May is over and I’m back with another monthly update. In North Carolina we enjoyed very mild weather last month which meant we got to spend some great days outside. I took several 18+ mile bike rides down to the Neuse River and back home. We also spent plenty of quality time in the hammocks.
The kids are almost done with their remote learning “homeschool” before school officially breaks for the summer. As of now, we are planning on staying around Raleigh for the next two months. I’ve been busy cancelling all our reservations throughout South America and our August cruise.
Financially speaking, May was a very good month. Our net worth shot up $69,000 to end the month at $2,022,000. Income was relatively decent at $2,605. Our expenses were higher than average at $4,692 but that included a very expensive house repair that was mostly expected.
Let’s jump into the details from last month.
Investment income totaled $402 in May, primarily interest from our bond fund. 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 $1,413 for the month which was about the same as last month. Blog income has dropped for everyone since advertisers are spending less money on advertising right now.
My early retirement lifestyle consulting income (“consulting”) was $537 for the month of May which represents four hours of consulting. This amount of consulting is slightly higher than March and April but still much lower than January and February levels. As the stock market returns to lofty levels, I assume people are getting more interested in discussing early retirement once again.
The “deposit income” totaled $252. We received a $50 cash back check from our Citi credit card and checking account.
We also received $202 that came from 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 $4,692 during May which is about $1,300 more than our regularly budgeted $3,333 per month (or $40,000 per year). Home maintenance and groceries topped the list last month.
Detailed breakdown of spending:
Home Maintenance – $3,740:
It is with great sadness that I announce the demise of our long-lived water heater. It steadfastly heated water for eleven years before finally giving up the good fight.
I spent $40 on various parts to attempt to resuscitate the water heater but to no avail. The tank cracked around the pressure relief valve and started leaking uncontrollably.
The water heater was located in our crawl space where it had inadequate clearance between the top of the unit and the bottom of the interior floor joists. As a result, I couldn’t replace the gas water heater with a similar tank model.
I ended up replacing the tank water heater in the crawl space with an exterior tankless gas water heater. I chose the RL75 tankless from Rinnai which was also the recommendation from every plumber I talked to.
The tankless water heater promises unlimited hot water but at a very steep price. The total installation was $3,700.
I filed two rebates totaling $250 so I may get the price down to $3,450 eventually.
I like the ease of maintenance – the exterior tankless unit needs a DIY flush every two years and it’s easy to access compared to hunkering over in the cramped crawl space.
We had the option to add a beefed up electrical circuit and install an electric tank water heater in the same location in the crawl space. This would still cost about $2,200 installed to bring it up to code. Electric water heaters eventually run out of water and take a while to reheat a tankful to the target temperature, which isn’t conducive to the five of us living in peaceful harmony.
We knew the water heater would die eventually and to bring it up to code, we would have to spend quite a bit of money. Or I would have to attempt a DIY task that is beyond my skill set. So we plonked down the $3,700. Now we should have 15 to 20 years of hot water from this unit.
With the exterior unit, I can more easily attempt DIY maintenance and repairs on it. I figured I may not be interested in crawling around under the house two decades from now when I’m 60!
That’s why we saved up all this money over the years. To allow us to pay more for ease of maintenance and comfort.
As far as long term operating costs go, the tankless unit will probably cost about the same amount each month as the tank unit once the natural gas consumption and electricity are added together. It only cost $10-20 per month for the gas for our tank water heater, so there just isn’t that much room to save money with a slightly more efficient tank unit.
Groceries – $490:
Grocery expenses are slightly lower than normal. I used some Walmart and Amazon gift cards that I bought in previous months to offset some of this month’s grocery expenses.
We’ve also been stocking up on supplies during March and April so we didn’t need to buy as much in May since the worry about interruptions in the food supply chain have decreased. Pretty much everything is available in our stores now.
I’m still using Walmart Grocery 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 app to get them to bring it 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.
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Healthcare/Medical – $141:
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.
I paid $18 for my monthly dental insurance premiums for 2020.
Utilities – $135:
The city water, sewer, and trash bill was $100 for May.
The natural gas bill (for the water heater and furnace) totaled $35 for the month.
In February I paid $602 for electricity which left us with a huge credit balance. I still have about $250 of that credit on the account right now but that will undoubtedly get used up in a month or two since we are staying at home all summer.
