February was an awesome month overall! Mrs. Root of Good finally quit her job and joined me in early retirement. Our oldest daughter was accepted into one of the best middle schools in the county (our first choice school) which feeds into the best high school in the county.
Our $4,221 income during the month was more than double our $2,030 in expenses. In spite of spending half of what we made, our net worth still declined by $4,000 during the month due to a slight decline in the stock market.
In January, we received $41 in interest and investment income. Our monthly dividend income is very inconsistent, with most of the income arriving at the end of each quarter. For all of 2015, we received $28,527 in dividend income. During March we should receive around $2,500 in dividend income if it remains consistent with dividend income earned in March 2015.
Blog income, shown as “other income” in the chart, was much lower than normal at $433. A major payment didn’t arrive until February 29th (posted March 1st) so March’s income should be higher than average. My early retirement lifestyle consulting brought in $86 in February.
The “deposits” income of $259 comes from cash back rebates from the Ebates.com online shopping portal. 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. Fair disclosure: a big portion of the Ebates earnings comes from referrals, but you can benefit from this too if your family or friends sign up for an account (earn $75 if three people sign up). I also sold $58 worth of United Club airport lounge passes on ebay. I received the lounge passes for signing up for United Explorer credit cards with Chase last year (along with many tens of thousands of United miles).
The $500 “paycheck” income is the last dribble of remuneration from Mrs. Root of Good’s job. After working three or four days per week from home since September of 2015, then taking most of December and January off, she finally quit for good in early February.
Long time readers will recall that we debated about becoming a one car household after owning two cars for all of our adult lives. On a whim, we sold my sixteen year old Honda Civic after I saw someone at the Mr. Money Mustache forum expressing interest in buying an older car. $2,900 was what I asked based on the Kelly Blue Book value in “excellent” condition. And that’s the price we settled on.
That’s one less liability taking up space in my driveway and sucking up cash for maintenance, depreciation, taxes, insurance, registration, and inspection fees. Right after selling the car, I removed it from our insurance policy and we received a $40 reduction on the remaining four months of coverage during this six month coverage period. Going forward our auto liability coverage should drop by about $100 per year to $400.
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Now let’s look at February expenses:
We spent $2,030 in February. That is two thirds of our budget of $3,333 per month (or $40,000 per year).
The $1,005 in utilities includes about $300 of actual electricity, natural gas, and water/sewer/trash plus $700 additional prepaid electricity. I’m trying to meet the $3,000 minimum spending requirement on our new Barclay Arrival card so I can receive the $400 sign up bonus (all credit card offers), and prepaying utilities is an excellent way for us low spenders to hit the minimum spending requirement within three months of signing up. We also won’t have an electricity bill until September!
At $512, our grocery spending was pretty average for the month. We finally visited the central Asian/Mediterranean grocery store in our neighborhood where a nice Iranian couple greet their old time customers with “as-salamu alaykum” (they greeted us with “hello”). It’s a wild mix of Turkish, Iranian, Israeli, Ukrainian, Russian, and central Asian sourced products. Lots of Cyrillic writing. After the little dude decided he had to poop immediately, we got a tour of the stock room while heading to the bathroom. “It’s scary” according to the little dude. It’s also full of hundreds of neatly organized Persian language movies on VHS. We ended up spending $18 on a jar of caviar ($12) and a one pound box of turkish delight with hazelnuts (imported from Turkey – $6). $6 is way cheaper than plane tickets to Istanbul!
Our entertainment spending of $211 includes:
- $122 worth of liquor we purchased while on our cruise
- $56 for a week of summer camp for one kid in August
- $18 for a wheeled moving dolly that, once mated with a wooden shipping pallet, turned into a wagon of sorts
- $10 for skating rink admission for two
- $3 for Civilization V (total nerd crack – don’t buy it if you are still working)
I’m trying to spend our $40,000 budget folks. I’m trying.
