The Costs of a South American Vacation

I’m back from my vacation to South America and I had a great time! I am documenting the vacation expenses this time around, which is something I regret not doing last year.   The one thing I love about South America is that it’s very affordable. During this trip the most I paid for a meal was $15. This was at an upscale formal-attire restaurant. In the US $15, may not even cover an appetizer at a similar restaurant.

Now to summarize my spending:

Day 1: Travel Cost Description
Food $37 No lounge access, a delayed flight and stomach problems resulted in sizable food purchases.
Uber $15 I Ubered to the airport due to Metro construction
Day 2-10: Fun Cost Description
Credit Card Transactions $127 These were mostly food purchases but I did buy some souvenirs.
Cash Withdrawal $195 I withdrew local currency from my checking account
Currency Exchange ($135) But I didn’t use all of the currency I withdrew. I ended up having free lodging for my entire trip!
Day 11: Return Cost Description
Food $7  I ate breakfast in the lounge ($0) and for lunch I was only charged for my drink due to an error with my entree.
Souvenirs $12  I bought some last minute souvenirs at the airport.
Day 12: Delay Cost Description
Lodging $157 About 4 hours into my 5 hour layover on Day 11, I learned my second flight was cancelled. I ended up with an extra day of “vacation”. Since I insured my trip, I got a hotel.
Food $33  Eating is a thing that I tend to do.
Ubers $15  Prior to my departure I made a pharmacy run.
Pharmacy Run $36 I had an ear infection. I bought extra toiletries since I knew these were reimbursable.


  • If I don’t include the extra day of travel, I spent $258 on my vacation. Or $122 below my stretch goal.
  • My extra day bumped up my vacation costs to $499. Which was $119 above my stretch goal but $118 below my realistic goal.
  • I anticipate spending no more than $110 the rest of this month, meaning I’ll easily stay within a typical month’s budget (if I don’t include the costs of the extra day).
  • I need to start the claims process with my travel insurer to be reimbursed. I’ll never second guess purchasing travel insurance again!



Pre-Vacay Check-in and Budget

I haven’t been successful with the 9 no-spend days before my vacation. I ended up spending $82.74. I don’t plan on going anywhere else before my trip so that should be the end of the money leakage. Here’s how things went down:

  • $2.85 – UPS – merchandise return
  • $40.22 – Food  work function and I also treated myself on numerous occasions.
  • $6.67 – Target Item Subscription – I forgot to cancel this, but I would need it eventually.
  • $33.00 – Credit Repayment – I’ve been paying back a small purchase at 0% interest. I have been tracking the payments as if they were small purchases due to the small cost. This was the last payment.

Even though I didn’t reach my goal, I’m pleased with my performance. It was hard!! I really wanted to buy some things, but I was able to hold back. Had my spending trajectory continued, I’d spend ~$180 on food and everything else by months end. This is $270 below my usual budget.

My Vacation Budget

So I guess I should share where in the world I’m heading! I’m going to South America for 10 days. I will be spending time in 2 countries. I have three numbers in mind when I think about how much I want to spend on this vacation:

  1. $380 – stretch goal My “stretch” goal would keep my spending within my usual $2,200/monthly spend budget.
  2. $617 – realistic goal My more realistic goal is to limit my spending to what I spend and save in one month excluding the Emergency Fund savings!
  3. $750 – absolute threshold This is my absolute upper bound and it’s what I’d usually spend and save each month including emergency fund savings.

I wish I had kept track of how much I spent on my 2 week vacation last year. But I remember wanting to spend $500. I also remember it being difficult to spend $500 even after spending $200 for a last minute excursion that required a plane ticket and lodging. We’ll see if this trip is similar. So far I know I’ll be spending $110 on lodging.

Net Worth Update – March 2017

I have this horrible habit of throwing my budget to the wind when I notice that I’m falling off the wagon. I figure if I’m already screwing up, I might as well have a good time doing it.  March was one of those months. I went over my budget in several areas, and then I decided to stop tracking my budget altogether.

