Minimum Contribution Restarted

I have some good news to report. The minimum contribution to my dividend portfolio has been raised. As you may recall, in August 2021, I paused the minimum contribution to my dividend portfolio. The reasons for that were simple. I was planning on buying my beach condo, and I needed to ensure I have enough cash on hand to deal with that purchase. I simply couldn’t do both. It was a very difficult decision, but one that was the right thing for me to do. The good news is that I did buy that beach condo. But that was back in October. So, why am I now just restarting the minimum contributions? And for how much? Let’s dive in.

Why Now?

The simple answer is that owning the condo has been nothing but expensive! I keep having to spend money for one reason or another. I’ve spent money on removing the carpets and redoing the floors, as well as setting up my management system. So far, I’ve decided to manage the condo myself – in part to avoid the typical 20% cost that goes to the property managers. But that’s a post for another day. The point is that I’ve been spending money left and right. I even spent money on unexpected expenses that have arisen.

Honestly, it got to the point where I wasn’t sure how I was going to pay the mortgage in February! Haha, I know right! Last year, I felt like I was rich (far from it) compared to the low amount of available cash I had left over after the condo purchase. By definition, I was the quintessential example of being house rich and cash poor. I practically had zero dollars at the end of January!

That’s probably one reason why my current credit card balance is approximately $7000! An increase from the last time I reported my balance, which was at the end of January 2022. I wrote about it in my Credit Card Debt Progress Report post. Yikes!

So Again, Why Now?

Well, my financial situation is getting back to normal. I still don’t have an emergency fund! I am slowly working on it. It is a priority of mine to build up at least a cushion for my expenses. But, I don’t want to do that to the exclusion of other goals: such as dividend growth investing.

Additionally, I’ve finally started to get bookings, despite not ranking high on Airbnb or VRBO and despite not yet having any reviews! The busy season for vacation rentals is coming up, and I’m very excited for the future. However, I am taking things slow and trying to have a good system set up. But, so far so good.

I do know that my credit card debit is high and so is the interest I am paying on that debt! However, I fully expect to have a zero balance by the end of April – or an aggressive plan that will pay off my debt before the end of the year. So I’ll carry that high balance for the next couple of months (notwithstanding the increase). Then, I’ll payoff the balance in April or sooner rather than later.

So, to answer the question, I just feel more financially comfortable doing so. Restarting the contributions does not add financial stress to my situation. As the saying goes, personal finance is personal.

How Much?

Well, now that I’ve restarted my contributions, how much should I be contributing on a monthly basis to my dividend portfolio? Before I paused my contributions, I was putting approximately $1000 towards my portfolio every month. Unfortunately, I’m no where near that. But, we got to start somewhere.

I’ve decided that I will contribute a minimum of $150 towards my dividend portfolio. Of course, this is separate and apart from my Driving For Dividends project. This allows me to restart slowly and carefully.

I fully intend on raising this amount and I anticipate that I will be able to report another modest increase shortly. Any reported increase won’t impact my immediate goal of paying off my credit card balance by the end of April (or before the end of the year).

Conclusion

I have a lot of financial goals for the future, but not a lot of income. Most of the time I don’t feel financially stressed because I have a stable job with predictable income, and I keep track of my income and expenses on a spreadsheet. However, I don’t have a strict budget per say, but my system works for me.

I’m really trying to have a healthier relationship with my finances this year. So far so good. But despite a rocky start, I feel financially comfortable to restart the minimum contribution to my dividend portfolio. Hopefully, as the weeks and months go by, this minimum contribution will be increased.

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