Let’s get Healthy and May 2024 Financial Results

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

Let’s get healthy!

Now that I’m in my 40’s (and suspect perimenopause), it’s time to finally commit more effort into improving my health. I’m not happy with where I’m currently at. And I’m certainly not ready to surrender to the physical decline and weight gain most women experience in their 40’s and 50’s.

Although I successfully lost over 30 pounds after leaving my accounting career in March 2020, I’ve since regained about 15 pounds back. I’m hoping some of this weight was muscle though, since I started seriously strength training about a year ago.

My goal is to feel great about my body and my health before it becomes increasingly harder to lose fat and gain muscle. I want to feel like I’m in the best shape of my life (and love my body) by the time I turn 45.

For this journey, I decided to invest in some baseline health tests. I recently went for my first Dexa scan, which provides a detailed analysis of body composition, including body fat, muscle mass, visceral fat, and bone density. Earlier this year I also took some hormone tests, and I’ll have my regular annual blood work done next month. I already regularly track my physical body measurements and weight.

All these tests will serve as a baseline so that I can evaluate my progress over the coming years.

Because I’m want to both lose fat and build muscle, I took a Basal Metabolic Rate test to establish how many calories my body burns at rest. For the past month I’ve been tracking my macros. This information will allow me to appropriately set my macro goals to make sure I’m eating enough calories and protein to lose some fat, without sacrificing my metabolism and muscle mass.

Naturally, I’ll also continue to work on reducing stress and improving my mental health.

It’s all going to be a big fun experiment… with (hopefully) stellar results.

See you after summer break…

School’s out for summer, which means it’s time for me to one again take a break from all things blogging and Rich Frugal Life.

I took about a month off last year and it was great! This year, I’m planning to take off around 6 weeks.

While I don’t spend nearly as much time on this blog as I did at the beginning, taking a formal break makes me feel better about neglecting this part of my life for a period of time. Instead, I’ll enjoy real life with my family, work on my health, travel and catch up on other hobbies.

I hope you and your loved ones have an awesome summer!

Without further ado, here are our May 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. 

May 2024 Financial Results

Investments

We made net investments of $40,200 into our financial independence portfolio during the month of May.

We sold off one more tranche of Mr. RFL’s vested stock options. The stock price has been doing so well lately and our gross income will be much lower than normal, thanks to a surprisingly low bonus payout this year. That’s left us more room to take these earnings in 2024 without climbing into a higher tax bracket.

This will probably be our last sale of company stock for the year. We effectively invested the proceeds in CD’s this time to lock in the higher rates before they disappear. Our current month’s earnings and some existing cash were used to pay for the remaining investments in May.

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

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

Debt

We currently have $149,100 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 82%.

We cashed out of one final tranche of stock options, which boosted our income this month and offset our higher spending levels.

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.

May 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 – $791

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 – $928

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.

We paid the premium for Mr. RFL’s term life insurance policy in May, which is why this category is about double our usual spending.

Food – $937

It’s time for a pantry clean out challenge! First, I had to sneak in one more Costco trip, so I was only able to reduce our grocery spending by so much this month. We came in at $525 for groceries, which is just a little below our budgeted amount.

We also spent a whopping $412 on restaurants this month, although $158 of this was the prepayment for a four-course June dinner date at a local restaurant. The remaining spending was for two date nights/lunches out, Mother’s Day brunch, one moms’ night out dinner, a family outing for fancy milkshakes, and a Starbucks gift card.

Household Consumables – $50

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 – $188

Utilities include electric, water, gas, and security. 

Surprisingly, lower than last month, but summer is here.

Home Maintenance – $375

After four years of neglect, we finally paid someone to come clean our windows inside-and-out. Worth it.

Medical– $200

Discretionary medical spending for my Dexa scan and BMR test (See above).

Alcohol – $60

This month we paid for our Cooper’s Hawk wine club membership, which we’ve downgraded for the summer. Our wine fridge is full, and we’ve been drinking less often this year, so it’s time to use some up before we buy any more. We also picked up one 4-pack of our favorite local craft beer.

Travel – $1,838

More travel costs for our upcoming summer vacations.

Entertainment & Learning – $65

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. We also took a family outing to play mini golf this month.

Self-care – $537

Yikes! I admit this looks bad…

However, over $200 of this month’s self-care spending was for a sleek new walking pad so that I could get my steps in when the weather is too hot to walk outside comfortably (which is 3-4 months of the year here). I was gifted a free walking treadmill last summer, but that one was too bulky and low quality, so it didn’t get much use. We ultimately passed it on to someone else at the end of the summer. A few weeks into using this new walking pad and I’d say it’s worth every penny.

My new goal for the year is 9,000 steps per day. I averaged 7,722 steps per day last year and originally set my 2024 goal at 8,000.

I also received a 3-pack of massages to a local day spa for Mother’s Day.

Clothes – $40

I bought a new bathing suit from Target since the others I have are currently either too big or too small.

Kid Activities & Other Purchases – $575

This was an expensive month for the kiddo. We spent $410 on kids’ activities this month which included gymnastics, summer swim team and another camp fee.

We also bought our daughter a couple pairs of proper running sneakers (on sale, in multiple sizes), several pairs of shorts, and a new bathing suit (since her hand-me-downs are starting to fall apart). Finally, we bought some swim flippers, goggles, and a kick board from Amazon, as recommended by her swim instructor (affiliate links).

Furniture, Tools & Other Home Purchases – $4

Couldn’t resist buying a mini fake lavender plant on a recent trip to Target.

Cash Back Rewards

We received $105 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.

May 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:

May investment income was pretty much average for our monthly dividends and interest these days. June will be a big month…

I also made $67 from selling old clothes on Poshmark and nothing from affiliate links on the blog this month.   

The referral credits from my ButcherBox review were $90 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 a wrap on our May 2024 financial results. Happy summer! I’ll be back soon…

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