New Year’s Goals and January 2024 Financial Results

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

New Year, New Goals

Happy new year! It’s March, but I’ve been spending less time in front of the computer and more time enjoying the “best time of year” here in Arizona. Better late than never.

Recap of my 2023 Goals:

I didn’t set any! Instead, I set a mantra for 2023: “Healthy self; healthy planet.”

While I still believe that my concept and reasoning behind this approach was sound, it ultimately wasn’t as successful as I had hoped it would be. I made numerous choices over the course of the year that were good for the planet, as well as some that were good for my body. But not as many as I might have if I had set more specific goals. Perhaps I need a little bit more structure than that to thrive, so I’m going back to traditional goals for 2024.

My goals for the new year:  

Listed in no particular order, here are the goals that I’ve set for myself for 2024:

• Read 25 books
• Finish home remodel
• Walk an average of 8,000+ steps per day
• Do strength workouts 4x per week (20 min+)
• Do cardio focused workout 2x per week (20 min+)
• Finish setting up will & trust
• Complete Simply Piano intermediate level lessons
• Weekly dates with spouse
• Weekly activity or outing with my daughter
• Volunteer more than 200 hours
• Declutter 500+ items (complete decluttering challenge in August 2024)
• Lose the 15 pounds I gained back after reaching my goal weight
• Lose 2″ off my waist measurement
• Homemade treats only challenge (Inspired by Michael Pollan, very few exceptions)
• Perform at least one act of self-care daily (i.e. stretch, workout, meditate, bath, journal, etc.)
• Drink at least 50 ounces of water per day before dinner (2 Yeti cups)
• Do yoga or foam roll at least once per week
• Eat 30 different plant foods each week
• Establish a daily/weekly cleaning routine
• Invest at least $100,000 in brokerage accounts
• Spend less on food and shopping in 2024 (excluding Mr. RFL’s planned tool purchase)
• Write 24 blog posts
• Increase charitable contributions

Without further ado, here are our January 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 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. 

January 2024 Financial Results

Investments

We made a net investment in our Financial Independence (“FI”) portfolio of $20,900 this month.

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

January’s number includes the reinvestment of remaining cash we received in December from selling $12,500 of Mr. RFL’s company stock options.

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

Debt

We currently have $153,700 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 4.35% 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 66%. This is lower than average due to higher spending this month, without any additional income (i.e. bonus or stock options).

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.

January 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 – $799

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.

Although we won’t receive our property tax bill until October, I am assuming it will go up again this year, so have increased our monthly accrual accordingly.

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.

As expected, our auto insurance increased another 10% this renewal cycle. Although it’s annoying, we are still paying a pretty reasonable rate at ~$50 per car per month. Maybe when I have more time, I’ll shop around again.

Surprisingly, Mr. RFL’s health insurance cost stayed the same again this year, which is a nice perk.

Food – $774

We are trying to spend a bit less on groceries this year, especially because most of our meat, poultry and seafood will be covered by accumulated ButcherBox credits ($0 cost).

A trip to Costco certainly didn’t help, but we were still able to stick reasonably close to our $550/month budget for groceries.

Our restaurant spending of $198 was spent on one fancy date lunch out, one family lunch out, and reloading our daughter’s school meal plan with $60 to cover the rest of the year. We pack lunches most days but allow our daughter to pick one day a week to buy school lunch (and drink chocolate milk).

Household Consumables – $278

This category includes most of the non-food consumables used in our household, such as toilet paper, shampoo, skincare, laundry detergent, cleaning products, etc. 

We spent way above our budgeted amount last month, but a lot of that was spent to stock up on products we use, which will reduce our costs going forward. For example, I bought a giant tub of the natural and eco-friendly laundry detergent we use during a sale last month, which should last us for 2 years.

I also bought some sort of expensive sunscreen (I’m currently using this one, because I have sensitive skin and can tolerate very few formulas), as well as a few pretty notebooks for meal planning and organizing my life, and several other Costco-sized paper products and cleaning supplies. (Affiliate links)

Utilities – $195

Utilities include electric, water, gas, and security. We’re still in the “cheap” season.

Fuel – $79

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

Car Maintenance – $1,469

My car needed a lot of love this month. And by love, I mean money.

I brought my SUV in for a 45.000 mile service (which is typically pretty expensive to begin with) and walked out with new brake pads and new front tires. Overall, I haven’t spent very much money maintaining this car over the 8+ years that I’ve driven it, so I’m not mad.

Alcohol – $229

This month we paid for our Cooper’s Hawk wine club membership and made a liquor and wine stock up at Fry’s during one of their 25% off sales.

Entertainment & Learning – $48

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 received free club tickets and parking from Mr. RFL’s employer to a Phoenix Suns game this month, so paid $14 for that outing in cash tips.

Self-care – $182

After a year of enjoying the Peloton app, primarily for their strength workouts and my cheap spin bike hack, I renewed my membership for another year.

Since I’m stronger than I was last year, I also bought a heavier set of dumbbells (discounted because one was slightly damaged in transit).

Clothes – $555

Umm, well that’s embarrassing… and not quite how I planned to start off the new year. I bought and returned so many things this month that it’s hard to tell where the money went just by looking at the transactions.

But before I take all the blame, this spending does include 3 new pairs of work pants for Mr. RFL.

The rest of the money went towards clothes I bought during the post-holiday sales, including some super cozy shearling Dearfoams slippers, a cute date dress and two blouses from Ann Taylor LOFT, three Athleta sports bras, and a couple pair of shorts and another pair of joggers from Vuori (oops).

Kid Activities & Other Purchases – $299

This month we paid for gymnastics lessons and a semester-long art class for our daughter.

Furniture, Tools & Other Home Purchases – $881

The cheap laptop that I bought when I left my old firm almost 5 years ago finally bit the dust. The screen cracked in half so badly that I could no longer even shut the computer. And that was on top of the fact that the battery had long since died, leaving me tethered to an outlet, and the computer sounded like it was going to explode every time I opened Excel. It was time.

Most of the money we spent in this category was to buy a replacement laptop.

I also bought another set of Hotel sheets from Costco when they went on sale again. These are our new favorite sheets, and I wanted a second set for laundry day.

Fees & Charges – $48

Because I decided to buy my new laptop at Costco (they have great warranty and return periods), we decided to upgrade our membership to the Executive level since we’ll now likely surpass the spending threshold that makes this upgrade worth it.

Cash Back Rewards

We received $97 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.

January 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:

After the big payouts in December, January is always a bit underwhelming when it comes to dividends and interest. Our passive income from investments came in at $1,129. Still not too shabby.

We also received a late holiday gift in the form of cash and made $10 from selling old clothes on Poshmark.   

The referral credits from my ButcherBox review made a recovery this month, landing at $500. 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 January 2024 financial results. How did your first month of the year go?

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Featured image by 12756913 from Pixabay.

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