April 2015 Financial Update
In April, we spent quite a bit of money. We are ramping up for our seven week summer trip to Mexico which led to many expenses in excess of our routine monthly spending. As a result, our income of $2,125 didn’t quite keep up with our $4,549 of expenditures in April. In spite of that shortfall, our net worth climbed another $30,000 primarily due to investment returns.
After receiving over $2,600 investment income in the last few days of March, we had a very light month in April with only $135 of dividends and interest. June will be our next big month of dividends since our funds pay out at the end of each quarter.
Blog income, shown as “other income” in the chart, dipped to a very low $286 in April after a smashing $2,274 in March. This is mostly due to the timing of receiving a few payments that will likely appear in the first few days of May. I have a feeling May and June will be very very good months for Root of Good income.
Freelance writing income was zero, however a check showed up on May 1 for $250 (which will be included in the May financial update).
I expect to make around $600-800 per month over the long term from blogging and freelance writing, and I only made about half of that in April. However I’m still exceeding the $600-800 monthly target on average for the year.
The “deposits” income includes $63 for some stuff I sold on ebay and cash back rebates from the two online shopping portals I use.
I recently started using Ebates, and I’m very happy with it so far. I only received $3 in cash from them last month because I just started using them. Ebates pays out more quickly than Mr. Rebates and I like the site design a little better. When you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card. I got a $10 Walmart gift card very quickly after making my first purchase.
Mr. Rebates paid me $48 for various shopping I completed over the last several months (including $40 for cruise tickets!). You can sign up for Mr. Rebates through Root of Good and get a bonus $5.00 to get your savings started. You can check out both shopping portals, but I would lean toward recommending Ebates if you only want to pick one.
If you’re interested in tracking your income and expenses like I do, then check out Personal Capital (it’s free!). All of our savings and spending accounts (including checking, money market, and five credit cards) are all linked and updated in real time through Personal Capital. We have accounts all over the place, and Personal Capital makes it really easy to check on everything at one time.
Personal Capital is also a solid tool for investment management. Keeping track of our entire investment portfolio takes two clicks. If you haven’t signed up for the free Personal Capital service, check it out today (review here).
Now let’s look at April expenses:
At $4,549 for April, we exceeded our target of $2,700 per month (1/12th of our $32,400 per year early retirement budget) by almost $2,000. That’s mostly due to abnormally large travel expenses and prepaying some utilities to meet the spending requirements on credit cards (to get massive sign up bonuses).
In April, we spent $1,587 on lodging for our big trip to Mexico this summer. We projected the total cost for the seven week trip at $7,000 to $8,000 (full trip budget). So far, we are doing a good job managing the costs without sacrificing quality. We budgeted $3,000 for lodging but managed to come in at about half that for our six weeks of apartment rentals (thanks to AirBnB and VRBO!). I’m excited about the places we are renting. All of them have two bedrooms (or more). One place has a pool while another place has two kitchens and multiple lushly gardened patios with skyline views of the city. For an average of $36 per night.
Our utilities came in at $1,342 for the month. I had to make some last minute charges to meet the minimum spending requirements on a pair of Chase British Airways cards to get another 100,000 BA Avios points (= how we fly for free). I prepaid almost $900 on our electricity bill and $300 on our water bill to hit the $2,000 per card spending requirement. That means I won’t have to pay another electricity bill until the end of the summer. Check out all of the current credit card deals if you want to cash in on free travel too!
Grocery expenses were slightly below average, and that’s partly because of the gift card I purchased last month so I could in essence use a credit card at Aldi. Otherwise, we continued our trend of cooking almost all meals at home and eating incredibly awesome food. Dining out was $17 (and so low it didn’t even make it onto the summary chart of expenses) which includes a few cups of Starbucks for Mrs. Root of Good at work, a super mega sized slushee at the gas station for the kids, and take out pizzas for the family.
Summer is coming and our kids are growing. Time for some new clothes. And shoes for all that walking we’ll be doing in Mexico. We spent $97 at the thrift store on:
- 4 skirts
- 4 shorts
- 6 pair of pants
- 10 shirts
- 1 sweater
- 2 pair of dress shoes
- 2 pair of sandals
- 1 pair of running shoes
- 1 belt
Right after we finished checking out, the friendly cashier casually said “oh, you guys should have come in next week. Everything in the store will be half off. You could have saved $50”. Lucky for us, everything was already 85-90% off regular retail prices, so I don’t lament the “loss” of that $50 we could have saved.