All things being considered, things didn’t end nearly as horribly as they usually do when I have months like these. I’m at a point in life where I don’t have many things that I want or need to spend my money on, at least not that I can afford. All the things I really want are in the $200+ dollar range and require budgeting, planning and adulting – meh.

Here is where my accounts stand:

Liquid Assets Feb-17 Mar-17 $ Change
Cash & Savings $1,425 $600  -$825
Emergency Fund  $3,009  $3,026  +$17
Short Term Savings $300 $500  +$200
Long Term Savings $144 $154 +$10 
Illiquid Assets Feb-17 Mar-17 $ Change
Brokerage $197  $287 +$90
Savings Bonds $1,315 $1,445  +$130
Incoming $0 $76  +$76
Retirement Accts Feb-17 Mar-17 $ Change
Roth IRA $13,600 $ 14,492  +$892
Traditional 401K $15,364  $17.157 +$1,793
Net Worth $35,354 $37,737 +$2,383
% Change +6.7%

Goal Progress:

Fund/Goal Contrib. Total  Goal Progress
401K $1,476 $5,462 $18,000 30.3%
Roth IRA $810 $2,030 $5,500  36.9%
Emergency Fund $147 $4,471 $5,500  81.3%
Vacation Fund $200 $500 $500 100.0%
Vanguard Fund $10 $154 $3,000 5.1%

I’m still on track for meeting all of my goals! My vacation fund was a super short term goal that I easily met over a span of two months.

Category Budgeted Actual Remaining
Rent $1,650 $1,650 $0 left
Fixed Expenses $100 $87 $13 left
Medical $- $600
Food $200 $286 $86 over
Everything Else $250 $314 $64 over
Total  $2,200  $2,337 $137 over

Rent: I paid the usual: a lot. I choose to live close to work.

Food: I paid only $150 on groceries this month, but I ate out more than usual. I took a friend out for her birthday ($30) and overall was feeling lazy in regards to food preparation.

Fixed Expenses: No surprises here.

Everything Else:

Some extras this month include:

  • $40 in gift purchases for the friends I am visiting next month.
  • $35 for new floor lamps

Medical Expenses: I don’t include medical expenses in my monthly budget (I am reimbursed with my FSA). But I had a couple big expenses this month all of which are related to my health problems.  I still have a sizable FSA, but may have to wait another year to get my wisdom teeth removed. My health costs this year are a little higher than I had anticipated. Still, they are on a downward trend in comparison to last year.

But the way things are going I may have to start a new treatment that would require monthly infusions.  If it works I’ll need it for the rest of my life. This will be fairly expensive. We’re trying one more thing in hopes that I don’t have to go that route, but it looks likely.

Coming in April:

I’m buying no groceries. And will have absolutely no spending for the first 9 days. On the 10th day I’m going on a 10-day international vacation!

My hotel/lodging arrangements are set, and much cheaper than I expected.  I have a general idea of how much I want to spend on this vacation but I’m not trying to make a big deal about it.

If I can manage no spending in the first 9 days, I will have a $200 food budget and a $250 miscellaneous expense budget to use for my vacation. This would be ideal because I may not even have to dip into my savings for this vacation! A business trip soon after means that I won’t be home for most of April and won’t actually need any groceries this month.

Side Hustling?

One thing that I promised myself after I earned my PhD was that I would never work harder than my body would allow. My health is very precarious. I have some pretty serious health issues that affect me daily. These conditions are potentially life threatening. Fatigue and pain are major components of my illness, and if I push myself too hard, it can lead to worsening health. Because of this, I’ve been avoiding pursuing a side hustle.

I got a PhD to make my life easier. It made me a competitive candidate on the job market. I have an awesome job, with my desired employer. I’m working 9-5 and no more. My earning potential in my current position is $100,000+. Work doesn’t make my life very stressful. These are all things I knew  a PhD would get me. And I’m very thankful for that, and that was exactly my goal.

That being said I’ve been approached with a side hustle opportunity and I have accepted. The great thing is my life shouldn’t change all too much. I’m currently active in the health community mostly dealing with patient engagement. I’ve been doing this for a couple of years on a voluntary basis. A group of friends are now looking to branch out and make this a non-profit organization. But in general, it is something I’m already passionate about and already do on a regular basis without compensation.

