Hello, my friends and potential FIRE-seekers. Time for an update! So sorry that my “first month update really soon” turned out to be 18 weeks later.
For the past few months, I have been trying to live on an assumed alternative income of $2,750 per month as part of my real-life experiment in preparation for the FIRE lifestyle.
If this is your first time reading about it, a brief re-cap of my definition of FIRE-itis :
FIRE-itis : An imaginary disease that when afflicted, causes the infected to pursue early retirement immediately regardless of their financial readiness. Full-time employment is no longer an option.
As mentioned in my previous blog post, expenses are going to fall into one of these four broad categories –
- Family & Daily
- Wellness
- Sinking Funds
Invest & SavingsTravel Lust
Minor update to the broad categories.
I had removed Invest & Savings because like what I have mentioned, no money (therefore $0) will be “spent” for savings and investments for simplicity.
In addition, I have decided to re-include Travel Lust because even though we can’t really travel that much now (hassle and cost), it would be accurate to factor in expenses relating to this aspect.
Alright, part 4 of this series. Let’s go!
New To The FIRE Trial Series?
The concept of FIRE-itis was first introduced in Jun 2020 and expanded upon in Mar 2021. This series continued in Jun 2021, followed by updates in Nov 2021 and Sep 2022, before rebooting as a monthly feature in Jan 2026.
Alternative income is any income that isn’t a full-time salary. I split my portfolio in two. The income-producing side pays dividends. The other side holds index ETFs. Side hustle income goes on top. I call it “alternative”, not “passive”. Some of it takes effort, such as blog revenue and product sales.
Income I Count ✅
- Dividends from my income portfolio
- Side hustle income
- Any other income that isn’t a full-time salary
Income I Leave Out 🚫
- Index ETFs
- Salary
- CPF
- Property equity
Expenses I Leave Out 🚫
- Our mortgage. CPF pays it in full, so housing doesn’t show up in these numbers.
- Allowances. That’s a personal choice that varies by family, and it would muddy the comparison.
My personal view, not financial advice. Some links may earn me a referral commission.
Investing involves risk, past performance doesn’t guarantee future results, and you should do your own research. While efforts are made to ensure the accuracy of content at the time of publication, I am not responsible for any errors, omissions, or outdated information.
Overview
For a start, let me drop a quick summary of what happened in the past five months.
At first glance, it would appear that we have spent approximately $19281 in total (or $3856 per month) from June to October 2021.
This is way, way higher (by 40%) than the expected $2750 projected in the earlier blog post.
I’ll dig deeper into this in the subsequent section to explain why this is happening.
Breakdown of the amount spent in each individual category is reflected in the above screenshot.
If you’re wondering how I’m able to achieve such specific numbers in terms of expense tracking, that is because I’m using You Need A Budget (YNAB) and inputting every single transaction.
Category #1 : Family & Daily
The amount budgeted for home and daily formed the bulk of the total amount, and the amount spent largely remained “consistent” around $2167 – $2619.
To re-cap, I’m pretty lax when it comes to spending on food and groceries. Services like Grab Food, Food Panda etc I actually use them pretty regularly, enough to have premium subs for them too! We found ourselves frequently prioritizing convenience > cost. This also means that there is significant room to optimize that we’re not actively doing – oops.
Subscriptions-wise, we have our quality-of-live improvements for Spotify and Netflix etc both which happen to be almost free. Rounding up the monthly payments are mobile subscriptions and insurance payments.
In addition, we have our transport costs, charity donations and parents’ allowances.
My thoughts – No surprises here. I knew what I was getting into and happily paid for them.
Category #2 :Wellness
Wellness is the one category that fluctuated wildly. As previously talked about, these expenses aren’t really clocked on a monthly basis.
Special mentions – in the month of June and October, I went for medical appointments ($342) and on top of that, two separate dental appointments ($465) in the month of October!
I have procrastinated quite a while for my dental visits due to Covid, unfortunately. I know I know, excuses. Happy to finally sort it out.
Another notable expense came in the form of a new box of disposable contact lens purchased in July – for use when I go running or active sports.
My thoughts – Although the numbers were high, that’s perfectly alright and within expectations. There will be months with minimal expenses such as August and September. More importantly, money continues to be budgeted for those categories on a monthly basis and when the time comes, I’d spend from them.
Category #3 : Sinking Funds
Before we go there, let’s omit the red herrings. I currently have two sets of regular payments that are already fully budgeted for, so I’ll need to remove them from the expenses. I would have preferred to pay for them in full but the extra time I’m able to hold on to capital for free before payment meant that I can actually generate yield off them.
- Family’s medical bill 0% interest @ $290/mth (Jun-Oct)
- IRAS tax payments @ $345/mth (Jul-Oct)
This means that I can potentially omit $2830 from Sinking Funds, bringing it down from $5540 to $2710.
Ah, yes. The work-from-home (WFH) situation really brought to our attention all the stuff that needed fixing or improving.
The big hitters for this category include the air-conditioner ($428), LED ceiling lights ($295), Korean blinds ($576) and study room chair ($379) – which total up to $1678. One may consider them as optional expenses but I think they are really important in ensuring that we have optimal living conditions at home.
My thoughts – This few months illustrated it perfectly why Sinking Funds is needed. Putting money aside for times that call for it. It would be prudent to allocate a much more generous budget to this category if possible, for maintenance upkeep or repairs. Ease of mind is priceless.
Category #4 : Travel Lust
A category which I re-inserted back into the experiment, considering that we can equate these expenses to overseas trips.
- Dream Cruises in July
- Clan Hotel in August
Actual vacations overseas would likely cost a lot more, obviously. While air miles can be leveraged on to bring down the cost somewhat, cold hard cash is still a necessity.
My thoughts – A quick and easy win would be to attack the food and groceries department aggressively to bring down expenses and divert the extra funds to Travel Lust.
Summary
After digging through the expenses, this is what we end up with versus the original $2750 budget –
- Average spend per month (without adjustment) = $3856
- Average spend per month (adj. for 0% int payments) = $3290 // minus $2830
- Average spend per month (adj. for home improvements) = $2956 // minus $1678
Based on these five months of data –
- It was worth noting that there was a disproportionate spend on these one-off expenses occurring in the last five months
- It would be possible to bring down expenses to the $2750 level by aggressively cutting back on food and groceries department if we choose to
- Budgeting an extra $250 to make it $3000 per month would make for a much more comfortable buffer for unexpected expenses
If you ask me, this is ultimately an experiment from which observations can be drawn upon.
In reality, I would buffer a lot more funds in preparation. Probably around the $4,000-$4,500 range per month to be able to keep growing my net-worth and emergency funds indefinitely.
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Kevin started Turtle Investor after hitting rock bottom at negative $25,755 net worth. Today, his monthly alternative income pays for all his daily expenses. He shares what actually works (and what doesn’t) for Singaporeans building wealth. Learn more about Kevin here.
I am a new subscriber. Sorry you may have mentioned in previous articles,. Which app are you using to track your spending?
Hi Keith,
Welcome! I’m using You Need A Budget (YNAB).
https://www.youneedabudget.com/