crucial is the need to be looking to quickly fill the 37% savings gap due to the recent changes you've been through (apartment, job, loss of parent)? Take small steps, and then look at some of the larger items that you could slowly pare back over the course of next 6-12 months or more if it still makes sense for you.