September 2015 Financial Update

money-january-2014

September is over and left us a little poorer but in overall great financial shape.  Our net worth dropped by $36,000 in spite of $8,225 in income for the month and a meager $927 in expenses.

The older kids are back in school and we’re settling into the school year routine.  I’m back to my normal weekly early retirement schedule.  We returned home from our 7 week vacation in Mexico two months ago.  Mrs. Root of Good experienced some excitement this month when she submitted her resignation letter to join me in early retirement.  Instead of quitting outright, she’s now working from home four days per week with full time pay.  Pretty sweet deal!

Income

September is dividend season for us since that’s when our mutual funds and ETFs pay out quarterly dividends.   We received $5,038 in dividends in September and around $1,500 so far in October.  A solid bit of investment income, but it’s still a little less than the $7,500 in dividends for the second quarter.

Blog income, shown as “other income” in the chart, is back up to $1,448 after coming in at less than $100 last month.  I started this blog as a hobby without any great expectations to make big money, so it’s pretty amazing watching the blog income cover all of our expenses some months.  Somehow profitable hobbies or side hustles keep finding me in early retirement!

I didn’t make any money from freelance writing during the month (it turns out the check was really in the mail and arrived in October) but I did pick up $55 in consulting fees from my newly launched early retirement lifestyle consulting practice.  I’m not really advertising it or promoting it (other than tossing a page up here on my blog), because I don’t want it to consume all of my time.  So far interest has been strong.  If you’re interested in a one on one consultation to help guide you on your path to early retirement, check it out and give me a shout.

The “deposits” income of $70 comes from cash back from credit card spending plus cash back rebates from the Ebates.com and Mrrebates.com online shopping portals. I’m all about sharing the wealth, so 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 a while back.  I try to do all of my online shopping through one of these portals and the cash back adds up.  While shopping for cruises at Travelocity, for example, I noticed Ebates pays 7% cash back on cruise purchases whereas Mr. Rebates pays only 4%.  It pays to compare rates between those two online shopping portals because the cash back rates vary.

Rounding out this month’s income is Mrs. Root of Good’s paycheck.  She’s still working but only four days per week from home.  She managed to retain her full time pay, work a little less and skip the 30-45 minute one way commute and the related gas and tolls.

september-2015-income

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).

 

Expenses

Now let’s look at September expenses:

september-2015-expenses

We ended the month without breaking the $1,000 spending barrier.  I always feel thrifty whenever we spend less than $1,000 in a month.  $927 is just a third of our targeted budget of $2,700 per month (1/12th of our $32,400 per year early retirement budget).

Just like last month, we spent the most on groceries at $507 for the month.  That’s an expense that’s hard to avoid when you’re feeding five mouths.

The $182 in healthcare expenses includes a doctor’s visit, a prescription medicine, and a tube of prescription toothpaste with really high fluoride content.  Since we have high deductible health insurance through Mrs. RoG’s employer, we pay out of pocket for doctor’s visits other than physicals.  We rarely have more than one or two of these “sick visits” per year so we’re still coming out way ahead versus paying thousands extra for more comprehensive insurance with lower or non-existent deductibles.  And we get to max out our Health Savings Account (which stays fully invested at Fidelity).

Once Mrs. RoG quits working, we’ll be jumping into an exchange health insurance plan and snagging some big Affordable Care Act subsidies.

The prescription toothpaste was recommended by our dentist as a bootleg way of receiving fluoride treatments at a fraction of the cost.  At $1 for a moldable athletic mouthguard and $5 for the 5x strength prescription fluoride toothpaste, it’s a cheap way to prevent tooth decay and rebuild enamel in a problem spot the dentist found at my last routine check up.  Per the dentist, squeeze toothpaste into the mouthguard and wear for at least 30 minutes.  We’ll see how well it works!

