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Tuesday, July 26, 2016

June 2016 FrugalMaster Results

I am back from a great family vacation.  We headed up to Niagara Falls for a few days to spend time with my wife's side of the family.  The cousins had a blast seeing the sights and hanging out.  This was a budgeted vacation so we will see how the FrugalMaster 2000 performed in next month's results. 

June however was a different kind of spending.  There were changes in my insurance that set me over my normal budget.  There was also my birthday weekend away.

It was a weekend away at a great state park.  Being a state park it was very low cost compared to any other tourist trap.  I think it was $109 a night (2) for a recently renovated cabin that slept 6.  It was very clean and modern.  The kids (and me) enjoyed swimming, fishing and hiking.  We did all of the cooking with dinners around the campfire.  That also kept costs very low. The entire weekend cost us around $300 which I think is great.

Fixed spending was over budget

For June we were $411 over budget in the fixed category.  The usual quarterly sewer utility bill was a painful drain of $415.  Honestly I don't know if me and the kids really produce that much waste but according to the county we do.  Heck the baby does her business in the diaper and that gets put into a landfill.  Sometimes I do miss living in the country where water and septic were free (minus maintenance).  That would save me $250 a month.



My new house insurance and car insurance I will talk about in my next post.  The goal as always is to reduce spending where I can to have more savings for retirement.  Why pay more for insurance that I have never had to use in my life and I am 42 now (fingers crossed!)

I do wish I were a stay at home dad.  There would be an attempt to make baby food with that baby ninja device or something.  My daughter is now hard core on baby food and I had forgotten how expensive the stuff is.  It is adding $28 per week to my food costs.  Besides that looking at my transactions I went to the grocery store more than once a week.  That tells me I need to do a better job of planning the menu so I only go once a week.  I am human and when I go sometimes I come back with things (junk food) my family does not need.  Plan your menu and stick to it.  Not only will it reduce your grocery costs but also reduce the temptation to eat out.

Looking at the chart below we can see the percentage of my income going towards fixed costs is lower than last years.  Part from higher income and part from continued frugality.  This gives me the juice to keep on going.  Charts and graphs help you visualize your success so give them a try.


Guilt Free spending was over budget

Well technically if you don't count spending related to vacation (separate budget) then I was under by $144.  However I lumped vacation into GFSM.  Vacation isn't a necessity in life but a luxury.  One of my goals for the year was to save ahead for vacation so that when the bills come in I can easily pay them off.

Like I mentioned earlier my birthday weekend camping was a few hundred dollars.  The rest of the money taken from the vacation budget was for passports for the adults (16+) in the family.  That amounted to a hefty bill of $257.  We did normal processing to save money and the passports came a few weeks before we left for Niagara Falls.

Savings Goals were still met though!

In the end though (even with vacation) we were able to come out ahead.  All three of my savings goals were met.  My vacation fund is almost totally funded and I am half way there with both my Emergency and Christmas funds.  All that for a grand total of saving 9% of my income.  Just looking at this now I found it weird to be able to fund all my savings goals and only save 9%.  Thinking about it more I am using surplus savings from previous months to fund the goals.  Plus as I take vacation I am also depleting my vacation budget too. 



I hope your month of June was a great month of saving and investing.  I look forward to reading up on them (if I have not already).  Drop me a comment if I haven't visited your site.

Regards,

Dividend Family Guy

Monday, July 18, 2016

July 2016 Watchlist

I am on a mad dash to get my usual posts done before the end of the month.  Since I will be out on vacation this week here is my very late stock screen results.  I am not sure what happened but I usual like to create this motif in the beginning of the month when the data from dripinvesting.org is the freshest.

Oh well here are the results for July!


 

The chart should start to fill in within the next couple of days as data is collected by Motif.  The 10 companies in this list have been showing up recently and are still presenting themselves as bargains for the dividend growth community.

The all follow my screen found on my blog.  The have all been paying dividends for 10 or more years which makes them less riskier than the newby dividend payers.  I have fallen to the high growth high yield curse before only to see the dividend cut.  This year we changed that and if you look back at my past motifs they are all doing well.  That is probably true for most people because of the bull run.  I guess my screens will carry more weight when the bear market hits us.

