Today's Focus

Current Goal: Automate Savings and Mortgage Paydown

1) Extra $1,100/mo. to mortgage
2) $1,000/mo. to short-term savings
3) $400/mo. to investing

Previous Goal: Eliminate Mortgage on Rental Property
Interest Rate is 5.125%!

January 1, 2019: $59,592
August 11, 2020: PAID!


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Sunday, January 26

My Frugal Miser's Bank, Credit Card and Brokerage New Account Bonuses

Something I want to focus on this year is making money (or saving it!) by opening new bank accounts and credit cards.  This is as close to a free lunch as I can think of.  While this creates a little complexity in keeping up with promotions and managing new accounts, I think it is well worth it for all the free money and miles I am earning.

Cold Hard Cash

Last year I made $1,200 from 3 account transactions.  In a conversation with my broker, he offered me a $500 bonus if I transferred new money to my E*Trade account.  All I had to do was keep it there for 60 days.  Similarly, Discover Bank paid me $200 to open a savings account and I received $500 for opening and meeting the minimum spend requirement on the Wells Fargo Propel card.  I was also offered $500 from Wells Fargo for funding a new savings account.  I completed this task late last year and, after 90 days, I'll have the money in the bank.

I've already got some ideas for 2020.  I received two bank offers last week to open a new account.  Fifth Third Bank is offering $550 if I deposit $20,000 into a new checking account.  Suntrust will give me $300 if I meet their requirements.

Travel Perks

I love to travel; therefore I live to travel.  But it can't get expensive if you aren't careful.  Last year I opened a new Marriott Bonvoy card, receiving 100,000 Bonvoy points after I met the minimum spending requirement.

I'm cranking things up in 2020.  At the end of last year I opened two Southwest Airlines credit cards.  I met the minimum spend this month and am working on earning the last points needed for a companion pass which will be valid through the end of 2021.  I have a bit of spend left to get there, and in that time I'll be hunting for the next new card.

Finally, I plan to put more thought into the promotions offered by hotel loyalty programs.  For example, Choice Hotels has two valuable promotions each year.  After two stays, you earn 8,000 points, which is enough for a free night at some lower-end properties.  During the second promotion they discount $50 retailer gift cards to 8,000 points - a free $50 gift card after just two stays - WOW!  All the loyalty programs have promotions.  By being more thoughtful, I think there are times when it makes sense to book a hotel with a specific brand, even if the rate is higher, because the value of the promotion brings down the ultimate cost.

How are you hacking your finances?

Sunday, January 12

How Can I Cut My Spending in 2020?

In 2019 I spent over $146,000:  $84K on our various business ventures and $62K on what I consider personal spending.

Expenses-$146,371
AirBnB Expenses-$54,311
Rental Expense-$29,020
App Expenses-$86
Interest Expense-$199
Reimbursed Job Expense$811
Unreimbursed Job Expense-$2,144
Auto Expenses-$7,211
Bank Fees-$1,792
Clothes/Personal Care-$1,193
Fun-$10,104
Food-$6,140
House Expense-$17,204
Utilities-$3,116
Health & Dental-$8,677
Taxes$2,103
Miscellaneous-$8,088

My goal (or more strongly, my mandate!) is to drastically reduce expenses in 2020.  Here's the plan:

Airbnb Expenses

Last year our single Airbnb took in just south of $30,000.  But I spent $54,000.  It's easy to conclude expenses will be much lower this year:  in 2019 I replaced the siding and windows.  And I didn't go cheap - I selected the nicest windows and siding I could find.  I'm learning firsthand a business principle I've struggled to adopt:  simply, you invest in your best opportunities, not the cigar butts.

Once we realized its potential, I knew how important it was to upgrade some things to keep guests coming back.  A side benefit:  it's still early, but it looks like the power bill will be lower this year thanks to the better insulating properties of the windows and siding.

With that project checked off, the biggest change in 2020 will be that our Airbnb expenses will be significantly less than the income.

Rental Expenses

Four of our five long-term rentals are in the Birmingham, AL area.  Last year I sold 5 townhouses there.  Naturally, spending will be lower (rental income will be as well!).  Lately I've been dissatisfied with the performance of my Birmingham properties.  One of the most frustrating things is an empty property.  It simply takes longer to rent a house in Birmingham versus Tampa Bay.  It's been 60 days already for the one vacant property I currently have, and there haven't been any qualified applications.  I'm thinking about selling it.  Bottom line, rental expenses will be lower in 2020.

