We reflect on how we're doing on getting into a school year routine so far (dishes front: good; coffee date front: not so good). Kelsey is eager for fall weather but all Chris wants to talk about is his birthday.
In money talk, we look back at August, as tracked in Mint, and reveal how we did at sticking to our budgets. We had wins and losses. For those of you who love to break it down graphically, here's what our August spending looked like:
We budget a total of $6,100 for our expenses each month but in August we spent $6,800, womp womp. We had overages in the categories of childcare, home repairs and car repairs although we did well on our entertainment spending (a challenge for us!). We also determined that our coffee habit is the gateway for unnecessary spending and we need to do some soul searching about it. Overall, our spending resulted in not being able to save as much last month.
And we've got our current budget to share with you! Find it on our Resources page.
We also give some more context to our advice that you probably don't need a financial planner. First, let us say that for some people a financial planner could be a great resource. This might be if you have overly complex finances (many rental properties, self-employed, are so intimidated by your finances you don't know where to start or you are preparing to retire soon and draw down your investments).
If you do plan to see a financial advisor we recommend choosing someone who does not work for a large investment firm and therefore will be more likely to evaluate your finances objectively with your goals in mind and not push a pre-determined investment strategy or products. And be sure to choose a fee-only advisor and not fee-based advisor. Fee-only means you will pay a flat fee.
We have gotten by without a financial advisor following these steps:
- Identify life goals and the financial strategies to support those goals.
- Increase income (only partly under our control, such as raises and changing jobs).
- Drastically reducing expenses (nearly completely under our control). This is where we have done a lot of work. We discuss several of the ways - big and small - that we have decreased our living expenses in episode 3.
To determine where and how to invest our money we did lots of reading and research and determined that Vanguard investment accounts are the right choice for us (low fees and perform well). We invest in an index fund, which means that the fund is a diverse portfolio of stocks, is not actively managed and tracks with the stock market (goes both up and down with the stock market).
We close the show with Chris reflecting on the philosophy of creating more value than you take in and both of us getting emotional about how fast our boys are growing.
If you are in the United States, happy Labor Day! We hope you have the day off and are relaxing, perhaps by budgeting and finding new ways to save.