Giving Back in Early Retirement and April 2024 Financial Results

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

Giving back and smashing goals

One of my personal goals for this year was to volunteer at least 200 hours in our local community. I completely smashed that goal last month and will double or triple it by year end!

Given the number of volunteer positions I now have, and how cumbersome it was to track my time, I’ve decided to stop formally tracking volunteer hours. Although I won’t know the grand total at year end, I will know that I’m doing a lot of good in my community, and that’s what really matters.

One of the complaints about the FIRE Movement that annoys me most is that it’s selfish to retire early. Critics claim that people who stop working are a burden on society. I think that just shows how messed up our society’s priorities really are.

Working is certainly one way to contribute to society… but it’s not the only way.

I’m a much better person now than when I was working in corporate America and I bet many early retirees would probably say the same about themselves. Good people make the world a better place.

Do we pay a bit less in taxes now that I don’t have an income? Sure. But money isn’t everything.

When I was working, I rarely gave back to my community. It was all about me, because I had no time or energy left for anything else.

Since quitting my high paying career over four years ago, I’ve been far more generous with my time and money. It’s easier to show kindness and patience to the people I encounter each day than it was when I was working long hours and stressed out all the time. In addition to volunteering within the community, I don’t drive rushed or distracted (safer roads); spend more quality time with my family (positive relationships and mental health); regularly exercise and cook nutritious food (lower burden on our health care system); and focus on making sustainable choices (save the planet!).

There’s still plenty of room for improvement, but one might argue that I’m actually a better member of society these days.

Early retirement doesn’t mean you are no longer a contributing member of society. It just gives you the opportunity to contribute in different ways.

[Rant over]

Dental work (ouch!)

My back molar cracked… again. It also developed a cavity, so I finally bit the bullet this month and had a crown put on the tooth.

I’m pretty skittish when it comes to medical procedures and there were some complications with my temporary crown, so I spent most of the month anxious, in pain, and pounding Ibuprofen (which my husband will tell you I rarely take at all). It seems to be all good now, which is a relief. There was a lot of mushy food eaten last month.

After insurance, the cost to put on a crown wasn’t as high as I had expected when drafting our budget for the year at $568. Though that’s still not “cheap” and certainly not something I enjoyed spending our money on. Fortunately, we have a robust emergency fund to cover one-time medical expenses when they arise.

Without further ado, here are our April 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 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. 

April 2024 Financial Results

Investments

We made net investments of $40,700 into our financial independence portfolio during the month of April.

Although that may seem like a lot of money, almost $28,000 of it came from cash that we were already holding from selling Mr. RFL’s vested stock options earlier this year (which resulted in negative or lower than average net investments in previous months).

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

I forgot to save a copy of my pie chart before updating my investments tracker for May, so no graph this month on how we invested our money. Sorry! For the most part, we stuck to our strategy of buying a higher percentage of income producers (dividends and bonds) within our taxable brokerage, with the rest going into the total stock market.

I know that time in the market is what really matters. But even I’m feeling skittish these days about whether the stock market might be overinflated, so have been taking longer than I should to redeploy funds from Mr. RFL’s company stock back into the market.

Debt

We currently have $150,100 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 4.3% 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 39.3%, which is WAY below our average rate!

We had no big boosts in extra income this month and spent more than usual booking summer travel and camp costs, amongst other things. After a few super frugal months, this extra spending doesn’t bother me at all.

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.

April 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 – $793

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 – $777

After several months on target, we finally blew the grocery budget at $718. I’m a bit of a stockpiler and have trouble passing up a good deal. This of course included a trip to Costco.

That said, my pantry is overflowing. With the summer heat and our upcoming vacations, I’m going to challenge myself to try and use up what’s in my pantry and keep grocery spending low for the next two months. We’ll still have to buy dairy and produce, but I’m going to try and minimize the pantry items I buy.

Fortunately, April was extremely low when it came to our restaurant spending at $59. We went on one lunch date and spent the rest of our weekly coffee and lunch dates making food at home.

Household Consumables – $111

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 coffee filters, toothpaste, oral b replacement heads (which are $$). I also decided to try a couple natural deodorants from a sustainable small business (affiliate link). I swear, after I got used to it, natural deodorant works much better for me than the pasty regular stuff ever did.

Utilities – $195

Utilities include electric, water, gas, and security. 

This ties January for our lowest cost month. It will only go up from here throughout the rest of the year, as we’ve already reached 90-degree temperatures. Summer is coming…

Home Maintenance – $0

Nothing to report this month.

Fuel – $92

We filled up both cars this month, discounted using Fry’s fuel points.

Medical– $574

Medical costs were for the dental work I had this month and the related pain medicine. See above.

Alcohol – $65

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

Travel – $2,740

Summer heat means we’re already planning our escape from the desert!

This year’s big summer vacation will be another trip back east to visit with family and explore the blue ridge mountains of Virgina and North Carolina (one of our favorite places).

Our travel expenses this month include airfare and deposits on lodging for the trip.

Entertainment & Learning – $47

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. I also played Bunco with some other moms this month, which had a $13 cash buy in.

Self-care – $267

This month I bought a Groupon for two diamond glow facials a local day spa. Back when I used to actually take care of my skin (i.e. before becoming a parent), I enjoyed regular microdermabrasion treatments to keep my skin clear and glowing. This is apparently the next gen… at a much higher price.

I tried out the first treatment at the end of the month and I’m still on the fence as to whether or not it’s worth it. Dermabrasion takes multiple treatments to see results.

Self-care spending this month included the cost of the Groupon, tip at the spa, a cheap haircut for Mr. RFL and a gua sha tool I bought on Amazon (because, why not?).

Clothes – $176

I discovered a new store that I like… Quince!

This month I bought multiple tee shirts, tank tops, a pair of bike shorts and three dresses at a great price. Only time will tell if the quality holds up, but after seeing a noticeable decline in quality at my previous go-to stores (while prices increased), I decided to give Quince a try. So far, so good.

Kid Activities & Other Purchases – $320

We decided to do three weeks of day camp this summer and had to pay fees to reserve spots in April. We also paid the dues for our daughter’s weekly gymnastics lessons.

Furniture, Tools & Other Home Purchases – $32

It was another frugal month for discretionary shopping!

This month we purchased a camping pillow and small pillowcases for Girl Scouts.

Cash Back Rewards

We received $132 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.

April 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:

April investment income was pretty much average for our monthly dividends and interest these days. It’s nice to finally see this number consistently above $1,000.

I also made $22 from selling old clothes on Poshmark and $1 from affiliate links on the blog this month.   

The referral credits from my ButcherBox review were $300 this month. I updated my review with more recent comparative pricing last month, which seems to have boosted traffic. 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 April 2024 financial results. How was your month?

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Featured image by Rich Frugal Life

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