My favorite out of the list is Target.  49 long years of paying dividends and it is sitting at above a 3% yield.  Just because it is my favorite doesn't mean it was number 1 in the screen.  #1 goes to Ameriprise Financial Inc.  It beat out over 700 companies to become #1 based on Value, Growth, Quality and Yield.  I screen on each of these factors and see what bubbles to the top.  The only high score was in the Quality factor.  However a MRQ Price/Book of 2.19 and Debt/Equity of 2.03 are not shabby at all.  

Both these companies look great still mid-July so they are definitely on my watch list.

Any red flags for Ameriprise I should know about?

Happy investing!

Dividend Family Guy

June 2016 Dividends

This will probably be the smallest dividend month since I started dividend investing in 2010.  It will probably also be the shortest post about my dividends.  The main reason is the shifting of my accounts that I talked about in this post on Merrill Edge and its rewards program.

Some stocks did transfer so their income was not interrupted.  The grand total was a whopping $2.76!  I don't think that could even buy me lunch but I am still grateful for the income.  For these guys it was cash as I could not setup reinvestment yet.  I have now.  It will of course grow overtime as the dividends are reinvested and start the compounding machine.

Company
Held In
 Dividend
Amount Received
Shares of Life Purchased
June Notes
ORI
Tax
0.1875
0.75


MCD
Tax
0.89
0.89


CNRL
Tax
            0.23
1.12

 (Also known as CNQ)

In a future post I will be laying out my new portfolio for you all to see. For some reason I never put it out there to share and to get feedback from all of my readers.  Probably from fear that it didn't stack up against others awesome portfolios.  Well this time I will (just need to find time in between feedings and diaper changes.)


Until then happy investing all!

Regards,
Dividend Family Guy

Saturday, July 16, 2016

Taking Advantage of Rewards Programs

In late May and during this month of June I have made some changes in my life that will generate some additional income and savings for the DFG family.  It all started when another frugal minded person mentioned in their blog about different investment platforms that were low cost.  After reading the article and doing some research the winner was Bank of America Preferred Awards.

The move is not easy and involves lots of account setup and transfers of funds from my old banks.  As I write this in July I still have not transitioned all of my bill payments over so my old checking lingers.

The only thing left behind were my kids savings and investment accounts.  That will be another project to undertake when the snow flies this winter.  All in all I was able to transfer over enough funds to make the Platinum level.  The catch is the funds have to be with BoA/Merrill for 3 months before you can sign up for the rewards program.  For me that will land in August.

Banking Advantages

First I opened up an interest checking account.  As long as you have combined more that 10k between all your accounts the minimum balance and fees is waived.  So now I get paid interest in my checking!  Sure interest rates are super low right now but I will take it over my no interest checking in my old account.  If you need checks they are completely free (even shipping.)  There is also no-fee ATM transactions at non BoA ATM's.  Up to 12/year for my tier.  Luckily there is a BoA ATM near me as 12 won't go very far.

Second I opened a rewards money market savings account.  I will use this as my new savings account.    Right now the APY is 0.03%.  Once my reward tier kicks in in August it will jump to 0.05%.  I will say this, Capital One 360 (my old savings) did beat this.  Right now if you have under 10k it is 0.60% APY and over 10k you get a whopping 1.00% APY.  My kids savings accounts at 360 get a generous 0.75% APY regardless of the balance.  I checked some other banks and they are similar to BoA.  I am not sure how Capital One does it.  I mainly transferred this just to keep my accounts in one place to simplify my life. 
If you are going to have a credit card ensure you can pay off the balance each month to avoid any interest charges.  If you can do that then sign up for one that gives you rewards.  They have their rewards credit card.  Just for opening it up and making some purchases they kindly deposited $100 into my savings account.  The other benefit is the bonus program.  It is fairly typical of others.  1% at most places, 2% for groceries or wholesale clubs, and 3% for gas.  Right now I also get a 10% bonus because I deposit it into my savings account.  Once my rewards kick in the bonus will be 50%.  For example if I earned $10 in rewards they would deposit $11 into my savings.  Then in August when I move up rewards tiers that $10 will turn into $15.  Not bad (just remember to pay off your balance every month!) In June I earned $40.22 in rewards.  That is way better than any APY from a savings account.

Investment Advantages

The bulk of my assets came from moving my IRA over to Merrill Edge.  This is what got me to the Platinum level and it is the main reason for the move.  Some stocks I moved 'in kind' over.  Some I sold to take advantage of the great bull market we have been experiencing and then moved the cash.

