Getting Social and May 2022 Financial Results

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

Before we get into the numbers, here’s a little bit about what we did last month.

Getting social again (finally!)

While we haven’t been complete hermits during the past year, May was the month we finally got out into the world and got social again!

It was fun and freeing, and only slightly fettered with anxiety by yours truly.

This month we took our daughter to her first Major League Baseball game. It was also our first Diamondbacks game since moving to Phoenix. Even sweeter was the price tag. We paid $15 total for the experience – for parking. The awesome seats and food were all covered by Mr. RFL’s employer. Who says having a real job is all bad?

Mr. RFL was also lucky enough to get free tickets to an NBA playoffs game this month, which he attended with coworkers.

Finally, we also got to enjoy a childfree weekend (thanks to the grandparents) and attended our first concert since before the pandemic the began.

In addition to these larger events and our normal coffee/lunch dates, I resumed attendance at my old book club, indulged in a mom’s night out, and our whole family attended a local foam and pizza party. The foam was primarily for the kiddos. Our daughter has since repeatedly described the event as “epic!”

Before we get into this month’s financial update…

The Plutus Foundation is currently collecting ballots for it’s 13th annual Plutus Awards.

If you haven’t heard of them, the Plutus Awards celebrate and recognize the hard work of content creators across the personal finance community. It’s a big deal to be a finalist, let alone win in a category.

I was extremely honored to be selected as a finalist last year in both the “Best New Personal Finance Blog” and “Best Financial Independence / Retire Early Content” categories. It would be thrilling to be a repeat nominee!

If you enjoy reading this blog and would like to help me reach more people, I would be so grateful if you would take a few minutes to nominate me for the “Best Financial Independence / Retire Early Blog” category. You can fill out the nomination form here.

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Without further ado, here are our May 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.

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, 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. 

May 2022 Financial Results

Net Worth

Well, the stock market continued to tank for most of May. Unfortunately, we ran out of dry powder to continue aggressively buying the dip about halfway through the month. It didn’t end up being a bad thing, because the stock market recovered most of the losses by the end of the month.

Have we reached the bottom? Who knows, but I have a major case of whiplash.

The market decline meant that we were unable to exercise Mr. RFL’s stock options at a desirable price once his blackout period expired. We were, however, able to unload all his vested shares at a decent price and reinvest that money while the market was down. That said, we’re still sitting with about 10% of our portfolio invested in his employer’s stock, which is a little less diversified than I’d like.

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 rose just slightly this month (1.7%). We’re still up 18% year-to-date, thanks mostly to rising home values and a significant equity pay out earlier in the year. 

Investments

We made a net investment of $8,800 to our Financial Independence (“FI”) portfolio this month (including employer matches).

After surpassing our FIRE goal earlier this year, our financial independence continues to be threatened by recent market declines. We ended May with an investment balance of $1,136,000, which is about $33,000 less than our peak two months ago. It could be worse.  

If we were to retire today, our nest egg would provide a base withdrawal of $45,400 per year, using the 4% rule. This exceeds our current FIRE budget though we’ve recently been reconsidering if that budget still works for us. 

Regularly tracking our investments and net worth has been a big factor in our financial success.

You can also easily track your investments and net worth, as well as plan for retirement, for free with Personal Capital (affiliate link).

Debt

We currently have $178,200 in debt, the majority of which relates to our mortgage, which has an interest rate of 2.5%.  Because the rate is so low, we rarely make additional principal payments to our mortgage. 

Savings Rate

Our after-tax savings rate this month was 81%, which is well above our budgeted amount.

We prefer using an after-tax rate, since it allows us to assess our true living expenses and savings rate more clearly.

While we currently pay an obscene amount of taxes, it’s because we’re still bringing in a high income. Our taxes should be much lower in early retirement.

If we decide to do something that generates income in retirement, that’s okay. We’ll owe more taxes, but we also won’t need to withdraw as much from our portfolio.

May 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 $835, or charitable contributions made, which we don’t treat as expenses (to encourage more giving) or share publicly.

Housing-Related – $849

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

Insurance – $925

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 also paid Mr. RFL’s term life insurance premium this month.

