Celebrations, Family Time, and December 2021 Financial Results

Happy New Year! Today I’m sharing our December 2021 financial results.

Next week I’ll share our year-end financial review for all of 2021, which will include total spending and passive income for the year, our current investment portfolio, and how we fared on our 2021 financial goals.

Before we dive into the money talk, here’s what the RFL Family was up to last month.

A merry frugal Christmas

If you celebrate any holidays in December, I hope you had a great one! We kept our holiday celebrations merry and frugal this year, with lots of low cost activities and only a few presents for everyone. Although there was that one splurge for the kiddo (affiliate link), it was probably as much a gift for us, as it was for her.

I also scratched my baking itch this month, making over 15 dozen and 5 types of cookies, as well as a pecan tart.

Birthday celebrations and the most expensive meal of our lives

Last month was big for me, ending with the celebration of my 40th birthday!

While we are generally pretty frugal when it comes to dining out, birthdays are one of the few occasions where we don’t mind splurging on a nice dinner out. Yet, despite this being my birthday month (and a big one at that), our actual restaurant spending was only $57.

But… we technically spent a lot more than that. It’s just that it wasn’t our money.

Mr. RFL and I celebrated my 40th birthday with a fancy date night at Café Monarch, where we spent OVER $600 after tip. Yes, you read that right.  This is by far the most money we’ve ever spent on one dinner, and we’ve dined at a few very fancy and Michelin-starred restaurants in our day. This occasion; however, was paid for by Mr. RFL’s employer! It was a congratulatory gift for an industry award that he won at the start of the pandemic, which we hadn’t cashed in on yet.

Café Monarch is a pricey restaurant, but there’s no way we would have spent that much money if we were footing the bill. Because it was free to us, we indulged in several things that I’d normally feel too guilty about buying for myself. Mr. RFL’s boss did say “no price limit”…

Either way it was an amazing meal and a birthday date night to remember!

2 weeks of uninterrupted family-time!

Maybe the best part of the holiday season is the vacation time!

Because we haven’t been travelling much during the pandemic, Mr. RFL was able to take 2-weeks off of work at the end of the year, which meant extra family time. Historically when one of us had a day or two off of work, it’s meant either taking a trip or working on projects around the house. This time, we stayed home and both slacked off, truly enjoying extra couple and family time.

It was unusually cold and rainy in the Phoenix metro, so we spent an absurd amount of this time playing board games. Although Mr. RFL would probably disagree with my use of that term… he’s a board game fanatic.

Little A’s new favorite game is Monopoly, although she tries to play the grown-up games. She also refuses to sit through a whole game of anything we play. Mr. RFL and I have been playing a lot of Catan, Ticket to Ride, Carcassonne, and Splendor (all affiliate links). If you have any favorite board games that work well with only 2 players, please send the recommendations my way!

That was our month. Without further ado, here are our December 2021 financial results, with all the juicy details of this month’s spending, passive income, savings rate, investments, and changes in net worth.

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 do believe there is value in sharing information to normalize the discussion of money and provide context.

Seeing other people happily embracing 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.

If you’re looking for the frugalist of the frugal, you won’t find that here.  Life is short and we have no problem splurging on things that make us happy.  Although we spend freely in these value areas, we’re trying to ruthlessly cut back everywhere else.

Other information useful in reading our monthly financial results

Did we just buy a money pit?

We took a risk and 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 in North Carolina.  So, when we found a great deal on a fixer upper, we decided to go for it.

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 a former 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 2021 Financial Results

Net Worth

We calculate net worth by subtracting debt & other liabilities from total assets. Total assets include cash, investments, home equity, and an immaterial amount of other assets.

For those wondering, I do include the value of our cars in this number. Twice a year, I use the Kelley Blue Book trade-in value to update this number. While I usually depreciate the values each month; they (surprisingly) increased by $5.5k during 2021!  

Our net worth is up 3.2% from November, 31% from a year ago, and is double our net worth from 3 years ago.

Investments

Our Financial Independence portfolio, which consists of cash and investments, excluding our daughter’s 529 Plan, is up by 39% for the year. We added $9,101 in investments to the portfolio during the month.

We ended the month at 97% of our FIRE goal. So close! Stay tuned for a special update in January…

Debt

We currently have $193,779 in debt, the majority of which relates to our mortgage.

