FIFoldPath

Monthly Financial Snapshot: August 2021

I got a new phone this month since my 3+ year old OnePlus 6 is approaching end-of-life. It received its final major software update about a month ago, its battery has trouble making it through a day without recharging, its charging connector seems to be bent since most cables don't stay seated, and various other small issues continue to pop up. It's been a great phone so far, and I'll probably keep it around as a backup phone or to turn into a home device or hobby project. To replace it, I got a new Pixel 5a that just launched. I've been very happy with it so far as it is very similar to my previous phone in physical dimensions, except its battery has much higher capacity and it has a lower-powered chip that is still more than enough for daily use (I don't play mobile games). As a result, I haven't been able to even drain its battery below about 60% in a day, even with substantial YouTube viewing. Since it's a Google device it will receive at least 3 years of software support and is first in line for updates. To top it off, it has support for the myriad Japan-only electronic payments and transit systems which will finally allow me to use my phone for payments and trains instead of periodically recharging a plastic card with cash. All in all, I hope this phone will serve me for several years at an affordable price.

This month I also made some large tax-related payments. The first one is a little over $500 worth in residence tax payments for 2020. The way that tax works in Japan is there is income tax at the national level, plus a local income tax, which I will call residence tax from now on. I haven't familiarized myself with all the details, but the gist is that the amount of tax that you pay in a given year is based on your previous year's income, the tax bracket you fall into, your marital status, and some other factors. If you are a company employee, tax is withheld from your paychecks according to your salary and there is an adjustment done towards the end of the calendar year in order to true-up discrepencies that may have occurred throughout the year (unpaid absences, overtime, etc.). For whatever reason, my employers in 2020 did not withhold residence taxes from my paychecks, so as a result I received a letter from my local government informing me of how much I owed and 4 bills to be paid quarterly. I had been expecting this, so I have been setting aside savings in preparation to pay the bills. I paid the first one this month and will make 3 more payments over the next several months at regular intervals. Nothing much more to say about that.

The second payment was a voluntary tax "payment" to the US government. As I've written about previously, this is actually more of a loan than a tax payment. I applied for the United Quest card back in May and it required $5,000 in spend over the first 3 months in order to earn its 80,000 mile sign up bonus. Since I don't usually spend anywhere near $1,666 / month on credit cards, I had to make up the difference using tax payments. As a result, I gave the IRS a nearly $4,000 interest-free loan this month and paid a fee of $75.73 in order to do it via my credit card. I will receive my loan back when I file my return in 2022, but in the meantime I did receive my 80,000 bonus miles to use as I please. Unfortunately COVID-19 is still going strong here in Japan so I might have to wait a while before it's safe to get on a plane again, but when I do those 80k miles will be good for about 4 domestic roundtrip excursions with my girlfriend, courtesy of the IRS and United Airlines. Oh, and I will do the same thing again in another 3 months to earn an extra 20k miles on top of that.

Aren't taxes just wonderful?

Here's my August expenses:

Category 08/21 Comments
Rent $897.00
Internet $49.67
Cell Phone $40.23 I'm in the process of changing providers, so this includes a phone number porting fee
Natural Gas $13.85
Electricity $78.74 Air conditioning in Tokyo summers is a necessity, and unfortunately isn't cheap.
Water $35.15
Groceries $713.70
Transport $5.91
Health $204.17
Other $3.99
Necessary $2,042.41
Restaurants $40.13
Entertainment $0.00
Shopping $908.67
Travel/Parking $75.73 Tax payment service fee
Gifts/Donations $0.00
Software/Games $65.84 Password manager subscription renewal
Business $0.00
Other $0.00
Discretionary $1,090.37
Total Expenses $3,132.78
Gross Income $5,805.35 Salary, gifts, interest, class action settlements
Taxes $4,855.88 Extra US tax payment, Japan residence tax payment, regular withholding
Net Income $949.47
Savings -$2,183.31 Negative due to tax payments
Savings Rate -229.95%
Net Worth $430,054.68

Projected time to FI (assuming 6% growth and 4% withdrawal rate): 6 years, 1 month.

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