Keeping Track of My Personal Savings Rate

One thing that I didn’t do a good job of last year was keeping track of how much I was saving and spending month to month. Because of this, I was unable to determine my personal savings rate, or the percentage of income saved.

I am now outlining my budgeted expenditures in all of my net worth updates.  And while, I don’t directly mention how much I save, I can extrapolate this number by looking at my goal progression.

In order to calculate my personal savings rate I take the following steps:

  1. Calculate the amount of income saved
  2. Determine total income earned
  3. Divide income saved by total income

When I do this, I get a savings rate of approximately 45% of my gross income. This is for the first 2 months of 2017. This is quite a bit higher than I was expecting, but I did have three paychecks in January and  received a tax return.

I live in a city with one of the highest costs of living in the nation.  I make enough money to live comfortably, but I’m pretty far off from a six-figure salary.  Given that I live by myself, due to my health condition, I’m pretty happy with this savings rate.

As a statistician, I like graphs, so I broke down my spending a bit further to better illustrate my savings and all other categorical expenditures. As you can see, most of my income goes towards taxes and deductions, rent, and my 401K contributions.



I know some calculate the personal savings rate based on net income, which is defined as gross income minus taxes. If I were to use net income my savings rate jumps to 60% so far in 2017.

Personally, it’s easier for me to use gross income. Additionally, since I will be paying taxes in retirement, it doesn’t really make sense to look back on net income statistics. For example, knowing that I saved 27% of my gross income towards retirement tells me I could most likely live comfortably on 75% of my current income in retirement, even if it’s taxed.  The fact that I contribute to a Roth IRA should shelter me from some of the tax burden, but I’d rather overestimate the money I need as opposed to underestimate.

Net Worth Update – February 2017

It’s number time!

Liquid Assets Jan-17 Feb-17 $ Change
Cash & Savings $1,200 $1,425  +$225
Emergency Fund  $2501 $3,009  +$508
Short Term Savings $75 $300  +$225
Long Term Savings $43 $144  +$101
Other $303 $0 ($303)
Illiquid Assets Jan-17 Feb-17 $ Change
Brokerage $197  +$197
Savings Bonds $500 $1,315  +$815
Retirement Accts Jan-17 Feb-17 $ Change
Roth IRA $12,824 $13,600  +$776
Traditional 401K $13,126 $15,364  +$2,238
Liabilities Jan-17 Feb-17 $ Change
Medical ($100) ($0) +$100
Net Worth $30,472 $35,353 +$4,882
% Change +16.0%

My net worth increased by close to $5,000 this month!

The increase was mostly due to my tax returns. I’m not aiming for a sizable tax return next year. I only did so this tax season because I knew I’d be tempted to dip into my emergency fund during my first year of work. So I let Uncle Sam hold onto my emergency fund. Now that I’m through the rough year, I won’t have to resort to such measures.

I love how my net worth went from $20K  to $25k to $30K over the past 3 months. It was a good run, but I don’t anticipate on keeping that momentum going.

Goal Progression:

Fund/Goal Contrib. Total  Goal Progress
401K $1476 $2,510 $18,000 13.9%
Roth IRA $398 $1,219 $5,500  22.2%
Emergency Fund $1,323 $4,324 $5,500  78.7%
Vacation Fund $225 $300 $500 60.0%
Vanguard Fund $101 $144 $3,000 4.8%
February Stretch $- $6,390 $5,570 111.1%

I’m on track for meeting all of my goals, and I’ve started two new ones. My vacation fund is in my short-term savings account and my Vanguard Fund  is in my long-term savings account. My vacation funds need to be accumulated by April. I have no specific timeline on my vanguard fund.

Oh and I surpassed my February stretch goal of having $5,750 in liquid and illiquid assets.  I even met my March stretch goal.  Using my goal post trajectory, I also surpassed my April goal.  This allowed for my vacation in April which was a spur of the moment decision I did not budget for.