Food – $551

We spent a lot on groceries in April, including a huge order from ButcherBox (link to my review). Because our pantry and freezers are now fully stocked, we made fewer grocery trips and spent less this month.

However, we did eat out more than usual this month. This is line with our recent strategy change: to enjoy more of our money today. We enjoyed two dinner dates, one lunch date, one coffee date, and a couple drinks at a girl’s night out this month, totaling $197.

Household Consumables – $72

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. Nothing glamorous in here.

Utilities – $179

Utilities includes electric, water, gas, and security. 

It’s almost summer here, which means our electric bill will skyrocket over the next few months. This is probably the last decently cheap month for a while.

Home Maintenance – $171

We had a shower back up that Drano and our usual techniques weren’t able to resolve. In a last-ditch effort to avoid calling a plumber, we bought a cheap little tool (affiliate link) which fixed the problem. Though it was certainly a dirty job (for Mr. RFL, not me).

We also restocked our air filter supply for summer and purchased super concentrated glyphosate (affiliate link) to nuke the roots popping up around our yard from a tree we recently cut down.

Entertainment – $47

This category is for television, streaming music, books, games, concerts, and other family activities. In addition to our normal streaming subscriptions, we paid for parking at two of the events we attended this month.

Fitness & Wellness – $42

After letting my Calm subscription lapse earlier this month, I received an offer to renew at 40% off. Over the past year of using the app, I’ve found that meditation helps me better cope with stress and anxiety.

The app is great, but it’s pricey. I’d been hoping they’d offer a discount if I cancelled. Success!

Clothing – $184

Well folks, I finally ended my no-spend clothing challenge!

I didn’t quite make it the full two years, but 23 months is close enough to call this a “win.” I’m pretty proud of myself. This is by far the longest period of time I’ve ever gone not buying any clothes, shoes, or accessories.

The big splurge to break my fast? A couple pairs of workout leggings & shorts from Old Navy and a pair of PJs from Target. I’ve finally tamed my big spender ways!

This money wasn’t all spent on me though. Most of the $184 went towards purchasing three new button-down shirts for Mr. RFL, so he can dress for the job he now has.

Alcohol – $67

We stocked up on beer, hard seltzer, and tequila (for margaritas) for something refreshing to beat the Arizona heat.

Child Activities & Other Kid Purchases – $94

We only paid for swim lessons this month, but with school now out, I’ll have to load up on art supplies and crafts to keep us busy in June.

Other Shopping – $24

Once again, I caved and did some shopping at the end of the month. This time to buy reusable straws for our summer smoothies and more glass storage containers for pantry beautification (affiliate links).

Gifts – $112

We purchased flowers on Mother’s Day, year-end gifts for our daughter’s teachers, and attended one kid’s birthday party this month.

May 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 $1,206.

Interest & Dividends

May is a relatively quiet month for investment income. We earned $534 in interest and dividends.

Reselling

I only sold one item this month on the secondhand market, netting $23 in commissions.

My reselling profits have been low lately partially because we’re running out of things to sell, and partially because I been putting little time or effort into it. After reflecting on how I spend my time, I’m planning to reduce that effort even more going forward.

Cash Back Rewards

We received $649 in cash back rewards this month. I think that’s a new record for us!  

The bulk of this was earned through credit card/bank hacking. We earned $225 as a bonus for opening a new bank account, and an additional $200 by reaching the spending threshold for a cash back credit card we recently opened.

The remainder was from our regular cash back credit cards usage. We strategize the 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.

Earn extra cash back on your purchases with Rakuten!

This month we also received out quarterly check from Rakuten (formerly Ebates). Although our checks are smaller than when we used to buy more things, we’ve earned $1,683 in cash back over the last six years using Rakuten (my referral link).

If you shop online and have never used Rakuten, I highly recommend checking it out. It’s a great way to earn cash back on the things you’re already buying. The deals change daily, and can really add up during promotions. I always check the site before making an online purchase. I also like that you can stack the offers with cash back or other rewards offered through your credit card, as we often do.

If you use my referral link above to sign up, you’ll receive $30 cash back after making a purchase of $30 or more from any retailor through one of their links (while this offer is still active). For full disclosure, I’ll also receive $30 cash back. Thank you for your support!

There you have it, our May 2022 financial results. How’d your month go?

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