The $75 in gifts represents cash we gave to our middle child for her birthday.  We gave her a few small toys too, but the cash is her main source of spending money throughout the year.  Whenever she asks if she can have something, our normal response is to say “sure, if you want to spend your money”.  The kids are getting really good at spending their money wisely and maximizing value.  And we never get nagged to buy them the latest gadget.

Another month of low restaurant spending at $54.  Two thirds of that figure went toward large quantities of pizza (about once per week roughly – thanks crazy good Papa John’s deal!) and one third to Chinese take out from Mrs. RoG’s favorite spot near her work (incredible marinated tofu).  Since she’s telecommuting, she won’t be visiting that restaurant very often since it’s on the other side of town from our house.

Gas and tolls at $45 are much lower than previous months when Mrs. RoG was commuting full time.  Since she’s no longer driving to work, we haven’t needed more than one car at a time during September, so I’m thinking we could drop to one car if we want to.

Rounding out the other expenses are $34 for internet (“cable”), $16 for entertainment (two roller skating trips for two kids to the neighborhood skating rink), and $9 in “other income” (a blog-related expense for web site hosting at Hostgator).

 

Year to date expenses

september-2015-ytd-expenses

At $17,467 year to date spending, we are almost seven thousand dollars under the $24,300 budgeted for the first nine months of 2015.  Considering we spent $5,100 for a seven week trip to Mexico, our 2015 living expenses are ridiculously low for a family of five!

We are on track to significantly under spend our $32,400 annual budget as long as no major unexpected expenses pop up later in the year. With an almost $7,000 budget surplus, we can cover a lot of unexpected mishaps in the last few months of the year and still do okay overall.  We’re starting to get cruise fever again, so that might be a fun way to spend another couple thousand bucks before the year is over.

Monthly spending for 2015 to date:

 

Net Worth: $1,434,000 (-$36,000)

Another month with a big drop in net worth!  After losing $74,000 in August, our net worth dropped another $36,000 in September, bringing our two month total loss to $110,000.

After spending five months of 2015 in the $1.5 Millionaire club, we are sadly no longer qualified to hang out and breath that group’s rarefied air.  Otherwise, the drop in net worth hasn’t change a lot in our daily lives.  We’re still spending (or not spending) the same as we always do.

We have close to a year’s worth of living expenses sitting in cash even after dropping $15,000 into my solo 401k to shield most of my online income from taxation for 2015 (part of our strategy to keep our taxes near zero). Eventually, we’ll use the Roth IRA Conversion Ladder to unwind these tax-deferred contributions and convert them into spendable assets.

Emotionally, it feels good to know we won’t have to sell any investments to fund our living expenses for the next year or so even if:

  1. Mrs. Root of Good quits working for good,
  2. Root of Good blog income and my freelancing/consulting income drops to zero, and
  3. all of our investments stop paying dividends.

Odds are that those sources of income won’t disappear completely in the next year or two (though Mrs. RoG’s income probably will!).  I’m pretty confident we won’t run out of money any time soon.

september-2015-net-worth

The chart tells the whole story – it was a bumpy month of ups and downs (with a little more down than up).  In the middle of the month we were actually in the positive before losing the gains and closing out the month on a down note.  However the first few days of October have erased most of September’s losses.

Our net worth at the end of September is still higher than it was during most of 2014, so in relative terms we’re still feeling pretty wealthy.  We have more than enough to cover our spending needs for the foreseeable future and a steady stream of income from multiple sources.

Life is good.

 

 

How did you do in September?  Another ugly month or a month of opportunities?

 

 

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64 comments

  • The stock market did its number on us too, August and September were numerically brutal but it’s not worrisome when you know the cause. I’d be more worried at a few thousand uptick in spending (which we also had but it was because we paid for a big group vacation rental and are getting paid back).

    • October is looking pretty good so far, and if things remain flat for 2015 from here on, we’ll still be in the positive for the year so I can’t complain too much!

