After a long hot summer in the Pacific Northwest, the clouds, rain, and cool weather are officially back. This means the Tako family’s expenses begin their seasonal increase as the garden now produces fewer vegetables, and our heating costs grow to match the falling temperatures.
It was a golden summer (probably one of the warmest in recent memory) and I spent a lot of quality time with the kids. We went camping, swimming, played at our local parks, road bikes, gardened, visited the library, built things together, and (of course) enjoyed the company of friends and family.
It was a pretty wonderful summer and one I will probably never forget. I’m eternally grateful for all the time Financial Independence allows me to spend with the kids and Mrs. Tako.
I still think “time with family” is one of the best reasons for Financial Independence.
We spent a lot of time outdoors this summer — everyone got well tanned and soaked-up our requisite Vitamin D in preparation for the “dark times“.
Just like realm of Mordor (from the Lord of The Rings), gloom will now embrace the Pacific Northwest and we’ll be covered in perpetual cloud cover and rain for the next 9 months.
(There’s probably a Sauron running things here too.) It’s super depressing and we probably won’t see a sunny day again until May 2019.
Wish us luck. I hope we survive…
Dividends In September
Dividends in September totaled $10,898, which is our largest monthly payout this year. This rather healthy sum occured because our main dividend payments happen in March, June, September, and December.
This just happened to be a ‘fat’ month for dividends. Other months of the year tend to be a little leaner.
Monthly dividend fluctuations like this are perfectly normal, and we make no attempt to “smooth out” the dividend payments. Our focus is simply on owning the best assets that we can, which means dividend income will always be a little lumpy.
For the year (so far), we’ve received $38,071 in dividends. Given our current dividend pace, our 2018 dividend income goal of $53k might be slightly optimistic. I won’t be surprised if we end the year a couple thousand dollars short of our goal. (More on this later)
September expenses totaled $4,949 for the month. It would have been a cheaper month, but we got hit with a number of inflation increases and “once a year” fees that made September’s expenses considerably higher than I was planning. Boooo!
Here’s the requisite category breakdown:
Do you spend a lot on food? Some months I think we do. Compared to the really cheap summer months when our economic garden is producing a maximum, $465 feels like a lot for food. But really, our annual average works out to around $500, so this wasn’t a terrible month.
As usual, there was plenty of really delicious food to go around. When the weather starts to get a fall chill, I tend to turn to comfort-food recipes. Like this homemade clam chowder.
I also whipped up a Mr. Tako classic — Chicken Chorizo soup. It’s spicy, hearty, and everyone in the family just gobbles it down. Even the kids! (Also a great way to use up tortilla chip crumbs)
My homemade gyros (of the meaty variety) made an appearance in September too:
And of course…. there were tacos. There’s always tacos at Mr. Tako’s house! We eat tacos at least once a week. Sometimes more.
Clearly we live a deprived culinary life because we skip over-priced restaurants to make nearly all of our food at home.
World, this is my suffering, and it tastes delicious!
Fuel costs in September amounted to $75, which was unusual low for us (typically we spend around $100-$120 per month in fuel). I attribute this low fuel cost mainly to the timing of fill-ups, but I also drove very little during the month. I didn’t need to gas-up in September. With half a tank of gas left, my car should be covered well into October.
Mrs. Tako did a normal amount of driving and refilled her vehicle twice in September.
Internet expenses in September amounted to $0 … exactly as it was in June, July, and August. Rest assured we still have very speedy internet service despite a non-existent bill.
Why is our internet expense $0?
We prepaid our internet expenses back in May to achieve a credit card sign-up reward. Usually our monthly internet bill is $49.95, but we prepaid $500 toward the account giving us a significant credit with our cable internet provider.
Unless a price increase happens, I expect to see our next internet bill in March of next year.
Mortgage And Childcare
Mortgage and childcare expenses was the category that really hit us with surprise price increases. First, our monthly mortgage payment increased to $2315.05 (instead of the previous $2,180). Our mortgage is a fixed-rate mortgage, so this increase was entirely to cover rising property taxes.
Everybody likes it when the value of real estate rises, but the downside is quickly rising property taxes. Grrr!
The second big increase of the month was the cost of child care. Tako Jr. #2 still goes to a daycare, and that daycare had its annual price increase last month. The price increased from $1265 in August to $1444 in September. That also included an annual registration fee, so my next monthly report will include a slightly lower daycare cost when that registration fee falls off.
Utility bills in September rang-up at $277. This total was comprised entirely of our bi-monthly water bill. Yes, that’s just the damn water bill!
This was our most expensive water bill ever, and we’re still in shock about the total. I went around the house looking for leaks, but didn’t find any hidden swimming pools that might account for our gigantic water bill.
All of our other utilities (electricity, phone, etc) were prepaid earlier in the year to capture some nice credit card sign-up points.
The other category included a couple one-off annual expenses this month: A school photo for Tako Jr. ($10) and the annual license plate registration tabs for our car ($267.75).
Yes, the annual license plate registration is very expensive here in Washington. There’s not much we can do to avoid this large expense (other than driving fewer vehicles and older vehicles). As cars age the annual registration fee is supposed to drop, reflecting the depreciated value of the car.
Compared to last year, the price of registration dropped $25. While I don’t like large annual taxes, this is actually a big incentive to maintain and drive older vehicles.
Long term, that’s probably good for my finances AND the planet.
Cumulative Expenses For 2018
For the year so far, the Tako family spent $51,165. I know that sounds like a lot, but please remember that we live in a very high cost of living area AND we have two children.
Believe it or not, this is nearly $3,000 less than what we spent at this time last year (2017). I attribute most of our lower expenses to Tako Jr. #1 starting kindergarten. As a result, childcare expenses have fallen.
With any luck, we can maintain this same level of lower spending for the rest of the year.
Surprise, surprise! In September, I actually did something with our portfolio! After a couple years of Wells Fargo failing my dividend scorecards, we finally sold off all 3200 shares (roughly $176,500 worth) of this investment.
This investment represented about $6,000 in annual dividend income that needs to be replaced if we’re going to meet our 2018 dividend income goal. It’s unlikely that I’ll find a replacement with slightly less than 3 months remaining in the year, so our income will probably lag a few thousand behind our annual goal. Oh well!
Other portfolio changes in September included a new position initiated in Discover Financial Services (Symbol: DFS). At the end of the month, we purchased 630 shares at roughly $77 per share. That’s an investment of $49k.
If you follow my blog regularly, you’ll know that I’ve been considering an investment in the credit-card space for quite awhile. I considered many of the smaller players in the credit card space and finally settled on DFS. It doesn’t check all my boxes, but it does check enough of them that I think we’ll be able to safely keep-up with the market. Here’s to hoping.
Although this investment only yields 2% dividends, it looks like a decent place to store some cash until better options arise. In the meantime, I’ll keep looking for a market beating rocket ship. 🙂
Clearly we’re cash heavy too (after the WFC sale). Cash now represents around 30% of our taxable portfolio. Frankly, I don’t like holding this much cash (it earns less than 1% and it’s really heavy!). But what’s an Octopus to do?
For now, we’re buying DFS and accepting a lower dividend yield. In the short term this means a little pain in the “income department”, but over the long term I believe we’ll do better in the “net worth” department.
[Image Credit: Special thanks goes to Steve @ ThinkSaveRetire for graciously providing today’s featured image…]