Summer always speeds by faster than I’d like. It’s a “blink and you’ll miss it” kind of moment here in the Pacific Northwest. Owing largely to our very short summers. We really only get 3 months of good weather here a year — June, July, and August.
It’s too bad summer ends so quickly — The kids just love being outdoors, and frankly it’s good for them to stretch their legs and get a little sunshine.
August sped by incredibly quickly here in the Tako household, as we busied ourselves with back to school shopping, and as many dry bike rides as we could fit into a month.
It was a great summer, but it’s now drawing to a close. I will miss it.
The rain and miserable weather will return very soon, so I busied myself with as many home maintenance tasks as I could manage in August — toilet repairs, deck repairs, painting, landscaping, and resealing the windows around our home, and so on! And I’m still not done!
The end of summer is always a race to get everything done before the rain begins, but did it rain dividends in August? Read on to find out!
Dividend Income In August
Dividends from our taxable portfolio amounted to $309 in August. This was not a record breaking month by any means, but I remind myself that “every dollar counts”, especially when they’re dollars I don’t have to work for!
Here’s the breakdown of our 2021 dividend income:
As you can see in the table above, we see large swings in dividend income from month-to-month. This is entirely normal, due to the payout schedule of the stocks and funds we own. Some months our passive income stream is a veritable river of money, other months it’s just a trickle of cash.
Most dividend payments occur quarterly, with the bulk of dividend payments arriving in March, June, September, and November. This means 8 out of 12 months of the year are ‘dry’ months for dividend income (like August). It’s mostly ‘crickets’ for those months, and then come the ‘big’ months like June — when the floodgates finally open and all that sweet dividend cash comes gushing in.
To deal with the lull of payments during the dry months, we keep a reasonable cash balance (roughly 6 months worth of expenses) in a checking account.
Expenses in August totaled $4,669. This was a pretty expensive month for us, as we’ve been averaging around $4,000 per month in 2021.
Really, it was just a couple of large (car-related) expenses that pushed us over the $4k per month territory. That, and a few kid-related activities really blew-out the “Other” category this month.
Here’s the breakdown of expenses by category:
Grocery spending in August was a reasonable $485. Normally we spend around $500 per month, so groceries were still affordable in August. That said, I’m concerned about our growing food expenses. Food inflation is very real, despite the noticeable lack of increase in our monthly grocery total.
What you don’t see in that number is lots of effort to keep our grocery costs low. I’ve been working hard at it. So far, I’ve been able to hold the line on grocery spending at $500, but it’s definitely getting harder. I’ve had to be much more creative and careful about shopping, and looking for sale items.
Are we down to eating rice and beans every night? Hardly! Our plates continue to be filled with plenty of delicious food despite the inflation!
What kind of delicious food, you ask?
Take for example this dish called “hayashi rice”. It’s basically a Japanese version of “beef stew” over rice. Simple, but delicious!:
Surprisingly, it was the only beef dish we ate all month! All other meals were made with other proteins — Like this delicious chicken and shrimp Pho. (You can find my recipe for this dish here)
Many meals in August were about maximizing our use of sale items, like these brussels sprouts (which were on sale) with bacon:
Other meals were purely about making things we enjoy, like these fresh Vietnamese spring rolls! It’s one of my favorite dishes!
Salads were also frequently on our table in August, owing primarily to the abundance of fresh cucumbers from our garden, and fresh tomatoes from a friend.
All those fresh veggies made this panko fried chicken salad a delightfully frugal meal!
Of course, not wasting food is one of the keys to keeping your food budget low. This tofu stir-fry is a good example of how we avoid food waste. Just grab all the odds and ends from the fridge, add a little sauce, and then stir-fried in a wok! It turns into a cheap but delicious meal!
Japanese cuisine favorites were also plentiful on our table in August — like this delicious Okonomiyaki! A Japanese classic we eat at home a lot!
Clearly we’re not starving on $485 a month, but it’s definitely been harder to keep our food budget low. I won’t be surprised if we blow past our $500 per month average later this year.
Fuel spending was a very normal $104 in August. Under the Covid-19 era, our fuel spending has been averaging around $100 per month, so August’s fuel spending was inline with that amount.
We don’t do a ton of daily driving, but most days typically have a small errand that involves less than 15 miles of driving. That, and the occasional visit to the grocery store add-up to two or three fill-ups per month.
As usual, our largest single monthly expense is our home mortgage. This amounted to $2,357 in August. This includes interest, principal, insurance, and taxes. If this seems like a lot of money, please remember that we live in a very HCOL (high-cost of living) area.