      • I like the discounts so I can buy some more dividend stocks 🙂 but they are a challenge to manage psychologically.

        • Absolutely! I’m very glad I dumped the $15,000 into my solo 401k during the middle of this latest volatility. I didn’t hit the exact bottom, but it’s already well into positive territory right now. I bought it for 25% off recent highs, so long term this should be a good investment.

  • perhaps you’re already aware of it but you can use cashbackmonitor.com to compare online portal earnings/rebate rates. not always perfectly synced but good starting point.

  • We’ve been hit too, mostly in our 401K accounts, my taxable investments overall are the only thing positive right now. I think that is awesome you’ve started an early retirement consulting service. I think it is much needed and has the potential to really grow. I find that every finance and tax person, outside of our online blogging community, cannot grasp the concept of early retirement. You have a really good understanding of taxes as well, probably better than most people who do taxes for a living.

    • Income taxation was the only class where I earned a 4.0 during law school. 🙂 I’m no CPA but I’ve got early retirement taxation issues pretty well sorted out. I have heard your comments on financial advisers and tax specialists before. Your run of the mill guy/gal in those games won’t grasp the nuances for the ER crowd.

  • I dream of the day that we could go to one car instead of two but unfortunately with 2 FT jobs/commutes it’s not feasible just yet. There is no public transportation alternative either. I do use my scooter instead of the car whenever I can but it doesn’t really work when the weather is bad. If I were in your shoes I’d dump the second car and keep my scooter as a backup. One day…

    • Weather is the curveball for us, too. I’ve taken double the car trips this past week compared to a normal week mainly because it’s been raining almost solid for the past week. I could bundle the kids and myself in rain gear and make the trip to school on foot, but I choose to indulge in the luxury of a quick, dry car trip out of convenience.

      I’m thinking of holding on to the car until next fall when the oldest kid is in middle school. Not sure how our transportation needs will change at that point and I still don’t know if her school will be 3 miles away or 10 miles away and what bus or carpool options would look like.

  • I like the concept of a dividend season 😉 I may have to borrow that sometime in the future

    Good luck!

    DGI

    • I look at all you guys buying individual stocks that pay out randomly throughout the year, and get jealous of the constant stream of dividends. Mine only come around at the end of March, June, September, and December. But, hey, I get 3 extra Christmases throughout the year so I can’t complain.

      • There are two ways you can get a constant stream of payments:

        1. There are a # of stocks that pay dividends monthly; this would be the easiest way.

        2. Many large cap stocks (or smaller for that matter) pay their dividends on off months, while most pay/declare on the traditional months of Mar/Jun/Sep/Dec. It is not too difficult to structure a nice portfolio over time that would have 12 different issues paying you dividends on 12 different months.

        • The quarterly payments don’t bother me too much since we keep plenty of cash on hand. Once I see us getting a little light on cash toward the end of the quarter, I know there’s a big payday not far away. And every December is the huge dividend payout where we get about half the year’s dividends within one week (~$15k last December).

          These dividend payments are still bizarre to me. I knew a decade ago that one day they would flow freely like this as long as I kept dumping money into investments over the years. Just surprising to see that day come and the dividends to actually show up.

          • A lot of individual companies I follow have a set schedule for dividend payments. It is really easy to estimate how much income I will be able to receive in the next 30,60, 90, 365 days. If I own 60 or more securities that pay quarterly, I can end up receiving 240 dividend checks per year. Or a check almost every day.

            For example:

            Exxon Mobil pays a dividend around the tenth every March, June, September, December.

            Procter & Gamble pays a dividend in the middle of every February, May, August and November.

            Companies like Altria and Phillip Morris International pay around the 9th/10th day in January, April, July and October.

