November 2016 Financial Update
November was a busy month for us! We ate a lot of turkey then packed up the minivan and set out for a five night Caribbean cruise. Now that we are back, it’s time to take a look at our financials for last month. Income looks tiny at $785 for the month (but I’ll explain why) while expenses remained moderate at
$2,774 $1,884. A strong stock market propelled our net worth $33,000 higher to $1,651,000. All in all, November was a great month financially and otherwise.
Here’s the details:
November investment income dropped to $39. Since our mutual funds pay at the end of each quarter, the months of March, June, September, and December always bring us high investment income while the other months are near zero. December should be a huge month of dividends, hopefully pushing our 2016 dividends over last year’s total of $28,527 in dividend income.
Blog income, shown as “other income” in the chart, shrunk to $276, down from $7,253 in October. The stark difference is a matter of timing of deposits. I received some checks in the mail while we were on vacation and didn’t get them deposited till the first few days of December. November’s numbers were bad but December’s income will make up for it. My early retirement lifestyle consulting also declined from October to $242. After a month of spotty income like November, I’m very glad I don’t rely on my blog and consulting income to support our living expenses!
The $227 in Deposits includes the cash back rebates from the Ebates.com and Mrrebates.com online shopping portals. If you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did. I try to do all of my online shopping through one of these portals and the cash back adds up fast. We spent over $800 on the cruise through the Ebates portal and we’ll be getting 10% of that back soon.
Not shown in the income chart is the $10 per day our middle child earns as a tutor. She was just getting started with tutoring at the time of my last monthly financial update and now she’s steadily earning $10 two or three days per week.
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 November expenses:
Even though we went on a Black Friday spending spree, at
$2,774 $1,884* for the month, we still spent almost $1,500 less than our budget of $3,333 per month (or $40,000 per year).
$1,273 $383*: No, we didn’t dine on wagyu beef and caviar for every meal. I spent $890 on $1,000 worth of Aldi gift cards (my largest Black Friday purchase). The other $383 was our actual grocery bill for the month, which was less than we usually spend because we didn’t want to buy many perishable goods then head out of town for a week on our cruise.
* 1/4/2017 note: since getting a quick refund of $890 on the Aldi gift card purchase, our revised spending total for November 2016 was $1,884 total, and $383 on groceries
I’ll probably blow through those Aldi gift cards in the next three or four months since I spend more on groceries at Aldi than other grocery stores. I bought them at Cardcash.com, a gift card reseller that buys and sells gift cards, for 11% off of face value which saved me $110. If you want to browse their inventory and save $5 on your first gift card purchase, click on over! That’s my go-to site before I make any major purchases. They offer gift cards for hundreds of different retailers like Lowe’s, Home Depot, grocery stores, gas stations, restaurants, even hotels. Some are discounted just a percent or two while others routinely sell at double digit discounts. They also run sales for an extra 5-10% off select gift cards (like the Black Friday 5% off everything sale).
*** 12/14/2016 Update: A couple of readers bought the Aldi gift cards from Cardcash and they turned out to be empty or invalid (and it turns out my $1000 of gift cards are duds too). Cardcash will almost certainly refund the money we paid since it’s within their 45 day guaranteed refund period. If not a credit card charge back will do the trick!
After reading similar complaints online about Cardcash (maybe it’s only certain stores’ gift cards bought through Cardcash??) I think I’m switching my gift card buying to Raise.com (get a $5 discount off your first purchase through that link). They have very similar offerings and not as much negative feedback AND offer a 100 day money back guarantee. I’m also learning it’s a good idea to buy just what you plan on spending within the guarantee period so you can ensure you won’t lose money.
