November was really a great month for our household in terms of moving towards early retirement. Despite some holiday and medical spending, we increased our net worth and paid for our travel to the Midwest next month. I typically had not looked at our net worth on a monthly basis, so seeing the large increase was a pleasant surprise for me. I will probably obsess over it into the foreseeable future.
November had a couple of unexpected income sources. I also received an expense reimbursement for our Vegas trip in October from work. The mileage reimbursement alone was about $150 greater than the gas used for the trip.
I received a $250 check for referring someone to buy solar. I didn’t even know about the $500 bonus when I told my friend about the deal I got (they shorted me somehow, but promised to send a second check). This just lowers my cost of the solar power system, which means my return is even higher!
Should I include the $42 in change that I took to Coinstar in my income? I put it on a Starbucks card to surprise my wife (and to avoid the 9.8% redemption fee). She keeps her coffee spending at around $25 a month, so I figured this would be a nice reward for her effort. Can I count it as a Christmas present too? I’m only sort of kidding…
The best extra income came from a sick time cash out at work (it’s really an attendance bonus). I got paid almost an extra week of salary! I had recently surpassed the Social Security limit for the year, so my take home pay was higher anyway. I have increased my 403b withholding to try and get close to the $17,500 limit for 2014. I think I will be about 5% short, but considering this is more than twice what I have ever contributed, I still consider it a victory.
I have already set the 2015 contribution to be $750 per paycheck (paid twice a month), so that I will hit the $18,000 limit for sure next year. It’s a good feeling! I feel much more prepared going in to 2015 for my early retirement plans. Almost all of the contributions will be automated and started on January 1, 2015, which takes out some of the worry.
We took a weekend trip to a nice hotel in Yosemite a couple of weeks ago. The dinner and massages made it a pricey weekend, but it was nice to get up into the clean air of the mountains (our area is one of the worst for air quality in the country). That was pretty out of character for us, but I consider the hike we took to be a great success. Of course we could go hiking with the kids without a hotel stay, expensive dinner, and spa treatments (and plan to in the future with day trips to Sequoia National Park). At least I used a Barclays travel credit so the room was free!
Unfortunately, there was a large medical bill to pay this month. Despite the Mad Fientist’s advice, I used the last of my old HSA account to pay for part of it. The ~$700 balance was now low enough that I was being charged a $2.50 a month service fee, so that account was going to dwindle away over time anyway. The out of pocket was another $700 to our November spending. At least I was able to combine both bills and negotiate a 20% discount for paying in full.
I also made a $300 donation for a fundraiser for the local charity that I recently got involved in on its board of directors. Unfortunately, I had to give the 2 dinner tickets away because I didn’t coordinate the date with my wife and she booked the aforementioned trip for the same weekend! I was told by the recipient of the tickets that it was a great steak and shrimp meal, though.
I booked three flights back to Kansas for the holidays. While I am looking forward to seeing family, tickets were almost $700 apiece. I decided to use some United reward points for 2 of the flights. At 37,500 point for each flight, I got a value of $.0187 per point. That is not great, but it’s not bad either. When you add in the $150 savings for free bags using the United credit card, it makes the redemption be $.02 which is a bit better. As much as I wanted to save the points for a trip in 2016, using them now eliminated some devaluation risk for the rewards program. I can always earn more points, so I like taking advantage of the $1,400 savings now.
The rest of our expenses were as expected. Mild weather combined with solar power led to a low expense month for utilities. I am choosing to ignore the cost of hosting Thanksgiving dinner at our house! My mother-in-law reimbursed us a good portion of it (which was not necessary), so it wasn’t as bad as I originally expected
Net Worth Progress Towards Early Retirement
I believe our net worth increased by about $11,000 for November. I am extremely pleased for such a solid increase! I expect December to be even better as well. I can’t wait until the market increases dwarf the new contributions (and the debt is only mortgage related). For early retirement, consistent, large contributions are a big deal. Broken down it looks like this:
- $3,500 from paying down debt (car/solar/student loan/mortgage principal)
- $5,500 from saving/retirement
- $2,000 from market increases
- Included in the savings/retirement numbers is the annual 403b match (paid all at once), that I received in November
- Includes the automatic payroll deductions and the withdrawals for our IRA and Roth IRAs
I did not include the $220 put into a Coverdell ESA for one of our two kids into these numbers. Both kids will get the $2,000 a year maximum for 2014.
Still Cash Poor
One thing I recently realized is that I don’t keep very much cash around. I have less than 3 months of cash in checking/savings accounts. I tend to allocate it very quickly, so maybe that is a good thing. I have plenty of credit card availability to substitute as an emergency fund. At the very least, a credit card can function as like a 45 day 0%, $0 fee loan when the float and payment due date are factored in to the equation. I may add this to my 2015 goals to try and keep a bit more cash on hand (or at least in our 1% savings account that is pretty liquid). I think Mr Money Mustache would agree.
Did any big events affect your finances in November?