            A company like Realty Income pays dividends monthly. They call themselves the monthly dividend company. They collect rent from several thousand properties throughout the US, and then send me my portion of the free cash flow every month. Being a Realty Income shareholder sure beats being a landlord ( I can hardly unclog a toilet)

            It is interesting that index funds aggregate dividend payments and send them out once a quarter, rather than when receiving ( though I would assume that would be costly, yet compounding is better at a weekly rate than at a quarterly rate). Do you know whether those payments earn any interest as they sit in cash for say 1 – 2 months?

            • Those dividends sitting in the mutual fund theoretically accrue interest (but it’s close to zero these days). They are typically invested in some sort of money market fund or very short term notes. I think Vanguard has a “Market Liquidity Fund” or something like that where mutual fund excess cash is held. They also use the cash to manage fund redemptions.

          • Above you mention that December’s dividends will be about $15k and half of your dividends for the year, or $30k for the year. Your 2013 dividends were $22k for the year.

            I was just curious to see if you changed your asset allocation and now simply earn a higher percentage in dividends or if instead your assets have grown to compensate for the $8k or so difference? If you changed your asset allocation do you mind sharing?

            • No change in asset allocation. Since Mrs. RoG was still working in 2014 and 2015, we are still adding to investments, so that’s part of the growth in dividends. But the overall economic picture improved between 2013 and now. Though it’s started to decline in Europe, so who knows what we’ll end up with in terms of dividends. 2014 dividends were around $30k as well, and I’m guessing dividend growth will be roughly flat for the year based on dividends received so far in 2015.

  • Super impressive expense number, as always. I never really considered retirement consulting as a way to generate money. Although, being nosy, I might want to go this route once I’m retired. I suppose I need to be retired first, though, to get some street cred.

    Thanks for posting the update.

    Eric

    • So far the sessions have been rewarding for the participants and for me so win win win, right? I enjoy them, the client gets great advice and reassurance, and I get paid a little.

  • Great job as usual on the spending front. Amazing how the whole family does in that regard. Congratulations!

    Like virtually everyone not 100% in cash, we took a significant hit over the last couple of months. Got into too many options that expire in Sept and Oct, so I have slowed down on them. Between the gains and losses on those in Sept I was able to minimize the damage nicely, but Oct might be another story on the expiration date of the 16th. Still ahead in my trading in this area, but need to be a little more cautious during these times. As for the 401Ks and other investments, they will rise and fall with the overall indexes they track. Don’t plan any changes there for the near to mid-term.

    Keep up the great work. And I agree 100% – life is good, particularly in early retirement.

  • Your frugalness inspires me. I spend about the same as you do but as a single guy living alone in a paid off house. Maybe I should dial it back some!

    • You got to watch it you big spender! 😉

      This past month was particularly frugal because most of the big lumpy annual or semi-annual bills didn’t fall in September. We also prepaid all utilities prior to last month to move ahead some spending for credit card offers, so there’s that (although this time of year we don’t pay a lot in utilities anyway – the AC hasn’t been on for almost 2 weeks now, and next is probably turning the heat on in a few weeks).

      December or January will be much bigger months due to the $1600 property tax bill and a few hundred for auto insurance renewal.

  • Well done this month. I love your tactic for giving kids money on their birthday and letting them govern themselves. Great idea. As a family of five as well, but living in Alaska, I’m glad to see you spend around $500 on groceries. It makes me feel better about $600-700 up here. Sheesh. Wish we could cut that down more!

    • Yes, it’s working well so far. We experimented with an allowance for a while and deductions for bad behavior but it didn’t seem to be an effective or efficient way to encourage good behavior or good work habits. We’re about to reinstate it for the oldest kid since she’s helping a lot with the 3 year old in the bedtime routine.

      How is the grocery situation up there? When I was talking to my wife about relocating to Alaska to get some of those sweet Permanent Fund dividends (x5!!), I mentioned I bet it’s hard to get a wide variety of fresh produce at reasonable prices. Any truth to that?

