Hope you all had happy holidays! We had a great December. It was a good Christmas and happy new year for our family. The picture above is from a local tree farm that put on a huge lighted exhibit. It was fun walking around surrounded by all the lights, and our kids loved it.

It’s 2022 already! It’s hard to believe another year has come and gone. Financially, we ended the year well. Here is our monthly financial update for December.

Monthly Spending and Income

December 2021 Spending

Primary Residence – Property Tax+Assoc. Fees $290
Rental – Property Tax+Assoc. Fees $215
Internet $40
Cell Phone $321
Gas + Electric $69
Water/Sewer $63
Food (Groceries/Household) $1,136
Food (Eating Out) $510
Transportation [Gas] $97
Car Insurance $0
Life/Home/Umbrella Insurance $1,312
Health/Dental Insurance $893
Misc/Buffer [Yearbooks, Epic/Hulu/Netflix, Gifts, Outings, Clothes, Masks] $1,216
Total Monthly Spending $6,163

Our grocery and eating out expenses are both higher than average this month. Counting this month, our average monthly grocery/household spending for 2021 was $1,086. We spent about $442 per month on average to eat out.  It’s about what I expected for “retirement”. I initially estimated about $1k for groceries and $600 for eating out per month, so I underestimated groceries and overestimated eating out. I expect this might get higher as our kids get older, but for now I’m fine with where it is.

Our health insurance premium was back to normal for December.

The cell phone expense was for a year of prepaid AT&T wireless service. It’s $25/month + tax for unlimited talk/text and 8GB of data with some carry-over. It also has a hotspot for my kids’ devices. I considered and tried a few other service providers like T-Mobile, Tracfone, and Cricket Wireless this year. However, I wanted more stability and better coverage going forward. I think the location of our home isn’t the best for cell phone coverage, and I’ve grown tired of constant dropped calls and inconsistent services both in and out of the home. In any case, AT&T has been good for Mr. FD, so I decided to switch.

Our miscellaneous spending was high again this month.  The majority of spending went to Christmas gifts to family and friends. The second highest in miscellaneous spending went to outings for the holidays. My favorite was a night out at a really cool Christmas Tree farm that dedicated a section of their farm to over-the-top decorations and activities for families. Our kids were able to write and send letters to Santa in their special post office. We also did a drive through the Magic of Lights show at the PNC Arts Center. We did a few other random outings too. We didn’t take a big winter trip. (Thanks, Omicron.) Instead, we did a lot of local driving around and eating out. Winter break was actually pretty relaxing and fun. Still, I am hoping 2022 will be better. We haven’t had a big trip with our kids since the pandemic began. 

The remaining miscellaneous spending included more KF94 masks, clothes for the kids, yearbooks for the kids, and finally online entertainment services like Hulu, Netflix, and Epic!

December 2021 InCOME

Rent $1295
Child Tax Credit (Federal) $500
Hobby Site $681
Mr. FD Freelance $10,150
Total Monthly Income $12,626

Mr. FD’s freelance income was good this month. It was unusually high because he didn’t contribute to 401k or taxes this month.

Rent came in as expected, but there were some small maintenance expenses. The hobby site brought in more than usual from ads. Somehow ad revenue always goes up around this time of the year. We also had yet another month of Advance Child Tax Credits.

December 2021 RETIREMENT CONTRIBUTIONS

Solo 401k Contributions
$0

As stated before, Mr. FD didn’t contribute to his Solo 401k this month. He’d already calculated and made his contributions in previous months, and there was no need to adjust.

By subtracting our expenses from our income and retirement contributions, we saved $6,463 in December.

December Savings: $12,626 –  $6,163 + $0 = $6,463 in total

Spending and Savings Summary for the year

Here’s a table of our spending and savings for this year.

  Spending Saving
January 2021 -$4,977 $6,259
February 2021 -$4,288 $3,632
March 2021 -$2,567 $11,802
April 2021 -$5,632 $1,591
May 2021 -$3,271 $9,888
June 2021 -$3,207 $9,880
July 2021 -$4,850 $11,881
August 2021 -$3,403 $806
September 2021 -$6,837 $8,896
October 2021 -$6,056 $7,402
November 2021 -$5,411 -$1,298
December 2021 -$6,163 $6,463
TOTAL -$56,662 $77,202

Net Worth for the year

For net worth, here’s how we’ve been doing. I calculate net worth near the end of the month, but not always on the final day of the month. Most of our net worth changes are heavily dependent on the stock market. I’m also including our total FIRE assets, which are invested and expected to grow in our retirement.

