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Poof goes the rollover (and my 2015 investment plan and updates to my Investment Policy Statement)

I realized in hindsight that this could have been three separate posts, but I’m going to leave it as is.

Rolling over a 401(k) is a slow process stuck in the archaic ages. At the beginning of April, I initiated the termination from my old employer’s plan. The next day, I had my Roth 401(k) money invested in my Roth IRA. Three business days later, I had in my hands a check for the tens of thousands of dollars that I had in my pre-tax 401(k). I filled out the rollover paperwork that I had acquired from the new 401(k) plan a few weeks prior and mailed off the check the next day, with the morning mail pickup. Within 10 business days of the original request, the funds were in my new 401(k) and I could breathe clearly again.

It was pretty scary seeing the ~$100k in my 401(k) disappear the evening after I started the process and the vast majority of it still not in a bank account. It definitely made me question my attachment to the Backdoor Roth IRA and make me wonder if I was making the right decision not rolling my old 401(k) into a Rollover IRA. Once the funds had arrived in the new 401(k) though, I was definitely in agreement that this was the best and simplest decision, to keep all of my 401(k) money in one spot.

My asset allocation was quite a bit out of whack during this time – basically all of my fixed income was in my 401(k) that disappeared. For reference, today, 2/3 of my fixed income is in my 401(k). Since my 401(k) is a bit over half of my investments, that wasn’t the end of the world. My allocation looked something like 23% fixed income (not bad), 57% US stocks (way too much), and 20% international stocks (way too little).

Overall though, the rollover went reasonably smoothly and so far, I’m glad I did it instead of trying to manage two 401(k)s.

 

My 2015 investment plan

Since there was a large chunk of money to be invested, this was a great time to re-balance and set up my 2015 investment plan!

I’m working with a target asset allocation of 28% fixed income (age in bonds + 1 percentage point for having > $100,000 in investments) and then the stocks split 50/50 to US and international.

Category EOY Value Current Missing
Total $218.4k $87.4k $131.0k
Fixed income $61.2k $18.6k $42.5k
US stocks $78.6k $52.1k $26.6k
International stocks $78.6k $16.8k $61.9k

The missing chunk represents the rollover, my mid-April through end of year pre-tax and after-tax 401(k) contributions, and expected 401(k) employer match contributions. This year is going to be reasonably easy to re-balance with contributions and not needing to exchange anything.

At the moment, my Roth IRA holds US stocks, so I just sent my Roth 401(k) to the Total Stock Market index fund there. I used to hold shares of an Extended Market index fund in my Roth IRA as well to balance out the large portion of my 401(k) that was in a S&P 500 index fund, but I now have access to a Total Stock Market index fund in my 401(k) and don’t need to worry about that anymore, so I exchanged all of the Extended Market index fund into the Total Stock Market index fund.

Since my Roth IRA holds mostly US stocks and that’s where my after-tax 401(k) contributions will go, I plan to put my after-tax 401(k) contributions into a US stock market index fund in my 401(k) until I move the money over to my Roth IRA since it’ll take several months to max it out.

That means my 2015 contributions will be allocated as follows:

Account Category $
After-tax 401(k) US stocks $Xk
Pre-tax 401(k) US stocks $26.6k – $Xk
International stocks $61.9k
Fixed income $42.5k

I calculated the percentages for each of the pre-tax 401(k) contribution categories overall for the year and then applied those to the amount that was being contributed this week (the rollover and the mid-April paycheck deductions and employer match).

That means that the only manual thing left to do for my investments this year is to move my after-tax 401(k) to my Roth IRA in the fall. I’m a little overweight in fixed income at the moment (30% of my investments) since a big stock contribution will come later in the year, but that’s perfectly fine.

I’m so happy to have finally finished this! Usually I do this work in December/January and it’s now late April…

 

Updates to my Investment Policy Statement

With the new job and 401(k), I decided it was time to check up on my Investment Policy Statement, which hadn’t really been updated since early 2012.

My long-term goal has always been to be able to retire at 50 with a paid-off home and enough in investments to cover estimated living expenses at a 3% withdrawal rate. I also added a medium-term goal of having the mortgage paid off by my 30th birthday and enough in investments to cover my then-current expenses at a 4% withdrawal rate. This sounds like a Big Hairy Goal, but I’m actually on track to meet it.

I changed my IPS to reflect my plan to lump sum my 401(k) contributions since it no longer affects my employer match. I also added some notes on my feelings about rollovers.

I’ve been contemplating asset allocation a lot over the last six months or so. I’ve been using the following model for the last several years:

The percentage of the investments in stocks is 100 minus (at the time of re-balancing):

  • My age
  • The multiples of $100,000 in investment assets that I have

I added an additional note of: “This formula will continue until I reach 30% in fixed income and 70% in stocks and then it will stay there until I choose to re-evaluate it.”

