Time flies when you’re having fun. We’re all having fun, right? Summer just flew by and we are officially feeling fall here in North Carolina. It’s cooling off some and the kids are back in (virtual) school so it definitely feels like fall even if the calendar says we have a couple more weeks of summer.
This was our first summer in a long time that we didn’t travel anywhere. Was staying at home all summer boring? Not really. I still have the travel bug and want to hit the road again when it’s safe and convenient. In fact, we booked some speculative travel for next year with our fingers crossed that it will happen. You’ll have to keep reading to find out how optimistic our travel plans are!
Financially speaking, August was a fantastic month for us. Our net worth climbed $73,000 to end the month at $2,206,000. Income was relatively decent at $5,759 while our expenses came in slightly above budget at $3,468 for the entire month.
Let’s jump into the details from last month.
Investment income totaled $353 in August which was quite a bit lower than what we received in July. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December with some payments arriving at the beginning of the next month. Here’s more on our dividend investments.
Blog income, shown as “other income” in the chart, totaled $1,240 for the month which was about the same as last month’s blog income.
My early retirement lifestyle consulting income (“consulting”) was $839 for the month of August which represents three sessions of two hours each. The consulting income has been relatively steady the past few months after taking a big hit during March and April. I guess folks are once again focused on retiring early.
“Travel” income of $1,780 comes from all the cancellations and refunds from our summer trip to South America and October trip to Spain. After a concerted and sustained effort, we were able to obtain full refunds of all cash and miles for all lodging, flights, and car rentals except one single hotel night in Madrid that cost $8 plus some Expedia Rewards points. I won’t be too heartbroken if the grand total of travel losses for 2020 comes to $8 plus points I have a hard time using anyway.
The “deposit income” totaled $1,506 in August. Of the total, $1,500 came from a brokerage sign up bonus that we received in exchange for transferring a half million dollar IRA brokerage account to Citi Investments.
If you sign up for Ebates/Rakuten through this link and make a qualifying $25 purchase through Ebates/Rakuten, you’ll get a $10 gift card.
The final $39 of income received during August came from returning a box of vinyl plank flooring that we didn’t use for our flooring job in July.
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Tracking spending was one of the critical steps I took that allowed me to retire at 33. And it’s now easier than ever with Personal Capital.
Now let’s take a look at August expenses:
In total, we spent $3,468 during August which is about $100 more than our regularly budgeted $3,333 per month (or $40,000 per year). Healthcare/dental and electronics topped the spending categories for the month.
Detailed breakdown of spending:
Healthcare/Medical/Dental – $1,133:
Our 2020 healthcare premiums are $123 per month thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$40,000 per year Adjusted Gross Income. The benefit of being “poor” on our tax return.
Both of the adults in our household bought dental insurance since the premiums are anticipated to be much less than the actual dental care we receive during 2020. The premiums total $64 per month for the two of us.
Mrs. Root of Good needed a root canal to fix a previous root canal procedure from about a decade ago. We paid over $1,200 in July and another $945 during August for the root canal. The insurance reimbursement paperwork isn’t complete yet. However, it appears we will only get back about $550 in total from the insurance company which is much less than what I estimated.
The good news is that the reimbursement for the root canal should roughly cover the full cost of the 12 months of dental insurance premiums. And Mrs. Root of Good still has two more regular dental visits that will be free or nearly free depending on how the claims are processed. Overall the dental insurance wasn’t a horrible value but it wasn’t the huge win I thought it would be.
Electronics – $528:
We went on a shopping spree in August.
We geared up for virtual schooling by buying 3 more pairs of bluetooth headphones so we can all attend class, listen to music, and watch TV in solitude without disturbing anyone else in the house.
These Ijoy ISO headphones are pretty great for the $20-25 price tag (and we used a gift card to cover half the cost).
I also bought a ton of components for a new computer build. It was time to bring the Root of Good Media Empire PC up to 2020 standards.
Between the motherboard, CPU, SSD hard drive, graphics card, memory, and power supply, the whole computer was a bit under $600. I used a $70 Walmart gift card bought several months ago to offset some of the cost. I decided to build this computer myself so that I could get what I wanted and ensure that I could upgrade it in the future as technology improves.
