Have you ever been shocked at your own frugality? This quarter's spending numbers proved that Rob and I may be more frugal than we ever thought possible. Of course, this quarter's frugality will be short lived. I've got a $2000 oral surgery coming up in a few weeks. Plus, Kenny's preschool ends in early May. We're thankful to have a friend willing to watch both Kenny and Shirley on a part time basis for the summer. However, that means higher spending. I'll discuss that more below.
And for interested parties, I'll ruminate on investment opportunities, and for the real voyeurs, I'll reveal our net worth.
Quarter One Expenses
The spending we have listed only includes our "family" spending. That is our living expenses. I don't include expenses associated with our rental property. I exclude taxes and charitable giving. I encourage everyone to give generously, but I believe that each person should give what he has decided in his heart to give. Not reluctantly or under compulsion, for God loves a cheerful giver. If you struggle with generosity, comparing giving is a bad idea.
So what was our total first quarter spending? $7,206.22. Not bad.
The spending reflects close to "rock bottom" expenses. The only lumpy payments this quarter were vehicle registration and insurance (6 months), and two dental fillings.
Groceries and "household goods" accounted for 26% of our total spending. "Household goods" are things that we buy at stores that aren't grocery stores or hardware stores. This could be food, paper towels, and diapers or shoes, underwear and a lacrosse ball. This quarter, it included all of those.
If we managed to keep our spending to Q1 levels, a diversified portfolio of approximately $750,000 could support our lifestyle expenses. Of course, I don't expect to keep our spending this low for any extended period of time. In fact, next quarter we'll see a doubling of expenditures. Why?
Preschool cost just $495 for the quarter. A paltry sum for a school that Kenny loves. Alas, school ends in May and we will recruit a friend to watch both kids on a part time basis. I expect that Q2 childcare expenses will be around $3000.
$3000 seems like a lot for childcare (personalized though it is). However, I view this as an "education" budget for my kids. As my kids grow up, I hope to direct childcare funds to educational activities. This could include language curricula and tutors, athletic coaches, music teachers, art classes, etc. Essentially, giving the kids opportunities to learn and grow in ways that a local school can't offer.
Aside from increased childcare expenses, we will spend money on our bathroom remodel (perhaps $3-4k more), oral surgery $2K, and our annual property taxes ($1K). Q2 expenses will be at least double Q1 expenses. A lot of people have almost the same budget from month to month. How is that possible? These massive fluctuations are par for the course around here.
Q1 Net Worth: $573,000
Our current net worth climbed up to $573,000. In my previous net worth update, I reported that our net worth was $542,000. I forgot to include the value of our HSA... oops!
The net worth includes $80,000 in cash, $130,000 in properties (kept at book value), and the remainder in various retirement accounts.
Rob and I are keeping a keen eye out for rental property opportunities, but we're finding nothing. A nearby house entered pre-foreclosure, and I'm hoping to swoop in with a cash offer. Otherwise, we're priced out for the time being.
Prior to the last 12 months, I thought I was an index fund investor for life. Unfortunately John Bogle's gospel is starting to ring a bit hollow. I still recommend index funds as a general rule, but I wonder if I'm ill suited to investing in the public markets.
Has anyone else had an investment philosophy crisis? The crisis is amplified by the fact that I just got Rob hooked onto modern portfolio theory. What did you do about your crisis? What would you do if you were me?
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.