      We don’t spend a fortune on fresh veggies and fruits, but have them in the fridge all the time so we can cook up whatever whenever (or snack on the fruit). And I figure we could cut $100 or so from the groceries if we tried really hard (like forgoing beer/wine/champagne, fancy cheeses, fresh salmon, etc), but we enjoy the small things. We would end up blowing over $100 on restaurants to compensate for the lack of frills in our grocery buys.

      • We get all the fresh fruits and veggies here in Alaska, they just cost more since they are mostly flown or barged up from Seattle. We do have farmers markets and grow some awesomely huge veggies due to the midnight sun too.

  • Those year to date numbers are crazy impressive. I like to try to track against you, even though we’ve still got the home remodel and the childcare expenses.

    Even outside of those two categories, we’re running a bit higher YTD mainly due to “miscellanous” (we’ve bought several electronics this year) and “medical” (Narcolepsy+sticking my finger in the blender+ some prenatal testing). Other than that, we’re quite similar.

    • Ouch. Sticking your finger in the blender? We just watched a show on Netflix (“Luther”) where a murderer did that to eliminate his fingerprints from his fingertips. I hope you didn’t off anyone and use the old blender trick in the same way 😉

      We’ve been fortunate on the electronics front to not need much this year. We bought the tablets for the Mexico trip ($200 or so total) but I don’t think they hit my budget as tablets, because the kids paid for them with their B-day and Christmas money. Otherwise, we tend to have a $300 electronics purchase almost every year. The last 5-6 years it’s been 2 laptops, a desktop, 2 HDTVs, and all tend to be in the $250-400 range, and all of them about a year apart. I’m sure we’ll be buying another electronic gadget in the next year or so.

  • Great month Justin! September was my best month in 2015. It was bonus and raise season, so I maxed out my 401k, and made some after-tax contributions to my brokerage account as well. I also kept expenses quite low for myself! October is a three paycheck month for me, so hope it’s a good one as well. Take care!

  • Jason how are you doing with the weather? Aren’t you in one of the Carolinas? I hope you’re not flooded.

    • It’s Justin actually, but don’t worry, my old boss used to call me Jason all the time too. 🙂

      And thanks for asking. We’re doing fine. It’s rained almost non-stop for the past 2 weeks but it’s been mostly light rain. No flooding in the Raleigh area other than the typical creeks filling up and flooding limited areas that happens at least once per year. Our neighborhood hasn’t had any flooding and it doesn’t take much to flood some nearby businesses. Joaquin the hurricane turned right instead of left, otherwise we’d probably have trees down throughout the neighborhood and more flooding. South Carolina got hit hard I think (probably 150 miles due south of us). And plenty of coastal areas were hit pretty bad (though they flood frequently anyway).

      I need the rain to stop so I can enjoy the fall here before it gets too cold outside!

  • Nice work! We’re currently in the midst of a spending challenge for the month to bring our expenses down but I doubt that our they are going to come in under $1,000. Great job!

  • I am always amazed by your low spending.

    This month was good for us. Our spending was the lowest it has been all year at $8,978, which was down about 32% vs. August. So, it was a nice improvement.

    Although we are not too frugal on the expense side of the equation. We have been absolutely killing the income side of the equation. Going into 2015, I actually thought we would experience a drop in income vs. 2014. However, that has not been the case at all.

    In September our income was up 38% @ $28,000, which produced our highest savings rate this year of 66% after taxes. Our goal is to save 50% after taxes (we set that in June of this year), and based on my most recent forecast, it looks like we are going to slightly miss it and finish the year at 44%.

    But we are trying our best to keep an eye on expenses to come as close to the 50% mark as possible.

    Net Worth increased $7K to $249K. This is largely due to 3 reasons:

    1 – We still have a large amount of investable assets sitting in cash.
    2 – Our new contributions are more than enough to offset any market losses.
    3 – We were lucky enough to deploy some of our cash stash near the August 24th lows.

    We realize this will not always be the case, but we will take it as a win nonetheless.

