Yeah, yeah. I know. That title can sound bad in the wrong context. When discussing FI, though, being a tweaker isn't necessarily a bad thing. At least, not in my opinion. Let me explain.
It wasn't until I created my first rudimentary budget that I became slightly interested in spreadsheets. Mainly, because I didn't know how to do a lot of things in Excel to get my data to look the way I wanted or to calculate rows, columns, etc. the right way. When doing something you actually enjoy or take an interest in, it's amazing the determination you can muster when faced with an obstacle.
Once I had my simple spreadsheet, I thought of ways to expand it and improve upon the equations, identify trends that were important to me. Then I wanted to represent the data using charts so I could take joy in watching the upward trends (and kick myself when I discovered a downward trend--usually, this was because of some bone-headed move on my part).
Being able to see my spending/saving each month and then over the course of a year was invaluable. My mind started searching for more ways to leverage this information. I loved being in control of seeing my financial landscape from whatever perspective was useful to me, not what someone else thought I should see (I'm looking at you online budget programs).
Side Note: If you strike out on the path to FI, you'll eventually come to realize that it's slow going. If you're pretty much relying solely on your work income to grow your investment accounts, then you're going to be playing the waiting game. Sadly, this is something you'll just have to get used to. As others will tell you; this is a marathon, not a race. If it was quick and easy, everyone would be doing it. The lottery, this ain't! (Reaching FI actually has better odds. Much, much better!)
While I was twiddling my thumbs waiting for my next paycheck, I'd review my budget to make sure I covered the necessities, then find myself thinking about how to allocate the money that was left over. Before long, I found that I was killing hours "tweaking" the numbers in a new spreadsheet made for future projections. This was/is a copy of my current budget. I have a sheet for each year. On each sheet there are twelve columns; one for each month. These columns consist of my net pay for the month, all expenses, then all investment/savings accounts. I have grand totals at the bottom and track monthly expense rate (percent), monthly savings rate (percent), and then an annual total for net pay, expenses, and savings.
Based on prior performance, I'm able to carry these numbers forward and predict how much I might be able to save in the coming year(s). I try to remain conservative (read: set my sights a bit low) so I'm not disappointed if/when I encounter a set back during the year. For example, if I didn't withhold enough taxes and find out that I owe more than I thought or I have an unexpected major car repair (this has happened a few times--the joys of having an old vehicle). This is when an emergency fund saves the day and, at some point, you've got to replenish it or you're going to find yourself in a financial bind when you encounter the next emergency.
Let me give you a couple of examples of how I try to remain conservative with my projections. First, let me say that I'm salaried and get paid bi-weekly. This means that there are a couple of months where I will receive three paychecks instead of the normal two. When "projecting", I don't figure in these extra checks. Also, I don't account for capital gains/losses or interest. I'm only tracking the money I'm funneling into my investment/savings accounts. So far, I've received a meager raise each year with my current employer. I don't use any estimations of future raises. I simply use the amount of money I'm currently earning to figure how much I will have for future allocations.
So, based on this information, I'm able to form strategies for how/where I want to move money in the future. For instance, I like to front-load my Roth IRA in January to get it out of the way so I can focus on other accounts. Well, I keep two HYSAs (High-Yield Savings Account). One is my emergency fund. The other, while being a secondary emergency fund, is mainly used to fund my Roth IRA all at once. After all, it doesn't take very long to accrue $5,500 when you're saving $1,500-$2,000+ a month. Once this account has enough to fully fund my Roth, I concentrate on my taxable account. My Roth IRA has already been taken care of and my 401k is set up so I don't have to worry about it (currently, close to maxing it out).
I'm able to have an idea of when I'll hit certain milestones along the path to FI (100k, 250k, etc.) with better accuracy. And, being conservative means that I will most likely reach those milestones even faster because (hopefully) compounding interest/raises/extra paychecks will be my financial tailwinds propelling me forward. Besides, I can always go back and re-tweak my projections based on current-model data.
To some, all of this may sound boring as hell. I don't know what to say to that. It's not boring to me because I'm at the helm of the USS Lazy FI Guy. I plan to sail this vessel into the luxurious port of FI. I want all the maps I can get to help me along the way so it will be smooth sailing.
So, what about you? Are you a tweaker?
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