Mrs. Root of Good picked up some Steve Madden fancy shoes (I wish I could be more specific; no, I don’t) and black boots. We noticed one pair of jeans and the sweater were both from Banana Republic. The $100 original price tag when the jeans were new on the shelf didn’t dissuade us from cropping off the legs and converting the pricey apparel into capri shorts (we paid $3). After the thrift store, we went to Walmart ($29) to finish the clothes purchasing for the next several months.
Our cars needed a lot of attention in April. We try to keep auto costs low, and DIY is a part of that strategy when the task isn’t too daunting. A routine brake pad and rotor replacement resulted in $90 for parts and free labor at a friend’s house. A check engine light on my Civic led me to a faulty oxygen sensor. Which led me to the cracked exhaust manifold the oxygen sensor is mounted in. The exhaust manifold is regrettably attached to the catalytic converter. Over 10 years ago, the mechanic warned me about the rusted exhaust manifold and said it would crack eventually. It did, but I got a good extra 10 years out of it first.
The auto shop quoted $1,100 for a repair but I decided to DIY instead using the same parts they use at the shop. I picked up a $277 exhaust manifold/catalytic converter after lots of research. I skipped the cheapo $150-200 manifold/cats because the reviews were pretty sketchy (one of the few instances I’m willing to pay up for quality). I also snagged two new oxygen sensors at $29 each. Between the brake job and the exhaust manifold replacement, I’ll be saving roughly $800 over the auto shop’s rates. I’m getting the same or equivalent parts at half the price the shop charges, and along with the help of a friend, I’m not paying the $98 per hour for labor.
Our gas expense of $310 is artificially high for the month. I picked up $300 worth of Exxon Mobil gas gift cards for $270 off of Ebay (plus another $10 worth of cash back/rewards through Ebates and ebay bucks). These gift cards will probably last us through September since Mrs. Root of Good won’t be working (and commuting a long way) for the next three months due to a paid sabbatical.
There’s something about spring that makes our family buy lots of electronics. Last spring and the spring before that we bought new laptops. This year we were in the market for new tablets. After looking around and trying to balance performance, weight, versatility, ease of use, and cost, we went with the Kindle Fire HD 7 (4th generation, 2014 edition). It’s last year’s model and we picked up two on ebay for $70 each. They look almost brand new, and we saved about 50% versus the $127-143 sale price at Amazon for the 16 GB options we purchased.
After a few days of the kids playing on them non-stop, I’m pretty sure they get a strong endorsement from the eight to ten year old demographic. The device feels sturdy. The screen looks amazing, and it’s easy to use (a slightly customized Android interface). We liked them so much that we bought a third one on ebay for $65. Mrs. Root of Good says it’s for our three year old son, but we’ll see who ends up using it the most. The Amazon interface worked seamlessly with my existing Amazon account and didn’t require me to add a new electronic ecosystem to our household (the reason I have avoided Apple stuff so far).
Since we’ll be packing these in our bookbags on our seven week trip to Mexico, weight is critical. The Fire HD 7’s weigh just under 12 ounces, and even with the charger and cable the weight stays under a pound. Not bad for a Netflix/youtube player, an e-reader, a gaming machine, and a videochatting device that cost $70.
At $10,445 year to date spending, we still managed to stay a few hundred dollars under our $10,800 budgeted for the first four months of 2015. Which is amazing since around half of our expensive summer trip is already paid for, and I have over $1,000 sitting in prepaid utility accounts and gift cards. Our spending for the year as a whole should still be roughly within our budget.
Net Worth: $1,533,000 (+$30,000)
By the close of April, we were still proud members of the $1.5 Millionaire Club. It’s a precarious position since a $10,000+ daily fluctuation in net worth happens often enough. The last two days of April led to a $20,000 net worth drop after our NW temporarily peaked at $1.553 million.
Hey, it comes and goes. No reason to worry since we only plan on spending a small fraction of that net worth in the next few years.
I’m not really confident that these net worth gains are permanent. I’m mentally discounting the $1.5 million net worth down to $1.4 or $1.3 million so that if (when?) it drops, there won’t be any tears shed. If we suddenly lost $200,000 over the next month, we would still be spending less than 3% of our portfolio each year, which is easily within the 4% rule’s safe withdrawal rate.
I don’t think we’ll ever run out of money in early retirement because we have the flexibility to earn a little bit of money or spend a little less (weekend trips around home versus seven weeks in Mexico for example).
Was April as kind to you as it was to me? Any big changes for the better (or worse) in your finances?