    I can never get enough of these financial income reports and updates.

    Cheers!

  • I am impressed with your results this year and overall spending level. You are doing better than the wife and I (our kids are out of the house). Inspiring to be sure.

    I look forward to an update on a potential cruise in the future. We are heading out to Mexico in February on a 7 night trip, celebrating a significant birthday milestone. We can’t wait!

  • Congrats to Mrs. Root of Good for negotiating work from home and one less day of work. September was an incredibly expensive month for me. The most expensive one I’ve seen all year. But I’m ready to get back on track. Your expenses are seriously impressive!

  • Things were tough this month thanks to some unexpected spending while my husband was on a trip. Arizona has warped us so much that he left without a jacket. And he’s lost some weight, so he’s extra prone to the cold. He ended up buying a $100 jacket while he was away. Ouch. There were a couple of others, but the point is that we’re just barely breaking even this month. Which is better than taking money out of savings but… sigh.

  • My net worth dropped as well by 0.6% this month continued from 2 months ago. I don’t care as much as they are all temporary. Just as you said, my lifestyle did not change at all because of the drop but will continue to live within our means, save and invest wisely to take advantage of the discounts given in the market. The rain will eventually stop and sun will shine again. 🙂

    Cheers!

    BSR

  • Looks like you had a great month!

    Our investments dropped of course but we had a great month for income. You win some, you lose some!

  • The market has been rough the last couple of months with no real defined direction, but hang in there! Also, seems like some good investment opportunities have presented themselves with all of the volatility. Keep the chin up – short term volatility is just noise!

    -DP

    • I’m digging the volatility. Got a nice price on the $15,000 I dropped into my solo 401k. I still plan on making IRA contributions for 2015 so maybe I’ll get another shot at it.

  • September was a great month for income for us, but a bad month for expenses. I booked us a 4 day trip to Portland, OR. The flight deals were great, but the downtown hotels are expensive!

    Pretty impressive you spent under $1,000 for the month! We’ll probably never be able to do that ourselves, but really makes a person think about what truly matters in life.

  • Awesome job. Do you ever, in your planning, put aside money for future expenses (e.g. property taxes, insurance, car insurance, etc)? Just curious how that factors into your income planning.

    • I have a “cash flow projection” spreadsheet that helps me figure out how much cash to keep on hand versus investing the excess in my solo 401k/IRA. In that spreadsheet I don’t include the smaller routine expenses like property tax ($1600), car insurance ($500/yr) or house insurance ($550/yr). I do have big ticket items in there like a new roof a few years out and a new car (both in the $5-10k range).

      I’d like to do an article about that at some point. It’s not a fancy spreadsheet but a good way to manage those lumpy expenses that you know will arise in the next five years.

  • That’s good income for someone who is FI. I know the drop in investments stinks, but you have big time assets, so that just comes with the territory. October will be a drop in dividend income for me, but December will hopefully break all previous monthly records. Good luck.

    • Our investments have already turned around and recovered more than we lost in September. Whether the gains stick around, who knows? Income is still solid for now so we don’t have to touch the portfolio at all.

      I’m looking forward to December dividends too! 🙂

  • You have any posts regarding your plans to help fund your kids’ college? I would love to hear your thoughts about the pros and cons of contributing to a 529. Or if you have placed in a lump sum or monthly contributions. Also, do you include your contributions in your net worth total? This is unrelated to this post, but I thought it might be some interesting info.

    Thanks,

    Conrad

    • I don’t have a post dedicated to college savings or our plan to pay for it.

      Right now we have dedicated 529 accounts that have enough funds to cover roughly 2 years of college tuition for each of our 3 kids. We’ll probably have plenty of money when college time approaches to pay all four years of tuition. And maybe more. I also expect to get a decent financial aid package for the kids since our retirement assets don’t count against them on the FAFSA. They can also work in the summers during HS and college, and seek internships in their field.

