December was a pretty ho-hum spending month here at the graying saver household. We didn’t go crazy on gifts, decorations, and loads of fancy foods in an effort to try and make Christmas live up to the hype.
The biggest thing we did was host our Christmas Eve party for family and friends. We’ve been doing this party for several years and its become a highlight of our Christmas season.
We keep it low-key, which works very well for us.
People often have more than one commitment, place to be, or group of people to see on Christmas Eve so we just tell invitees to come when they can, stay as long as they want, and leave whenever they need to.
As a result people come and go and there is none of the nonsense of trying to accommodate a zillion different schedules. Handy when dealing with a family tree that has been shaped by multiple divorces and re-marriages.
At some point in the evening we fire up the electric panini press and lay out an assortment of breads, meats, cheeses, and condiments. We spend a little money on this but invariably our guests bring lots of food too and the evening is more like a pot luck than a hosted dinner party.
The brilliance of doing paninis is not having to worry about keeping food warm. Guests come and go. If you want a yummy panini hot off the press then you put it together and in a minute or two it’s done.
There’s also no fretting over who likes or doesn’t like this or that ingredient. You make your own so you pick what you want.
On with the show!
Net Worth and Invested Assets
It was another great month for both net worth and invested assets.
Our net worth went up by $11,096 to bring our total to $742,387. We have not seen a dip in net worth since we started tracking in August of 2016.
Invested assets increased by $8,103 to finish the year at $510,037. We met our invested assets goal for 2017 by reaching the $500k milestone. It feels great.
When we started this journey I never would’ve believed we’d see our invested assets increase by more than $140k in only 17 months. One big reason for that gain is the long running bull market the U.S. has enjoyed since March of 2009. Something we obviously have no control over.
Two other big reasons for our gains are due to things we do have control over:
1. Reducing our spending in order to increase monthly investments.
2. Moving our investments out of higher-fee target date funds into low-fee index funds.
If you’ve read any other FIRE-related blog you already know about these steps. There’s nothing new, unique, or complex about how we’re investing.
We’re not doing anything special, we’re just doing what works: spending less than we earn, avoiding debt, and investing in low-fee index funds.
I think of invested assets as just that: funds invested in retirement accounts – not cash in the bank. The net worth numbers above do include cash in the bank so there’s not a direct mapping between home equity + invested asset gains and the net worth increase.
At this point all of our invested assets are in retirement accounts (403b, 401k, IRA, employer retirement plan) and invested in low-fee index funds.
What Did We Spend in December?
Primary home mortgage: $1,627.32
Interest only payment on primary home HELOC: $31.69
Cabin mortgage: $3,090.05 ($1,090.05 regular mortgage and $2,000.00 in additional principal. At the end of December our balance on the cabin mortgage is $120,350. You can check on our cabin-payoff progress here.)
Electricity at cabin: $47.74 (A little higher than last month. With an electric heat pump our electric bill goes up in the winter and down in summer. The exact opposite of electricity spending at home.)
Electricity at home: $52.10 (Decent.)
Internet at cabin: $52.37 (The promotional period on our original rate has ended and the price has gone up by $11. I will be calling to renegotiate. We had some road work done up at the cabin and our fiber optic cable was cut in the process. Our internet provider was great about getting a crew out fast to fix it at no cost to us.)
Internet at home: $64.99 (Check out an app called Trim that will negotiate on your behalf to reduce your internet bill. There’s no cost to sign up with Trim. The way they make money is by negotiating a lower price and then keeping 25% of the price reduction.)
Cell phone: $50.63 (I use Google Fi and my wife has Republic Wireless. Google Fi is ever so slightly more expensive than Republic but it has better coverage around the cabin when we’re not on the wifi. Google Fi was $27.63 this month and Republic was $23.00.)
Natural gas: $31.50 (We use this for heat, cooking, and hot water at home.)
Water/sewer: $70.25 (Water comes in, water goes out. We pay for it coming and going.)
Groceries: $637.80 (Very pleasantly surprised that groceries came in at under our usual average of around $650. Even with some unusual grocery purchases for our Christmas Eve party we still came in lower than expected.)
Gasoline: $155.20 (We made a couple trips to the cabin in December and on one trip I did a fair amount of driving around exploring potential fishing spots. You don’t know unless you go. Unfortunately no big discoveries to report.)
Cars: $266.73 ($167.97 Subaru registration and property taxes, $30.00 Subaru state inspection, $68.76 for tools and supplies to start doing oil changes on the three cars and the tractor at home. Did my first oil change on the Subaru – piece of cake.)
House: $413.34 ($87.51 home supplies at Wal-mart, $100 to have the cabin gutters cleaned, $65.83 tractor maintenance supplies, $160 cabin road maintenance.)
Childcare: $199.98 (My son goes to the Y for after school care.)
Health and medical: $30.98 (Prescription meds.)
Life insurance: $22.75 (My wife has a policy outside of the policies offered through her employer. I have enough coverage through my employer to pay off both houses and put my son through college.)
Animals: $7.35 (Chicken feed.)
Restaurants: $0.00 (I feel great when this one is $0!!)
Gifts: $122.31 (Together with the $84.13 we spent last month on Christmas gifts, and the $7 for my awesome Simms fleece we spent a grand total of $213.44 on Christmas gifts. Most of that was for our son. Last year we somehow spent a total of $736 on Christmas gifts. This year we were determined to cut that way back and we did. Miraculously, Christmas was not ruined.)
Kids/School: $4.95 (Supplies for art class at school.)
Clothing: $18.23 (Thrift store run.)
Fishing: $48.38 (leaders, hooks, other fly tying supplies.)
Miscellaneous: $170.50 ($87 for website technical assistance from Grayson at iMark Interactive. Thank you Grayson!!! $83.50 ATM)
Y Membership/gym: $58.75 (My wife has a Y gym membership which also gets us a discount on after school care at the Y.)
Total Monthly Expenses: $7,227.51
Total Monthly Non-Mortgage Expenses: $2,478.55 (Our goal for annual non-mortgage spending is $40,000 or less as explained in this post. I started tracking our expenses in August of 2016, so our “fiscal year” is August 1 to July 31. Over the first five months of our current fiscal year our non-mortgage expenses are $13,840.00, which is $2,826.65 below our five-month target of $16,666.65.
This is Not Extreme Frugality
Thoughts on our December 2017 expense report? I don’t think we’re living a life of extreme frugality and I certainly don’t feel any sense of deprivation. Since we started this journey in August 2016 we’ve simply made a few tweaks to our lifestyle and in a relatively short time seen incredible progress towards our goals.
You can do this too.