July 2021 Review – Home Taxes and Fees

This year has been expensive and July was no different. This time it was driven by some expenses that I forgot were coming. I get through a good portion of my health expenses and think I have a good month ahead and then a bunch of home taxes and fees come due.

That’s one thing I quickly learned about home ownerships, there’s a lot of bills that you just don’t see as a renter. Of course, I was told about these home taxes at closing but, as one tends to do, forgot about them until they arrived in my mailbox.

But before we get into that let’s do a quick update on what’s going on in my life with 5 things that happened since the last update. This is a new thing I’m trying so let me know if it sucks ass.

1. I think I have a diagnosis for all the health problems I’ve been having! Yay. It’s an autoimmune disease so not life-threatening but life-quality altering and not easy to treat. Boo! Still have a few doctors to see but will probably know more next time I see my rheumatologist. This means I might have to pay more for better insurance next year, will have to calculate out whether that makes sense. Excel spreadsheet excitement builds!
2. Had a small window leak in our basement a week or two ago so spent the last few days buying a bunch of stuff to try to waterproof that area including a window well cover and some flex seal and a bunch of tubing to attach to our gutters to lead the water away. Had to visit 3 separate Lowe’s or Home Depot’s to find everything since everyone was getting ready for the hurricane. Lots of things to learn as a new homeowner. We’re in the middle of a tropical storm now and things seem to be holding up well so that’s cool.
3. Staying on the home front, our garage door started acting up and was on the verge of breaking so we had to get a good portion of it replaced. Still have the same door but pretty much everything else went as this system was in place since the early 90s and at the end of its lifecycle. August will likely also suck when it comes to savings rate.
4. Ted Lasso is back! What an awesome show and Apple TV+ is quickly becoming my favorite streaming network even if the quantity of shows is low. After all quality over quantity works, something that Netflix has forgotten. Schmigadoon was fun and CODA was probably the best movie I’ve seen in a while(the dad should get an Oscar nomination IMO). Having access to movies like that and The Suicide Squad means I may never go back to a movie theater again. Even with big ticket flicks like Shang Chi or Black Widow, I’m ok waiting a few weeks and seeing them on Disney+. Streaming is definitely a 10/10 invention. I’m thinking of getting a decent sound bar to improve the sound quality of my home theater.
5. Spent some time friends and the wife playing a ton of board games this month. My favorite game we played was Tokaido in case you wanted to know, although it definitely works best with max players.

And now back to talking about home taxes!

The bills we got this month aren’t even the property tax since that’s bundled in the mortgage but it’s other home taxes and fees that may not apply to everyone.

For one I live in an HOA. Luckily this one isn’t too intrusive as we’ve been for 7 months have had no issues at all nor is it too expensive but they do charge a bi-annual HOA fee that just happened to go up this year. Yay! It’s not a huge chunk of change on a monthly basis but since the fee is billed twice a year, it can really hit that month.

The next surprise bill was the sewer/waste tax that was due this month. Again, not a massive bill but when you add it to other stuff, it begins to add up. On top of that, since it’s property tax season, the car tax bill was due this month as well.

Add that to paying off some residual health bills from various doctor visits in the past few months and it’s a recipe for another tough savings rate month.

While home expenses aren’t the best, living in a home is such a good lifestyle choice for us that whatever it is, it’s worth it. The rent to mortgage difference wasn’t huge but there’s certainly a lot of additional costs that come with a house. We’ve already had more unexpected home expenses in August like I mentioned and I’m sure there’s more of that to come.

On the dividend side, July is one of those smaller months and generally trends under $300. I’ve been aiming to get these off months above $300 on a regular basis and I think that moment is coming soon.

While I haven’t saved a ton this year due to a variety of expenses, I’ve still seen decent growth due to historical savings, re-investing dividends and dividend growth within the stocks and index funds I hold. That’s the beauty of long term investing and getting some dividends on the side. As long as you’re not using those dividends, they get reinvested and help your future returns.

The dividends I’ve re-invested this year already probably make up more than I saved in total in my first year of working and that’ll definitely be the case before the year is over. That’s a cool thing and really shows the power of long term investing and compounding.

Last July, I ended the month with $275.18 so let’s see if I can continue this year’s streak of growth and beat that.

July Dividends

July’s dividends came in at $291.31, a small 5.9% boost over last year’s number.

That’s not huge growth and still under $300 but any growth is appreciated during a year like this one.

