I am a little slow, but December was a an eventful month, so I wanted to share our monthly expenses. The last month of the calendar year is finished and what a fast year 2014 turned out to be for us. In 2014, we managed to significantly increase our savings rate, add solar to our house, take a week-long vacation back to see my family (and a few other small trips), purchase a new car (probably NOT a highlight), and start this blog.
December was one of the best months we have ever had as a married couple in terms of take home income. I received a vacation cash-out that amounted to more than a week’s pay. Combine that with the 6.2% social security limit being passed, means my take home pay actually went up! I did do a last minute 403b contribution increase to try and get as close to the $17,500 contribution limit as possible (only got to $16,500 for the year).
We also received another $250 for a solar referral (making the total received $500 for just recommending my installer). My wife and I each received $250 from my parents for Christmas. That $500 pretty much got redeployed for presents for our families (mostly for the kids).
There were quite a bit of dividends and mutual fund capital gains as well, but those are all in IRA or Roth IRA accounts, so it’s not yet considered income. Either way, it was neat to see over $1,600 paid out to me for being an owner of so many companies like Apple, IBM, Vanguard International Equity Index, Fidelity Contrafund, and many other stocks, index funds, and mutual funds. Watch out Dividend Mantra Freedom Fund, I am coming for you! (Obvious disclaimer here that I own AAPL, IBM, VEU, and FCNTX). And yes I know I need to sell FCNTX and buy an index fund to avoid the high fees…
Between the $500 budget for Christmas gifts (which we actually came in under on!) and travelling back to the Mid-West, the month was not set up to be a stingy one for spending. We did better in some areas than expected, but had a few consumer moments as well. First a trip recap.
We managed to fly into the airport about 10 minutes from my parents’ house, which meant no taxi or rental car needed. They were also nice enough to let us borrow one of their cars to go visit friends for a couple days. Gas was under $2 in Kansas for the trip, so filling the tank up when we got home seemed like it only cost pennies! We also used a free night at a Marriott in Kansas City and a college friend was nice enough to host us for dinner at his house one night. We did eat a great lunch at my favorite barbecue joint in KC (shout out to Joe’s Kansas City Barbecue, formerly known as Oklahoma Joe’s).
We then moved on to visit my sister for a few days in central Kansas. We stayed at her house and only bought a few groceries. I felt a bit like a freeloader, but the holiday time with them was worth it! The last few days were back at my parents’ house before flying out after about a week. We managed to eat out very little, so it was actually cheaper than being at home.
Normally a week’s vacation for us involves lots of shopping and eating out, so this vacation was a very successful one on the financial front and full of quality time with friends and family. We also got to see two movies. We saw the Hobbit: Battle of the Five Armies in IMAX 3D and it was worth it. IMAX is just made for epic movies like this with lots of action. We also saw Interstellar and I loved it. I like long movies with lots of buildup and it did not disappoint.
There was another batch of medical expenses that I didn’t anticipate that cost almost $500. I went ahead and prepaid my tags for 2015 to get the tax break now, so that was another $375 out the door (new cars really hurt the wallet). On the bright side, we came in under budget on groceries and restaurants for once, probably as a result of the aforementioned trip.
On the discretionary spending front, I spent $120 on a new 240GB SSD (solid state) hard drive. It came with a $70 rebate for including McAfee Total Protection software with the purchase. I just barely got the rebate sent in on time, so the VISA gift card won’t be here for a while (and I have to remember to turn off the auto renewal on the software to avoid a charge in a year). The computer is much faster now though!
I also spent $120 on wireless Sony noise cancelling headphones that were on sale at Costco for 25% off. I thought it would be nice to have a second pair on our flights, but they turned out to not be that great. I will be returning them to Costco this weekend. I just can’t justify that purchase for how often I will use them. I will continue to look for something in the $40 range as well (I don’t really need wireless anyway).
My wife and I actually spent just over $250 on new clothes in December. Neither of us has really purchased anything in a while, so I don’t mind it (on sale and high quality pieces). Turns out we will be taking a couple of the items back anyway. We didn’t exchange presents with each other, so I will consider this a substitute.
I also spent about $120 to buy some clothing for a really deserving family. I would have done it either way, but I guess the tax break helps, too. Their response made my year and I want to keep finding ways to give back that don’t just include writing a check. We had fun shopping for the clothes.
Net Worth Progress
Now for the exciting part: I believe our net worth increased by about $12,000 for December. I am extremely pleased for such a solid increase for the second month in a row! I can’t wait until the market increases dwarf the new contributions (and the debt is only mortgage related). Broken down it looks like this:
- $3,200 from paying down debt (car/solar/student loan/mortgage principal)
- $6,800 from saving/retirement
- $2,000 from market increases
- Includes the automatic payroll deductions and the withdrawals for our IRA and Roth IRAs
- Does not include the pension and 403b match that accrued and only gets deposited once a year
- Housing market value not factored in here as it doesn’t fluctuate up or down much each month
I did not include the $220 put into a Coverdell ESA for one of our two kids into these numbers. Both kids received the $2,000 maximum for 2014. I will probably wait to max out their accounts in 2015, so that I can make larger purchases in our Roth and IRA accounts to save on commissions. Once maxed out, I will move on to contributing larger amounts to the Coverdell ESA accounts for the kids.
Based on my review, our net worth increased by almost 35% in 2014. That is a combination of savings (combined with lower spending), debt repayment, a slight home value increase of $5,000 (including the valued added from installing solar panels), and solid investment increases. I am very pleased with that result and am aiming for another 35% increase in 2015. If I avoid stupidly buying another new car that will probably help a lot.
It was an exciting month with lots of things going on for us. I am happy with our progress and think we finished 2014 with a bang. We still don’t have a lot of cash in the bank, but made a massive improvement in our retirement accounts for the year.
We could have spent less in 2014, but we are not naturally as thrifty on the expense front as bloggers like Mrs Frugalwoods or Root of Good. I enjoy reading their blogs as it gives me both new ideas and a benchmark to try and slowly spend less of our hard earned income.
Here’s wishing everyone a prosperous 2015 and beyond!