May was another successful month of early retirement. We took it easy and enjoyed a relatively slow month of leisure with family and friends. I spent a few days being a “real” blogger and influencer by attending Camp FI in Virginia where I gave a presentation titled “FIRE for Fun!”. That makes me a real blogger, right?
Our finances were a mixed bag in May. Our net worth dropped precipitously by $87,000 to end the month at $2,022,000. Fortunately our cash flow situation was much better. Income remained decent at $3,438 while our expenses dropped significantly to only $752 for the month of May. When income exceeds outflow, you can’t worry about finances too much!
Let’s jump into the details from last month.
Investment income totaled $491 in May. Our equity mutual funds and ETFs pay dividends quarterly at the end of March, June, September, and December. As a result, the May investment income was lower than the quarter-end months. The $491 investment income represents interest from our fixed income holdings which are primarily the VBTLX Vanguard Total Bond fund plus a low five figure cash/money market position.
Blog income, shown as “other income” in the chart, totaled $2,365 for the month of May which is fairly average. I received a double payment in May from one source so June blog income will be a bit lower.
My early retirement lifestyle consulting income (“consulting”) dropped significantly in May to only $130 for the month. This represents one hour of consulting. This lack of work may explain why May was particularly leisurely!
Deposit income of $452 which was 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).
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Now let’s take a look at May expenses:
In total, we spent $752 during May which is less than a quarter of our target spending of $3,333 per month (or $40,000 per year). June will see a lot more spending since our home and auto insurance bills are due.
Detailed breakdown of spending:
Groceries – $367:
Our grocery spending is trailing off due to our upcoming two month trip overseas. We are trying to empty the fridge, freezer, and pantry to the extent possible, so that’s why we are spending less on groceries in the past month.
I don’t know how this happened but we’ve started to buy more organic products like fresh greens. They don’t carry the non-organic version of what we want at our usual stores, so we end up getting the organic version. That’s all wrapped up within the $367 grocery spending so it’s not like this minor upgrade is making a noticeable difference in overall grocery spending!
In other grocery news, I just cancelled my free Costco membership because their prices are higher across the board.
The customer service rep at Costco asked why I wanted to cancel and I stated “the prices at Costco aren’t competitive with the local grocery stores on most items”. She said it was the first time she’s ever heard that! Maybe she’s a new employee or maybe the typical Costco shopper doesn’t comparison shop. As I found out during an extensive comparison of prices, Costco is about 35-40% more expensive than the local grocery stores.
I did save about $2 per tank of gas at Costco. However, the Costco isn’t very conveniently located to me, so I’d be driving out of the way just to save a few bucks. No thanks.
Clothing/Shoes – $147:
A bit of marathon shopping for clothes and shoes in May. We bought two pairs of athletic shoes, two pairs of sandals, a bathing suit, and other clothing for our upcoming two month trip to Asia. We also bought a $17 dress for our daughter’s eighth grade formal dance (discounted from a much higher price of course!).
We also bought a $10 school T-shirt that doubles as a fundraiser.
Healthcare/Medical – $46:
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. The benefit of being “poor” on our tax return.
Other healthcare spending includes a $10 copay for a prescription and a $5 copay for a doctor’s visit. I had some lab work done during the doctor’s visit but the bill didn’t arrive until June.
Automotive – $45:
This might be a weird one for those that think I’m frugal.
I don’t change my own oil in my car. I take it to the dealer.
For $45 (discounted about $15 thanks to a coupon) they change my oil and do a detailed inspection for free. They always find several “major” things wrong with the vehicle that they recommend I fix immediately.
This time around it was $2,000 for several items including a new steering rack (“leaking power steering fluid”) and a new battery (“old one passes charge test but it’s past the warranty period”).
I’ll keep an eye on the power steering fluid level which hasn’t moved in three years of ownership. I’ll also watch for a puddle of PS fluid on the driveway where I park. I assume the auto shop found a tiny leak that will never materialize into something major.