The $150 in medical/healthcare expenses includes our $125 monthly insurance premium (thanks Affordable Care Act subsidies!) that we signed up for after Mrs. RoG quit working, $5 for a last minute prescription before Mrs. RoG’s old employer provided insurance expires, and $19 for a “used” electric toothbrush. I always wondered who would buy a second hand electric toothbrush, because ewww gross, right? Then I realized that all I needed was the base and the charger and I already have an unused brush head that Mrs. Root of Good isn’t using. Instead of spending $45+ including shipping and tax for a new one, I picked up a dented box Sonicare Essence electric toothbrush from ebay for $19. It’s missing the brush head but I would have tossed it anyway if the package is open (because possibly reusing the brush head is kinda gross).
Cable expenses of $74 included two months of service. I recently called Time Warner Cable to do my downgrade/upgrade trick. Ask for the absolute cheapest service ($15 for an Everyday Low Price 3mb/1mb connection in my area). You’ll either get them to persuade you to keep your faster internet service for a lower price or you will in fact get downgraded. If you do get downgraded, go online and upgrade for $10 or $20 or whatever to the service tier that you actually want. This trick saves me $5-20 per month for a whole year with about 15 minutes of effort annually. Now we are paying $35 per month for 50mb/5mb service.
And we are finally getting the speed we are paying for thanks to my most recent electronics purchase. While researching the internet plan pricing, I realized that we were upgraded to 50 mb service at some point, yet our internet speeds remained at 18 mb per second. I eventually determined it was our outdated cable modem that couldn’t handle more than 18 mb per second. Instead of leasing our modem for $10 per month, we bought our modem a few years ago for $25. The old modem reached the end of it’s life so we had to upgrade to tap the higher speeds we were already paying for. $31 later and we are the proud new owners of a used Motorola SB6120 cable modem. Now we routinely get 40-55 mb per second download speeds (double or triple what we used to get) and 5 mb per second upload speeds (five times what we used to get!).
Our $19 in travel expenses covered the gas to drive home from the cruise terminal in Charleston. I count gas purchased while on vacation as a vacation expense instead of a gasoline expense. We didn’t purchase any other gas in February since we don’t drive very much outside of vacations. That makes month #2 of no gasoline purchases (other than for vacation).
We spent $17 on gifts. $15 of that went to our kids for getting excellent grades on their report cards. $2 covered the copays for two prescription medicines for Mrs. Root of Good’s father during his post-surgery recovery (Medicare is awesome by the way). A small bit of charity for the critical naysayers commenting in this post.
Rounding out the monthly expenses was $6 at our favorite Chinese restaurant. That’s the going rate for about 20 pork potsticker dumplings. Yum!
Year to Date Living Expenses
At $4,324 year to date spending, we’ve only spent about two thirds of the $6,667 budgeted for the first two months of the year.
We might catch up and even exceed (!!) our budget in the next few months as we search for a new (used) minivan and plan a road trip for this summer.
Monthly Expense Summary:
- January 2016 – $2,293
- February 2016 – $2,030
Net Worth: $1,435,000 (-$4,000)
February marks the fourth month in a row with a decline in net worth.
Is the fear more real now that Mrs. Root of Good doesn’t have a steady paycheck and we are both retired? No. I don’t think we will ever run out of money in early retirement. We developed a solid financial plan to fund our early retirement and struggle to even spend 4% of our current portfolio. Cutting back on spending if times get tougher won’t be a huge sacrifice (like skipping seven week trips to Mexico).
In the meantime, we are too busy enjoying early retirement to pay much attention to daily market fluctuations. $20,000 to $30,000 movements in a day are common enough. That means on some days we make or lose an amount equal to every cent we spent in 2015.
It goes up, it goes down. What are you going to do? Freak out over every movement, or let the long term growth engine of the stock market work its magic?
Right now we have around $30,000 in cash. That amount plus the dividends we receive in our taxable brokerage accounts during the year is enough to cover our full $40,000 annual budget. If the market continues it’s decline then we’ll be able to avoid selling anything for about a year (or much longer if my Root of Good revenue remains steady).
In last month’s financial update, I mentioned how there was a lot of negative sentiment in the market and some thought we were headed for a recession. So far the market has turned around quite a bit. We were down $78,000 during the month of February but the markets mostly recovered by month’s end.
I have no clue which way the market is headed next month or the rest of the year but I bet the stock market will be up in a decade or two.
How was your February? Big changes or staying the course?
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