There are fees associated with the move so always make sure the gains outweigh them.  For me the fees were a fraction of a percentage compared to the gains received by selling some stocks as part of the move.  Even with the loss of dividend income for a few months that fraction bumped up a little but I still came out thousands of dollars ahead.

OK so why the big move.  First, there is a bonus for moving your IRA.  Sometime in August when I can get into the rewards program I should also receive the transfer bonus of  $150.  Second, and also the biggest reason is the FREE trades.  In the beginning they give you 90 free trades for the first month.  That allowed me to get back into dividend growth stocks when the Brexit dip happened. In August I will then be eligible for 30 free trades a month.

I always struggled with monthly purchases because I was unable to save up enough to justify the $7 fee associated with a buy.  Now with 30 free trades a month I can purchase any number of stocks for any price and dollar cost average my way into more dividend income.  This will saving me hundreds of dollars a year in fees.

Am I Happy With the Decision?

Being able to buy a stock or two with a few hundred dollars every week or two is worth it to me.  Just contributing to my snowball machine when I have some savings will keep me energized and willing to save and invest even more money.

I encourage all savers and investors out there to take advantage of the system and find a way to reduce your investment costs and boost any rewards from them.  They offer them to lure in those who don't pay off their credit cards or fall under minimum balances to  rack up fees.  Living well below your income level and staying on top of your finances will lead to additional income from these companies.  That gets me excited.  FREE money!

What are your thoughts on this move?  What is your experience with BoA and Merrill Edge?  Anything I need to watch out for?

Disclaimer

I am not associated with Bank of America (just a customer now!)

Thursday, June 23, 2016

May 2016 FrugalMaster Results

May was mostly quiet here in the DFG household.  My daughter was baptized and we celebrated that.  My older daughter had a birthday slumber party.  That is always interesting to see how teenage girls act these days.  They were all good kids and even went to bed at a reasonable hour.  Even on the finance side it was mostly quiet.  I will write about some of changes in another article that in the long run will benefit my family and I.  Now let's get on with the show and see if I came out ahead this month.

Income
I posted my dividend income already.  It was lower compared to last year due to some changes and dividend cuts.  Nevertheless it was still income I did not have to work for.

On my paycheck side it was steady Eddy.  The only difference was I started my investment in my company's employee stock purchase program.  It is a great deal as long as you hold the stocks long enough to avoid short term capital gains taxes. 

First they take out a percentage of your income from each paycheck.  At the end of a fixed period of time they take your money and buy company stock at a 15% discount.  The best part is they take the lower of the 2 stock prices that are measured at the start and end of this time period.

For example, May 1st starts the period and it ends on August 30th.  If the stock on the 1st is $20/share and in August it ends at $40/share you get it for $20*.85=$17.00 per share.

You can't beat that so I am currently sinking 1% of my pay into this program and may increase it the next period if I think the company is heading in the right direction. 

Expenses
This month was pretty good.  I came in under budget on all my "needs" categories.  However my wants category was about double what I had budgeted.  First of all I didn't plan on (oops) the expenses related to the celebration from my daughter's baptism.  That was ~$150 dollar expense I categorized under wants.  Sure I could have just sent the family home with no lunch but it was the least I could do for having them travel the distance to our church.

Again I just want to point out to everyone that my house is still the largest monthly expense I have.  Especially when you factor in maintenance and utilities for the beast of a large home.  I am still working on aligning my simple lifestyle goal with my wife.  I hope once we are on the same page it will lead to a downsize in possessions and home but NOT the quality of life.



If we look at my cost of living over time versus my income the downward trend YOY continues.  I attribute that to my salary increase this year as well as continuing to life a frugal life.  My goal is to get that down to 50% one day.  I highly recommend to any of you who are just starting out in life to set that goal as well.  It will teach to live well within your means and allow you to invest early and often.



Summary
Well we did it.  Another month of savings.  Not as kick butt as last months but still double digits.  In the end it was a cool 28% saved.  Lower than last years's 36% mostly due to going over budget in my wants category and a decrease in taxable dividend income.  Still this makes 4/5 months of being in the green. 



With that said I was able to funnel the full amount into my emergency fund and vacation and holiday funds.  I didn't purchase any new stocks this month as I continue to build up my emergency fund.  At this time those 3 savings goals consume all free cash after my expenses.

Next month will be different though as I shift my money around.  This will cause me to have to pick some new companies to invest in which is always fun.  I look forward to sharing what I have done and what I will buy soon.

Until next time,
Dividend Family Guy.