March 2019 Financial Update – Springtime Pollen Edition

Spring is definitely here in Raleigh. Warm afternoon temperatures bring us outside while green clouds of pollen filling the air push us back inside. And everything is in bloom! 

We had a busy March as you’ll see in this article. April will be no different. We are just a few days away from departing for our one week cruise to Jamaica, Mexico, and Cuba. When we return, the last week of April will be filled with volunteering at our kid’s school all week and a big birthday party to close out the month. 

Our March financials look great. Net worth climbed $13,000 to $2,062,000. Our spending remained low at $2,299 while our income continued to be strong at $4,553. We just wrapped up another month where income greatly exceeded spending. 

Let’s jump into the full details of our March finances. 

 

Income

Investment income totaled $1,498 in March. Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December so our March investment income was understandably higher than usual. In the first few days of April, another slug of end-of-quarter dividends arrived in our investment accounts, so April will also be a good month for investment income.

Blog income, shown as “other income” in the chart, totaled $2,915 for the month of March which is slightly lower than February. 

My early retirement lifestyle consulting income (“consulting”) dropped to zero reported income for March. I forgot to transfer the consulting fees for a two hour session into my checking account until April 1, so at least I’m ahead of the game for April consulting revenue! Although April will likely be a low revenue month for my consulting business since I’m going to be gone for a third of the month on a cruise with no internet. 

Deposit income of $139 included cash back and incentive bonuses from the Ebates.com and Mrrebates.com online shopping portals (some of which was earned from you readers signing up through these links).

If you sign up for Ebates through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card. 

The “Deposit Income” category also includes $64 in cash back from my Fidelity 2% cash back credit card. Part of that $64 cash back was the 2% earnings accumulated over the past year and the remainder was a $25 promotional bonus earned by spending $500 in the last part of 2018. 

 

 

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).

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.

 

Expenses

Now let’s take a look at March expenses:

 

In total, we spent $2,299 during March  which is about $1,000 less than our target spending of $3,333 per month (or $40,000 per year).  The top expense categories for March were travel and groceries like most months. It’s almost like all we do is vacation and eat. 

 

Detailed breakdown of spending:

 

Travel – $1,026:

We didn’t go on any trips during March but I did manage to buy $1,200 worth of Airbnb gift cards at a nice little discount. Some were purchased from Raise. The rest were purchased from a friend at 16% off (she needed to liquidate the GCs).

We’ll likely use these Airbnb credits during our summer 2020 trip (location remains uncertain but probably South America or Central Europe).

Airbnb plays a huge role in keeping lodging expenses moderate when we travel. Save $40 off your first Airbnb stay with my airbnb referral link.

In other travel news, I’ve been working on the spending required to get the 70,000 point sign up bonus (worth $700+ when credited to reimburse travel purchases) on my Barclay Arrival card. 

If you want to score some free travel 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 credit card deals.

 

 

 

 

 

Groceries – $588:

Grocery spending returned to a somewhat normal amount since we had to restock after being gone the last half of February. 

In notable purchases, we bought two more packs of our favorite butter chicken curry paste while it was on sale at Amazon for $11 per six pack. 

 

 

 

Utilities – $214:

The water, sewer, and trash bill from the city was $117 and the natural gas bill was $97 (home heating and water heater).

I prepaid the electric bill a long time ago to hit the minimum spending requirement on credit cards, so I don’t have a monthly electric bill to pay right now. 

 

Automotive – $169:

Our annual safety and emissions inspection came due in March for our minivan. It’s usually $30 but I had a $6 coupon so I only spent $24 on the inspection. Fortunately the auto shop didn’t find anything wrong during the inspection. 

The state vehicle registration and license plate fee came due in March, along with the annual car property tax bill. Altogether those charges came to $145.

The state added a new $3 fee to pay online. Since I was in a time crunch to pay by the end of March (or face a $15 late fee!) I went ahead and paid the convenience fee. That $3 fee saved me at least 30 minutes of driving down to the license plate office and waiting in line. Cheap price to pay!

But I wonder how many people will wait in line to avoid the $3 fee? End result: the state will incur higher labor costs when they have to hire more staff to process more in-person payments.

 

Healthcare/Medical – $161:

Our 2019 healthcare premiums are $31 per month thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$40,000 per year Adjusted Gross Income. I spent $62 in March since I paid for insurance premiums for February and March. 

The other healthcare spending was a $99 routine dental exam and cleaning. We get the “cash discount” price since we don’t have dental insurance. And rumor has it that our dentist is offering a $20 referral fee when we recruit new patients. Dental costs might be dropping a lot for us given how many patients we send their way! 

 

Restaurants – $63:

Even though we took an eleven day trip to Mexico to celebrate our fifteenth wedding anniversary, we didn’t travel on our actual anniversary date. So once the special day arrived in March, we enjoyed a quiet lunch at our favorite Indian restaurant here in Raleigh for $22.

 

 

This year I remembered my wallet so it made paying for lunch a lot easier compared to last year (when we also dined at the same restaurant for our anniversary). 

The remaining $41 of restaurant spending came from the purchase of $50 worth of Pei Wei gift cards at Raise.com at a discount. I made the Raise purchase through ebates for another 1% cash back. I love the pad thai at Pei Wei but everything else is unimpressive in my opinion. 