Parts I used for this build:
- AMD Ryzen 3 3100 CPU
- Gigabyte B450M DS3H motherboard
- TEAMGROUP T-Force Vulcan Z DDR4 16GB Kit (2 x 8GB) 3200MHz
- Crucial P1 500GB NAND NVMe SSD hard drive
- Gigabyte GeForce GTX 1650 Super Windforce OC 4GB Graphics Card
- EVGA BR 600 Watt Bronze Power Supply
I saved a few bucks by repurposing the case from an old Dell computer. It needed “a slight bit” of modification to accommodate the new motherboard’s input/output ports on the rear of the case. A Sawzall wasn’t the most delicate tool to use for cutting through galvanized steel but it got the job done. That plus a little metal tape to clean up the rear of the case.
Shhhh… don’t tell the hardcore computer builders what I did!
In hindsight, I should have bought a new computer case. It was a lot of work to clean the old case and modify it enough to fit the new motherboard in there. But sawing through metal is pretty awesome so there’s that aspect of it too.
I’m still a little concerned about the thermals inside the case but I don’t have any huge plans to convert this into a mega-overpowered hardcore gaming PC.
I also found two good sites to research computer builds. They both help guide you toward compatible components that work together. The first site is PC Part Picker and the second is Logical Increments.
Groceries – $508:
Grocery expenses were back in line at $508 for the month. We tend to spend around $500-550 per month so August was a very normal month for us. That’s not bad considering we rarely get food from restaurants!
I’m still using Walmart Grocery pick up service several times per month along with visits to Aldi, Lidl, and Food Lion.
The Walmart grocery pickers put together your order for you and you just drive up and click a button on the Walmart app to get them to bring the order out to you. The best part is you pay the same low prices as they offer in-store to all their customers and there is no delivery fee.
If you want to try Walmart Grocery, you can take $10 off your first $50+ order with my referral link. Enjoy!
Travel – $493:
The surprise travel booking for 2021 is…
We booked a one week Caribbean cruise for next September. It was a ridiculously good deal at $267 per person. We paid $398 for a deposit and will owe the other $136 in June of 2021.
The good news is that the cruise is fully refundable up to 48 hours before the sailing date, so we aren’t locked into anything if the travel safety picture still looks bleak next summer.
Mentally I haven’t committed to going on the cruise since I know there is a decent chance it’ll get cancelled. But hopefully everything will be back to normal by next summer and we’ll set sail after all!
In other travel spending, I paid a $95 annual fee for a credit card to get 75,000 American Airlines miles as a sign up bonus. That’s a round trip flight to Europe or Asia so it represents a very good travel value in my opinion.
If you want to score free travel or big cash back from credit cards, there are several cards currently offering 50,000 points or more. These points can be redeemed for $500 cash or $500+ in free flights or hotel stays. Compare travel and cash back credit card deals.
Utilities – $457:
The city water, sewer, and trash bill was $139 for August. I paid an extra $100 toward that bill to hit the minimum spending requirement on a credit card. The September water bill will be much lower as a result of the credit balance on the account.
The natural gas bill for hot water was $0 since we got a $150 rebate in the form of a bill credit when we installed our new tankless water heater in May. I still have over $50 in credit balance on the natural gas account which should last until the winter heating bills start to arrive.
Our electricity bill was $218 for August. It was a hot summer (like all summers in North Carolina), and we don’t mind cranking the AC to stay cool. With cooler temperatures around the corner, our electricity charges should be much lower during the fall months.
Gifts – $200:
I withdrew $200 from the ATM to give as gifts throughout the year. $100 of that went to our daughter for her 14th birthday that we celebrated in August.
Restaurants – $110:
During August, I bought $100 worth of Pei Wei gift cards for $70 through gift card marketplace Cardcash.com. After buying the gift cards I realized I could have obtained almost the same deal through Sams Club without the risk that the gift cards might be used up by the seller after the 45 day money back guarantee!
For the birthday party (immediate family only) we spent $30 on burgers, fries, shakes, and chorizo quesadillas from Cookout (a North Carolina burger chain). Good stuff!
We also picked up a Sam’s Club cafe pizza for $10 during August. Sam’s pizzas are way better than Costco cafe’s pizza. Fight me in the comments if you disagree!
Cable/Satellite – $36:
We pay $18 per month for a local reduced rate package due to having a lower income and having kids. 30 mbit/s download, 4 mbit/s upload.
I paid for two months of service during August.
