February is always an interesting month. Not only is it the shortest month of the year, but it’s also right smack in the middle of winter.
Like many other families living in the northern hemisphere, we received a giant blast of winter weather this February. We got “snowed-in”, after receiving a bunch of snow over the course of two days. It certainly was a winter wonderland at the Tako household!
None of this is unusual of course. Winter storms are exceedingly common here in February. Yes, it’s cold and snowy. Sometimes there’s wind and ice as well, but we simply try to make the most of the situation — By getting out and playing in it as much as we can.
The boys had a ton of fun sledding, making snow angels, and throwing snowballs. Those rascals’ may have even gotten a few thrown back at them too! (All in good fun of course!)
Thankfully, we didn’t lose power like all those unfortunate folks in Texas did. It’s not unusual to lose power after a winter storm here, but typically it’s only a one or two day affair. Nothing too serious.
Our strategy is to simply hang-around the house and try not to drive anywhere for a few days until the roads are cleared. I typically occupy myself with shoveling snow, so a winter storm has the added benefit of being good exercise!
Inevitably, all this wintery weather has a pretty big impact on our monthly finances. Read on to find out how much!
Dividend Income In February
Just like in January, February was a low dividend income month. We pulled in a mere $67.93 in dividend income.
What the heck happened!? Is the Tako family back in the poor house?
Months with low dividend income might seem a bit disappointing, but this is just part of the dividend income game. Most stocks pay out dividends on a quarterly schedule. In other words, you get a check in the mail 4 times a year. (Or in my case, the check gets automatically deposited into my brokerage account).
This means 8 out of 12 months of the year are going to be ‘dry’ months for dividend income. It’s crickets for those months, and then there’s a big a river of cash when the floodgates finally open.
Since dividend schedules can vary significantly from company to company we still end-up seeing a few payments in months like February or January, but the bulk of our dividend payments always arrive in March, June, September, and December.
For the year so far, we’ve collected $776 in dividend income. It’s a bit too early in the year to make predictions about our income levels, but I don’t expect most stocks will be raising dividends in 2021.
Expenses in February totaled up to $3,735. Essentially a “normal” month for the Tako family (give or take a few hundred dollars).
February is a ‘winter’ month, and when the snow is falling we don’t tend to do a whole lot (other than shovel snow). We mostly stayed at home during the month of February, which kept many of our expenses quite low.
Here’s the breakdown by category:
Groceries were an ultra low $302 in February. That’s slightly less than $11 per day! Normally we spend around $500 per month on groceries, so this amount came as a surprise when I totaled it up.
Why was our grocery spending that much lower? My guess is that being snowed in for a few days kept us from shopping. We ate food out of the pantry and freezer instead, and spent roughly $200 less than usual on food. It’s amazing what a little winter weather can do to the budget!
By now, you’re probably wondering, “How can a family of four possibly eat on $11/day?” And, “What did they eat?”
Well, your in luck — I’ve taken photos! It was a veritable feast of food all month. Take for example, this wonderful bacon-pepperoni pizza made by Mrs. Tako. It tasted fantastic!
One of the great parts of being the main chef in the household means I get to cook what I like. So I do! I get to make all my favorite dishes, such as this Japanese style Mabo Tofu (the recipe is here).
By request of Mrs. Tako, I also made a batch of my delicious Pho (Vietnamese style noodle soup) one night. It’s a very popular recipe in the Tako household, and I always get a ton of compliments when I make it.
This time around I was short on vegetables, so I used broccoli and daikon instead (because that’s all we had). Yes, those aren’t traditional items in a Pho recipe, but they worked surprisingly well!
Not every night in the Tako household is a fancy meal of course — One night the kids requested egg sandwiches for dinner, and that’s exactly what they got! Egg sandwiches and cucumber soup for dinner!
The Tako family also has to occasionally suffer through my more “experimental” dishes — such as my version of Thai Holy Basil (with fried egg). The dish ended-up being a little bit too spicy! Oops!
Not every dish turns out perfect! Thankfully, there’s plenty of family “staple” dishes in our arsenal of recipes that are nearly impossible to goof up. Okonomiyaki (and miso soup) is one such dish in our household.
As you can see, we didn’t starve ourselves in February, nor did we only eat tins of beans to keep costs low. Despite being a low cost month for food, I think we ate very well on a budget of $302! The food was also delicious and varied.
What more could you ask for in a ultra-low grocery budget?
Fuel spending in February amounted to $97. After having absolutely no fuel spending in January, it was time to fill up the cars again in February.
