Revealing March 2022 Financial Results (Spoiler: We Blew the Budget!)

Welcome to Rich Frugal Life’s March 2022 financial results!

Confession: we spent a lot of money this month!

As you’ll see below, we spent a lot of money in March… more than double what was spent in February and well above our budgeted amount.

While much of this was due to timing of certain bills and purchases, we’re beginning to realize that we’d like to give in to lifestyle inflation a bit more while Mr. RFL is still working.

When I took to social media last month with our plans on how to invest (or spend) the lump sum from Mr. RFL’s bonus and equity payouts, two responses came up a lot, which I hadn’t addressed in my original blog post: “donate it” and “spend it”.

In writing my post, I didn’t specifically mention charity because we’d already decided to open a Donor Advised Fund in 2022 and to fund it with a substantial amount of money (since it’s more tax efficient to make contributions that are larger and less frequent). My thinking was that the funds for our donation were coming from elsewhere, but the reality is that we wouldn’t be comfortable contributing such a large amount without this extra money.

As far as spending it on ourselves… the thought hadn’t even crossed my mind. That just shows you how deeply the FIRE movement’s frugality is engrained in me. We made very modest increases to our 2022 budget for more travel, dining out and other fun things, but really should have increased it even more.

So, we’re going to blow our budget in some areas this year… and that’s okay with me.

Sourdough adventures

In this month’s “learning to homestead” adventures, I decided to tackle the art of making real (re: fermented) sourdough bread, which experienced a resurgence in popularity during the pandemic.

I’ve wanted to try this for a while now, but admit I was a bit intimidated. And so I created a little monster out of organic flour and water, which I subsequently named “Little Monster” due to it’s wild vigor in the Arizona heat. While there’s certainly room for improvement, my first loaf came out pretty tasty.

We also made some delicious pizza crusts with the sourdough discard that will likely replace our previous pizza dough recipe.

In sadder news…

Earlier this year we lost my last remaining grandparent. My grandma was an incredible woman and we’ll miss her greatly.

She lived into her mid-90’s and remained relatively independent and healthy until just recently. We’re thankful to have been able to spend the last few years living nearby so that we could spend more time together and our daughter could get to know her great-grandmother.

This is all personal and I was intending to keep it private; however, there was a notable financial impact as well. So, I’m sharing the news with you now.

We inherited approximately $37,000 from my Grandma’s estate. While I recognize that this amount of money would be lifechanging for many, it is not for us given where we are on our financial journey. Though it’s certainly nice to be thought of and have some extra money, I’d rather have my loved one back.

We’ll use a small portion of the inheritance to pay for our summer road trip, which will include visiting my family on the East coast. The rest will be earmarked for charity.

Without further ado, here are our March 2022 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 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.

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 bought a complete fixer upper in late 2018… with a toddler.  When we moved across the country for Mr. RFL’s job, we found housing costs much higher than we were used to.  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. 

March 2022 Financial Results

Net Worth & Investments

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.

Our total net worth increased by 4.3% this month, and 39% from a year ago.

We added $25,600 to our Financial Independence (“FI”) portfolio this month (including employer matches).

We passed our FIRE goal earlier this year and ended the month with an investment balance of $1,170,000.  This balance provides a base withdrawal rate of $46,800 per year, using the 4% rule or $38,600 if we use the more conservative 3.3% rate suggested in a recent Morningstar report.

Debt

We currently have $180,900 in debt, the majority of which relates to our mortgage, which has an interest rate of 2.5%.  Because of this, we now rarely make additional principal payments to our mortgage. 

Savings Rate

Our after-tax savings rate was 88%; however, this includes the lump sum which I inherited during the month. Our savings rate decreases to 66% if this amount is excluded from the calculation.   

This was also the first month Mr. RFL received the higher salary of his new position, which will boost our savings rate going forward. 

March 2022 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 $3,161, or charitable contributions made, which we don’t treat as expenses (to encourage more giving) or share publicly.

Housing-Related – $853

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

Insurance – $1,073

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.

