Student Loans, New Friends, and September 2021 Financial Results

Before we dive into our September 2021 financial results, let’s talk about some of this month’s highlights.

The market was a dumpster fire this month, but our family had a great month. Mr. RFL and I celebrated 6 years of wedded bliss, and we all enjoyed a nice visit from my sister and her partner, whom we hadn’t seen in person for over two years due to the pandemic.

New “FIRE” Friends

Last week, I had the chance to meet up with some fellow FIRE bloggers, Ali and Alison (All Options Considered) while they were in town.  It was my first real-life FIRE meetup, and it definitely will not be my last! 

Besides the fact that these women are amazing human beings, I found it so easy to talk to them about everything, which is rare for an introvert, like me. It usually takes me a while to get comfortable around new people, but a couple hours flew by like it was nothing. I’m already looking forward to a future meet up.  

Maybe it’s the shared challenges of the journey, or the departure of this lifestyle from what’s considered “normal,”  but it feels easier to relate to other FIRE enthusiasts. It was nice to just be myself and talk to people who seemed to understand me and share a lot of my values.  So far, I’ve found the FIRE community to be pretty open-minded and giving of their time and experience.  It makes me even more excited to meet more of you in the future!

Buh Bye, Student Loans

I paid off my student loans this month!  

While I was fortunate enough to have help in paying for college from my parents, I paid for a portion of the costs myself through work study programs and student loans.  I graduated over 16 years ago with about $40,000 of student loan debt. 

There is a lot of hate around student loans in the personal finance community. While I agree that the amounts and interest rates have gotten out of control in recent years, I don’t regret my debt.  The bulk of my loans were for a graduate degree that allowed me to become a CPA and obtain a stable, high-paying job right out of college.  The breakeven period was relatively short, which makes taking on debt for school worth it.

Although the balance and interest rates on my loans were low, it still felt great to wipe that slate clean!

Without further ado, here are our September 2021 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 love reading about other people’s spending habits and net worth. Maybe you do, too.

Everyone’s financial situation is unique, and personal finance is personal. However, I do believe there is value in sharing information and providing context.

We’ve been motivated by people in the FI community who’ve happily embraced simpler lives. Seeing others succeed 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.

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.

Sharing our finances each month also helps us stay accountable.

Other information useful in reading our September financial results

Did we just buy a money pit?

We took a risk and 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. 

September 2021 Financial Results

Net Worth

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 net worth is down 0.9% this month! Yep, that’s right. We finally had a down month, due to a volatile month in the market.  It’s okay though.  We’re still up 30% from a year ago, and 94% over the past 3 years!

Investments

Our Financial Independence portfolio, which consists of cash and investments, excluding our daughter’s 529 Plan, is up by 26.3% year-to-date.

We invested $10,335 this month; however, some of that money came from existing cash. The net addition to our Financial Independence (“FI”) portfolio during the month was $5,233.

While we made it to as high as 92% early in the month, we ultimately finished September at 88.4% of our FIRE goal (or $884,000) due to the significant downturn in the market at the end of the month.   

Debt

We ended the month with $197,600 in debt, the majority of which relates to our mortgage.

For the most part, we no longer make additional principal payments to our mortgage during the year. We shifted our priorities to investing excess cash once we got the mortgage balance below $200,000 and refinanced to a rate of 2.5%.

Savings Rate

Our after-tax savings rate was 68.5% for the month, which is well above our budgeted rate for the month!

September 2021 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 $388, or charitable contributions made (which we don’t share publicly).

Housing-Related – $816

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

Our property tax bill for 2021 arrived this month and was actually a little lower than I had been accruing (shocker).  As such, this month also includes a small true-up.

Insurance – $465

This category includes our monthly 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.

Student Loan Interest – $0

I paid off my last remaining student loan at the beginning of the month, so there were no interest payments this month.  After 16+ years, I’m finally done paying for college!

Food – $1,036

Oops, I did it again.  We went over budget in both groceries and restaurants this month.  The grocery budget was doomed from the start when I blew over half of it on the second day of the month at Costco.  However, with inflation and supply shortages, I’m back to feeling okay with stocking up on things.

