August 2023: Fresh Start and Hustle Mentality

This is the first in a series of monthly posts where I share my family’s tracked expenses in the hope of showing my (slow but steady) progress towards FIRE and motivating myself through accountability in this space.

Our main goals

So far, I’ve been flip-flopping between some major goals, which were aggressively paying down student loans (our only debt at this point) and building up a healthy emergency fund. At first, we were paying down the student loans because the interest rates were slightly high (ranging from 6-8%) and because I always have an uneasy feeling in the pit of my stomach just having loans and losing money to interest, despite the possibility that my money may be earning more somewhere else.

However, in the past couple of months, we switched to bulking up our $1,000 emergency fund because I started having multiple mass layoffs at my job. While I think my position is too junior in salary to be cut and I’ve been having glowing reviews from all my managers and coworkers, I don’t trust that and it’s better to be safe than sorry afterwards.

Major developments

The major development of this month was our enrollment into the government’s Fresh Start program, which allows borrowers to basically bring back defaulted federal loans into current status, and potentially joining an income-driven repayment program. I had totally forgotten about the existence of these loans, and so as soon as we remembered they were still there and would definitely not be wiped off, we enrolled into Fresh Start and are still waiting on the calculation of the monthly payments - hopefully nothing too crazy as we also have private loans we’re still tackling. I’m nervous but fingers crossed it is something we can manage!

I know having loans in default is a scary concept, but my mentality is just, “As long as we keep working towards paying it off, and pay off more than the interest monthly, and keep spending below what we’re earning, we should be good in the long run.” As much as I hate paying interest, especially on something that should be a public commodity, I hate uncertainty even more. I’d like to have everything laid out and tackled, no surprises, no matter how difficult the task is. And I bring that approach to our finances!

The numbers

3-month emergency fund: 55% complete - we will likely pause contributions to this, depending on how much the monthly payments are for all the student loans

Net worth: -$13k (pretty close to breaking even…!)

Rent and utilities: $1,215

Groceries: $496

Medical and health-related: $1,046 (this is high this month because of pricey bike tuneups. Bikes are our main form of transportation since we don’t have a car. One of the bikes was falling apart and hadn’t been serviced in years, and so the price of the items to be replaced was pretty pricey. Still cheaper than a monthly car payment!)

Transportation: $62

International / visa-related: $76

Home maintenance and supplies: $37

Pets: $68

Dining out: $613

Entertainment: $81

Gifts: $283

Miscellaneous: $391

Total: $4,369

There’s still a bunch of fat to be trimmed from the dining out and gift categories, but as long as we see better numbers next month, I’ll be happy!