I’ll also take note of any difficulty cranking due to weakening battery. In addition, I might get a battery check at Autozone in late fall before cold weather sets in. Worst case is my battery dies in the middle of winter and I ride my bike to one of the three auto parts stores in the neighborhood (have I mentioned how I love living in the city? 🙂 ).
And in the meantime while I waited for the oil change and inspection to be completed, I got to hang out at the swanky dealership with Mrs. Root of Good while enjoying free fancy coffee drinks and eating freshly popped buttery popcorn. For this oil change, the only grease I got on my hands was from the popcorn.
After the auto work we went on a hike in the city nature preserve while we were in that part of Raleigh.
Utilities – $41:
The water, sewer, and trash bill from the city had a positive credit balance from extra payments in previous months. No payment was due.
The natural gas bill was $41 which includes a small amount of home heating plus the regular usage for the 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. This month I will use up my bill credit and have to resume payments for electricity. Which is perfect timing because I have two new credit cards on the way with two sets of spending requirements!
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Gasoline – $34:
About three quarters of a tank of gas. Costco saved me $2 on the fill up. We buy gas so infrequently that the Costco savings don’t add up to much.
Restaurants – $22:
$22 for takeout from Mrs. Root of Good’s favorite Chinese restaurant on the extreme opposite side of town near where she used to work. We are rarely in that part of town so grabbing take out from there isn’t usually convenient. I happened to find a free electronics class for our older kids and it was right next door to her former favorite lunch spot. Their Mandarin Tofu is unique and delicious.
Gifts – $20:
Two Lego sets to give for future kids birthday party gifts. Our son gets invited to several of these per year so it’s good to have appropriate gifts on hand when they can be acquired at a good price.
Education – $18:
The elementary school yearbook was $18 this year.
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.
Total Spending in 2019
By the end of May we were $7,500 under the $16,667 budgeted for five months of our $40,000 annual early retirement budget. We have a spending problem (in a good way!).
Spending in June will definitely be higher than May’s spending since the home and auto insurance bills total almost $1,000.
However, we may not spend a ton in June. We will spend the second half of June vacationing in Vietnam where costs are very low. Our plane tickets and lodging are already paid for. Local transportation is only a few bucks for a taxi. Meals will average $1-2 per person for street food or $5 if we visit a sit down restaurant. Museum admissions are generally about $1 per person.
Monthly Expense Summary for 2019:
Summary of annual spending from all years of early retirement:
Net Worth: $2,022,000 (-$87,000)
Last month I said:
This roller coaster keeps going higher! Wheee!
May also felt like a roller coaster ride in the downward direction. I don’t like roller coasters at all but I’m strangely okay with watching the portfolio swing back and forth by $50,000 or $100,000.
Our net worth dropped by $87,000 to end the month at $2,022,000. The first few days of June have seen the balances recover slightly. It’s all noise at this point.
Our modest spending is easily supported by our investment portfolio long term, so months like these where we lose $87,000 don’t mean too much since the value is constantly going up and down.
Update on Life In General
Our kids are almost done with school for the year. They have a couple more days before they are officially out for summer vacation. Our oldest daughter is graduating from middle school and will go to high school in the fall.
Our first grader (and us parents!) worked really hard this past year. While studying first grade math at school he worked on the second grade math curriculum at home (mostly Khan Academy). He took a year-end mathematics assessment to test out of second grade math. And we just found out he passed! In the fall he will move up to a second grade class for most subjects but he will attend math with the third graders.
Right now we are one week away from hopping on a plane destined for Southeast Asia where we will spend eight weeks exploring Vietnam, Cambodia, and Thailand. We have the plane tickets and lodging booked for the entire trip so all we have to do is get to the airport on time and enjoy a week or two in many different cities across Southeast Asia.
Life is going very well for us right now!
That’s it for this month’s installment of “What Is Root of Good Up To??”. Tune in next month to see where we’re at!
Is it summer wherever you are? It definitely is here in North Carolina! What excitement do you have planned for this summer?
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