Well losing over $1000 in face value of my Snowball funds 1 month in has been a gut check that doesn’t feel great. February is also the month of many bills in my household. Six month car insurance premiums due, property tax due and to top it off deductibles and out of pocket limits for medical care reset in January so many bills are coming through from regular check ups, procedures and those wonderful everyone is sick this time of year visits.

It’s not an insignificant amount of money. Insurance sits around $700 every 6 months. Home owners insurance about $1,300 annually, also due around this time. Property Tax around $2200 annually. When you combine this with Medical it is a huge hit to snowball funds that could be coming in this month. I’ve got at least $1000 in Medical bills on my desk right now as well. That’s $5,200 due over the next roughly 4-8 weeks.

The appropriate path is to budget clearly. $2200/y is $184/m. That should be set aside as part of my budget for the property tax, but that lacks the growth possibilities of investing. What do you do when you know you’re going to have such large bills? The choices are limited. Pay out of your paycheck (if you can), budget it into your savings account all year and pay it stress free, or invest it into the market accept gain or losses and choose to sell off the funds to pay for the bill.

I think the frugal path is to set that money aside early and often. Keep it in your emergency fund, but counted separately. (high yield savings is key to cash that’s sitting around).

The snowball path is definitely to put it into the market. Discounting the medical portion $4,200 divided into a monthly budget is $350. $350 even in SGOV would give almost $1 a month in dividends. The last month before the bills were due would be a little over $12, totaling $78 for the year. That’s almost 1 month of savings for the 6 month car insurance payment that you don’t have to pull out of your paycheck. This is probably the better path. Especially if you stick to something with an above inflation rate of return, but very stable and easy to sell off like SGOV.

Part of FI (Financial Independence) is controlling your spending so that you can reach the level of passive investment growth that allows working to become optional. This means Budgeting. Set yourself a path and don’t stray from it. Write down your last year of utility bills. Plan for those, document them. Find ways to put $5 a day, or $3 a day into an investment, or a savings account.

I’m documenting my journey for myself, and if it helps someone else, that’s the bee’s knees, but whoever you may be. You can do this. You can get ahead, you can stay ahead.

Added note: While writing this post, my modem died and I had to replace it, due to my full time job requirements I could not wait or be frugal on this and had to spend $240 getting up and running again. February is just kicking money butt.

~~Miniwing~~
Stoic, Investor, Parent, Wordsmith