      Overall, it’ll be a mix of our funds, their earnings, and loans/grants/scholarships covering the total cost of college.

      I count our 529 accounts in our net worth but mentally set aside about $100k of our investments to cover 4 years of college tuition for each kid.

  • You guys continue to crush it. Well done. The market has been pretty turbulent in the past few months, but it’s basically been a wash. As you said in an above comment, the markets are still up on the whole this year. It’s crazy how much the $$ amounts can fluctuate even though it has literally no affect on your life. I guess that’s the benefit of knowing the math 🙂 Cheers!

  • Have you tracked your net worth since you started out working? It would be interesting to see how you managed to build up your wealth over the years.

  • Stocks are a crap shoot right now. Tough telling if they’re priced too high, if the Fed is going to up interest rates, how the market will react and whether that is already “cooked in” . . . too many moving parts – good work for still being up on the year! Still some strong dividends to be had on the energy and commodities front. Hopefully, October keeps moving in the right direction!

    -DP

  • I’m pretty bummed. I’m new to FI this year, and have been meticulously reading this blog, Jim Collins, Mr. Money Mustache, and Go Curry Cracker since about April (2015). I’ve had like 100,000 in a savings account for years, too scared to do anything. After mustering up some long-term courage and commitment to these ideas about FI, I bought a ton of VTSAX through Vanguard. I maxed out my IRA, (5.5K), Employer 401k (18K), and threw the rest in a taxable account (60K). I struggled with it hardcore, but went all in during the month of July. As rotten luck would have it, I did this right before the correction, and my net worth is still lower. I know its only been 4 month, but I’m struggling to hang on. Any advice from those who have been doing this long term?

    • Perfectly horrible timing! We did a cash out refinance on our house back in 2005 or 2006 and stuck a ton of cash into the market, only to watch it drop during 2007 and 2008 before eventually recovering in 2009. Time fixes a lot of mistakes.

      The good news is that you’re just starting out, so you can keep plowing money into the market at a discount to recent highs. The absolute best thing that could happen to those starting out with investing would be to have a huge prolonged market crash (as long as you keep your job!) so you can spend many years investing in steeply discounted securities.

  • I read this one and several similar-type blogs and haven’t really found anyone to address our issue. Teenagers! We have 3 wonderful teenagers (son 18, son 16, daughter 15) and expenses just go up with teenagers. I am trying to accept that this is a season of life when things are just going to get more expensive. Our monthly auto insurance is half of your monthly spending ($470/mo). That’s the best I could do after a week’s hard work (no tickets, no accidents, no points, etc). We do carry high liability limits but that is to protect our home, which is paid for. Insurance companies hate teenage boys. Is it necessary that they drive? YES. They are both in higher education (EMT school and community college) and both have jobs. This month bought a new auto transmission ($3500 is cheaper than another car) and a $425 custom night guard for a teen who grinds her teeth terribly at night. Contact lenses, meds, doctor visits (when one gets STREP from his girlfriend), copious amounts of laundry and food, etc. etc. Get the picture? =)

    • I wish I had an answer! 🙂 We’ll be in teenager zone in another few years, with the driving coming up in about six years. I assume we’ll be getting the kids licensed and insured at 16 when they can legally drive. I don’t think there’s a cheap way around the first three or so years of auto insurance for teenagers (other than not driving, which just extends that period of high auto insurance rates into the future).

      Our 10 year old just told us which one of our cars she’s going to take once she can drive. The Accord. 🙂

      The good news is that the high cost years end eventually. Either at age 18 when they go out on their own or perhaps a few years later when they finish college. It might be worth encouraging them to think about ways to make money to help cover some of their expenses as a way to ease the transition into paying for 100% of their expenses once they are on their own. Part time jobs, odd jobs around the neighborhood, starting a small business, etc. I had summer jobs during HS and college and it certainly went a long way toward paying for my expenses during college.

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