March is the month during which we pay our annual additional liability and umbrella insurance policy premiums, making it a more expensive month for insurance.

Food – $869

We spent a lot more on food this month, primarily because we spent so little in January and February.  In addition to enjoying more day dates and family meals dining out in March, we bought more groceries to replenish our pantry and max out cash back rewards.

Despite the higher costs in March, we’re still on track with our budget on food spending year-to-date.

Household Consumables – $166

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. 

This was a bit higher than usual because I did a Costco run, as well as purchased a slew of sunscreen and other personal care products during the month.

Utilities – $179

Utilities includes electric, water, gas, and security. Although the heat is rising, our low utility usage during the winter has kept these costs low (compared to the summer months).

Home Maintenance – $351

This is for the annual premium on our HVAC maintenance plan, as well as a replacement propane tank for the grill.

Fuel – $113

We continue to drive very little, but gas recently topped $5 per gallon where we live and we both needed to buy some this month.

Travel – $813

I’m so excited to begin to travelling more!

Although Mr. RFL and I both travelled significantly before having kids, we haven’t done much of it since. First it was because travelling with a little (un-potty-trained) child is not very fun, and then the pandemic hit. While we still plan to be cautious, it’s time for the RFL family to finally get out there again!

We started planning and booking a 2-week New England road-trip we intend to take later this summer, so these charges are for that. We’re travel hacking a portion of the trip, which will keep costs lower, although decided to splurge on the one hotel that we are paying for out of pocket (re: this is not a “budget” vacation). More details to come this summer.  

Entertainment – $77

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

In addition to the usual, we purchased concert tickets for a date night next month. Mr. RFL and I bonded over our shared love of music early on in our relationship. While we slowed things down after becoming parents, this will be our first concert in nearly 2.5 years.

Clothes – $46

My no-spend clothing challenge is still going strong, but we did buy a few new work shirts for Mr. RFL so he could look spiffy for his new promotion.

Alcohol – $135

We purchased 12 bottles of wine and some craft beer this month.

Personal Care Services – $253

One more last ditch effort to slow down the aging process the not-so-natural way. I think it’s time to give up and just embrace it.

Child Activities & Other Purchases – $180

This month we paid $95 for our daughter’s swim lessons.

I also bought her some new summer clothes from Target, more face masks for school (affiliate link), a stainless-steel water bottle (affiliate link), and some goodies for Easter.

Other Shopping – $747

Oops. We bought a lot of stuff this month!

Mr. RFL spent $500 on new tools during the month, including a used sliding table saw that he bought for $250 from a reputable source (retails for $650). He also picked up a new angle grinder, corded blower/leaf vacuum for the yard and a few tools for an upcoming DIY home project.  

The rest of this money was spent on dirt and materials to complete our final raised garden bed, tincture bottles for my DIY personal care attempts, and the most adorable wool dryer balls ever.

(Note: links above are Amazon affiliate links)

Gifts – $109

For budgeting purposes, “gifts” are anything purchased for someone who lives outside of our home. As an example, Mr. RFL sweetly brought home some flowers for me this month, but we classified those charges to the miscellaneous category rather than gifts.

While travelling last month for work, Mr. RFL took a few family members out to a nice dinner and paid their tab with his personal card (his tab went on corporate card, since it was a work trip).

March 2022 Financial Results: Other Income

The majority of our income comes from W-2 wages and related employee benefits (i.e. 401k match); however, we’re continuing to build our passive and other income streams.

The total non-employer related income either earned (or gifted to us) this month was $39,841.

Inheritance

As mentioned above, we received an inheritance of ~$37,000, which is obviously a one-time thing and skews our results for the month.

Interest & Dividends

March is a quarter-end month, which means lots of dividends!  We mostly invest in ETFs, which typically pay dividends once per quarter. We earned $2,581 in interest and dividends this month.

Reselling

 No major activity on the secondhand market this month. I earned $11 in commissions for selling two items.   

Cash Back Rewards

We received $66 in cash back rewards this month.  We shift 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.

That’s it for our March 2022 financial results. How’d your month go?

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