12/15/2016 Update: Cardcash approved my refund claim and I received the full $890 value paid. ***
Electronics – $759: I’ve been looking for a smaller, lightweight laptop for our Europe trip next summer. I finally found an almost perfect laptop on a Black Friday sale for $349. Mrs. Root of Good said she needed one too so we got matching his and hers laptops. I went with the HP ProBook 430 G3 13.3″. It’s like a 70% cheaper version of the Macbook Pro but with a crappier LCD screen and worse battery life. It came with a SSD hard drive, Intel i3-6100U CPU, and 8 GB of RAM. I have to say I’m impressed so far given the $349 price tag. It weighs just over 3 pounds and it’s lightning fast for most tasks (but could only run my Heroes of the Storm graphic-intensive game at medium settings). The keyboard feels a tiny bit cramped but I think it will be fine once I get used to the slightly different key layout.
I also bought the HP X3000 wireless mouse for $8 to accompany the new laptop.
Mrs. Root of Good indulged her photography habit with the purchase of a Canon EF 75-300mm f/4-5.6 III zoom lens for $53. Now she can take really close up pretty pictures of birds and stuff from far away.
Insurance – $213: 6 months of auto insurance for the two of us. $500,000 liability limits.
Healthcare/Medical – $135: Health insurance premiums of $125 for our very impressive gold plated silver plan obtained through Healthcare.gov with some very sizable ACA subsidies. $10 for a prescription.
Utilities – $124: Mainly the city water, sewer, and trash bill plus a small natural gas bill (before we turned the heat on in November). In a previous month I prepaid the electric bill by applying an extra $250 toward my account balance – more credit card travel hacking. This month I’ll have to start paying the electric bill once again.
Home improvement – $87: A run to Home Depot for miscellaneous home improvement and yard maintenance stuff. Ant killer, some blue paint, wood stain for a furniture project, primer/stain block for some water stains, and HVAC vent covers. Sadly, I didn’t have any discounted Home Depot gift cards on hand nor did I have any coupons so I HAD TO PAY RETAIL (and it breaks my heart a little). But we knocked out several projects so there’s that.
Travel – $63: Gas on the way to the cruise terminal in Jacksonville – $22. Parking right across the street from the cruise terminal for six days – $41 (way better than $75 for parking at the port).
Restaurants – $62: This includes one meal for the whole family at the Chinese restaurant and a $25 Groupon deal for a $25 Papa John’s gift card plus two free large pizzas. Using coupons and promotions, I’ll turn that $25 Groupon deal into six or seven large pizzas. I’m not a huge Groupon fan because we don’t go out to eat very often, but there are certainly some killer deals to be had if you dine out often. Check out Groupon if you haven’t already (they offer 25% off your first purchase through that link).
Gasoline – $28: I finally had to buy two thirds of a tank of gas. This was at the beginning of November when the east coast gasoline pipeline blew up (again) and we feared gasoline shortages. Nothing ever happened here and prices didn’t even go up. I topped off the tank at the very end of November while driving to the Jacksonville, Florida cruise port but I classify any gas purchased while on vacation as a “travel” expense and not a routine driving-around-town gasoline expense.
Cable – $24: This is internet from the cable company. It’s usually $35 but I had a small credit from the previous bill.
Overall we had a very frugal month. When I pull out the Aldi gift card purchase, the big electronics purchases, and the six months of auto insurance, our routine monthly expenses were only about $1,000. Even when we include all those big lumpy expenses we were still several hundred dollars below our monthly budget of $3,333.
Year to Date Living Expenses
$33,554 $32,664 (see note under “groceries”) year to date spending, we remain below our annual spending target of $36,667 budgeted for the first eleven months of the year by a few thousand dollars.
With only a few weeks left in the year, it looks like we’ll have a budget surplus of at least four or five thousand dollars. I’ll mentally carry that balance forward into 2017 because we will need it. Nine weeks in Europe in the summer of 2017 won’t be cheap. I doubt I can pull it off for less than our 2016 travel budget of $10,000.
We also need to replace the roof early in 2017. The budget for the roof replacement is somewhere around $4,000 to $8,000.