This was still a relatively “below normal” level of spending on fuel, which I attribute mainly to the COVD-19 pandemic. We’re staying at home and not going out nearly as much as we did before, and this has a tendency to keep our fuel spending low.
Will this level of fuel spending become our new “normal” level? Only time will tell!
As usual, our largest single monthly expense is our home mortgage. This amounted to $2,357 in February. This includes interest, principal, insurance, and taxes. If this seems like a lot of money, please remember that we live in a high-cost of living area, and real estate is quite expensive here.
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.
Internet expense for the month of February was $45. This is our regular monthly payment for 100Mbps cable internet provided by Comcast (XFinity) with 5Mbps upload speeds. It might not be the fastest package available, but it’s more than sufficient for our needs.
While it is possible to spend less in this category, having good internet is a essential during the COVID-19 pandemic. We routinely have 3 zoom meetings going on simultaneously in our household. Having good internet is now a MUST.
It makes no sense to try to scrimp and save for sub-par internet during these troubled times.
Mobile phone spending in February came to $0. Yes, $0 dollars! 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.
Why is it zero?
Typically we pre-pay our mobile phone service once a year. This happened back in May of last year, and amounted to $35 for two phones. Yes, that is our annual amount. (Note: We are grandfathered into this plan. T-Mobile no longer offers it to new subscribers.)
Google Voice handles the remainder of our telephony needs for free. Why bother paying more than necessary?
Utility bills in February were $278. This was our electricity/gas bill for $155, and a garbage bill of $123. Both amounts seemed perfectly “normal” for this time of year.
We saw considerable snow, ice, and cold temperatures during the month of February, but surprisingly our energy usage stayed roughly the same as it did last month. That’s a win in my book!
Insurance costs in February amounted to $0. This is a normal amount for us. Most of our insurance expenses actually occur once a year in October, when we pay our annual car insurance bill.
As usual, we prefer to pay very large once-a-year insurance premiums due to the slightly lower cost (given by our insurance company) when doing it this 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 was $656 for the month. This “Other” expense category is my ‘catch-all’ for all the expenses that don’t fit anywhere else in our monthly report.
In the case of February, we had a few big ticket “Other” items:
- HOA dues ($200)
- Swimming lessons for the boys ($200)
- Household items purchased from Amazon ($224). Numerous items. I won’t list every single item here.
- Takeout from a local sandwich shop ($32)
By far my least favorite expenditure of the month was the HOA dues. I absolutely *hate* spending money for no reason, and our HOA dues certainly seem to qualify at that!
Cumulative Expenses For 2021
For the year 2021 so far, the Tako family has spent $7,261. That’s an average of $3,631 per month. While we’re only two months into 2021, this amount compares well to our 2020 average of $3,497/month.
I expect to see dividends of $62,000 for the year, so as long as our monthly average spending is less than $5167/month we should underspend our dividend income for the year.
It’s been said that underspending your income is one of the secrets to a happy life. I have to say that underspending our passive income is even better — It has me ecstatic. While many people are fretting and worrying about inflation in 2021, so far I haven’t seen large changes in our monthly expenses.
Of course, any of our passive income that we don’t spend on household expenses will be eventually reinvested and compounded further.
February 2021 Investing Update
On the investing front, February was an extremely active month. In total, we invested $151,875 into stocks in the month of February. This amount was split between two stocks, one of which was Axos Financial (Symbol: AX).
We added approximately $30,000 into our existing position of AX, and I continue to like my prospects in the bank. I’m not thrilled about the current prices, but ultimately decided it was better to ‘average in’ to the stock than to not have the shares I ultimately wanted.
The second stock is a small, thinly traded community bank we’ve been buying, that I’m not going to name at this time. Sorry folks! It’s extremely difficult to get shares in this particular bank, and I would like to buy more if the opportunity presents itself.
Meanwhile, I wrote both ‘put’ and ‘call’ options on Axos Financial shares in February, and pocketed $2,218 in cash. Should either (or both) of those options get exercised, I’ll ultimately be pleased with the results, but I won’t know for a few months which scenario is ultimately going to play out.
This is the beauty of investing for multiple potential outcomes. Much like a game of Settlers of Catan, when you build settlements and cities on the highest probability dice rolls. You just keep winning more and more resources regardless of how the dice ultimately land.
If you’ve never played Catan before, give it a try. On the surface it’s a great family game, but I’ve come to think of it as really game about investing. Winning at the Settlers of Catan actually requires a different way of thinking about investing rather than just “diversification” that’s so commonly promoted today.
Much like investing, it’s a great game to play!