April 2016 net worth update (+1.6%)

In April, I:

  1. contributed ~15% of the amount I can contribute to my 401(k) after-tax, for a total year-to-date contribution of ~40% of the maximum.
  2. sold the Q1 ESPP shares and transferred their value to my general savings account.
  3. paid half of my annual property taxes. They’re up about $1,000 for the year from what I paid four years ago.
  4. made my 2016 Backdoor Roth IRA contribution of $5,500.
  5. saw my tuition reimbursement for the academic period that started in January and some other work reimbursements.
  6. saved 79% of my net income for a total savings rate overall so far of 76%. Looking at my income spreadsheet, I saw about 40% of my expected gross income for the 2016 calendar year in the first four months of the year (first 33% of the year). I expect my savings rate to be about 60% per month going forward until I hit the Social Security maximum and that my overall savings rate for the year will be about 70% before grad school withdrawals.
  7. saw my net worth go up by $12,000 to $703,000, which if you’re following along closely is up $102,300 from my December 2015 reported net worth or about 17%. Four months is definitely the fastest I’ve seen a $100,000 increase in net worth yet!!! (note that I rounded this number differently than the ones in the table below) About half of that increase was updating the book value of my condo and the other half was savings / employer 401(k) matching / stock markets.

Since I have another $100,000 in the books, let’s take a look at the table I used in previous years:

31-Dec-2015 30-Apr-2016 YTD
cash $7,200 $8,500 +$1,300
savings $70,600 $73,900 +$3,300
investments $207,000 $251,000 +$44,000
+21.3%
mortgage $134,100 $131,100 +$3,000
+2.2%
net worth $600,700 $702,300 +$101,600
+16.9%
taxable assets – debts $41,600 $30,300 +$11,300
+27.2%
$ until FI* $783,300 $642,600 -$140,700
-18.0%

*$ to FI=(average monthly spending over the last 12 months – mortgage payment)*12*25 + condo value – net worth

Cash is probably up because I’ve been underspending my budget so far this year. Savings is only up a small bit because I have been spending more from my HSA than I put into it so far this year, I spent from my savings account while frontloading my retirement accounts, and I used some money from my general savings account to fund my Roth IRA for 2016. Investments are the real story here since that was what I was concentrating on in the first third of 2016.

I am still investigating it, but if I plan to retire in my thirties or early forties, I’m not sure the Mega Backdoor Roth IRA is that useful considering that assuming 8% returns and a rate of inflation of 3.22%, I already have enough in my Roth IRA and 401(k) to support me at my current lifestyle after age 60. Not all employers offer it, so I’ve also debated using it while I can. I still have some time to decide as it would take me 3-4ish paychecks (about 2 months) to finish it. I’ll make the decision by October.

My savings goal for the remainder of the year is to build up my liquid funds (general savings account, ESPP funds, Series I Savings Bonds, NetSpend accounts, and taxable index funds) to two years of expenses which with the amount the mortgage would be reamortized to in early 2018 equates to about $90,000. As of April, those accounts add up to $65,400, which is a $3,900 improvement over December 2015. I estimate that it will take me most of this year to save up that amount, at which point my current plan is to go back to pre-paying the mortgage.

Expenses: I spent $6,149 in April including the mortgage or $5,122 without it, with no charitable donations this month. That breaks down to:

  • $3,609 in fixed/unavoidable expenses: HOA dues, mortgage payment, property taxes, medical bills, and transportation
  • $2,778 in discretionary expenses: clothing, entertainment, food, eyebrows, toiletries, vision, fitness, shopping, and travel

Some of my controllable expenses broke down as follows:

  • $1,310 Clothing [$1,875 total so far this year; $1,760 at this point last year] – cute belt ($31), hiking pants ($93), one summer dress ($50), spring jacket ($201), wind breaker ($109 – I’m kind of torn on this one, so if I don’t wear it at all in May, I’ll return it), sandals ($88), sleep top ($49), one t-shirt ($16), two long-sleeved tops ($129), and clothes mailed for return ($545)
  • $31 Entertainment/Social [average so far this year: $48, average last year: $116] – LastPass, using some cash from last month for something else, and a little bit of eating out with friends
  • $105 Food [average so far this year: $87, average last year: $51] – this covers all discretionary food. I have still been lazy with taking my lunch to work.
  • $0 Cell phone – got a rebate that should cover my Cricket cell phone bill for March and April and all but $5 in May
  • Half of my annual property taxes
  • $239 Health – yay for high-deductible plans…
  • $360 Vision – a second pair of glasses feels like such a luxury!
  • $20 Eyebrows
  • $112 Make-up – time to stock up
  • $8 Toiletries [average so far this year: $39, average last year: $48] – allergy medicine
  • $338 Recreation: my running shoes that I love were discontinued in favor of a new version that doesn’t fit me, so I bought three pairs discounted on Amazon. I also bought a running armband, a few barre classes, and sticky socks.
  • $24 Shopping: bought a sun hat and used a $25 gift card
  • $169 Transportation: tolls replenishment (x4) and two tanks of gas
  • $471 Travel: booked a long weekend trip!

