Most of the time when I write one of these monthly income and expense reports I say, “The month flew by!” But this time around the month of April just drug on… and on … and on. It seemed like April lasted 2 or 3 months instead of the usual 30 day period.
I have no idea why.
Maybe it was because the whole family was down with a cold. I usually keep the kids home with me when they’re sick. Two sick kids can make for a very long day.
Or, maybe the month seemed long because we weren’t out traveling like last month. When I’m traveling the time always seems to move faster.
Whatever the case, it was a LONG month…
April was also a quiet month around the Tako household. We’ve been trying to cut back our spending a little after our big-expensive trip to Texas, so we kept things pretty tame and stuck to free activities — Mainly the library, the park, books, board games, legos, and the occasional movie night.
It’s all free entertainment.
April also included some free local sightseeing — We took visiting family members (and the kids) out to see Snoqualmie falls on a dry day. It was completely packed with tourists, but the kids still enjoyed the rare April day in the sun.
We also held a couple parties at our house, but we didn’t splurge big on party expenses. One of the parties was a sushi party and (as you’ll see) the expense was still pretty low.
What’s a sushi party you ask? Well, at our house it’s a DIY food experience…
Decent sushi from restaurants can be very expensive, so we make our own for sushi parties. We let the guests roll their temaki (hand rolls) rather than doing hours of prep work to prepare rolls or nigiri.
It’s easy enough to learn with a little practice. Most of the guests have fun giving it a try. I even have a youtube video that shows how it’s done.
In total, a sushi party like this probably costs $20-$40 (depends upon the sushi ingredients) and nobody goes away hungry. By comparison, this much sushi from a restaurant would easily break $100 (not counting tax and tip).
Our expenses in April totaled $5,744. At first blush this sounds like a lot, but it was actually one of our lowest cost months in a very long time.
After a food-spendy March, we tried to cut back in April. I think we succeeded (a little). Food spending was $420, which is lower than our usual by $80. (FYI: This is for a family of four with two boys that love to eat.)
As usual we ate almost entirely homemade food, except for a take-n-bake pizza night with friends ($34). My focus for the month was on making good use of what was on-sale at the grocery store, and using what we had in the freezer.
(Yes, I’m primarily the cook in our household)
I avoided fancy meat and other high value goods. That meant lots of in-season vegetables whenever possible.
We had some really good meals in April, and I submit the following as evidence that you don’t need to spend big to eat well.
We make a huge variety of cuisines in the Tako household. Every night is different. Some nights we go with traditional “Western” staples…
Other nights my famous tacos make an appearance…
There were plenty of salads to go around too. Nothing quite like fresh vegetables to keep the expenses low.
Soup is often a popular menu item at our house. We make a ton of soup…
Not every night is a gourmet dinner of course — some nights our main meal can be quite simple…
Fuel costs were lower than average in April, pumping in at $85. Did we suddenly start driving more efficiently in April?
Nah! Unfortunately an elderly woman crashed into our car and it was in the repair shop for three weeks.
Everyone was OK, and the accident was completely covered by the elderly lady’s insurance. We simply drove less as a result.
Internet costs were higher in April at $64.99. This happens when we transitioned between promotional plans. One promotion ends, and then I make a phone call to get us signed-up for the next promotional plan.
Normally we pay $49.99 per month for high speed cable internet, but there’s usually a “billing blip” when one promotion ends and another start.
This month was that blip. Next month the cost will be $34.99 to adjust for the higher bill this month.
Mortgage And Childcare
As usual, our mortgage and childcare expenses make-up the bulk of our monthly spending at $4,380.78. These are our two largest monthly expenses, but we consider them entirely optional.
I could take the kids out of daycare and keep them home with me (I wouldn’t have time to blog), and we could pay-off the mortgage with cash. So why do we bother paying for a mortgage and for daycare?
We simply choose to pay these large bills on purpose because of the advantages they provide — The kids are becoming fluent in a second language at daycare, and I get the time to blog a little!
For the mortgage — our interest rate is so low I’m almost 100% positive we can find a better return in the stock market. Financially we’ll be better-off not paying-off the mortgage.
Utilities might appear to be high at $606, but they’re really not! We only spent only $106 on electricity and gas. The rest of the monthly our utility cost was a prepayment of $500 to the power company.
Yes, this is manufactured spending to meet the spending requirements of our new Chase Sapphire card!
We signed up for the card in anticipation of getting the reward bonus, but we spend so little outside of our mortgage and childcare we have to work hard to manufacture enough spending.
Those reward cards can be very lucrative if you can swing it. I don’t expect we’ll pay another power bill until November.
Other expenses in April included a trip to Home Depot, tax prep software for this year’s taxes, and the $95 annual membership fee for our new credit card. In total, the Other category was $186.
Nothing terribly exciting happened in the Other category!
Cumulative Expenses For 2018
Our cumulative expenses for the year have stacked-up to reach $24,364.
This is roughly on-pace to match our spending from 2017 which totaled $73,173. It seems high, but we do live in a very high-cost of living city. You get use to it (unfortunately).
However, this fall we begin the (very) long awaited reduction in our monthly expenses. Our oldest son (Tako Jr #1) starts kindergarten!
Around $1,000 per month will be cut from our monthly expenses, but we’ll gain an estimated $120 in new expenses (school lunches, school supplies, field trip costs, etc)!!! It should be a net reduction of $880/month.
The long-term plan is to have all of our expenses covered entirely by dividend income without the need to harvest capital gains. When the kids start school it’s going to make a huge difference in our monthly budget.
Instead of spending around $6,000 per month, our spending will drop to about $4,240 per month — which means expenses should be covered by dividend income. It’s going to take a while though (Tako Jr #2 has still has two years until he starts school).
Until then we’ll stay focused on growing our dividend income.
Dividends In April
Dividend for April were $1,629. This was not a big month for dividends, as most of our stocks and index funds did not pay-out during the month April.
Strangely, April’s dividends are mainly from REITs. I never noticed this before.
Our best dividend months tend to be March, June, September, and December. We tend to gross about $10,000 for each of those months.
For the entire year, I expect we’ll average a monthly dividend income of $4500.
For the year 2018, we’ve collected $13,905 in dividends. Our goal for the year is to maintain the same dividend income we had last year — $53,504.
We should be able to accomplish this goal via re-investing cash and through various dividend raises. I’m crossing my fingers I find good places to invest money…
Investment Changes In April
Usually this is the section of the post where I find a fancy new way to say “nothing changed” in our portfolio, and then try to write a few words about my investing philosophy.
You see — I’m not a very active investor. I put money into a new investment and then wait years until I change something again. Sometimes I’ll hold onto a position for a decade or longer.
I do this primarily by maintaining strong filters to keep out bad investments…
Meanwhile, prices on certain stocks did fall during the month of April, but they didn’t fall quite far enough for me to pull the trigger. (It actually did happened in early May, but you’ll have to wait until our May report to hear more about it).
Ultimately I concluded the cigarette maker shares were still overvalued on a long-term runout basis. Like the rest of the market, I think they have room to fall further.
That’s it for now! Keep reading for more investing, food, and financial independence fun!
[Image Credit: Flickr]