Buying Back our Time and February 2024 Financial Results

Welcome to Rich Frugal Life’s February 2024 financial results! Before we get into the numbers, here’s what we were up to last month.  

Trying to buy back our time

As mentioned in my recent 2024 budget blog post, we’re planning to use our financial freedom to buy back more of our time this year. We set money aside for this last year and then never spent it. This was mostly my fault. I still have too much guilt. Spending money to pay people for things that we can do ourselves is still something I struggle with.

But with Mr. RFL still working full-time, we want to give it another try this year. We’ve specifically set aside additional money in our home maintenance budget to hire out cleaning, landscaping, and other maintenance services this year. Afterall, time is our most precious commodity.   

This month, I finally caved and hired a house cleaning company. We live in an affluent area, so the cost of cleaners (and pretty much all services) is incredibly high. It took a lot to get myself over that initial hurdle and set the appointment.

We haven’t had great luck with cleaners in the past, so I wasn’t all that surprised to be disappointed when they left. There were several things not to my expectations. And yes, I do have high expectations. I know this. However, there were baseboards and blinds coated in dust, shower glass that still had soap scum, and several dirty spots on the floor that were clearly not mopped. These things were all supposed to be “deep cleaned” under the package I selected.

It was better than before, but still required too much extra work on my end and was ultimately not worth the on-going cost to continue. So, I’m going to stick to cleaning the house myself this year.

We’ll just have to buy back our time in other ways…

Without further ado, here are our February 2024 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. 

February 2024 Financial Results

Investments

We sold off $67,000 worth of Mr. RFL’s vested stock options in February, which provided around $46,000 in cash after taxes were paid.

Using some of this money, in addition to Mr. RFL’s regular paychecks and a small bonus, we made new investments of $32,800 into our financial independence portfolio this month. This money was pretty evenly split between dividend, total stock market, taxable bonds and municipal (tax-exempt) bond funds and ETFs.

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

Debt

We currently have $152,200 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 97%!

This unusually high savings rate is entirely driven by the extra income we reported this month from the large number of stock options we cashed out (income when exercised/sold), in addition to a large vesting of company stock (income when vested) and small bonus payout.

Our tax bill for the month was more than the total amount we spent in all of 2023 (excluding income taxes)!

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.

February 2024 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. We don’t share that information publicly and prefer not to treat charitable giving as an “expense” against our budget to encourage ourselves to be more generous (since we tend to want to manage and reduce “expenses”).  Additionally, approximately half of our annual giving is now made from the Donor Advised fund we opened in 2022, which is already excluded from our net worth.

Housing-Related – $797

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 – $463

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 – $676

This month we kept our grocery shopping around the budgeted amount at $571.

We also spent $105 at restaurants in February, dining out for only one of our weekly lunch dates and picking up dinner from a food truck at a community event.

Although Mr. RFL and I have been continuing our weekly dates this year, we’ve been trying to spend more of these lunch dates making and eating a nice meal together at home instead of going out as frequently. This is primarily for health reasons, but it also helps to keep the budget in check.

Household Consumables – $74

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

This month we purchased some toiletries from Costco and a bunch of essential oils to make all my DIY cleaning products.

We’re trying to reduce the amount of toxins in our home and the waste we send to landfills. Making our own cleaning products is a simple and frugal way to do both things! It’s just another way in which going green can actually save you money.  I replaced a few traditional cleaning products last year and have slowly been adding new ones, having now almost fully replaced traditional cleaning products with DIY versions.

Utilities – $271

Utilities include electric, water, gas, and security. January was pretty cold, so our February gas bill was higher than usual.

Home Maintenance – $819

In addition to hiring house cleaners this month, we also renewed our annual HVAC maintenance contract, since that is an expensive item and something we don’t want to DIY.

Fuel – $44

We filled up one car this month, discounted using Fry’s fuel points.

Car Maintenance – $3

Costco sent us the incorrect wiper blade, so I had to return it for a larger one this month (at a slightly higher cost).

Alcohol – $125

This month we paid for our Cooper’s Hawk wine club membership and held one of our day dates at a local craft beer bar.

I’ve decided to start including bars and breweries (when no food is purchased) in the alcohol category again. Alcohol consumed while dining out will still just go to the restaurant category, since it’s too much work to split it out.

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 – $269

Mr. RFL and I both needed new hiking boots this month (affiliate link).

I also joined a pickleball club so paid dues for that this month.

Clothes – $90

This month I bought a wrap that I’d been eyeing from Athleta during a sale and pre-loved Boden dress.

Kid Activities & Other Purchases – $156

We just paid for gymnastics lessons, which included our annual membership fee.

Furniture, Tools & Other Home Purchases – $7

It was a nice frugal month for discretionary shopping. I bought this silicone baking mold set for my homemade candy and treat making from Amazon (affiliate link).

Cash Back Rewards

We received $77 in cash back rewards this month.

Since these ultimately represent reductions in the purchases we make, we now reflect them as a reduction of expenses (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 to pay for travel. That’s not to say that the trade-off isn’t better for anyone who travels a lot and has the time to maximize points. 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 to maximize credit card rewards. However, we always pay the full balance due each month.

February 2024 Financial Results: Other Income

While most 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.

Here’s a summary of our Non-Employer Related Passive & Other Income for the month:

February investment income was a little bit higher this month because Mr. RFL received a payout of accrued dividends for his company shares that recently vested.

I also made $55 from selling old clothes and a DVD on Poshmark this month.   

The referral credits from my ButcherBox review were $150 this month. While I show these referral credits above for transparency; I don’t treat this money as income within our budget or when calculating our savings rate. That’s because credits are only redeemed as discounts off my future ButcherBox orders, which effectively just reduces our grocery expenses.

That’s all for our February 2024 financial results. How was your month?

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Featured image by Rich Frugal Life.

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