Long time, no blog. The summer ended up being more busy than I had ever imagined it being. It seems like school just let out, yet here we are halfway through July. Even after this brief hiatus of blogging, I can already feel the effects of how a lack of self-accountability can render one aimless. I was more or less on autopilot this month, allowing my attention and focus towards the goal to be redirected towards other things. The result was a mediocre performance all around that leaves much room for improvement in July. Unfortunately, the car was not paid off like I had hoped, so we’ll have to knock it out next month.
Here’s the summary for the month of June:
- Starting Cash: $200
- Starting Debt: $86,547
- Income: $6,010
- Expenses (Including regular loan payments): $4,495
- Amount paid to debt: $2,363
- Money Wasted to Loan Interest: $378
- Ending Debt: $84,562
- Ending Cash: $200
- Total Assets: $46,188
- Total Liabilities: $84,562
- Net Worth: -$38,374
Predicted student debt at the end of May 2014 (i.e. delta to goal): $21,127
Assessment of Cost and Revenue
Cell Phone Sales: LOSS – In June I spent $3,450 on inventory, $215.50 on shipping, and made $4,793 in sales. This works out to a profit of $1,127.50. I sold 20 phones and 6 Dr. Dre headphones for an average profit of $43.37 per unit. On the positive side, this is the most I’ve ever made in a single month, however I originally estimated that I could make $3,000 in the month of June. Unfortunately, I had more school obligations than I originally planned, and I did not factor in the time commitment required in preparing to move to a new apartment. Another negative is dropping over $20 in average per unit profit. That means I did far more work at a lower rate of efficiency. Had I maintained my efficiency level I would have seen at least $500 more in profits. Although, there were some unbelievable deals to be had in May, those same deals were probably available in June as well, I just didn’t have the time and commitment to seek them out and had to settle for the average deals available when buying phones was convenient for me. My disciplined procedure of regularly combing the listings all but vanished in June, and I need to step it up in July to make up for lost time. One positive change to the business in June was the addition of my first supplier. He regularly procures iPhones from different sources and then delivers to me for an agreed upon fixed price. The profits are typically only between $25-30, but the work required is practically zero. I think our relationship will stay positive because he prefers the quick cash of selling in person, whereas I have the patience to sell online for higher profits. This will keep him from becoming a direct competitor of mine.
Music Gigs: LOSS – I made zero dollars and put little effort into making any. I’m rethinking if the time I should spend marketing myself would maybe be better spent investing it into cell phone sales instead, but maybe that’s just me making excuses.
Baby sitting: WIN – When I first put together the pro forma spreadsheet, I had brainstormed possible ways that Rachel could make money over the summer, but did not put down a definite amount because I was unsure if anything would materialize. Luckily, she got a regular gig booked watching a set of twins. The number shows up in the red on the spreadsheet because the parents cancelled two of the scheduled days when they decided to extend a vacation.
Cell Phone: LOSS – Because I failed to get the ball rolling fast enough, we ended up having to extend our old plans a month longer, overlapping the start of the new Ting plan. Also, we used more texts/minutes than we ever have (largely due to increased cell phone sales activity) and had to pay $9 more for usage than the planned $26 I had hoped to keep the bill at. I went ahead and “reimbursed” our checking account for the difference though and called it a business expense. I can still strive to do more of that communication through gmail and google voice to cut down on the cost of doing business. However, even if we should “go over” in the future, it is still 50% cheaper than what we were paying before.
Electricity: LOSS – We budgeted $74/mo and spent $83. This is not over by much, and it makes sense with increased summer electricity costs. However, the bill always reflects the previous month’s usage, and I know we used a ton of a/c this month which will certainly mean taking a much bigger hit in July.
Water: WIN – We budgeted $58/mo and spent $60. Our water bill has been very consistent at this apartment complex, in which all tenants in a building split up that building’s costs. It will be interesting to see if this changes at our new place when each household is billed individually.