The electric utility charges a $1.50 convenience fee to use a credit card so I usually charge a big lump sum at one time so that the convenience fee is negligible as a percentage of the payment. These big payments help me hit credit card minimum spending requirements for new sign up bonuses too.
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Gifts – $100:
Mrs. Root of Good’s aunt passed away last month so we contributed $100 to the funeral “gift” from our side of the extended family to the aunt’s family. I believe the custom among the Cambodians is to give cash gifts for funerals to help offset burial expenses and help the surviving family during a difficult time.
I like this tradition better than the American tradition of giving very expensive flower arrangements that look pretty during the funeral and reception but don’t help out the family very much.
Restaurants – $47:
We bought $25 gift certificates to two different pizza places during the month of May that will be used in future months. I got a small discount by buying these gift cards through Raise.com.
We didn’t buy any take out during May but we did get some free burritos from Moe’s thanks to a promotion they ran last month.
Automotive – $20:
Guess which 15 year old finally got her driver’s permit?!?!
This one right here!!
After waiting a month and a half to get the required paperwork issued by her school that has been closed since the middle of March, we finally got everything in order. A quick visit to the DMV and our daughter obtained her learner’s permit in exchange for a $20 fee.
Fortunately the increased insurance costs don’t kick in until next year when she gets her full driver’s license. My insurance agent said we would only pay $900 per year to add our daughter to the insurance. That isn’t as bad as I was expecting!
Cable/Satellite – $18:
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.
Entertainment – $1:
I bought a Humble Bundle of computer games. This time around it was Cities: Skylines for a dollar. I’ve loaded it up and played for an hour or so and it looks promising.
Total Spending for 2020 – Year to Date
After five months, our spending totals $12,915 for the year. This is $3,700 less than the $16,667 we budgeted for five months of our $40,000 annual early retirement budget.
In spite of a rather expensive May due to the installation of a new water heater, we are still well under budget year to date. Barring any unexpected expenses I think 2020 will be an inexpensive year overall.
Our summer travel plans have completely fallen apart. We were planning to spend eight weeks touring around South America before returning to Miami for a week of cruising in the Caribbean.
I have cancelled the first half of our trip but I still have several flights and Airbnb bookings to cancel for July and August. It looks like we will get partial or full refunds for all of our bookings. I have already initiated one chargeback for a flight that cancelled on us but won’t provide a full cash refund.
The end result will be us staying at home in Raleigh and not spending a ton of money. Perhaps pandemic issues decline and we can take some short trips later in the summer. Or maybe we take a two month staycation and relax here!
Monthly Expense Summary for 2020:
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) – $12,915
Net Worth: $2,022,000 (+$69,000)
Anybody else feel like the most clueless investor in the world? Who would have predicted a global pandemic to tank the stock market in early 2020? Then have the stock market recover most of the losses by the end of May into early June? How crazy is that?
Fortunately my “do nothing” approach to investing makes it pretty easy take advantage of the gains (while losing when the market goes down of course).
We’re still holding steady over here. I did some tax loss harvesting in April but didn’t alter my equity/bond allocation away from the 90%/10% allocation that I had in March.
Our expenses remain low for the year and income from various sources remains okay. No worries from us on the early retirement finances!
I’m definitely looking forward to the lazy days of summer! Cranking up the AC, trying to stay cool. Hoping for low humidity days so we can get outside occasionally.
I’m looking forward even more to a post-pandemic world where we don’t have to be constantly conscientious about hygiene when going out. A time when we can once again travel at will, hop on a cruise, and visit overseas locales without fear of a mandatory quarantine or catching a deadly virus.
I’m also looking forward to a world with racial harmony and peace. Watching what has happened over the past couple of weeks is tough. Observing the apparently asymmetrical police shows of force infringing on constitutionally protected freedom of speech, freedom of the press, and the right of the people to peaceably assemble. And seeing the protests turn violent and the looting of local small businesses (often minority owned).
I have a feeling we will find ourselves in a post-pandemic world before we find the cure that solves all of our societal ills. But let’s hope for some peace and understanding in the meantime.
On that somber note, I’ll wish my goodbyes until next month!
How are you doing? Is everything back to business as usual where you are? Still seeing a lot of mask-wearing and people taking precautions? Looking forward to summer? Did your vacation plans get ruined?
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