Entertainment – $4:
I used a $25 off $25 purchase Ebay coupon they sent me at the end of the month. I bought 7 books from the Dragonlance series plus some small electronics. Our public library doesn’t have any of the Dragonlance books in stock. As a result I broke my multi-year streak of not buying any books.
After the coupon, all I had to pay was $4. The code they sent me was “HAPPY25” and it expires September 10th 2020. Check your account to see if it works on a $25.01+ purchase!
Home Maintenance – $3:
I rode my bike up to the neighborhood gas station to refill the lawnmower gas can.
There’s also a $7 toilet valve replacement kit from a Walmart Grocery pickup order. It’s expense is included in the “Groceries” category since I don’t bother splitting receipts.
Gasoline (for the car) – $0:
I wanted to list this expense in case anyone was wondering. We don’t drive a lot, so we don’t buy gas every month. We’re down to a quarter of a tank so we will have to refuel again this month!
Total Spending for 2020 – Year to Date
Our spending totals $21,726 for the first eight months of the year. This is about $5,000 less than the $26,667 we budgeted for eight months of our $40,000 annual early retirement budget.
Given all the “big spending” we’ve done in the past several months, I’m feeling pretty good with being $5,000 under budget year to date.
The trick is that we budget for all of these “one time” and “unexpected” expenses. In our $40,000 per year annual retirement budget we include:
- $1,000 for electronics
- $3,000 for medical/dental
- $2,500 for home maintenance/repairs
Plus a ton of other categories of course!
We go over some budget categories in some years while spending very little in other budget categories. With seven years of early retirement living under our belts, we have found that the spending averages out during the year.
This year we will be over budget in the medical/dental category and home maintenance category. But we will spend very little in the “travel” category (which is $10,000 per year).
Instead of spending our summer traveling, we have spent the summer here at home. Being home means we have more free time and energy to work on home repair projects (like the new flooring) and electronics upgrades (building a new PC).
In the end the spending averages out right where we want it to be at roughly $40,000 (or less) for the year.
Monthly Expense Summary for 2020:
- January – $2,682
- February – $2,618
- March – $1,600
- April – $1,324
- May – $4,692
- June – $2,311
- July – $3,035
- August – $3,468
Summary of annual spending from all years of early retirement:
- 2014 – $34,352
- 2015 – $23,802
- 2016 – $38,991
- 2017 – $31,708
- 2018 – $29,058
- 2019 – $25,630
- 2020 (year to date) – $21,726
Net Worth: $2,206,000 (+$73,000)
Another month and another big five figure gain in net worth. The stock market recovery since the March low has blown my mind.
I joke that this is the “richest poorest recession I’ve ever seen”. For those people that still have their jobs, they are busier than ever.
But to those who have lost their jobs and are struggling to pay their bills it’s no joke at all. Or at least it won’t be a joke once the unemployment and other stimulus money runs out.
Either the stock market got the whole economic recovery thesis 100% wrong or we actually will have continued economic growth going forward. Let’s hope this is a true economic recovery in action and not just a bubbly stock market. Big Ern at Early Retirement Now seems to think this is the real deal economic recovery (or it’s at least looking good out there!).
In terms of investments, I haven’t touched a thing all month. I’m still at roughly 90% equities and 10% bonds. And so it goes…
I quit working seven years ago this August. Most years I remember to celebrate that date. This year I totally forgot until a day and a half later. I guess that’s a sign that I’ve truly moved on from the working world and embraced this whole early retirement lifestyle!
Things are going well for us here at the Root of Good Household. All three kids are working hard on their remote learning through the Wake County Schools Virtual Academy. The schedule for the high school students is pretty nice. School from 8 to noon and then they are done for the day by lunchtime.
Three weeks into virtual schooling and all three kids still like virtual better than regular in-person classes. We will see if it’s just because this is “new” or if they remain this positive throughout the whole semester (and perhaps the whole school year).
I will say the school system has a much more cohesive distance learning process this school year compared to last spring. There is a lot less frustration with communication, expectations, technology, and learning this fall.
On the fun side of life, I spent several days in August nerding out over PC building. I enjoy technology and tinkering a lot. Especially when the end result is a sweet new computer to enhance my “productivity”. I will have to test some games on the system to ensure the build quality is good.
With the fall weather coming soon, we are all looking forward to spending more time outside. We just broke out the hammocks. And soon it will be campfire season once again!
Summer is over, but are you happy or sad? Are you enjoying the stock market zooming up or is it making you nervous?
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