Big Spenders, Paleo Challenge and January 2023 Financial Results

Welcome to Rich Frugal Life’s January 2023 financial results.

Before we get into the numbers, here’s a little bit about what we did this month.

Getting a taste of that big spender lifestyle

This month we got a brief taste of how big spenders live with courtside tickets to an NBA game and all-inclusive access to the Phoenix Sun’s ultra-swanky lounge.

The tickets were courtesy of Mr. RFL’s employer. See, there are some fun perks that come from working a real job.

From tenderloin filets and shrimp cocktail to high-end individual desserts for the grown-ups, stadium food and a candy bar for the kids, the food options were endless and delicious. The atmosphere, service, and open bar were pretty impressive as well.

There’s no way we would have paid the outrageous price for these tickets out of our own pockets, but it was a very cool experience and rare glimpse for us at how big spenders live.

Also, notice how I used the term “big spenders” and not “rich.” There’s a difference.

The Paleo & “Dry” January Challenge

This year, I didn’t set any formal New Year’s resolutions or goals for the year, as mentioned in a recent post.

However, I have been wanting to try a Paleo diet for a while now, so we decided to do a Paleo challenge for the month of January.

Despite making healthy choices much of the time, I have a bad habit of binging on junk food more than I’d like. I’ve been curious to see if a truly clean, whole-foods diet would make me feel more in control and better, both physically and mentally. In order to isolate the effects, I also eliminated alcohol.

For the first two weeks, I felt pretty amazing!

I had more energy, less anxiety and an overall happier demeanor than usual. While not intentionally low carb, my desire to minimize processed foods naturally kept my diet pretty low in carbs (~100g, net). In fact, I found it pretty hard to eat enough, never mind overeat.

After the first two weeks I stopped tracking my food, which led to eating more more Paleo crackers and treats, and a down hill slide. The positive effects subsided a bit, as expected.

We allowed a one night break from our experiment in late January for the basketball game, which quickly turned into calling it quits a few days before the end of the month. Oh well.

Overall though, I now know that eating mostly vegetables, fruits, nuts, healthy fats and lean meats will make me feel great. Okay, I already knew that. But hopefully my body is now convinced and I can make healthier decisions on a more regular basis.

Without further ado, here are our January 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. 

January 2023 Financial Results

Investments

We made a net investment of $8,800 to our Financial Independence (“FI”) portfolio during the month. This number includes employer matches but does not include reinvested dividends.   

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

Regularly tracking our investments and net worth has been a big factor in our financial success.

You can easily track your investments and net worth, as well as plan for retirement, for FREE with Personal Capital (affiliate link).

Debt

We currently have $167,600 in debt, the majority of which relates to our mortgage.

Because our mortgage has a fixed interest rate of 2.5%, which is LESS than the 3.4% our high-yield savings account pays, we have no plans to make additional principal payments anytime soon.  

Savings Rate

Our after-tax savings rate this month was 81%. This seems to be about average for us lately, and is consistent with our average savings rate for 2022 of 80%.

We calculate our savings rate after taxes, because we believe this gives us the best insight into our true cost of living. It also allows us to better compare expenses and savings rates over a period of time.

Although we currently pay a lot in taxes, it’s because our income is high. We will pay much less in early retirement.

January 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 monthly spending for home renovation of $348. Also excludes charitable contributions made, as we don’t share that information publicly. While we do 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 – $794

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. Because of this, and as we’d been paying extra all along, our loan-to-value ratio and mortgage payment are now quite low.

Housing costs are up from December, as I’ve included a modest increase to our monthly property tax accruals for this year. We won’t receive the actual bill for 2023 until September though.

Insurance – $449

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 – $756

This was a pretty low month for us. Since we were doing a “Paleo January” challenge, we did a lot of cooking at home.

The $93 in restaurant spending is when we gave up the challenge a few days early to go on a beer and BBQ “day date.”

Household Consumables – $45

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

Mostly spent on TP and a couple other things from Costco this month.

Utilities – $189

Utilities includes electric, water, gas, and security. Winter is our cheapest time of year here in Arizona. However, it’s been colder than normal lately, so I’m expecting to see a spike in our gas bill next month.

Entertainment & Learning – $31

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

This was for our streaming services (Spotify, Hulu, Amazon Kids+, Discovery+, and Disney).

Self-care – $153

The majority of this was my annual membership to the Peloton app (aka. the Peloton hack). I’m obsessed. I also bought some yoga blocks this month .

Clothes – $92

Another pair of joggers and a pack of athletic socks. To be fair, I had already bought these things before making the statement in last month’s blog post about not needing to buy anymore clothes.

Child Care – $388

Prepaid for after-school care through February.

Our kiddo loves the afterschool socialization. She’s been begging for us to let her go every day (instead of just 3 days a week). Since the next two months will be when I’m a little busier with my new part-time gig, we agreed to her request for February and March. She’s pumped.

Kid Activities & Other Purchases – $208

After a couple month break from activities, we encouraged our daughter to pick a new activity to try. She finally settled on Gymnastics, so we signed her up this month. She’s loving it so far, which is great.

We also bought her some Valentine’s Day supplies and a new bike helmet (affiliate link) to use with her hand-me down big girl bike that we got for free.

Furniture, Tools & Other Home Purchases – $106

I managed to keep our home purchases under control this month. However, I did splurge on a fancy wooden bathtub caddy that was unpurchased from my Christmas wish list (affiliate link). 

The rest of this month’s spending was for a few cheap plastic storage containers from Target and a $39 recharge of a previous Amazon return, who claim they never received my item (Ugh!).

Cash Back Rewards

We received $119 in cash back rewards this month.

I previously included cash back as a line item under “income” in our budget. However, that never felt right. For us, cash back represents a discount on purchases that we actually made. No purchases, no cash back.

This year, I decided to include cash back from our credit cards as a reduction in expenses for budgeting purposes (i.e. contra-expense). The accountant in me feels better now.

At the end of the year, I’ll probably allocate this savings against our other budgeting categories. This process shouldn’t be hard for most of our credit cards, which we only use for a single category each billing cycle.

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.

January 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.

The total non-employer related income earned this month was $1,556. Here’s a break out of where that money came from.

There you have it… our January 2023 financial results. How’d your first month of the year go?

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Image by Dave Smith from Pixabay

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