That brings the total for the year to $6870.48 or a 20.5% bump over last year at this time. That’s a pretty impressive growth rate given that my savings rate this year has been in the toilet.

It’s a far cry from June but these smaller months are still awesome to see as all this money will be re-invested and improve future income by $8.45. That’s nothing to write home about but every little bit helps especially during months where I’m not saving much.

The growth driver here were my M1 portfolios which shot up 36% over last year and are starting to make up a bigger chunk of these smaller months. I should do an update on those portfolios soon since I haven’t done one in a while. I haven’t been putting a lot of money into them lately due to the various expenses I’ve had but they’re still chugging along and buying more shares whenever dividends are paid out.

Steve, my dividend employee, only earned $1.75/hr this month and his annual wage dropped to $5.89/hr but the best months are still ahead.

After all, based on the below graph, it’s clear that September and December will be huge drivers of Steve’s hourly wage for the year.

August isn’t a big month but maybe it’ll break that $300 threshold. It’s followed by September and most importantly December up ahead. Even if I still have a bunch of expenses ahead of me, it’ll be nice to at least re-invest all those dividends into additional shares and hopefully get back on a savings streak before the year is through.

July Total : $291.31(+5.9%)
2021 Total : $6,870.48(+20.51%)
Portfolio monthly hourly wage : $1.75/hr
Portfolio annual hourly wage : $5.89/hr

July Expenses – Home Taxes and Fees

It’s HOA Fee and property tax season which means money flying out my wallet and not into my brokerage accounts.

That’s never fun but hey, stuff costs money. I think I may do a post about things I’ve learned as a new homeowner but one of them will certainly be, make sure to have a bunch of money on the side to fix shit that breaks and pay the numerous fees and taxes that your town may(or may not) charge.

Certainly these home taxes and fees may not apply to everyone as every jurisdiction is different but the northeast is for sure hella tax heavy.

I’m coming off a negative month so hopefully I was able to at least save something this July. Last July, my savings rate was 61.09% which was almost 30% higher than my best month in 2021! What a year!

I’m certainly not hitting that this July but let’s see where my money went.

My savings rate was 5.1% this month.

Aww yea, look at that dark red bar all the way in 8th place! What a winner! It’s not the greatest month but it’s certainly better than dipping into negatives again.

Adding in employer contributions brings that number to 12.1%

If I consider home equity as savings, my savings rate was 15.6%(22.7% with employer contributions). That number sits at 10.7% and 17.9% respectively if I only consider extra equity payments instead of including the ones that are embedded with my regular mortgage payment.

While my interest rate is low(2.75%), I still like the idea of paying down the mortgage faster. I consider it somewhat of a reverse bond since bond yields are pretty trash right now.

On a gross income basis, my savings rate was 3.8%, 9% with employer contributions and 16.9% with equity and employer contributions.

Where did my money go?

Well, #1 was a combination of home taxes(sewer tax and waste collection tax) and the HOA fee.

After that, I had more health bills. It’s crazy how slow that system moves sometimes as I was just billed for some blood work I had done around April.

Then we’ve got the mortgage and a pet bill. This is our biannual dog visit for our old lady. She takes a variety of meds and requires blood work which ends up costing quite a bit.

We’ve got the extra equity payments next followed by health insurance.

It’s likely that the health insurance pie grows a lot next year as it’s possible I’ll switch to a lower deductible insurance plans now that I have a chronic condition. I’ll have to calculate the expected costs of all my office visits, drugs and all and see if the increase in premium is worth it.

After that came the basics with groceries and utilities. It’s possible my grocery bill might go up soon since my diagnosis may mean I’ll have to try a few low inflammation diets to see if those helps and that kind of eating can be expensive. Utilities shot up a bit too as that include my first full quarterly water bill. Again, more perks of home ownership!

Overall, July wasn’t too bad. I saved money which is certainly better than the negatives I’ve already seen a few times this year and grew dividends. The nice part about this part of my investing journey is that even when I have a low savings rate, I’m still getting more and more shares as my dividends get bigger and bigger.

Naturally, I’d prefer to save more like I had in the past few years but hey shit happens and costs explode for one reason or another. In the end, that’s why I save money and having the flexibility to handle negative months and still keep trucking along is something I’m amazingly grateful for and not something to take lightly.

Thanks for hanging out and let me know how your July went this year.