|liquid assets – debts||$49,000||$36,700||$15,000||+$21,700
|$ until FI||$823,900||$890,600||$846,400||-$44,200
Finally an interesting month! May saw my first of two expected bonuses for the year. It was about 20% smaller than it was supposed to be (thanks stock market), which led me to get upset with myself for throwing a lot less at the mortgage than I had thought I would. But you know what? I threw more at my mortgage from my regular paycheck than I had planned on (almost double!) and I really can’t control how much my bonuses end up being – just what I do with them. I added the X% of my gross from the bonus to my donations budget and threw the rest of it at the mortgage – what else can I really do?
Now with this big jump, I’m looking at when I’ll surpass $400,000 in net worth – sometime between July and September most likely. And $500,000? Well that will most likely happen sometime next year, probably in the summer as well.
I decided to start tracking a new metric here: $ until FI. I’ve rounded the number to the nearest $100 like all of the other numbers. The formula I’m using is (Rolling monthly average expenses – Mortgage payment) x 12 months x 25 + Condo value – Current net worth. I thought it would be interesting to track this since it is not only affected by the current amount of money I’ve saved, but also by my current spending level. It is really strongly affected by small variations in spending. Some past numbers on this:
- EOY 2010: $1,027,400 (average monthly spending $3,600)
- EOY 2011: $856,500 (average monthly spending $3,300)
- EOY 2012: $1,104,800 (average monthly spending: $4,220)
- EOY 2013: $823,900 (average monthly spending: $3,730)
It sure has fluctuated a lot! So my number is definitely a bit of a moving target and definitely a ways away and I’m sure it’ll continue to change before I hit it, but it’s still interesting to see. If my spending this year ends up being exactly the same as last year, then I should lower the $ until FI marker by $100,000 to about $723,000 and if I lower the $ until FI marker by ~$100,000 each year, it should take me about 8.5 years to reach FI at my current spending.
Expenses: I spent $2,860 in May after the mortgage or $1,835 without it. So far, my total spending for 2014 is $19,880, which is $47,712 annualized (woo! the annualized figure is under $50,000!) To hit my $38,500 spending goal for the year, I need to spend no more than an average of $2,660/month over the remaining 7 months this year.
Some of my controllable expenses broke down as follows:
- ($65) Summer pants – returned two of them. I’m so glad I ordered four because one of the colors I loved online, I didn’t love in person and vice versa with another pair.
- $45 Skirts – a colorful, knee-length skirt
- $91 Jewelry – since it is now summer and I’m not wearing scarfs like I do in the winter, I wanted some fun and cheap necklaces to use to accessorize. I bought three and my goal is to keep one or two and return the other(s). They were all 40% off at least!
- $59 Running shoes. These need to be replaced every 6 months with how much I walk.
- ($28) Tops - returned one of the button-downs I bought in April and bought another camisole.
- [Total clothing spending in May: $102]
- $235 Entertainment/Social – And we’re back to a more normal month for this year. [average this year: $229, last year: $224] This was about 80% date nights with a small amount going to cash withdrawals, a few movie rentals, and hanging out with friends.
- $13 Eating out by myself [average this year: $12, last year: $25]
- $327 Groceries – this was for two. [average this year: $245, last year: $152]
- $176 Work lunches [average this year: $157, last year: $77]
- $46 Internet - $7 less since I overpaid by $7 last month
- $25 Household goods [average this year: $16, last year: $29] – I accidentally bought a four year supply of garbage bags. Go online shopping.
- $77 Hair cuts – my annual hair cut.
- $20 Eyebrows
- $0 Toiletries [average this year: $11, last year: $31] – This is lower because some of these items have been lumped into groceries since we’re splitting.
- $290 Recreation: a yoga mat bag and a yogitoes yoga mat towel, plus a 10 pack of classes at a barre place near work that I’m liking so far. The yoga mat towel made a HUGE difference.
- $30 Travel – preparation for an upcoming weekend trip
This month was reasonably average for spending, which was nice!
I would love to get my spending down closer to 2011 levels, but as I looked over the electricity bill I just got, I’m realizing that may not be completely possible, ignoring lifestyle inflation. For example, my property taxes and HOA dues went up a combined $900 this year.
Electricity rates are up about 7%, so even though I am using less electricity than I did last year, I’m paying more. In 2013, I spent $699.36 on electricity. If I take the amounts from the bills I have so far and otherwise project with last year’s usage and this year’s rates, I will end up spending $709.57 in 2014 on electricity. I used 8,702 kWh in 2013 and that forecasting shows about 8,361 to be used in 2014, about 4% fewer kWh used while spending about 1.5% more $-wise. I realize that the actual $ increase for electricity is pretty small, but it is still an increase and not a decrease, despite my efforts to reduce the kWh used.