Groceries: LOSS – We budgeted $470/mo and spent $590. This was the biggest surprise at the end of the month. I will acknowledge that because the calendar started on a weekend we had 5 big weekly grocery trips instead of the usual 4. However, if this were the only difference, we would have seen the cost go up only 70 or 80 dollars from last month, not $150. Looking back at the logged receipts in Quicken, it looks like there were more frequent side trips in the middle of the week. We are getting much better at wasting less food and using all that we buy, and we are eating mostly vegetarian. Because of this, I don’t think the problem is as much in the consumption end of things as it is in the purchasing. Over the next few months I’m going to try and explore ways to keep eating as we have been, but using different purchasing strategies to reduce the cost. Strategy #1 is getting a membership to Costco or Sam’s and seeing how these stores can help us out.
Misc: LOSS – We budgeted $200/mo and came in at $236. There were some big purchases for things like new sheets for the king bed and some new sandals for Rachel because her old ones were falling apart. However, it’s never the big things that put you over the top, it’s the little things here and there. We need to keep a closer watch on how much we’re spending and be able to deny ourselves some things until the following month (or altogether) when we’re getting close to the budgeted amount.
Fuel: WIN – We budgeted $257 and ended up at only $245. It will be fun to see this expense drop lower and lower over the next few months as both of our car commutes are eliminated by the move.
Eating Out: LOSS – We budgeted $50 and spent $93. The only time we went out together was for our anniversary, so the rest of that overage was me not planning well enough for meals on trips with my band students. I spent 3 days in Commerce with them at a leadership camp and ended up eating fast food way more than I wanted to. Maybe next time I fail to plan, I’ll just go hungry instead of slowing down the debt pay-down mission.
King Size Mattress: LOSS/WIN – We took a blow here in the short term and decided to take advantage of an ongoing Memorial Day sale. We spent $114 more than we had saved up to that point. In the long run though, we spent $152 less than the $800 deal I had hoped to get. Savings are diminished slightly when you take into account the $20-$25 in interest that will accumulate due to not putting an extra $114 towards the car loan. The mattress has translated to better sleep for the both of us and I think we will see it’s true value in increased productivity during the school year.
Renter’s Insurance: LOSS – This was a loss in two ways. First, I realized that I had simply forgotten to set aside money every month to cover this expense. Since renter’s insurance is mandatory to living in our apartment complex, there was no way around forking the money over in a large chunk. I split it up, paying the first $72 half in June and the second half in July. The other way this was a loss, is that I put off negotiating the $30 premium increase with my agent and then proceeded to completely forget about it before my debit card was automatically charged. If anything, I should have seen a decrease, as this is a brand new complex with fire sprinklers installed in every room. I will try and retroactively negotiate a credit when I call him to discuss our auto insurance premiums.
Instrument Insurance: LOSS – Same story as the renter’s insurance. This was something my mother fronted last year, and as such I forgot to plan in advance and did not make it a part of my regular monthly budget. I split this $300 hit between June and July. I debated with myself as to whether or not I should continue with the policy, but I will at least extend it for another year or two. I think insurance should only be for things you cannot afford to replace. When it comes to my bass worth 16k, I can not afford to replace it at this time. This December I’m flying with it to Chicago, so I need to have it covered despite the high premium.
Galveston Vacation: LOSS – This is something that Rachel and I had planned to do for a while for our first anniversary. The money was there to make it happen, I just didn’t have any funds previously set aside for travel expenses. June and July will take a big hit because of this. This went into the spreadsheet as “Out of Budget Expenditures”
All other expenses were fixed monthly payments that remained constant in June.
Revenue Challenge: I’ve got one focus: making enough cell phone sales to kick that car loan to the curb. Anything extra is a bonus.
Cost Challenge: July is going to be the most expense heavy month so far this year. There will be moving expenses, vacation expenses, insurance expenses, and the cost of getting a new puppy. These things will eat up all excess in the budget, and all debt snowball funds are going to have to be created through my business. I am also hoping we can come back to a more average grocery bill, and that June’s expense was just an outlier.
Here’s the full 24-month outlook: