Taking Time Off, Mountains, and June 2023 Financial Results

Welcome to Rich Frugal Life’s June 2023 financial results! Before we get into the numbers, here’s what we were up to this month.  

I took a whole month off!

You may have noticed that I’ve been a bit quiet over here on the blog and social media lately.

That’s because I inadvertently took the whole month off from doing all the things that I feel like I should do. Instead, I just lived life. It was pretty freeing and helped me to be more present while spending time with family this month.

This was the first time in the three years I’ve been blogging that I only published one post during the month. While I felt some nagging guilt when we returned from vacation for not being more ‘productive’ this month, I know deep down that I needed this break. Taking time off is important for mental health.

I hope you’ve been able to disconnect and be present in your own lives for a bit this summer as well.

We took a very expensive vacation to the North Carolina mountains

As you’ll see below, June was a VERY expensive month. We spent about double our typical monthly expenses.

However, roughly 70% of that spending was for travel, which included a portion of the costs for our recent vacation to North Carolina.

Once you’ve got your basics covered, experiences are a great way to spend your money! The memories you make will boost your happiness for longer than buying things will. Plus, memories will typically pay you back in dividends for years to come… and you know how much I love dividends.

We spent almost two weeks in North Carolina, where we had a nice visit with Mr. RFL’s siblings and their families. We stayed with family in Charlotte for a few days before heading to the mountains for a week, where we rented a huge house for everyone to stay in the Asheville area.

If you’ve never been, Asheville is very cool, and the surrounding mountains and forests are beautiful.

The Asheville area is on our “short list” for places to move to once Mr. RFL leaves his current job. It’s also somewhere we had considered buying a vacation home back when we were living in Charlotte. The area has been rapidly gaining popularity with the increase of remote work. Unfortunately, home prices are now a lot higher than when we first started considering buying property there. At some point I’ll pull together a blog post about the search for our next hometown.

Despite being rained out for much of the mountain portion of our trip, we were still able to catch a few hikes and waterfalls. Plus, since we are all spread across the country, it was a great experience to build connections and make memories.

How much we spent on our North Carolina vacation:

This was a pretty expensive vacation for us at over $500/night, especially considering that we stayed with family for multiple days.

Could we have done it cheaper? Absolutely. However, we made some deliberate choices that increased our cost. We also didn’t use any points or travel rewards for this trip.

The first decision we made that increased costs was to rent a house big enough for all ten of us to comfortably fit and pay for it ourselves. We realize we are in a fortunate financial position and wanted to keep the costs low for everyone else. Lodging costs would have been much less if we had either split the cost with Mr. RFL’s siblings, or if we had rented a smaller house for just the three of us (which were going for $1,500-$2,000).

Airfare was our other big cost. While it used to cost $350-$450 each to fly nonstop to Charlotte, we couldn’t find any tickets below $600 for this trip. We could have brought the price down by adding connections or choosing an overnight flight, but it would have only saved us $100-$150 per ticket. At this stage in life, convenience is more important to us than saving a little money… especially when travelling with a six-year old.

In addition to hanging out with family and exploring the great outdoors in between rain storms, we made sure to hit up plenty of local restaurants and breweries.

Without further ado, here are our June 2023 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. 

June 2023 Financial Results

Investments

We made a net investment of $10,740 to our Financial Independence (“FI”) portfolio during the month.

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

Here’s a break-out of investments we made in June:

Debt

We currently have $160,200 in debt, all of which relates to our mortgage.

Our mortgage has a fixed interest rate of 2.5%, which is LESS than the 4.15% our high-yield savings account currently pays. We’re taking advantage of the interest rate arbitrage while it lasts, so won’t be making any additional principal payments anytime soon.  

Savings Rate

Our after-tax savings rate this month was 58%.

That’s significantly below our recent averages. However, when you consider all the money we spent on travel this month, it makes sense.  

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, it’s because we’re still earning a high income. We expect to earn and pay much less in early retirement.

June 2023 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, as we don’t share that information publicly. Although we 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 – $784

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.

Insurance – $411

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.