Savings: $22,300 (same)
These funds are spread across a Chase savings account, a general online savings account, a checking account that gets free ATM fees anywhere in the world, and my health savings account.
I’ve decided to keep the Chase savings account open even though I could now close it with no penalty as it has come in handy a few times, for example to get a deposit rather than a statement credit for credit card rewards and then immediately send them to the mortgage. Plus, it is only the opportunity cost on $300, which at the Ally online savings account rates loses me $2.55/year.
Nothing interesting is going to happen here for a while…
Investments: $152,300 (up $4,300 or +2.9%)
This includes my Roth and Traditional 401(k), my 401(k) employer matching (fully vested!), my Roth IRA, my taxable investments including stock index funds and Series I Savings Bonds.
The change here comes from:
- Over $2,000 in stock market gains and interest (more than I put in this month!)
- April paycheck 401(k) contribution and employer matching
Mortgage: $153,000 (down $21,500 or -12.3%)
Some statistics here:
- 2.5%: the interest rate on my 5/1 ARM
- February 2018: when the interest rate on my mortgage is set to reset, possibly to 7.5%
- 2.5: years of payments eliminated with this month’s pre-payments
- $20,900.00: extra payments made on the mortgage this month (woo!)
- $43.50: interest this month’s extra payments will save me on the next regular payment
- 35.4%: portion of my regular payment went to interest (originally was 59%)
- 57.3%: amount of equity in my condo, assuming purchase price
- 46.5%: amount of the mortgage I’ve paid down
Now this was an interesting month for the mortgage! I threw pretty much all of my bonus at the mortgage (minus the X% of gross to my charitable donations budget). Doing so shaved off 2.5 years of mortgage payments, saved over $40 of June’s interest cost and got me only 3.5% or $10,000 away from having paid off 50% of the mortgage. I’m currently estimating that I will hit that marker around September.
I also found quite a bit of extra money in my checking account when I zeroed it out at the end of the month, which resulted in a $3,000 extra principal payment from my paycheck instead of the usual $1,800! That meant I saved ~72% of my regular net income this month, in addition to my bonus!
TOTAL: $387,100 (up $25,300 or +7.0%)
I ended 2013 with a net worth of $345,900, so I’ve seen a change of +$41,200 or +11.9% so far this year. I’ve set the y-axis on this graph to $465,000 so we can see how my net worth grows towards that throughout the year.
And let’s take a look at how I did on April’s goals:
- Find and buy a second skirt. (I’m currently eyeing eShakti.) DONE! I love it!
- Use my debit card for the small transactions – under $6 restaurants, under $15 2% cashback, and under $30 1% cashback. DONE! This was pretty easy to do. I finally came up with a simple way to track this. Since Barclaycard expanded their definition of “travel” costs, I’ve gone back to using that as my default credit card.
- Decide what to do about the new yoga studio. Do I want to buy a yoga towel or a better yoga mat? A better bag to make carrying my yoga mat to work and then to yoga easier? What I have now (an $8 yoga mat, no towel) is definitely not going to work if I want to keep going to hot yoga. DONE! I did buy a yoga mat towel and a bag and the towel has made things much better. I’m still having troubles with the heat, so I decided to try the barre studio by work for 10 classes to get into better shape and then try hot yoga again (with a 10 drop-in commitment).
- Enjoy spring! DONE! This one was far too easy.
- Trust my gut instincts more at work. I’m no longer a newbie and I do know more than I think I do. PASS! I’m definitely improving here, but now things are changing again a bit and figuring that out over the next few weeks is going to be interesting.
- Send $1,800 to the mortgage on pay day. SUCCESS! I actually sent $3,000 to the mortgage on pay day and I think I’ll end up sending another $100 with the regular June payment :)
- Add X% of the gross of my bonus to my donations budget and send the rest of it to the mortgage. I am super excited about how my finances will look at the end of May! DONE! My donations budget is at last pretty much in the clear and I’ll probably make my next donation in August since I’m trying to make at least $100 of a donation at a time.
- Clean the balcony. PASS! We cleaned part of it?
- Call my parents four times. (I’ve been lacking on this lately.) PASS! I think I might have called them four times. Definitely at least twice.
Apparently I should make harder goals! Now for some new goals for June:
- Go to the barre place by work twice per week before/after work.
- Commit to some form of exercise each weekend day, any of: a) 30-60 minute walk, b) 45 minute run, c) any distance/length of bike riding, d) going to a morning class at the yoga studio near my place (three time choices!), or e) doing some sit-ups and push-ups at home. Log it in Google Calendar too.
- Send $2,000 to the mortgage on pay day.
- Keep my total spending (including the mortgage!) under $2,400. This should be do-able, especially since I don’t have to pay for groceries.
- Enjoy the first of our summer weekend getaways!