In total, I’ve spent $14,219 after education and charitable expenses and my budget was for $48,000, so I’m on track to underspend my budget by about $5,000 at this point. We haven’t booked our fall trip yet but since I hit the deductible on my health insurance plan this month, that spending will reduce significantly. April is always one of my more expensive months because of the property tax payment.

Readers, how was your money in April?

16 thoughts on “April 2016 net worth update (+1.6%)

    • Yup, I am super stoked about that! They’re sure getting faster. The next one will be slower than that ;) I love the perspective of being 50% of the way to FI. It makes me feel better about April being expensive!

  1. That’s a huge bump! Nice work. (And shoutout to the stock and real estate markets for the boost!) :-) It’s hard for me to imagine that you would need the mega option, but makes sense to think about it, I suppose. I agree with FF — the second half of your saving for FI will for sure happen more quickly than the first half.

    We had a good April — came out well ahead despite a very large federal tax payment on tax day, which was a relief. I was sure we were going to have a dip for the month, or maybe break even. And now I’m basically refreshing my mortgage balance over and over to see if it’s ticked down to five digits yet. That’s definitely my distraction of the day. :-)

    • My overachiever-perfectionist-OCD personality has a really hard time with not maxing out all available retirement accounts ;) The mega does have some interesting qualities for if I ended up working past my mid-forties I think was the breaking point. This is about 6.5ish years post-college to get to 50%, so we’ll see how the next 6.5 years go unless I can get there sooner.

      Has your mortgage balance ticked down to five digits yet???? That is super exciting! I would be doing the exact same thing! :) I’m glad your April turned out okay. I find sometimes with a good nest egg to start, the “bad things” like a very large federal tax payment don’t seem to be that bad in the grand scheme of things.

  2. How do you decide where to put new liquid savings? I’m most interested in the choice between Series I Savings Bonds, NetSpend account, taxable index funds, other savings, etc..

    • This is something I’ve been thinking about a lot lately. I actually prefer taxable index funds over CDs, I think.

      Once I decided I wanted two years of liquid expenses plus grad school tuition ($136,000 at the time), well that was far more cash to keep on hand than I would generally prefer (okay maybe not generally), but still something to think about. I’ve debated putting the grad school money into some CDs because theoretically there’s some timeframe on it, but that’s also really flexible (i.e. if I kept working full-time, CDs would be fine, but if I quit my job to work on the degree full-time, then CDs would end up getting broken really quickly…).

      I have about $15,000 in taxable index funds which is about 4ish months of spending. I also have some Series I Savings Bonds from 2013 that I bought for $10,000 and are worth a bit more than that now, about 2.5 months of spending. I count those two things technically in investments in my net worth.

      With the “savings” money, I settled on was chasing bank bonuses a bit. I did a small bank bonus at a credit union and moved most of my tuition money there to get it. That required keeping my money there for six months to keep it. I then bought $10,000 more of Series I Savings Bonds back in November. Sometimes Series I Savings Bonds have reasonable rates and sometimes not. Mine are currently earning 1.54% or 1.64%, which is a bit better than a 1% savings account. It looks like for the next six months they won’t have a good rate. I sort of see them as a CD that changes rates to keep up with inflation and that I can withdraw at any time after 12 months (with a 3 month interest penalty within the first 5 years). If I was in a cash crunch, I would use up all of my normal savings account money before selling them, but I would probably sell them before selling taxable index funds. I then have two NetSpend savings accounts at 5% each for $5,000 and the rest of the savings is in my Alliant savings account. Once I get to the two year level in liquid accounts, my current plan is to go back to pre-paying the mortgage, but we’ve been contemplating selling my condo and buying a house in the next couple of years and so I might just keep even more cash around for a bit since raising an $80,000 to $100,000 down payment without selling my condo would take some cash hoarding.

      If we stayed in the condo and didn’t want to buy a house and my mortgage was paid off, then I think I would consider all NetSpend and Series I Savings Bond money part of my “investments” and keep about six months in cash which honestly for me the magic number of being happy with an amount in my general savings account seems to be $20,000 which is spot on with $3,000 of non-mortgage expenses per month times six being $18,000. I don’t like that amount being split up too much – I want to see that much solid cash in that account. With the mortgage paid off, I would be adding to taxable accounts after my 401(k) and Roth IRA, so having two years liquid would be pretty easy with my savings rate. That’s the $20,000 in cash savings plus $20,000 in Series I Savings Bonds, $10,000 in NetSpend accounts, and then $22,000 more in taxable index funds, which is pretty much already there. Perhaps if the NetSpend accounts went away, I might replace that $10,000 with three 5 year CDs or something to have some more principal-safe money that isn’t just stuck at whatever the current going savings account rate. Also, I see taxable index funds if you have enough of them as part of my emergency fund really since you can sell them easily other than having to pay capital gains taxes on the proceeds. Not everyone does, but I’m not scared (I hope!) to sell them in a pinch.

      Hope that helps!

  3. This is amazing! I just started playing around with our numbers a bit more today. I was running calculations of what we spend per month now versus what that number would be once we pay off our mortgage. It’s so exhilarating!

  4. As per taxable index funds, even in the Great Depression you could have sold them for 90% below what you bought them at. I’m not trying to joke but if you saved $10 million for example you could put the whole thing in the 500 Index and if it fell by that amount you still have $1 million so why worry?

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