For the most part, we no longer make additional principal payments to our mortgage during the year. We shifted our priorities to investing excess cash once we got the mortgage balance below $200,000 and refinanced to a rate of 2.5%. 

However, I’m now rethinking that strategy, given the lower market returns being projected for the next 10 years.

Savings Rate

Our after-tax savings rate was 78.3% in December, which is way above our budgeted rate for the month! It looks like I seriously underestimated our future dividends when drafting our 2021 budget last December.

December 2021 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 $347, or charitable contributions made (which we don’t share publicly).

Housing-Related – $858

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

Insurance – $464

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 – $505

Grocery spending was below our ~$600 monthly budget at $448. We finally ate some of the surplus of food that I’ve been buying over the past few months! Plus, we still managed to finish the year out with two nearly full freezers. As mentioned above, we spent only $57 of our own money on restaurants this month.

Alcohol – $20

Picked up some of our favorite local beer for the several stay-at-home board game & beer dates Mr. RFL and I had over the holiday vacation.

Household Consumables – $127

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

We purchased toner for the laser printer (affiliate link) bought earlier this year (which is way more economical than the old ink cartridges) and some household cleaning supplies this month.

Utilities – $165

Utilities includes electric, water, gas, and security. 

Yay for mild and cheap winters in the desert!

Home Maintenance – $35

This money was spent on KN95 masks that Mr. RFL uses for woodworking, and I sometimes use for pandemic-protection. I wasn’t really sure whether to put this one here or in “Other Shopping.”

Medical – $292

It was all about the eyes this month. We ordered ordered 3 pairs of sunglasses from EyeBuyDirect (referral link – Get $10 and 15% off), including a pair of prescription sunglasses for Mr. RFL for $105. The total cost of these glasses was brought down to $80, after taking advantage of cash back offers from our credit card and Rakuten (referral link – Get $30 back).

This was our first time using the site and I’d definitely use them again. It was way cheaper than buying through our eye doctor – Mr. RFL’s last prescription sunglasses cost ~$300! The one downside is that if you’re using insurance benefits, you have to submit the claims yourself, but the savings are worth the minor hassle to me.

I also ordered 2-years’ worth of contacts to take advantage of a credit card offer and free shipping. It seemed like a good deal, since I was completely out and my prescription hasn’t changed in 10 years.

Entertainment – $27

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

This month we took advantage of a “member appreciation” night for a family outing to Phoenix Zoo Lights. It only cost $15, including the hot chocolate and Christmas cookies. Our 5 year-old loved it, and we were pretty impressed as well.

Clothes – $0

No spend clothing challenge… nuff said.  

Child Activities & Other Purchases – $161

This month we paid for swim lessons and bought a couple last minute gifts for our daughter.  We try to keep holiday spending minimal, to set expectations while she’s young. A few of the gifts we bought this month and last are being saved for Valentine’s Day, Easter, and her next birthday.

Other Shopping – $129

I purchased a matching flour canister for a set from Target I already have, and lots of OXO pop top storage containers (affiliate link – bought a similar set for less at Costco). I’m currently into beautifying my pantry. These were my unexciting (but exciting to me) Christmas presents for myself.  

December 2021 Financial Results: Other Income

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

The total non-employer related income either earned (or gifted to us) this month was $5,413!

Interest

We earned $209 in interest this month! This is a bit higher than previous months, since it also includes interest for the $20,000 in U.S. treasury I-bonds we recently purchased (currently paying 7.12%). The remainder of these earnings are from our high-yield savings account and interest earned on Mr. RFL’s deferred compensation investments.  

Dividends

Woohoo!!!  December is the holy grail month for dividend investors. It was our best month ever for passive income, which is no surprise given how much our portfolio grew during the year. We raked in $4,289 of dividends this month!

Reselling

I’ve made literally no effort in this category for the last few months, though managed to make $8 in commissions from selling unwanted clothes and kid gear on the secondhand market.  I’ve recently set a goal to declutter 500 items in 2022, so expect this to ramp up over the coming months.   

Cash Back Rewards

We earned $132 in cash back rewards this month, primarily from our credit cards.  We charge everything we can on our cards to maximize cash back, but always pay the full balance off each month.

Gifts

We also received $775 from family members for Christmas and birthdays in December, which came in the form of either cash or 529 contributions.

Those are our financial results for December 2021. How did your final month of the year go?

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