So that’s another year of adulting. So here’s a look at my expenses this year vs last year:
2022 Expenses
2021 Expenses
First some observations:
I was able to lower costs a lot this year in several major categories, while some of my smaller spending categories increased.
My partner moved in in September and started splitting the cost of the mortgage. This helped to offset costs quite a bit even though housing costs (property taxes and HOA) went up slightly this year.
I fronted a bunch of money late 2021 for several ski trips in 2022, so my travels cost about $3k more this year and $3k less last year — about 9k per year. I was out of the state on vacation for 65 days of the year compared to 66 last year, including 28 days abroad. Not bad.
In 2022, I resolved to spend less on “General Merchandise” compared to 2021, but I ended up spending about the same. I probably need to do a more detailed breakdown to see how I’m spending money here. Spending almost $600/month on random stuff seems high to me.
Eating 2-3 meals a day on 2-4 days a week at Meta saved me quite a bit of money compared to in 2021 when I was mostly working from home. What a great perk to work at a company that feeds you. My partner spitting the grocery bills and the cooking also increases efficiency quite a bit.
My family finally kicked me off of their auto insurance, so I had to start paying for my own this year. Thanks mom and pops. Y’all can call me a manlet for mooching for so long.
Dues, subscriptions, and online services increased a bit this year. I got a new annual fee credit card, Squarespace and Amazon Prime prices went up, not sure what else contributed to the increase. I will look more closely at this at some point to see what subscriptions I can do without.
I didn’t spend >$8k on furniture this year. I’ll call my apartment fully furnished at this point. Only took 5 years 🤡
Next year projections:
I expect that my housing costs for next year to be around $12k since my partner will be contributing the entire year. So I will be saving about $8k compared to this year.
I probably won’t be eating Meta food in 2023 now that I’m no longer working there, so I can expect my food costs to go back up to 2021 levels, so increasing $2.5-3k.
I’m guessing I’ll be spending about $42-43k next year, before tax deductions for mortgage interest. Let’s see if I can hit that.
My reflections on my first year owning an investment property probably deserves its own post, but some quick thoughts:
I’m down 26.5k net on the investment property, which hurts me not a small amount. The big mistake I made was trying to do minor renovations myself after closing. I thought it wouldn’t be much effort and it would save money. Man was I wrong. Because I had a full-time job, I ended up splitting the work into 2-4 hour chunks over the course of 5 months, AND I hired painters anyway, AND it just wasn’t fun to have to spend my evenings and weekends fixing shit instead of doing my hobbies. Holding the bag for 7 months set me back financially way more than just hiring labor up front. I could have had tenants in the unit by February instead of August. I’ve learned the hard way that my time and sanity are worth much more than a couple of bucks, and scaling my impact requires outsourcing work that I’m not efficient at. Costly but important lesson. At least I gave myself a wide margin of error.
Got lucky with the rental market. I was able to get decent tenants in my unit pretty quickly at asking price, which allows me to cash flow a little bit every month after maintenance.
Speaking of maintenance, I’ve had to do a ton of maintenance, which has been quite the headache. Maybe I’ll write another post on the maintenance saga that I’ve had. The previous owner did a shit job maintaining the unit, and the building itself is in bad shape cosmetically. I should have done way more due diligence up front when buying the place. Next time, I will ask for HOA boards meeting minutes for the past year along with their financials to get a better picture of how the building is holding up. All the maintenance is cutting into my margins, but I’d rather be a good landlord possibly at a slight loss than be a slumlord.
Taxes and HOA went up this year, which will cut into my margins next year. The tenants are on a 2 year lease, so I can’t raise rent next year. We’ll see if this works in my favor or against me.
I hope these spending summaries for the past 2 years can convince someone that it’s possible to have a pretty decent lifestyle in a VHCOL area like New York City. For most people the biggest factor is cost of housing, and the next biggest factor is probably food. While most of my peers are spending between $2-4k a month on rent (that continues to increase each year) to live by themselves, my housing costs were <$2k/month and are going to be <$1000/month going forward. How did I achieve this? I bought my apartment in an area that’s close to the city but wasn’t rapidly gentrifying at the time. It was even better during COVID because I refinanced when mortgage rates were rock bottom. And I’m now splitting the housing cost with my partner. I don’t expect these costs to increase dramatically over time (property taxes and HOA will probably creep up slowly), whereas renters will continue to experience appreciable cost increases year over year.
The tradeoff is that it’s not as convenient or as serendipitous as living right in Manhattan. It’s 15-35 minutes outside of the city by public transit, so it feels qualitatively comparable to living not too far into an outer borough like Brooklyn or Queens. I can still do almost everything that I want to do in the city without feeling like transit is a drag. The tradeoff is that my neighborhood isn’t quite as hip as parts of Manhattan and Brooklyn yet, and none of my friends want to move here as a result (it’s safe, quiet, family-oriented, easy to get around, and pretty nice though). But saving an extra $1-3k/month in housing costs means I have an extra $12-36k to spend on my hobbies or to save compared to my peers and I get a lot of security knowing that my base cost of living is very sustainable. I don’t ever feel burdened by my living expenses, I don’t feel chained to the rat race, and I feel like I can continue enjoying what I enjoy to a long time to come. To me, that’s worth more than the convenience of being in a central location until I eventually get priced out anyway.
Getting to my FIRE goals: my net worth ended up right where it started at the beginning of the year, despite investing around ~175k of my income in 2022. I made the mistakes of holding my META and COMP equity instead of liquidating right away on vest and after lockup. Those stocks are down about 70% and 90% respectively from peak. I’m not really sure what to do besides tax loss harvest to offset the gains that I’ve gotten from investing in index funds. Somehow it feels way less bad when my index fund ETFs go down than when individual stocks go down. I guess it’s way less certain that individual stocks will recover compared to the larger market. And anyway, if the larger market isn’t going to recover, then that’s a much bigger problem. Do I continue holding and hoping that the value will recover once we come out of the recession? Do I realize losses and reinvest in other assets hoping to make back all that I’ve lost? I don’t know.
Recap of the goals that I made at the beginning of 2022 to follow in another post.