A New Dividend Record and December 2023 Financial Results

Welcome to Rich Frugal Life’s December 2023 financial results! Before we get into the numbers, here’s what we were up to last month.  

Breaking our previous dividend records

I expected a big payout this month from our investment portfolio… and it delivered!

Despite converting a portion of our 401k investments into non-dividend paying funds (due to changes within the plans), we still beat our previous monthly record for dividends and interest this month.

We earned $7,527 in passive income from interest and dividends in December!

That’s about 11% more than our previous high in December 2022. Certain funds we’re invested in (i.e. international funds) only pay out dividends at year-end, so December typically has the highest payout.

We also blew away our previous annual record, but I’ll share more about that in a few weeks within our upcoming 4th annual “Year in Review” post.

Enjoying the holiday season

My (almost) 3-week sabbatical from the blog and Rich Frugal Life’s social media was wonderful. I used this time to reflect on my year and hang out with family.

In an effort to really experience the holiday season, I finally made time to try a few new recipes and holiday ideas from the hundreds that I have saved in recent years.

We’re wishing you and yours a very happy, healthy and prosperous new year!

Without further ado, here are our December 2023 financial results, with all the juicy details of this month’s spending, passive income, savings rate, and investments.

Why share the details of our spending and finances?

Because I’m nosey and enjoy reading about other people’s spending habits and net worth.  Maybe you do, too.

Everyone’s financial situation is unique.  However, I believe there is value in sharing information to provide context and normalize the discussion of money.

Seeing other people happily embrace simpler lives gave us the confidence to begin our own journey to financial independence and a lifestyle we believe will be healthier, happier, and more fulfilling.  I’m just trying to pay it forward.  Sharing our finances each month also helps us stay accountable.

Other information useful in reading our monthly financial results

Did we just buy a money pit?

We bought a complete fixer upper in late 2018… with a toddler.  When we moved across the country for Mr. RFL’s job, housing costs were much higher than we were used to.  So, we decided to just go for it when we found a great deal on a fixer upper.

We’ve been working on projects ever since, trying to do as much as we can ourselves to learn some new skills and save money.  Since the costs of a whole home renovation are significant and non-recurring, we don’t include them in our monthly expense budget.  However, we do share renovation costs each month for full transparency.  

How we define an “expense”

The table below shows all expenses for the month, excluding renovation costs.  Principal payments on debt are not included.  As an accountant, I don’t view principal payments as “expenses,” since they directly reduce debt and increase net worth.  We don’t anticipate having any debt in retirement. 

December 2023 Financial Results

Investments

We made a net investment in our Financial Independence (“FI”) portfolio of $1,210 this month.

Our reported investment number includes employer matches but does not include reinvested dividends and interest.

This number is, once again, lower than usual since we cashed out another $12,500 of Mr. RFL’s company stock options during the month of December and have yet to reinvest all the proceeds.I omitted the decrease in “other stock” from the pie chart below because negative values skew the presentation.  

Here’s a break-out of investments we made this month:

Debt

We currently have $154,200 in debt, all of which relates to our mortgage.

Our mortgage has a fixed interest rate of 2.5%, which is a lot less than the 4.35% our high-yield savings account currently pays.

We’re taking advantage of the interest rate arbitrage while it lasts, so won’t be making additional principal payments anytime soon.  

Savings Rate

Our after-tax savings rate this month was 86.4%. This is above normal, primarily due to the additional income from the stock options we sold this month.

We calculate our savings rate after taxes, because we believe this gives us the best insight into our true cost of living.

Including taxes would skew our expenses and savings rates when comparing over a period of time. Although we currently pay a lot in taxes each year, that’s because we are still earning a high income. We expect to earn and pay much less in early retirement.

December 2023 Financial Results: Monthly spending

Ok, full disclosure time! The table below shows our expenses for the month, along with some additional thoughts (or excuses).

*Does not include charitable contributions made, as we don’t share that information publicly. Although we budget for donations each year, we don’t like to treat charitable giving as an “expense” against our budget (to encourage more giving).

Housing-Related – $789

Housing-related costs include mortgage interest paid, and a monthly allocation for property taxes, insurance, and HOA dues. 

We’ve refinanced our home several times over the past few years down to a rate of 2.5%. Because of this, and since we had been paying extra all along, our loan-to-value ratio and mortgage payment are now quite low.

Insurance – $451

This category includes our premiums for auto, term life, personal liability, and health insurance.

