Another fun month has flown by! Mrs. Root of Good and I should be driving through Northern Spain right now. Instead, we are keeping busy here in North Carolina while enjoying this wonderful fall weather. The kids are busy with virtual school during the days. Evenings and weekends are pretty relaxed. It’s business (mostly) as usual in our house right now.
Financially speaking, September was a decent month overall. Our net worth dropped by $40,000 to end September at $2,166,000. Income was great at $8,908 while our expenses came in below budget at $1,830 for the entire month.
Let’s jump into the details from last month.
Investment income totaled $6,373 in September. 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 $1,402 for the month which was a bit higher than last month’s blog income.
My early retirement lifestyle consulting income (“consulting”) was $275 for the month of September which represents a two hour consulting session. This was a little lower revenue than recent months but bookings for October are fairly strong so I’m not worried yet!
“Healthcare/medical” income of $496 represents the dental insurance reimbursement for Mrs. Root of Good’s root canal completed over the summer. We thought we were going to get back about $400 more. However, this was an out of network provider so the reimbursement rate wasn’t great. At least we have received enough in reimbursements to cover the entire 12 month dental premium. And Mrs. Root of Good should get 2 more mostly free dental visits during the policy year. Overall, the dental insurance was a good purchase for us.
The “deposit income” totaled $260 in September. I’ve been decluttering by listing on Ebay some old computer games and electronics that were literally collecting dust in my office. I made a total of $135 net of ebay fees and shipping costs so far.
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 $100 of “Home maintenance” income came from a manufacturer rebate for our tankless water heater installation in May, 2020. This rebate plus another $150 rebate from the gas company brought our total water heater cost to roughly $3,250. Since migrating from a tank water heater to a tankless unit, we are saving about $5 per month with reduced natural gas consumption.
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Now let’s take a look at September expenses:
In total, we spent $1,830 during September which is about $1,500 less than our regularly budgeted $3,333 per month (or $40,000 per year). Taxes and groceries topped the spending categories for the month.
Detailed breakdown of spending:
Taxes – $585:
I paid $300 for our third quarter estimated state income taxes.
I also bought a $300 Visa prepaid debit card to pay my annual property taxes. The prepaid card came with a $15 discount and no purchase fees, so the total was only $285.
Groceries – $502:
Grocery expenses were fairly average at $502 for the month. We tend to spend around $500-550 per month. 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.
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Healthcare/Medical/Dental – $188:
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.
Utilities – $181:
In September I paid $20 toward the city water, sewer, and trash bill that totaled $120 for the month. The balance was prepaid in August with $100 going toward the water bill to hit the minimum spending requirement on a credit card.
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 in another two months.
Our electricity bill was $161 for September. 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 right now, our electricity bill will be much more moderate from now until about April or May when the cooling season returns.
Clothing/Shoes – $172:
We did our first big shopping trip for clothing since everything got weird in March. It was easier than expected since the dressing rooms were open and we could try on clothes just like the good old days (of 2019 and before).
Electronics – $87:
After building a new computer in August, I decided to upgrade to a new 24″ monitor. I went with this 24″ 1080p monitor from HP. I set up the new monitor alongside an old 20″ monitor we were using on an older PC so I could have dual monitors. Excellent productivity setup for running my Root of Good Media empire!
The cost was only $87 due to a $20 off coupon I used at Staples.
Entertainment – $44:
I bought a $50 Netflix gift card to cover our share of the Netflix monthly fees for a while. I got the gift card at a $6 discount at Raise.com. They are offering an additional $5 off gift cards for new customers.
Gasoline – $34:
We haven’t bought gas for several months but it was finally time in September. I spent $34 to refuel the minivan.
We are driving about 100 miles per month for 2020 so far. The family hasn’t taken any big trips and our kids are in virtual school. I ride my bike to run a lot of errands around town, so there isn’t much of a demand for driving right now. Oh yeah, and we don’t have jobs to commute to. End result: we have not driven much this year.
Gifts – $25:
$25 for a baby shower gift for a new niece due any minute now.
Education – $11:
$11 for an AP World History e-textbook for one of our high schoolers. I don’t quite understand why the school doesn’t provide textbooks. But if this saves our kid 3 credit hours in college, then it will be $11 very well spent.
Travel – $6:
I paid my estimated state income taxes using a credit card. The convenience fee is 2%, which totaled $6 in this case. I assigned the credit card convenience fee to the “travel” category of spending. I try to put all of my expenses on credit cards if possible. This high level of spending helps us get large bonuses of miles and points from credit cards. And that means a whole lot of free travel! When it’s feasible again, of course.
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.
Total Spending for 2020 – Year to Date
Our spending totals $23,556 for the first nine months of the year. This is about $6,500 less than the $30,000 we budgeted for nine months of our $40,000 annual early retirement budget.
The biggest driver of low spending for 2020 is our inability to travel conveniently. 2021 will hopefully bring better opportunities to spend more in this category!
We did have a couple of big, lumpy multi-thousand dollar expenses this year. Mrs. Root of Good’s root canal was still almost $2,000 after factoring in the insurance reimbursement. And we spent a net of $3,250 on a new water heater.
The good news is that we budget for these big expenses every year, so it’s no big deal to pay for these “unexpected” costs. We expect them to occur on a fairly regular basis over the several decades of our early retirement.
With only three months of 2020 left to go, it seems like our overall 2020 spending will come in well below budget.
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
- September – $1,830
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) – $23,556
Net Worth: $2,166,000 (-$40,000)
The market kept going up all summer. Then September hit and it took a break from the perpetual growth streak. Oh well. Our net worth dropped by $40,000 by the end of September but as of this writing it has gained back all of those losses and then some. A $40,000 gain or loss on a $2+ million net worth is just background noise. Nothing to worry about!
September was another month of doing absolutely nothing with my investments. I’m a big fan of low cost passive index fund investing. Anecdotally, it has worked out pretty well for us.
I’m still at roughly 90% equities and 10% bonds and don’t plan on doing much until the end of the year when I’ll move around some money for tax purposes.
I’ve heard from some people that worry about being bored if they retire early. I can’t quite identify with that sentiment because I find I have the opposite problem. I never have enough time in the day to do everything I want to do.
I’m missing travel like a lot of folks this year. So I’ve been forced to focus on the other things that bring me joy. For me, that’s reading, watching movies and TV shows, playing video games, riding my bike, walking/hiking outdoors, and learning new things. I don’t focus on any single activity in a particular day, but rather mix it up to keep things fresh.
I’m definitely ready to hit the road once again when we can do so safely and conveniently. Hopefully by next summer, things will start to feel normal again. For now, we aren’t booking anything for our tentative summer 2020 road trip across the United States. However, we will do some research and planning on a rough itinerary at some point this winter. That’s something else to look forward to!
Until then, we have Halloween, Thanksgiving, and Christmas to look forward to. These will all be “modified format” endeavors this year but we’ll all make the most of it I’m sure.
I may have a strange take on 2020, but I refuse to “wish it all away”. Nobody should want to fast forward life’s clock, since that’s time we never get back. No do-overs.
Instead, I focus on making the most of the situation. We can still enjoy a lot of things. For example, we can spend time with family and friends, even it is under different circumstances compared to past years. While we can’t hop on a plane and fly anywhere we want, we can travel more locally. Or plan the next big trip! Or at least dream about the next big trip!
Life goes on; the clock doesn’t stop. Focus on the things you can enjoy and experience right now and don’t worry too much about what you’re missing out on.
Fall is here and that means fall/winter holidays are coming up. Are you looking forward to them? Ready for 2020 to be over? Or still trying to squeeze as much fun as possible out of the year?
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