Real estate is extremely expensive here. Most homes in our area sell for over $1 million dollars!
While technically we could pay-off our remaining mortgage at any time, we’ve chosen to retain all that money and hunt for better investments instead.
So far, this has proven to be a very effective strategy.
Home internet expense for the month was $45. We get a ton of value out of our 100Mbit cable internet service from Comcast, so I’m actually quite pleased with the performance of our internet package.
While there are certainly faster and slower packages available, most of these don’t make a lot of sense for our household. Slower and cheaper packages would be too bandwidth limited for our multi-video conferencing household, and faster packages would just be completely unnecessary.
Mobile phone spending in August came to $0. Yep, zero dollars again! This might come as a complete shock to people who are used to spending $60 (or more) for phone service every month, but it is possible to spend $0.
We pre-pay our mobile phone service, and pay only once a year. This happened back in May of 2021, and amounted to $34.50 for two phones. This amount usually lasts us the entire year because we don’t talk on the phone a lot, and have no need for an expensive texting or data plan.
Most of the time when I need to make a call, I simply use Google Voice. It gets the job done for free.
Utility spending was $0 in August. This ultra-low cost month is likely due to the timing of when our bills arrive, and the fact we prepaid our electricity and gas bill to meet some spending requirements on a new credit card.
Don’t worry, I don’t expect this low utility spending to continue in the future. This was simply a timing fluke, and September should have plenty of utility expenses for us to pay!
Insurance costs amounted to $0 in August. This amount is completely normal for us! Our insurance expenses typically occur once per year in October, when we pay our annual car insurance bill.
We prefer to pay very large once-a-year insurance premiums due to the slightly lower cost (given by our insurance company) when paying this way. One lump sum ends-up being cheaper, so why not do it that way?
(For the curious: We do have home-owners insurance. It’s included in our mortgage, but I’m super lazy, and I don’t break that number out here in the insurance section.)
Other spending in August was $1,677. Clearly that’s an unusually large amount of “other” spending. Over half of this amount was entirely due to car expenses. Mrs. Tako’s car needed new tires, and my car needed a little maintenance too.
Thankfully these care expenses are very irregular purchases, and we shouldn’t need any car work done for a very long time.
Here’s the breakdown of all the major “other” items in August:
- $419 – Kid’s soccer and swimming lessons.
- $695 – New tires for Mrs. Tako’s car.
- $310 – Minor maintenance work on my car.
- $12 – School supplies.
- $81 – Dinner out with friends. (Yep, we ate out! Hell must have froze over.)
- $120 – Home maintenance and repair supplies from Amazon.
- $28 – Leaky toilet repair supplies from Home Depot.
- $12 – 5 gallon propane tank refill.
Cumulative Expenses For 2021
For the year so far, the Tako family has spent a combined $33,322. That’s an average spend of $4,165 per month, which is slightly above our average monthly dividend income. Oops! We spent too much!
Normally spending more than your income doesn’t sound like a smart idea, but this slight discrepancy will be resolved in September when the river of dividends starts flowing again.
For the entire year, I’m projecting we’ll earn a total of $62k in dividend income, and our annual expenses will probably arrive at $56k. This is an estimate of course… things don’t always go as planned.
For example: We might need to replace our water-heater before year-end, and there are several other home-maintenance projects I might try to complete before the end of 2021. These unusual (and large) expenses could easily blow-up my budget estimates for the year.
That’s OK though, by spending less than our projected income we can breath-easy when the unpredictable expenses arrive. I might not be able to predict the future, but I try to control the damage by having a big buffer in our budget.
August 2021 Investing Update
For the month of August, I made two important changes to our portfolio — I sold my shares in Points International Ltd. (PCOM) and Amgen (AMGN). As a result, I realized a small ($3k) profit for each transaction.
Both stocks are former growth stocks that probably won’t be doing a lot of growing in the near future. Yet both stocks are still trading at growth stock prices! It seemed like a good time to safely exit with a profit.
The future is impossible to predict of course, so I might have to eat my own words about selling. Thankfully, I’m OK with that. These were only small investments, and I’m happy I made a decent profit. Time to move-on to something else with better prospects.
It’s certainly unusual for me to sell a stock this quickly (especially after I just wrote a post extolling the virtues of long-term holding) but reality changed very quickly. My investment thesis needed to change too.
Such is life. I never make a stock purchase wanting to sell, but conditions are always changing. I have to be mindful of that change, and ready to take action when I sniff out a lack of compounding in the air.
That’s it for August! Thanks for reading everyone!
[Image Credit: Flickr]