More Fancy Sweatpants and December 2022 Financial Results

Welcome to Rich Frugal Life’s December 2022 financial results.

Before we get into the numbers, here’s a little bit about what we were up to this month.

Note: Photo credit goes to my 6-year old, who was really excited for me to put one of her photos on the blog. Winter is the season when everything is blooming here in Arizona.

Keeping it Zen this holiday season

Happy new year! Whatever you celebrate, I hope your winter season was wonderful.

Other than another (discounted) visit to Phoenix Zoo Lights this year, we mostly stayed close to home in December and kept the celebration low key.

We spent time with family, baked cookies, ate good food, watched movies, created art, and played board games. I wouldn’t want it any other way.

More “fancy” sweatpants

So, this is a bit embarrassing, but I may have accidentally spent another $300 on Vuori joggers and hoodies this month.

Yes, that’s in addition to all the clothes I bought last month, which included a pair of said loungewear. We’re calling this month’s purchase a birthday present, but we all know that I would have bought them anyways.

Is this a lot to spend on loungewear? Probably. However, I’ve literally worn my joggers and hoodies at least 5 days a week since I bought the first pair. Laundry day is whatever day my new favorites are all dirty. Sorry, not sorry.

Also note that I have intentionally NOT included a referral link above. I don’t want to be tempted by the referral discount to buy more. You can still get 20% off your first order by signing up for their email, but consider my out of control spending to be a warning.

Perhaps it’s time for another no-spend clothing ban…

Without further ado, here are our December 2022 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 an 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 2022 Financial Results

Investments

We made a net investment of $4,900 to our Financial Independence (“FI”) portfolio during the month. This number includes employer matches but does not include reinvested dividends.   

Although we’ve invested the majority of our net earnings so far in 2022, we had to funnel all excess cash into our donor-advised fund during the last few months of the year to reach our charitable giving goal.

This number should go back up in January.

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

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

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

Debt

We currently have $169,000 in debt, the majority of which relates to our mortgage.

Because our mortgage has a fixed interest rate of 2.5%, which is currently LESS than what our high-yield savings account pays, we have no plans to make additional principal payments anytime soon.  

Savings Rate

Our after-tax savings rate this month was 80.0%. This is about average for us this year. It was a pretty expensive month, but Q4 dividends helped to offset the extra spending.

We calculate our savings rate after taxes, as we believe this allows us to best understand our true living expenses. It also allows us to better compare our expenses and savings rates over a period of time.

Although we currently pay a lot in taxes, we expect to pay much less in early retirement.

December 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 $685. Also excludes charitable contributions made, as we don’t share that information publicly. While we do budget for donations each year, we don’t like to treat charitable giving as an “expense” against our budget (to encourage more giving.)

Housing-Related – $713

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

Insurance – $452

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 – $1,286

Well, it was another month of coming in way over budget for food.

Our grocery bill was actually spot on, but our restaurant spending was massive!

Our restaurant spending of $743 did include $100 of gift cards purchased to our favorite restaurant during a bonus sale. However, I have no excuse for the rest of it.

I guess you could say that we enjoyed life and the freedom our financial position provides this month. Instead of one fancy dinner out for my birthday, we celebrated twice, once as a family and once as a date night. We also ordered in twice, went on a couple coffee and lunch dates, and met up with some FIRE friends.

It was a good month, and we don’t spend like this often, so I’m not too worried about it.

Household Consumables – $32

This category includes most of the non-food consumables used in our household, such as toilet paper, shampoo, skincare, laundry detergent, cleaning products, etc. Nothing exciting this month.

Utilities – $168

Utilities includes electric, water, gas, and security. 

I will dare to guess that this will be our lowest utility month of the year.

Alcohol – $0

See last month.

Entertainment & Learning – $60

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

This was for our streaming services (Spotify, Hulu, Amazon Kids+, Discovery+, and Disney) and more healthy eating cookbooks (affiliate link).

Clothes – $410

See above for the majority of this month’s clothing spending. The rest was spent on sneakers, sports bras, and other undergarments.

Child Care – $159

Hired our first babysitter in over 3 years and prepaid for January after-school care.

Kid Activities & Other Purchases – $206

We keep Christmas pretty low-key in our household, so nothing crazy here.

This spending also includes $85 worth of new clothes and shoes for our daughter as she’s outgrowing (and ripping holes) in many of her old ones. 

Furniture, Tools & Other Home Purchases – $270

We bought new blackout curtains for our bedroom this month (affiliate link). Our existing blinds and “room darkening” curtains just weren’t cutting it since we have streetlights nearby and a neighbor who leaves their floodlights on all night long. What a difference these have made to my sleep!

Other purchases this month included a silk pillowcase, a better shower squeegee, freezer-proof mason jar lids, reusable produce bags and a couple glass carafes from Target (affiliate links).

December 2022 Financial Results: Other Income

While the majority 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.

The total non-employer related income earned this month was $7,319.

Passive investment income

We earned $6,774 in interest and dividends this month! That’s more money than we actually spent in December, which is pretty incredible.

Of course, investments aren’t this lucrative every month. Quarter-end months are special. But it’s still nice to see this payout growing each quarter. 

Blog income

I made a whopping $0.80 through the Amazon affiliate program this month. Still haven’t earned enough to actually receive a payout yet.

Cash Back Rewards

We received $269 in cash back rewards this month.

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.

That’s it for our December 2022 financial results. How’d your last month of the year go?

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