There is a lot of ground to cover from the last update. Big changes are afoot! Have we lost our minds?!
You can check the latest and greatest info on the Track Our Progress page.
First, the numbers:
Net Worth:
- End of January Balance: $1,030,805 down $33,913
- Year to Date (YTD): Down $33,913 (down 3.2%)
- Since January 2018 (this is when I started tracking our net worth): Up $725,805
Portfolio:
- End of January Balance: $835,071 down $39,189*
- YTD: Up $258,389 (down 4.5%)
- Since January 2018: Up $595,071
*All numbers above include contributions and are not indicative of investment returns.
What a rough start to the year. Literally every investment we have (except the house) has gone down in value. Our little crypto experiment is down below the amount originally invested. And our stock picking experiment… well its performance to date can best be summed up as follows:
But honestly, investment performance has not been top of mind for a few weeks.
January Highlights
2021 Spending
I held my nose and dove into the financial statements to sort through our spending for last year. When I emerged, this is what I saw:
| Category | Annual | Monthly |
| ATM | -$265.00 | -$22.08 |
| Automotive | -$317.99 | -$26.50 |
| Booze | -$1,110.02 | -$92.50 |
| Cleaner | -$2,560.00 | -$213.33 |
| Daycare | -$6,370.70 | -$530.89 |
| Dining | -$5,724.52 | -$477.04 |
| Donations | -$1,348.75 | -$112.40 |
| Entertainment | -$939.71 | -$78.31 |
| Fees & Adjustments | -$187.00 | -$15.58 |
| Gas | -$1,955.99 | -$163.00 |
| Groceries | -$9,806.54 | -$817.21 |
| Health & Wellness | -$2,538.97 | -$211.58 |
| HOA | -$160.00 | -$13.33 |
| Hobbies/Activities | -$790.64 | -$65.89 |
| Home Improvement | -$10,882.13 | -$906.84 |
| Insurance | -$2,265.68 | -$188.81 |
| Internet | -$734.88 | -$61.24 |
| Investment | -$37,399.89 | -$3,116.66 |
| Merchandise | -$22,763.41 | -$1,896.95 |
| Mortgage | -$22,105.37 | -$1,842.11 |
| Personal Grooming | -$151.00 | -$12.58 |
| Pet | -$1,087.00 | -$90.58 |
| Phone | -$1,618.91 | -$134.91 |
| Taxes | -$4,223.91 | -$351.99 |
| TV | -$1,373.84 | -$114.49 |
| Utilities | -$3,462.13 | -$288.51 |
| Vacations | -$6,841.76 | -$570.15 |
Most categories have fluctuated a bit, but one stands out like a sore thumb.
General merchandise. Ho. Lee. Fook.
We spent a pretty penny on things last year. Notably including a new bed and bed frame, a kitchen table, sofa and love seat, a pizza oven (an Ooni Karu… totally worth it!), and lots of clothes (who knew kids keep growing?). I also used a good chunk of my bonus on hunting equipment as well.
On top of that, we had to shell out for our home insurance deductible to cover a new roof thanks to a hailstorm on my birthday. And lastly, our healthcare costs jumped a bit (mostly due to tennis elbow treatments and a dental crown for yours truly).
We are taking measures to be more mindful of our spending this year; however, spending will continue to be high for at least the first quarter of the year. Because…
We Bought an RV! …and a Truck!
In a major departure from our path to minimize spending, we went and bought an RV (a travel trailer to be correct). Which, of course, requires a tow vehicle. So, we doubled up and added a pickup truck to the mix as well. Oh, and we financed the purchases as well!
Now if you are a longtime reader of this blog, then you probably are feeling the urge to call me a hypocrite. Didn’t I write some posts about how owning a truck was a big financial mistake for us? Yup, sure did.
So why did we just up and lose our minds here?
The short answer is: Lifestyle Optimization
For the longer answer, I would start by saying I love the outdoors and would like to expose our children to the wonders of all things outside. Camping is a one of my very favorite things, and I would like to do it more often, and more comfortably. Growing up, my family owned a boat and we would spend most summer weekends on the Mississippi River or out on Table Rock Lake. It was some of the best times of my life. Our kids have had some awesome vacations to be sure, but where is the adventure?
Why Now?
From a financial standpoint, it doesn’t make a lot of sense. RV sales have jumped during the pandemic. Our RV would have cost thousands less last year. This also helped push us forward too. For at least the near future, much higher prices are forecast. For example, once the dealer sold us ours, 2 of the same models came in a week apart. The first to replace it cost $3,000 more, then the second was another $1,000 higher. Sheer craziness!
Traveling is something we want to do a lot of once we reach retirement. The RV lifestyle is appealing to us. But we have very little experience with it. It would be a real shame to plan on this lifestyle in retirement, only to found out too late it is not for us. A little bit of testing now could prove to us whether we are cut out for it or not.
Most importantly, our kids are still young enough that going camping with Mom and Dad is still cool. I figure we have, at best, 5 years until Mom and Dad are deemed decidedly uncool.
We will never get this time back. When I am sitting around in my 80s (if I’m so lucky), I believe I will be far more content with the time spent with the kids than I would be with a few extra bucks in a brokerage account.
At the heart financial independence is taking control of your time, removing things that don’t add joy to your life, and adding back in more of what does. I feel this is a good step in that direction, despite the financial aspects being a head-scratcher at best.
But a Truck Again? For Real?
I bought a truck right out of college and, while I loved it, I maintain it was one of the major expenditures that led to our lost decade of savings. The costs for fuel, maintenance, and insurance were one of many things eating away any potential savings.
I’ve been without a truck for about 3.5 years. What have I learned? I can definitely live without one. We’ve borrowed or rented trucks when needed, and I felt comfortable driving a sedan.
But with my lifestyle, I actually get a ton of use out of a truck. We remodeled our rental house and built a paver patio in 2020 without one, and it was a bit stressful. I’ve borrowed trailers and trucks for numerous bits of hauling in 2021. It would have been much less hassle to have a truck for all of that. So when it came down to buying a travel trailer, a truck made sense. If I drive it for work, my fuel costs are covered. I live about 10 minutes from work, so a full tank lasted a loooooonnnng time.
Coming Up in February
Equipping The Rig
An RV is like a second smaller home. As such, it needs to be outfitted with stuff. Let me tell you… the RV equipment rabbit hole runs DEEP. I expect we will be buying a number of items to equip it ahead of the camping season.
Adjusting to the New Normal
We are on a very steep learning curve with the RV and I’m sure there are a number of practical and financial surprises that lie ahead. We also will be starting our payments on the RV and truck. Amidst all of this spending, we still plan to max out our tax-advantaged accounts and contribute to our taxable account.
On top of that, it is our goal to pay off the RV within the year. This is because, unlike the truck, which is 0% interest, there is sizeable interest rate associated with the loan.
How we do that remains to be seen. Will we divert bonuses? Draw down on the taxable brokerage account, withdraw Roth contributions, or cut spending to cover it with positive cashflow?
Thanks for reading!