Of course we won’t be spending over $8,000 on a new vehicle in 2017, so things might work themselves out naturally.
Monthly Expense Summary:
- January 2016 – $2,293
- February 2016 – $2,030
- March 2016 – $10,911 (includes minivan purchase)
- April 2016 – $1,829
- May 2016 – $2,979
- June 2016 – $2,485
- July 2016 – $1,190
- August 2016 – $2,817
- September 2016 – $2,781
- October 2016 – $1,460
- November 2016 – $1,884
Net Worth: $1,651,000 (+$33,000)
The $33,000 net worth increase in November more than erases the $29,000 we lost in October. Our net worth reached a new high water mark in November at $1,651,000, and things are holding steady about a week into December as I publish this post. It certainly looks like we’ll close out 2016 with a much higher net worth than 2015, when we ended the year at $1,503,000.
Most of this year’s net worth increase came from investment growth. Mrs. Root of Good only worked about one month in 2016 before joining me in early retirement, so her salary this year was minimal. This blog and my Early Retirement Lifestyle Consulting generated enough income during the year to roughly offset all of our living expenses, so we haven’t touched our investments during the year other than withdrawing the dividends from our taxable portfolio.
In November, I finally bumped up the value of our house from $140,000 to $145,000 in Personal Capital after reading some reader comments in my article on the gentrification of our neighborhood. I don’t really update our home’s value on a regular basis because we have no plans of selling it any time soon, and I’m not sure I could get the $185,000 that Zillow says our home is worth. But I figure after paying for some minor fixes, landscaping upgrades, and a 5-6% realtor commission, I could get a net of $145,000 with an easy sale. Personal Capital has a neat tool where you can keep your home’s value updated in real time by linking to Zillow’s value estimate, but that seems like overkill for an illiquid asset. I like to have manual control over how I value our house since spikes in value might be fleeting.
On the investing front, I dumped $18,000 into my Roth solo 401k. Since my federal income tax (not including the self employment tax I owe) remains around zero in early retirement, I don’t need the tax deduction of a traditional 401k contribution, so I chose the Roth this time around. Later in the year or in early 2017 I’ll be making another contribution to the traditional 401k for my “employer” contribution since it isn’t possible to contribute to a Roth out of employer earnings. I’ll also max out two Roth IRAs (assuming our earned income is high enough for all these contributions).
Our cash position continued to climb throughout 2016. After the $18,000 solo 401k contribution, we still have close to $40,000 in cash right now. It’s a nice spot to be in since that will cover more than a year of living expenses given the stream of dividend income routinely flowing into our checking account plus the hit and miss blog and consulting income.
If markets remain high, I might take some capital gains in taxable accounts in 2017 to shore up our cash position a little more. I’m also looking closer at bonds as rates increase. The Vanguard Total Bond Index Fund, BND, has dropped a lot since the election and I’ve had my eye on it for a while.
Aside from the year end financial moves, December is a very busy month for the Root of Good family. We just returned from a Caribbean cruise and we are driving to Miami for another cruise next week heading to the central and eastern Caribbean. Then there’s Christmas and New Year’s right after we get back from Miami. Good thing we’re retired because we would have a hard time fitting in all this leisure with a full time work schedule.
Someone on Twitter suggested I block off an hour on the Monday morning after I get back from vacation to catch up on emails. I gently reminded him that I was retired and no longer needed those kind of time/stress management tips! I still get a lot of blog related emails and comments on the articles here which I promise I’ll respond to (eventually).
Given our hectic schedule for December, this will likely be my last blog post of the year. I hope everyone has a profitable and enjoyable remainder of the year!
I’ve been posting a lot less frequently in 2016 and that will probably be the trend in 2017 as well. Looking forward to 2017, I’ll be posting more about next summer’s nine week European vacation as well as the non-financial aspects of early retirement.
Did you have a good Thanksgiving? Looking forward to Christmas/holidays? Or dreading it? Any big year end financial moves in the works?