Health insurance premiums are withheld from Mr. RFL’s paycheck, but all our other insurance plans are paid annually or biannually.  We allocate an amount for auto insurance each month since the cost is high, but other insurance premiums are included here only when they’re actually paid.

Food – $956

Yikes! Our restaurant spending was over $500 this month, well above our budget and average for the year.

This month we splurged and went on three dinner dates, which is rare for us. We don’t get babysitters for most of our dates, but lucked out with three well-timed nights this month when our daughter was being watched by someone else for free. We also went to dinner out as a family for my birthday, had one date lunch out, and Mr. RFL took our daughter out for a daddy/daughter lunch.

We did a little better on groceries this month, spending $452.

Household Consumables – $20

This category includes most of the non-food consumables used in our household, such as toilet paper, shampoo, skincare, laundry detergent, cleaning products, etc. 

Utilities – $205

Utilities include electric, water, gas, and security. We’re still in the “cheap” season.

Fuel – $45

Only one car needed a fill up this month, discounted using Fry’s fuel points.

Alcohol – $65

This month we just paid for our Cooper’s Hawk wine club membership.

Entertainment & Learning – $34

This category is for television, streaming music, books, games, concerts, and other family activities.

We paid for streaming services from Spotify, Netflix, and Amazon Kids+ this month.

Self-care – $111

I bought a backup pair of my go-to Brooks running shoes on sale for 30% off, as well as sports glasses to protect my eyes during Pickleball (after being hit in the face more than a few times) (affiliate links).

Clothes – $316

I continued my shopping spree for new clothes in December, buying more Vuori activewear for my birthday, PJs from Target and a new sports bra and leggings from Old Navy.

Did I “need” everything that I bought? No. However, I’ve decided to continue my purge of all clothes that look worn or that don’t fit me right. I had a lot of clothes before, but not many that made me feel great. Instead, I’m stocking up on clothes that fit both my current body and lifestyle.

Kid Activities & Other Purchases – $229

This month we paid for gymnastics lessons.

We also ordered a couple more warm weather clothing items and one more Christmas present. In total, we spent about $120 on Christmas presents for our kid from us (and the man). 

Furniture, Tools & Other Home Purchases – $345

So, we bought some stuff this month.

My two favorite purchases this month were new Yeti ramblers for the family (to make hydrating more fun), and a set of silicone ice cream containers to keep all my homemade ice cream fresh (no more Ben & Jerry’s for this girl).

I also bought another silk pillowcase, an electric pencil sharpener, ceramic berry containers from Crate & Barrel, plus several sets of heavily discounted holiday string lights and a Christmas tree collar during the after Christmas sales. I’m sure I’m missing a few purchases, but those are the highlights. Links above are Amazon affiliate.

Gifts – $559

Christmas presents purchased in December.

In total, we spent around $815 on holiday gifts for family and co-workers. Mr. RFL started buying holiday gifts for his direct reports after his big promotion last year, so we’ve increased our gift giving budget accordingly.  

Cash Back Rewards

We received $122 in cash back rewards this month.

Since these ultimately represent reductions in the purchases we make, I decided to reflect them as a reduction of expenses this year, rather than as income. Travel hackers are always bragging about how little they pay for vacations, but the reality is that they are making a trade-off between earning cash back and earning points with their purchases. That’s not to say that the trade-off isn’t better for anyone who travels a lot (it appears to be for skilled travel hackers). It’s just different, so this is how I like to view the trade-off for our personal finances.

We strategize the timing of expenses and charge everything we can in order to maximize credit card rewards. However, we always pay the full balance due each month.

December 2023 Financial Results: Other Income

While the majority of our income still comes from W-2 wages and related employee benefits (i.e. 401k match), we’re continuing to build our passive and other income streams.

Our total non-employer-related income earned this month was $8,253.

Here’s a breakout of how that money was earned:

As mentioned earlier in this post, our income from dividends and interest this month was record breaking for us at $7,527!

We also received some holiday gifts in the form of cash or 529 contributions for our daughter this month. Plus, a whopping $1 from Amazon affiliate sales.   

After a brief dip, I also earned $300 in referral credits from my ButcherBox review this month. While I show these referral credits as “Other income” above for transparency; I don’t treat them as income within the budget or when calculating our savings rate. That’s because the credits are only paid out as discounts off future ButcherBox orders, which effectively just reduces our grocery expenses.

That’s it for our December 2023 financial results. Let’s see what 2024 brings!

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Featured image by Rich Frugal Life.

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