Fun

This is the discretionary category.  Technically, I don't have to spend anything here, but it gives us balance:  I live (and love) to travel!  In 2019 I spent over $10,000 on vacations, gambling, alcohol and movies.  In 2020, I will significantly reduce spending on fun, but not because we're going to have less of it!

How?  I joined a Facebook group called 10x Travel last year.  The group is all about opening new credit cards for the bonus points being offered.  Currently I'm working on earning a Companion Pass on Southwest Airlines.  In the process of earning the pass (which gets my partner a free seat on any flight I am on), I will earn 125,000 miles.  So, our spending on flights this year will be drastically reduced.  I've also accumulated thousands (in some cases, hundreds of thousands) of hotel points which we can use for free rooms.  By redeeming free flights and hotel stays, I expect this to significantly lower our spending in the "fun" category.

Other Observations

There are other categories that need to go down, but I'm not sure how much I can reduce.  The most obvious is spending on food.  It's a simple equation:  eat out less, save money.  I'm working on this.  Then there's auto expenses.  My car has over 200,000 miles on it, so keeping it will mean ongoing repair expenses.  Probably time to start looking at a new car.  With health and dental, the only thing that might go down is what I spend on dental work.  If my teeth stay healthy this year, I can save a bit.  Finally, spending on housing.  That's a big one:  I spent over $17,000 last year to keep a roof over our heads.  I would really like to move back to the area where our Airbnb is located.  Not only will this save time (two hours of commuting each time we clean - we made over 80 trips last year!), it will also save some on gas for the car.  A final benefit would be buying a house we can rent out on Airbnb when we aren't going to be there.  My partner has been reluctant to do this, but I think if I pick out the right house with the right layout, it could be a minimal inconvenience.  House hacking could significantly cut down our home costs.

So there it is.  These are the areas I'd like to reduce spending on in 2020.  What are your goals?


Thursday, January 9

My Frugal Miser - December Income: $66,792

December income, less a one-time inflow, was mixed.  The Airbnb did amazing - nearly the entire month was booked.  We worked a meeting in New York and I did as many deliveries with Amazon as I could.  We also traveled to Birmingham for several days to work on a vacant rental property.  It's still vacant.  It's hard to rent a suburban home there during the winter.

Just before Christmas I received the inheritance from my paternal grandfather's estate.  My grandfather passed away 5 years ago, and my brother and I had no idea what we were inheriting.  We split our father's share.  It's not life-changing, but I'm grateful for it. 

December Income: $66,792

$48 Mystery Shopping
$890 Meeting Jobs
$8 Gig Apps (Rideshare, Scooter Charging, etc.)
$1,343 Amazon Deliveries
$2,880 Rental Income
$3,556 Airbnb Income
$60 Interest Income
$58,006 Other Sources

Investment Accounts Change in Value:  ($3,961)

In a rarity for 2019, my investments declined in value in December.  

Tuesday, January 7

My Frugal Miser - December Expenses: $17,550


December finishes the year in the red.  Personal spending was around where it normally is, but business expenses were high. 

I averaged $19/day for food.  This has to stop!  We ate out every meal while in Birmingham to work on one of my properties, as well as a couple of meals in Miami when we went to the Madonna concert.  There was also some holiday meal spending mixed in there.

There were some larger expenses.  I paid $190 for a new car battery.  We drove to Birmingham to work on a vacant rental property - 600 miles each way.  That used up a lot of gas.  I bought a $500 Amazon gift card to take advantage of a 5% cash back offer.

Business expenses won't be nearly as high in 2020.  I made the final payment on the new siding at the Airbnb.  As I mentioned, we went to Birmingham to do some work.  This entailed a hotel room and supplies including paint and repair materials.

December Business Spending:  $12,989
December Personal Spending:  $4,561

December Expenses:  $17,550

$527 Auto (service, gas, insurance, AAA, etc.)
$199 Bank Fees
$38 Clothing/ Personal Care
$408 Fun (vacations movies, gambling, alcohol, concert tickets)
$590 Food
$406 Health and Dental
$1,498 Household/Mortgage Payment/Home Repair
$0 Interest Expense
$60 Miscellaneous
$494 Taxes includes quarterly tax payments
$0 App Jobs Expenses (tolls, car washes, etc.)
$60 Unreimbursed Job Expenses
($59) Reimbursed Job Expenses
$340 Utilities
$1,822 Rental Property Expenses
$11,167 AirBNB Expenses