 

 

Gas – $42:

Another tank of gas for the minivan. It seems like we are driving more these days for school-related activities and to enjoy our local parks and trails. 

 

 

 

 

Clothing/shoes – $24:

Thrift shopping for some bargains! The six year old got some sweet new threads (some were brand new) and Mrs. Root of Good picked up a nice purse that she’ll use as a padded camera bag on our Southeast Asia trip this summer.

The ladies of the house also had a major clothes shopping spree but that was paid for in February when I bought a discounted gift card. 

 

Cable/Satellite – $15:

$15 for one month’s internet bill. We qualify for a local reduced rate package due to having a lower income and having kids. 30 mbit/s download, 4 mbit/s upload.

 

 

 

General Merchandise – $2:

On Ebay, I spent $0.99 Canadian ($0.74 US) on a five pack of CR2032 watch batteries shipped direct from China. I mastered international finance and logistics for under a buck. I needed replacement batteries for my car’s key fob. Ebay is a cheap place to get tiny batteries. 

Ebay brought more goodies to me for cheap. They offered $3 off any $3+ purchase, so I found a set of 12 Torx security bits that I’ve wanted to add to my tool collection for a while. Total cost $0.65 shipped after the coupon. They might not be the best quality but they’ll get the job done a lot better than using a flathead screwdriver or pliers or chiseling off the security knob from torx security screws/bolts. 

 

 

Entertainment – $0:

It’s pretty common to have an entire month go by where we don’t spend anything explicitly on “entertainment”. That’s not to say we are total bores. 

We get free books from the library. We prepaid for a Netflix subscription. In March we used a free Amazon Prime family account trial subscription.

The world is a big place to explore and we do what we can locally. 

We also have people over to the house pretty often. I don’t explicitly separate the “entertainment” expenses from general grocery expenses since I’m more interested in big picture spending vs. micromanaging exactly where every dollar went. Are beers and food given to friends entertainment? Or groceries? I choose the latter for simplicity’s sake.

This past month we hosted several play dates for the kids, a birthday party/sleepover for our teen daughter and her friends, and we invited over several groups of our friends for lunch or dinner. 

 

 

 

 

 

 

Total Spending in 2019

 

One quarter of the way through the year and we are more than $3,000 under the $10,000 budgeted for three months of our $40,000 annual early retirement budget. Another year of under spending our budget! 

We have several big bills coming up in the next couple of months such as our six month auto insurance and annual home insurance premiums. Beyond that, spending should be fairly modest going into the summer since we’ve prepaid most of our big summer travel expenses. 

I’m not going to work too hard to spend all this extra money we have because we have two big expenses looming in the near future. We’ll want an additional car once our oldest kid starts driving. Probably something small-ish, fuel efficient, and used. We’ve enjoyed being a one car family (after debating it for a while) but that will come to an end in less than two years. Along with a second car comes another set of taxes, registration, inspection, and maintenance. 

The second big expense coming up soon is college for two kids. It’s still a few years off and the bottom line cost is unknown. More thoughts on what college costs might be for our early retired family. 

 

 

 

 

Monthly Expense Summary for 2019:

• January – $2,937
• February – $1,537
• March – $2,299

 

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 (so far) – $6,773

 

 

 

 

 

 

Net Worth: $2,062,000 (+$13,000!!!)

Another month of net worth gains! No complaints here. 

We’re still about $50,000 below our net worth high water mark of $2,114,000 set back in January 2018. The good news is we’re almost $200,000 higher than we were at the end of December 2018. Big moves in a short period of time!

 

 

I don’t spend much time watching the financial market news, but I do get a kick out of taking a glance at the headlines occasionally.  Every time the stock market has a minor dip, I see articles professing that this is the beginning of the end of the ten year stock market boom. Recession is coming they say. Recession will come eventually but no one knows precisely when.

Some expert on one of the business news channels will eventually get it right with their prediction of a correction. Then they will be revered as a market expert. That is, until they are wrong a few times in the future. By then we’ll have moved on to a new favorite market expert to listen to. I’m not intentionally omitting the names of the current, past, or future experts out of nicety. I simply can’t name any of them because they’re generally irrelevant. 

The latest financial news this past month was the inversion of the 10 year and 3 month treasury yields. This has historically been an indicator of a recession. Or put another way, recessions rarely happen without the yield curve inverting several months beforehand. However, a yield curve inversion by itself does not always lead to a recession shortly thereafter. Yield curve inversion is a (maybe) necessary condition but not a fully sufficient condition for recession.

More (and better) thoughts on the yield curve inversion and why it’s not too worrying yet (from fellow early retiree Karsten (who has a PhD in this money stuff) at his blog, Early Retirement Now).

My advice continues to be to maintain your investments in a reasonable asset allocation that matches your risk tolerance. Stay invested in low cost, tax efficient index funds and you’ll probably grow rather wealthy over the long term. 

 

 

Okay folks, that’s it for my thoughts this month. I’m off to wrap up my 2018 tax return and pack some bags for our cruise to Cuba. See you next month! 

 

 

Are you done with your taxes yet? Or still procrastinating like me? Does this spring weather get you thinking about big summer plans?

 

 

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