3rd Quarter Budget: 2016

I think I’m pretty good with budgets. I’ve been practicing with them for years. I think I’m so good that I want people to pay me to help them with theirs.

Mrs. Fi and I have pondered starting a small side job (or “side-hustle”) as financial mentors/coaches. We would essentially help people figure out where their money is going, how to budget that money, and then how to save for goals, etc.

Since we have no certification, we couldn’t give specific investment or tax advice—but we’d help set their thinking so they could make good, informed choices. Our goal is have the client become financially self-sufficient, or independent, if you will.

As our name infers, financial independence is the main focus here (Fi = Financial Independence). I’ve always wanted to help people financially, but looking into certifications and such, they are expensive, time-consuming, and ultimately touch on subjects (like estate planning) that I have no real interest in. Luckily, there are those who have gone before us and made a career out of being a financial coach.

financial mentoring

Ima just glance at this budget…

This site has been the best example I’ve seen.

If it goes well enough, I might look into getting certified in some capacity and expand it. But I think doing what we do here (and what many blogs do) is give financial advice based on our experience and what has worked for us. I don’t see why we couldn’t translate this into the physical world.

There are a number of logistics to sort through before we even begin searching for clients. Still–I think financial literacy is really lacking in this country and for as many blogs, shows, and podcasts there are, we’re still not reaching everyone. The more people we can reach, the better. If we can make a little money doing it, so be it!

Anyway, on to our super exciting 3rd quarter budget update. As always, savings rate is key to figuring out when you can retire early, so that’s included in the summary. The left side of the table shows my budget projections, the right is our spending to date. New to my exciting budget table is a percentage of “spend to date.” For instance, I budgeted $480 for gasoline and spent $373 to date; so 78% of $480. This chart is progressive and includes the 1st, 2nd, and 3rd quarter.

2016 Budget

Expense2016 Proj.YTD
Mortgage (incl. escrow)$13,680$11,476 (84%)
Home Improvement$300$226 (75%)
Lawn & Garden$420$306 (73%)
Home Supplies$240$184 (77%)
Recycling$168$168 (100%)
Water/Garbage$600$503 (84%)
Heat (MDU)$480$352 (73%)
Electric (NW)$480$338 (70%)
Internet/Cable$480$360 (75%)
Cell Phone$840$660 (79%)
Auto Payment$0$0
Car Insurance$480$246 (51%)
Gas$480$373 (78%)
Auto Maintenance + Services/Parts$600$25 (4%)
Car Registration/Parking$115$0
Bus Pass$264$210 (80%)
Travel$1,200$991 (83%)
Food$3,768$3048 (81%)
Health Insurance$1,575$1200 (76%)
Health & Fitness$600$1374 (229%)
Personal Care$360$331 (92%)
Pets$840$566 (67%)
Gifts & Donations$2,400$1912 (80%)
Shopping$600$589 (98%)
Education$300$100 (33%)
Entertainment$300$173 (58%)
Other$50$268 (536%)
Total$31,620$25,979 (82%)

Income:

  • Paychecks: $44,831 (after tax)
  • 401ks (Contributions + Match): $9,930
  • Savings Interest Income: $25
  • Car: $1600
  • Misc.: $428

Total: ~$56,814 (YTD)

Assets:

Investments: $83,593 (IRAs, 401ks, Prosper, Fundrise)

Cash Accounts: $9,040

Total: ~$92,632

YTD Savings Rate: ~54% 

2016 Target Savings Rate: 60%

We’ve had some unexpected health expenses this year and we will go over in a few other categories, but ultimately, we’re close to our savings rate goal which is the most important thing. We continue to look for ways to save money, but we’re also changing how we eat, how much money we give to people/charities, and more. Spending priorities are usually fluid so we’re always adjusting as we go.

We recently shifted focus to gaining more income, thus the side-job idea. I am also taking an SEO course to dabble in that from time to time. These are important elements to get us to early retirement quicker while maintaining a balanced life!