So how did my budgeting go this month?

Category Budgeted Actual Remaining
Rent $1,650 $1,650 $0 left
Fixed Expenses $100 $146 $46 over
Medical $- $73
Food $200 $163 $37 left
Everything Else $315 $286 $29 left
Total  $2,265  $2,252 $20 left
  • Rent: I paid the usual: a lot. I choose to live close to work.
  • Food: I was $37 under my food budget!
  • Fixed Expenses: I went over $46 because I decided to trial Sling TV (not keeping). I also kind of wanted the Roku that came with the trial.
  • Medical Expense: While I don’t budget for medical expenses, I finally received a medical bill that was long anticipated.
  • Everything Else: I gave myself an extra $65 to spend on “Everything Else” due to $65 extra income. Notables for this month include purchasing 4 plane tickets for 2 vacations and also partially funding a hostel stay. Thanks to credit card rewards I didn’t spend a whole lot on any of this.

Even with the overage in the Fixed Expense category I still managed to come $20 under my budget.  The $20 has been transferred to my long-term savings account.

March should be another straightforward month. April may be a bit more interesting since I’m going on my first vacation. This is a 10-day international trip. I would love to keep my spending on this trip under $500, but I think $750 may even be a stretch. We will see!

A Slow and Steady Portfolio Rebalance Explained

Now that my 401K and Roth IRA are decent sizes, I realize it’s time to evaluate my portfolio and rebalance accordingly. For a while I had my entire Roth and 401K invested in target retirement accounts. I decided to do this until I felt a bit more comfortable with investing in general. Now that I do, it’s definitely time to change my investment strategy. I’m not going to do this all at once, instead I’ll do this slowly as I make my biweekly contributions.

My 401K has some fairly limited options so I have to balance it out using my Roth that is through Vanguard, using a weighted average of both my 401K and Roth retirement accounts, my current retirement assets are allocated as follows:

  • US Stock – 63.8%
  • World Stock – 24.0%
  • US Bonds – 8.4%
  • International Bonds – 1.4%
  • US Real Estate – 2.2%
  • Cash – 0.2%

I’m pretty happy with this allocation considering that I’ve pulled myself out of my employer’s target retirement account and created my own mix. I’m roughly 10% bonds and 90% percent stock. And my stocks are split 72% US and 28% foreign.

Goal #1

My first goal is to increase my US Real Estate holdings so that it comprises 5% of my portfolio.  I hope to have this goal accomplished by the end of the year.

Goal #2

My second goal is to get into the habit of evaluating my portfolio and investment strategy biannually. I think February and July are good months to do this. It’s highly probable that my real estate investments may grow at a different pace than my stocks and/or bonds, so it’s important that I do this.

Of course the general economic environment will also guide my investments. A market correction may lead me to pour more into the stock market, for instance.

Goal #3

I would then like to start investing in International Real Estate until it makes up 2.5% of my portfolio. Hopefully this goal will be accomplished by the end of 2018.

Goal #4

My fourth goal, is to have enough to purchase a Vanguard admiral share. I’m still investing in a target fund at this point. Once I have enough money to do so, I can then move into a world stock mutual fund and mutual funds for bonds. Until then, this system works well enough. I think it will be 3 years before I can get to this point.

I did some calculations and I will eventually have to balance out my 401K with my Roth by having my Roth be:

  • 43% International
  • 31% Real Estate
  • 19% US Stock
  • 7% Bonds


Paycheck Allocation

The promotion I received a few months back has been a definite game changer. I am no longer living paycheck to paycheck. I can’t believe how hard it is to live in DC on a $65K salary! But when you consider that the average apartment rent is $2,200 in the city, it makes sense. According to this article, one needs to make $83,104 annually to live comfortably in DC versus $53,897 in nearby Baltimore. I’m now pretty close to that “comfortable” threshold and I can totally feel the difference!

The interesting thing is my paychecks are actually smaller this year than last. This is because of my new goal to max out my 401K. I am still more at ease because I now have an emergency fund, and I know I can cut back on my 401K contributions at any time if necessary. Now that I’m more comfortable with where I stand, I changed how I plan to allocate my paychecks.