We dined out three times this month and ordered takeout twice (only the good stuff, not fast-food).  We blew the budget, but I’m okay with it since our restaurant costs have been really low over the past 18 months. Plus, it was our anniversary month, so we splurged a bit, celebrating once as a family and another time as a couple on our “day date”. We also had family in town and tried out a new local restaurant with them.

Even with all that, we still spent less than we used to spend on one date night out at a fancy restaurant.   

Alcohol – $148

Picked up several bottles of wine during Fry’s 25% off wine & spirits sale.  The deals were great, and we were all out of our “cheap” wine.

Household Consumables – $14

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 scandalous to report this month.

Utilities (incl. internet) – $339

Utilities includes electric, water, gas, security, and internet.

This was our lowest electric bill for the summer, which means our attempts to save money on our summer cooling bills are paying off.  However, I was wrong in assuming that we had passed the peak last month.  Unfortunately, the 100+ degree days returned for most of September, which means our October bill will be higher than previously expected.

Mobile phone – $27

My current monthly bill is $30 + tax, but I still had a bit of my promotional credit leftover from last month.

Home maintenance – $251

Most of this money is for pest control, but that’s because Mr. RFL decided that he is ready to take on the responsibility of defending our home from scorpions.  It’s a very important job. 

We purchased a sprayer and some legit chemicals to do the job this month. They were pricey, but should last multiple applications. Doing this ourselves should cost a fraction of what the pest control company was charging us.  However, we also had to pay for our last professional treatment this month, and bought a few other maintenance items.  

Medical – $240

Healthcare tidbit: Women can receive a preventative baseline mammogram in the year they turn 40. This means it should be free (or low cost) and not subjected to deductibles.  However, if you mention that you are concerned about something, they will no longer treat that mammogram as preventative.  Instead they will charge you a lot for it. Lesson learned the hard way.

I paid $240 this month, but still have some claims showing as outstanding on my insurer’s portal. However, they appear to be duplicate mammogram charges and some ridiculous fee for a lab test that should have been covered. Both of which I plan to fight if and when I receive an invoice.  

Entertainment – $13

This category is for television, streaming music, books, games, concerts, and happy hours.  Just Hulu & Spotify bills this month.

Clothes – $0

No new purchases for anyone this month!  Proud to say that my no spend clothing challenge is still going strong.  I haven’t bought any clothes, shoes, or accessories since June 2020!

Child Activities & Other purchases – $94

Inflation has reached the swimming pool, as our month dues for lessons increased from $88 to $94 this month.

Other Shopping – $338

Our largest purchase this month was a new food dehydrator (affiliate link) that I’ve been wanting for a few months now.  I love cooking and tend to save our family a lot of money by making meals and snacks from scratch, so I don’t feel too bad about splurging on kitchen appliances or gadgets.  

My other kitchen purchase this month was two glass oil decanter bottles (affiliate link).  They’ve made the cooking process a lot less greasy!

The rest of the money was spent on our DIY cornhole project.  The project ended up costing us $87, which is more than expected.  However, we still came in below the cost of the decently rated wood cornhole sets I saw online.  Plus, it provided a fun activity to do as a family for a few hours, and I learned how to use some power tools.  Verdict: worth it!

September 2021 Financial Results: Other Income

While the majority of our income comes from W-2 wages and related employee benefits (i.e. 401k match), we continue to build on our passive and other income streams.

The total non-employer related income either earned (or gifted to us) this month was $1,884.

Interest

We earned $88 in interest this month, primarily from our high-yield savings account and interest earned on Mr. RFL’s deferred compensation investments.  This has gone down in recent months, as we’ve been moving more of our excess cash into investments.

Dividends

We received $1,545 in dividends this month!  I love quarter end months as that’s when most of our dividend paying investments show us the money!

We’ve earned $5,718 in dividends so far this year, which is on pace to cover about 14% of our projected expenses in early retirement.  

Reselling

It was a pretty good month for reselling.  We’re continuing to declutter and sell unwanted clothes and kid gear on the secondhand market. I sold three items during the month on Poshmark for a net reselling commission of $123.

If you join Poshmark using my referral link above or the promo code “RFL2024”, you’ll receive $10 off your first order.

Cash Back Rewards

We earned $128 in cash back rewards this month, primarily from our credit cards.  We charge everything we can on our cards to maximize cash back, but always pay the full balance off each month.

Those are our September 2021 Financial Results. How did your month go?

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