Our net worth went up by about $40k this month, and our FIRE assets went up by about the same. This is mainly from a robust stock market finish. For 2021, our net worth went up roughly $365k.  For us, that’s more than 6 years worth of expenses. I’m ecstatic about that. That’s the most our net worth has ever gone up, even more than when Mr. FD and I were both working full time. By the end of the year, our net worth crept back over $2.5M, and our FIRE assets hit $1.92M for the first time.

  Net Worth FIRE Assets
January 2021 $2.15 M $1.55 M
February 2021 $2.18 M $1.59 M
March 2021 $2.23 M $1.63 M
April 2021 $2.29 M $1.69 M
May 2021 $2.32 M $1.72 M
June 2021 $2.36 M $1.76 M
July 2021 $2.40 M $1.80 M
August 2021 $2.44 M $1.84 M
September 2021 $2.44 M $1.83 M
October 2021 $2.50 M $1.89 M
November 2021 $2.49 M $1.88 M
December 2021 $2.53 M $1.92 M

FIRE Failure Indicators

Here’s our sanity check for the month.  

  1. Is our spending on track? In 2021, we spent about $56,662. In a full retirement scenario where we have less freelance income, we would have likely spent less due to lower health insurance premiums. If we actually went on a bigger vacation, we might have bumped that spending up by about $2-3k. I’d say that overall we can expect that our expenses will be less than $60k in a retirement scenario where Mr. FD scales back further from his freelance work, which is already part-time. For now, this is acceptable for us.
  2. Is our withdrawal rate okay? If Mr. FD were to stop working today, we’d have a withdrawal rate close to 3%. That’s right around where we want to be. Below is a table of withdrawal rates and equivalent withdrawal amounts given our current FIRE assets. We want to keep our spending at or below 3%, so we should be fine if and when Mr. FD decides to significantly cut back on freelance work.  In the case where we go on a bigger vacation, we can expect to spend closer to 3.25%. We’re okay with that too.
     

    Withdrawal Rate Withdrawal Amount
    4.00% $76,800
    3.75% $71,200
    3.50% $67,200
    3.25% $62,400 
    3.00% $57,600
    2.75% $52,800

Happiness Indicators

On a scale of 1-10, how would I rate my happiness?

8. That’s pretty high for me. 

So, I have some news. I, Mrs. FireDesired, have secured a 4-month contract of work to start in mid-January 2022.

This may not sound like much, but this is actually big news for me. I haven’t worked a job in almost 3 years. I was surprised that I actually got it.

So, why am I doing this if I’m supposed to be FIRED, or at least transitioning to FIRE?

I’m pretty risk-averse. When I look at our numbers, they look solid given our spending. However, we’re so tied to the stock market. I sometimes think that if there were a big downturn that didn’t recover in a few years, I’d probably want to go back to work. But, if I’m honest with myself, I’m not sure what sort of job I’d be able to get the longer I stay out of the workforce. So, with all the time I had after dropping my grad course this term, I applied to a few opportunities. In any case, it’s 4 months long. We’ll see how this helps with my worries about waning skills.

Another reason to do this contract work is that I’d been itching to work on things again.  Things that are bigger than myself.

There’s an analogy that I’ve been thinking about a lot these days. Bear with me as I explain a bit. I used to play in orchestra as a kid. Nothing special. I never took formal lessons. I played in county orchestra for a season, and that was the most prestigious orchestra I have ever played in. However, despite my level, there was always something really great about making music with a group. I mean, by myself, I could play whatever I wanted, at the pace that I wanted. There was no pressure to perform or do well, only the pressure that I put on myself. To contrast, in an orchestra, someone else decided what we played and when we played. I had to practice for not only myself but the group. Sometimes, I’d encounter someone really mean and arrogant, who looked down on me. And, I’d have to put up with that. But sometimes, I’d encounter folks that gave me great feedback and helped me grow. Sometimes, we played music that was really fun or really beautiful.

I think of going back to work as being in an orchestra. I’m looking to do good work and contribute to something bigger than what I could do by myself. I could probably work on stuff by myself more freely, and I have been trying to, but I’m not the type that can create a symphony by myself. So, I’m trying contract work.

Okay, so my analogy might be just a little over-romanticized. I honestly do think this way right now. We’ll see how I feel in 4 months.

Happy 2022 everyone!

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