The Friday before I am paid, I have money from my main checking account distributed to my other accounts. This gives me a false sense of never seeing the money coming out of my checking account. The following is transfers occur:

  • +$195 – Roth IRA
  • +$65 – Savings Bonds
  • +$50 – Short Term Savings

Then on that Monday my paycheck is deposited. The remainder of my paycheck goes towards my monthly expenses and there is some left over to act as a cash buffer in  case I go over budget.

My plan is not to let my checking account/cash buffer get too high. So any time  my checking account gets to be over $2,500, I’ll be transferring the excess over to another account.

Net Worth Update – January 2017

After December I generally find Januarys easy to handle, at least in the financial sense. This January was no exception. This is where my accounts stand:

Liquid Assets Dec-16 Jan-17 $ Change
Cash & Savings $832 $1,200  +$368
Emergency Fund  $1,500 $2,501  +$1,001
Short Term Savings $0 $75  +$75
Long-Term Savings $0 $43  +$43
Other $290 $303 +$13
Illiquid Assets Dec-16 Jan-17 $ Change
Savings Bonds $0 $500  +$500
Roth IRA $11,756 $12,824  +$1,068
Traditional 401K $11,521- $13,126  +$1,605
Liabilities Dec-16 Jan-16 $ Change
Credit Cards $0 $0 +$0
Medical ($175) ($100) +$75
Net Worth $25,724 $30,472 +$4,748
% Change +18.5%

Liquid Assets:

According to my Goal post , if everything went as planned in January, my liquid assets should have increased by $1,950. Collectively, my Liquid Assets increased by exactly $1,500 – $450 below target. The main reason why I missed this target is due to transfers into illiquid savings. I contributed a bit extra to my Roth IRA and I decided to turn towards i-savings bonds. When these are taken into account I actually saved and invested $2,165.

One change to my financial plan is the fact that I opened accounts for my short and long term savings goals. I will make a post on what these goals are soon. My long term savings will eventually be transferred to a brokerage account.

Illiquid Assets: 

The second change in my financial plan is the slow movement of my emergency fund over to i-savings bonds. I haven’t quite figured out my contribution schedule for this yet since I won’t be able to touch these funds for 12 months (this is why they are listed as illiquid right now). But the interest rates are better than banking. I’ll most likely purchase a $500 savings bond with my tax returns.

My retirement accounts increased nicely. As stated in an earlier post, the first two 401K  contributions were small the third was $738. Subsequent contributions will continue to be $738 to reach $18,000 by the end of the year.


I decided not to carry over any credit card debt this month and I would like to get into that habit. I still have medical bills to pay though.


As I said previously, January tends to be good on the budget. I did change my budget slightly from the beginning of the month. Namely, I increased my “Everything Else” expenses by $300 due to receiving $100 as a late Christmas present and a  $200 banking reward.

Category Budgeted Actual Remaining
Rent $1,650 $1,650 $0 left
Fixed Expenses $100 $89 $11 left
Food $200 $192 $8 left
Medical $440
Travel $77 $77 $0 left
Everything Else* $373 $423 $50 over
Total  $2,400  $2,431 $31 over

I ended up spending $100 on an Amazon prime membership, and $75 on a toothbrush. I’m hoping the toothbrush saves on some of my dental bills.  I gave $25 to a friend and don’t expect it back. I spent the rest here and there on various things, such as booking a hostel for an upcoming trip .

I don’t budget for medical expenses because my health is too important to place an upper limit on my spending.I spent $440 on medical expenses this month but I don’t anticipate that this spending category will affect my net worth for a while due to a well padded FSA and a health based rewards card provided by my insurance company. If I remember correctly it was around April when I depleted my FSA and rewards card last year. My health is much better this year, so I’m hoping they’ll last the entire year


I finished up my tax returns this month and it will be larger than anticipated. I should be receiving the federal portion on February 5. I am not sure how long it will take to receive the state portion.

