My friends. It’s time to start a personal search: I will survive completely alternative income for six months. Or maybe even more.
I like to think of it as a real life experiment because nothing is better than a production and environment rehearsal, right?
After spending some time posting a bunch of review-type blog posts (sorry, I have more) that have been pending / half-written in the drafts folder, what about a more personalized blog post (well , it’s personal finance after all) for a change ?!
If this is your first time reading this, here is a summary of my definition of FIRE-itis:
FIRE-itis: an imaginary disease that, when affected, causes those infected to pursue early retirement immediately, regardless of their financial preparation. Full-time employment is no longer an option.
Previously, I wrote two blog posts on this recurring topic of a possible FIRE experience –
Now I will take that step further. I will try to keep our lifestyle (my wife and I) based entirely on alternative income that we are able to generate.
To make accurate projections before starting our little search, I will rely on my reliable web app that you need a quote that I use to keep track of everything.
Basically, spending will fall into one of these four broad categories:
- Family and daily
- Collapse fund
- Invest and save
In the following sections, I will detail which are the respective categories.
A lot of information is already mentioned in the previous posts I mentioned, so there will be some overlap, but there will also be a lot of news.
First, we establish the simple parameters of the experiment from the data I have collected over the years. I have been using this iteration of my budget since 2016, when I started my new job five years ago, which means there is a lot of historical data.
To start, we will need a total $ 2,750 per month to maintain a reasonably comfortable lifestyle and similar to what we have been enjoying so far. I came up with this number simply by looking at how much we spent and averaging it.
Okay, we don’t necessarily have low maintenance, but it’s not an excessive number either. Thermal, I guess?
Not as low as the SGD $ 420 per pax that the impressive Thoughtworthy Co got, but obviously everyone will end up with different numbers.
Although, to my knowledge, all financial commitments (variable and fixed expenses) were maintained, there were two notable exceptions:
- No money will be allocated for savings and investments
- No money will be allocated for travel-related issues (because Covid)
There’s too much information in my YNAB app, but I’ll try to spread out some screenshots here and there to make this blog post a little more interesting.
Category 1: Family and daily
In the first category, I have a section dedicated to boring day-to-day things as well as monthly obligations.
When it comes to food and meals, we struggle with a mix of cooking at home, eating out, as well as a generous dose of food. Grocery shopping revolves mainly around our visits to NTUC FairPrice (sure we’ll get two pints of Häagen-Dazs and not forget the toilet paper) for everything we need at home.
This category is practically the majority of our monthly expenses not only for this category (approximately 50%), but for the totally monthly budget.
Below are the monthly bills we have to pay.
Again, we don’t skimp much on our subscription services, but I admit, there’s room for optimization.
Regardless, we continue to enjoy our (free) Spotify, (free) Netflix and YouTube Premium plans (ads arghhhh). We don’t subscribe to cable TV services (who currently does?) And our TVs are only used for Chromecast — what we want to watch.
Mobile subscriptions and insurance payments are also included in our invoices section.
The following is the transportation subsidy.
Like the one I mentioned, there was no deliberate attempt to reduce quality of life expenses, which meant that travel transportation services, like Grab’s, continue to be used by us.
Finally, we continue to donate to charities and give monthly diets to parents.
A special mention in terms of monthly allowances, I had taken some steps to ensure that my parents had recurring and reliable sources of income.
From transfers of my CPF-OA money ($ 60,000) to my parents ’CPF-RA accounts, I’ve been able to increase their monthly CPF LIFE (CPF LIFE) income from potentially nothing to € 400 or more.
Along with their ownership status (I help them pay for some of the administrative and maintenance issues), it causes them $ 1,000 SGD monthly.
All in all, they can go out comfortably with close to $ 2,000 a month (give or take), in addition to excluding the monthly subscription my brother gives.
It’s a big load to take care of, at least in the short term, and I’m happy with the situation.
Category 2: well-being
In the second category, we talk about expenses related to medical and preparation aspects.
- Doctor – chronic medications and health supplements, reviews, etc.
- Cleaning up – haircuts, toiletries and glasses / contact lens, etc.
Right now I don’t need to spend as much on this category, but I do consider the possible expenses that could accrue in this category when we are older and potentially have more problems. That’s why we try to take better care of ourselves by sleeping better, eating healthier, and including even more workouts in our routines.
Unfortunately, I am also a victim of allergic rhinitis that requires the use of Nasonex. Otherwise, I’ll have my nose running every day and that’s bad news for Covid times, right? I guess the short DNA straw hits again!
I used to wear contact lens daily, but since then I have stopped doing it, but I still use it when I practice some forms of exercise, especially when I do cardiovascular exercises.
The way I use YNAB for budgeting is that I will allocate funds to the respective categories, regardless of whether I actually spend money during that month.
For some consumables, I would only supply it every two or three months, which meant that the available balance in the category would increase that month if I didn’t spend anything. For example, I usually buy CholesFree only when there are ongoing sales for a three-package deal. Buy more, save more!
Category 3: Amortization fund
The amortization fund category is really simple: it contains money that is earmarked for some purpose or purpose, but is not needed at this time.
For some months, the expense could be zero, but some months it could be three or four figures.
As you can imagine, this would include a good number of categories and it is my personal preference to create separate articles for each area for which I want to provide funds, as a visual reminder.
- Family – money that will go to family members, for example, special occasions such as birthdays, anniversaries and lunar new year or gifts
- Social – Significant events such as weddings, baby showers, home warm-ups and funerals
- Home – maintenance and repairs, furniture and appliances
- Big tickets – usually IT-related items, such as cell phones and laptops
- Shopping – various needs
- Taxes – income tax and property tax
Category 4: Invest and save
As I mentioned earlier in my assumptions, no money will be earmarked for savings and investments.
What will happen is that funds that have been allocated but not spent Family and daily by the end of the month I would be temporarily parked here in my reserve fund or emergency fund.
As you can see, I have an emergency fund category (as most people should do).
Also, I have what I called Income reserve fund configured categories as well.
They are basically intended for spare funds that I have booked so if you do have zero income, I can live reasonably on the money that is budgeted.
Associated expenses of alternative income
For now, I will also not save any funds for expenses related to my blog or other affiliate marketing efforts, as I have prepaid much of them, some for several years.
Surprise! First month update very soon
Well, well, what do you know ?!
In fact, I’ve already started this real-life experiment since early June. And the progress has been very good!
Much of my projections were punctual with very few deviations. After all, they relied on data.
Considering the impact of working from home (HFH), it has been an extremely real test of our food-related budget, as both my wife and I spent obscene time at home. More details in my future blog post!
If this is the type of content you want to read and want to chat about, feel free to leave a comment or contact me on any of the channels below.
See you next time!
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Hello! I’m Kevin, a turtle investor
At 30, I’m the personal finance blogger who claimed a negative net worth of less than $ 25,755 and decided to change things up.
Learn more about me here if you’re curious. My plan for financial independence can help you start your own FIRE journey: financial independence, early retirement (optional).
I am married to a lovely woman and that means two childless incomes. In my spare time, I chase miles so we can fly in business class. My hobby is to change the pocket of this blog and share with you everything I know.