What do you think of our side job idea? With the 3rd quarter in the books, how is your budget doing? Share your thoughts with us!

About the Author

Mr. FI

11 Comments

Mrs. BITA

Good job (mostly) sticking to your budget. We’ve recently started budgeting and it certainly takes practice and willpower.

About your side hustle – how do you envision being able to come up with budgets for folks in areas where the cost of living is very different from your own? I imagine that this would be challenging.

Mr. FI

Hi Mrs. Bita, it is indeed tough. It’s about perspective and goals mostly. Changing spending habits can result from that and then sticking to the budget becomes easier…

As for the side hustle, this is something I have thought about. I think we’ll start as local as possible to gain experience and hopefully learn more about people’s spending, goals, etc. and then adapt our philosophy to different COL situations. The key is figuring out where people’s money goes and then figuring out how to improve upon that.

Fervent Finance

That sounds like a neat side hustle. Only issue is the people needing budgeting help and are living paycheck to paycheck aren’t likely the ones who can pay you $100/month for a service like that. The key will be to articulate your value and that the $100/month (or however you decide to charge) will be giving them a much greater value (such as easily cutting out $500 of waste a month from their spending). Wish you the best of luck. Make sure to blog about the experience.

Mr. FI

Sure, low income clients would be a different challenge. Honestly, our focus would be those who are “living paycheck to paycheck” but unnecessarily. There are dozens of articles of how households making $100,000 or more are just scraping by.

That’s ridiculous in my eyes.

So I wouldn’t deny helping anyone, but when you’re dependent on a minimum wage job or government assistance, you’re probably not our client target even though they absolutely can benefit from learning to budget and such. Since I envision having a range of incomes for clients, I may have a sliding scale of how much I charge. But I will absolutely posit that whatever I charge will be made back and then some if they implement our suggestions and then they are free. It’s not like we’ll be on retainer–our ultimate goal would be to let them go and be financially independent in that respect.

Maggie @ Northern Expenditure

Congrats on the progress, you guys! And as for venturing into coaching… it sounds awesome (and legally scary!). But I fully support the idea if you get some good legal advice on how to make it all safe. 🙂

Mr. FI

Thanks! The good news is that there are those who have ventured out and done it (J. Money being one). You absolutely have to be careful, but I don’t envision anyone having legal grounds to come back at us since we won’t be giving tax or investing advice. If someone tries to sue, or whatever, for getting help with their budget and trying to save money…it seems absurd but I suppose it’s possible.

Penny @ She Picks Up Pennies

Love the percentage! I’m trying to play around with ours next year. I’m really good at coming in just under budget. But I wonder if something like this might motivate me to trim even more! Yay to side hustles! Can’t wait to hear more.

Mr. FI

Thanks! Yeah, at this point, we’re struggling to find areas to trim. If we really had to, we could. But those would come out of like recycling (not mandatory at all in MT) and our giving. I’d rather not cut those. I think we’ll come in above this year, but not by too much. That’s the thing about setting a budget a year in advance, spending can be fluid depending on circumstances. In a vacuum, I would have nailed the budget but I also set everything on a rolling average, so it’s never quite perfect.

Ryland

Hey guys! I am on the path to starting the exact same thing — a financial coach practice. Check out XY Planning Network podcast with Be Awesome, Not Broke (Google will pull it up.). The podcast will teach you all about fee structures, best way to get new clients, whether the CFP license is necessary, etc to be a financial coach around cash flow, budgets, and debt. Tons of other great podcasts there too. Would love to stay in touch to pass ideas back and forth if you guys decide to start this up! helloryland@gmail.com

Mr. FI

That’s awesome–I think the first thing I want to cover before I even begin looking for clients is the legal aspect. Have you come up with like a client contract to use?

Ryland

Haven’t covered the compliance aspect yet. But definitely plan to do that before working with a people too. If you find any solid resources, would love to check them out!

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