Each month, I share a net worth update for the Brewing FIRE household. This brief summary of our financial standing serves as a progress report on our journey to financial independence.
In addition to giving a snapshot of our net worth, I will take a brief look at our spending, saving, and investing activity for the month.
June 2020 Net Worth
We use Personal Capital to track our net worth. Personal Capital makes it easy to track all of our banking accounts, investing accounts, credit cards and loans all in one place. Personal Capital also has numerous other functions for analyzing your investment holdings, asset allocation and performance, as well as some great retirement planning tools.
June – A Month of Maintenance
There are two forms of maintenance in life: preventive, and reactive.
Preventive maintenance (PM), sometimes called proactive maintenance, focuses on doing planned work at regular intervals in order to prevent unexpected failures. Preventive maintenance is usually not very costly, but it can sometimes feel unnecessary.
Reactive maintenance (RM), on the other hand, is the situation where we don’t fix something until it has already shown signs of breaking, or has completely failed. Reactive maintenance is always necessary, and can often be very costly.
In life, you want to do enough of the former so as to avoid the latter as much as possible. But it’s a difficult balance.
We did a ton of maintenance in June.
Health-wise, we had a few doctor appointments for regular checkups, a visit to the dentist for a routine cleaning, and even a visit to a specialist for a chronic sore throat. All of this was preventive maintenance, and cost no more than the copay. Since we’ve already met our deductible for the year ($$$baby$$$), there was little chance of additional cost.
Mrs. BF had to replace the front brake pads on her car this month, which also falls under PM. Preventive maintenance on cars is essential. For example, what happens if you don’t replace your brakes until it’s too late? Or imagine if you never changed your oil, and just waited until the engine seized up to do something. Not a great idea.
When maintenance isn’t actually maintenance
The HVAC system that we installed last May came due for a yearly inspection and tuneup. The technician just checked that everything was connected and still working, and told us to change the air filters. This was mostly a useless visit. So why did we consent (and pay)? If we don’t do a yearly service, the warranty on the system is voided. Therefore, this is not maintenance, it’s a form of extortion.
Similarly, we normally pay for yearly service on our boiler which includes free emergency service visits and parts. Though it costs $400 per year, this has been massively beneficial to us since we bought the house in 2015. We’ve had no less than 15 emergency calls to fix the boiler and replace parts in the middle of the winter at odd hours. You see, this isn’t maintenance, it’s insurance. However, we’re forgoing the plan this year, because we will either have sold the house this fall, or we will be replacing the heating system before the winter.
And to round out the month of fixing things, the washing machine nearly exploded last weekend. I heard a deafening, grinding screech from the basement as it completed the spin cycle. After meticulously taking apart the washer, I found the problem: the spider arm assembly had disintegrated. Although I was up to the task of replacing it, the drum was also completely corroded, which would ensure that we never totally clean our clothes. $650 later, we’ve got a new washer!
We saw a slight increase in net worth for the month of June, which puts us right around our all-time high again. It seems that the recovery in the stock market has taken a pause, and it’s probable that the current risk of COVID-19 spread will drive the market sideways in the near-term. We’ll continue to save and invest, regardless.
Spending and Not Spending
|Home Maintenance||$842||New washing machine, HVAC service|
|Student Loan||$0||no payments until October|
|Childcare||$1,923||Only 2 days a week- ouch!|
|Medical||$231||doctor visits, new glasses/contacts|
|Groceries||$584||A Brewing FIRE family record!|
|Shopping / Misc.||$509||Diapers, dog food, household items…|
|Discretionary||$155||Wine, beer, renewed hiking pass|
You may have noticed that our food budget has been higher so far this year than it had been in previous years. For reference, we normally spend less than $350 per month on groceries, but we’ve averaged closer to $450 so far this year. What gives?
I have a few theories:
- A core tenet of our food buying strategy is be opportunistic. This means buying food when it’s on sale, or in the discount bin, and avoiding it otherwise. Well, the pandemic has reduced our food shopping to a once or twice monthly situation, so we can no longer be opportunistic. Therefore, we’re probably paying more for the same food, relative to our normal budget.
- I did a quick analysis on our YTD food expenses. We’re spending roughly $75 per month on protein (meat/poultry/fish), and $40 per month on nuts and berries. $40 on nuts!? Holy crap. I also estimated that I must be eating about 5 pounds of nuts per month. Shit. Time to cut back a little bit there.
- It’s also plausible that our daughter is eating more, now that she’s roughly 30 lbs. And Mrs. BF may be eating more, since she’s breastfeeding our newborn. Don’t worry, I didn’t question whether she’s overeating. That would go over like a lead balloon.
Most of our other abnormal spending fell under the “maintenance” heading that I mentioned above. The brake job, HVAC service, and washing machine added about $1,200 to our expenses.
Income and Investing
We had another month of 2X paychecks, although Mrs. BF is contributing almost half of it to her 403b to make up for 4 months of lost contributions (maternity leave). On the bright side, I discovered this month that she as a Cash Balance Pension Plan (CBPP) with her employer, with a balance of roughly $10,000. A CBPP is a form of direct benefit plan, where the employer puts aside cash and interest yearly for the retirement benefit of the employee. Mrs. BF actually has pretty good benefits, considering they match her 403b contributions (in a 401a), make a yearly defined contribution, and fund the CBPP.
The Basement Bungalow is occupied once again, with a familiar face from last year. In total, we’ve had 5 weeks of vacancy this year, which is not bad considering we tend to turn over our renters every 3 months.
We earned another $585 selling stuff in our house, as we continue the purge and aspire for a minimalist lifestyle. I started paring back my brewing equipment, which has grown way too big in the past few years.
In June, we earned $700 in bank account bonuses. Mrs. BF signed up for the Chase combined checking/savings account, which I did a few months ago. Also, I signed up for a Key Bank checking account, which paid me $400 for making one transfer. I might write a dedicated post on this in the future, though it’s pretty easy to look up in the Google machine.
That’s all for us. How was your June? How’s your garden doing? Did everything in your house break at once? Let me know in the comments.