Here is how I plan to allocate my return:

  • $500 in Emergency Fund
  • $500 in i-Savings Bonds
  • $100 in healthcare expenses
  • $70 Fun Money

The remainder will go towards my cash buffer in my primary checking account

Conclusions & Next Month

This was an incredible month. I stuck to my game plan and was able to save $215 more than I originally anticipated. Going back to my goal post, with taxes coming up next month, my goal was to increase my liquid assets by $1,125. I am going to roll over the extra savings from this month so I need to increase my liquid assets and savings bond category by $910 to stay on track.

Right now I have $4,622 in liquid assets and savings bonds. My goals now are:

  • February Goal: $5500
  • February Stretch: $5750
  • March Goal: $5750
  • March Stretch: $6000

Why I (currently) Have a Tiny Emergency Fund

I’ve gotten a few comments in the forums that I frequent about my dismal emergency fund. Right now I’m sitting on an emergency fund of $2,000 which isn’t even enough to cover one month’s expenses. The first thing I would like to say is I am working on building my emergency fund in 2017. If the stars properly align, I may even have a 3 month emergency fund in a couple of months.  Secondly I’m just going to admit that I am being gutsy.

When I first learned about the goodness of Roth IRAs my first inclination was to max it out. I read about the power of compound interest. I wanted the compound interest. I also read how an uninvested Roth IRA could serve as an emergency fund. I really just wanted the compound interest. So I invested my Roth IRA and went without an emergency fund for all of 2016. I worked on maxing out my Roth IRA for both 2015 and 2016 within the 2016 calendar year.  Maybe this is a taboo move in the personal finance blogosphere but hey I did what I wanted.

Still I wasn’t totally without access to “emergency” funds. I established an FSA account in 2016 knowing I had some costly health problems. This helped shelter the blow  of several thousand dollars in medical costs. I fully anticipate 2017 will be a year of high medical costs  due to the nature of my chronic illness. I hope it’s surprisingly less expensive, but I went ahead and funded my FSA even more than last year.  I also purchased disability insurance.  It’s also important to note that my retirement accounts serve as emergency funds for early disability retirement.

I became less compelled to establish an emergency fund as certain dates drew near. In September my lease ended and I began to rent my apartment month-to-month.  This means that if I do experience an emergency the $1,650 I spend in rent can be slashed very quickly.  My family also moved into the area and I now had a place to stay should I experience the emergency of all emergencies. My disability insurance will be effective in 3 months. Once it is effective, if I do get sick or injured I shouldn’t be without income for too long.

So I have no liabilities, and no recurring monthly expenses that are absolutely set in stone other than a $30 cell phone bill. In the worst situation I’d be able to lower my monthly expenses to about $1,000 by moving out of my apartment, placing everything in storage and moving in with my parents. I know one might think that relying on parents for emergencies may burden them, but that’s definitely not the case for my family.My intention wouldn’t be to rely on them financially, but just to have a place to stay. I have been 100% independent since I turned 18. When my older sister lost her job a few years ago, my parents wanted her to move in right away to minimize the damage to her finances.  It’s easier for everyone when you remain in the green versus the red.

So for all those reasons I focused on maxing out my Roth IRA, largely ignoring my emergency fund. I don’t regret my strategy probably because I had no real emergencies. As I said, I’m working on establishing my emergency fund in 2017. January is a month in which I will be seeing three paychecks. Since I only budget for two, the third paycheck will go directly to my emergency fund. It’s the end of the first week in January and my liquid holdings currently stand at:

  • Checking & Savings: $1,000
  • Emergency Fund: $2,000

According to the schedule I laid out, I expect to have an emergency fund large enough to cover 2 months of living expenses ($4,400) by the end of March.  My goal is to have an emergency fund of  $5,500 by the end of the year with an ultimate goal of $10,000 within the next 2-3 years.  Most likely I will be investing anything over $5,500.

Another mental note I’d like to make is that should I experience an emergency in 2017, I will be able to increase my income by $400 a paycheck by lowering my retirement contributions.  Even if I were to become unemployed, my paycheck is delayed enough to do this at least twice, for an additional $800 in one month.