This month we received a surprise refund on our personal liability insurance. Our auto and liability rates increased a couple years ago when Mr. RFL had a minor fender bender with a very expensive car. It looks like our penalty period may finally be over!

Food – $551

Food and alcohol spending was deceptively low this month. That’s because all the groceries, dining out and drinking that we did over our nearly two-week vacation to North Carolina this month went to the Travel budget line item.

During the first two weeks of the month, we spent $166 on a sushi date lunch (while our daughter was at summer camp), a family lunch outing and an ice cream outing. Mr. RFL also bought lunch out one day, which he rarely does anymore.

The rest of this month’s spending was on groceries, which included a trip to Costco, restocking our Nespresso capsules, and two other small grocery trips. 

Household Consumables – $26

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

Finally, a lower month for this category!

Utilities – $207

Utilities include electric, water, gas, and security. This is the calm before the storm.

Fuel – $70

Only one car needed a fill up in June since we were gone for half the month.

Travel – $6,713

This is where most of our money went in June. While it’s somewhat painful to see, we planned to spend a lot more on travel this year and are clearly following through with that plan.

Travel costs for June include approximately $4,000 of the costs from our North Carolina vacation, plus the hotel costs for our upcoming weeklong trip to the Colorado mountains later this summer.

Entertainment & Learning – $32

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

This month our spending included the cost of our regular streaming services (Spotify, Hulu, Amazon Kids+ and Disney), as well as Apple+ TV. We like to rotate subscriptions to keep costs down, so after getting our fill of Apple+ TV, we’re cancelling it again for a while.

Self-care – $42

All my Peloton strength-training workouts have been paying off! I’ve finally moved up in weights. I bought a pair of heavier dumbbells (affiliate link).

Kid Activities & Other Purchases – $121

We paid $89 for gymnastics in June, which is a reduced rate due to the holidays.

The rest of this spending was on new clothes for our daughter. Yes, I bought her more clothes this month. Most of the clothes and shoes I buy for her are from Old Navy and Target, so we get a lot for our money.

Kids destroy clothes so quickly, that we’ve decided it’s not worth buying more expensive/ higher quality items at this age. This time I purchased things in sizes that should fit her for at least another year. We’re still under $100 for her clothes and shoes so far this year, so I feel okay with where we’re at.

Furniture, Tools & Other Home Purchases – $216

Most of this money was spent on a new 5 cu-ft chest freezer from Home Depot that we will keep inside the house.

We already have a similar (new-ish) chest freezer in the garage, but even with that, I find we are constantly running out of freezer space. When everything is jam packed, it’s really hard to properly organize and track everything. Plus, with all the extra meat we’re buying from ButcherBox and the additional meal prep I’ve been trying to do, having more space will allow us to take advantage of good deals (when we see them) and avoid food waste.

I also purchased a couple extra-large glass mason jars for storing my produce after stumbling on @thecrosslegacy‘s Instagram account. She has a lot of great tips for keeping fruits and veggies fresh for way longer!

Blog Expenses

I renewed the domain and registration on my blog and paid for another year of hosting this month.

Cash Back Rewards

We received $142 in cash back rewards in June.

Since these ultimately represent reductions in the purchases we make, I decided to reflect them as a reduction of expenses this year, rather than as income.

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.

June 2023 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.

Total non-employer-related income earned this month was $4,981! Here’s a breakout of how that money was earned:

Yay! This month we hit another record for monthly investment income during the year. December is still typically our highest month, since some of our investments only pay out annually.

I’ll include a full break out of our dividends and interest, as well as our comparison to prior years and projection for the total year in my 2023 mid-year update later this month.  

I was also thrilled to see more referral activity from my ButcherBox review!  I show these credits here in the “Other income” section for transparency. However, since they are paid out as discounts off future orders (i.e. they reduce our grocery expenses), I don’t treat them as income within our budget or for calculating our savings rate.

That’s a wrap on our June 2023 financial results.

Stay tuned for our complete update on the first half of 2023 later this month…

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Featured image by Rich Frugal Life

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