Why? I’ve realized that with the possibility of early retirement, I’ll need more money in stocks than I’ve previously considered. If I end up working past when a 3% WR on my investments is achieved, then I’ll re-evaluate my asset allocation formula.

“I want the US stocks to replicate the entire US stock market.

I don’t want to stake everything on the US stock market. Market weighting sounds good, so my ideal split would be 50/50 on US/International Stocks.”

My plan for now is to keep my Roth IRA 100% stocks, all of the fixed income in my 401(k), and all stocks in my taxable investment account.

There was an interesting section at the bottom of my IPS showing short-term goals, including estimated net worth for 2010 through 2014. I surpassed all of those numbers, some by a long shot! Some of my goals for the next 5 years include getting my savings rate above 80%, paying off the mortgage, reaching a $1M net worth by the end of 2018, and reaching a $1.5 M net worth by the end of 2020. It seems pretty crazy to imagine my net worth going from the mid $500k range today to $1.5M in 5.5 years, considering that it took the last 5 years to build it up to $500k, but that’s what my spreadsheet shows! The next five years are going to be some incredible wealth building years and I thank all of you readers for following along on this wonderful ride!

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March 2015 net worth update (+4.3%)

31-Dec-2014 28-Feb-2015 31-Mar-2015 MoM YTD
cash $12,300 $6,600 $9,300 +$2,700 -$3,000
savings $47,800 $42,200 $61,900 +$19,700 +$14,100
investments $164,500 $176,500 $176,200 -$300
-0.2%
+$11,700
+7.1%
mortgage $143,000 $141,500 $140,800 +$700
+0.5%
+$2,200
+1.5%
net worth $531,600 $533,800 $556,600 +$22,800
+4.3%
+$25,000
+4.7%
taxable assets – debts $70,600 $73,800 $53,700 +$20,100
+27.2%
+$16,900
+23.9%
$ until FI $845,000 $785,600 $826,300 +$40,700
+5.2%
-$18,700
-2.2%

Yay, I finally got some big paychecks from my new job this month (which made up for all of the time with no income!) and I won’t get another one until September, but that’s okay because I’m going to max out my 401(k) as quickly as possible. I crossed off my first financial goal for the year of having $60,000 in savings for Operation Bayes. I have a bit more cash than that right now, which is so that I can cover expenses from cash while I max out my 401(k). My first 401(k) deduction for the new job came off my paycheck AND it was deposited into my actual 401(k) account, which is quite exciting! :)

I’ve been running the numbers and it looks like I should come within $1,000 of saving 80% of my net income this year!!! That’s been one of my targets and I would be very excited if I hit it. In fact, I saved 78% of my net non-bonus income this month! My original goal for the year was to save 70% of my monthly net income, but now I think that is too low of a goal and I should be shooting for 75% and then 100% of bonuses!

Expenses: I spent $5,718 in March including the mortgage or $4,691 without it. Some of my controllable expenses broke down as follows:

  • New pair of running shoes
  • Three layering camisoles
  • ~$400 end-of-season sales on outerwear: a vest (50% off), a light jacket at 20% off, and a warm jacket at 30% off. I haven’t bought a warm jacket in 5.5 years, so I’ve been budgeting for that one for a while.
  • Six pairs of socks
  • Returned all but $60 of the online shopping for shorts/skirt from last month
  • One pair of leggings
  • Online shopping to find a pair of jeans since I changed sizes AGAIN and not back to my previous size. I only plan to keep one pair, so I should see a ($500) clothing expense next month.
  • $1,200 total clothing
  • $452 Entertainment/Social [average so far this year: $248, average last year: $211] – Renewed our theater season tickets for next year and enjoyed some delicious meals out.
  • $1 Eating out by myself [average so far this year: $4, average last year: $18]
  • $177* Groceries [average so far this year: $118, average last year: $185]
  • $87 Work lunches [average so far this year: $45, average last year: $147] – Food at my new office is much cheaper than at my last job :)
  • $29* Household goods – paper towels, water filters, and some other cleaning supplies
  • $34* Internet
  • 4 months of HOA dues – we rearranged how we’re splitting expenses and I paid my boyfriend back for the last 3 months of HOA dues and then paid the April dues. This means that I removed several other items from my budget going forward.
  • Renewed my driver’s license early because I kept getting anxious about forgetting to renew it
  • Photos for my passport renewal
  • $46 Medical
  • $20 Eyebrows
  • $12 Toiletries [average so far this year: $14, average last year: $33] – over the counter medicine
  • $177* Shopping – some food storage containers, a speaker, and a case for my new sunglasses (that were covered by insurance 100%!)
  • $24 Fuel [$63 so far this year, $0 at this time last year]
  • Travel – booked flights and an Airbnb to go to a friend’s wedding later this year

* indicates expenses that were in the joint account. I calculate my expenses by tallying up all of my individual expenses for the month, adding in my mortgage payment, and adding in half of the joint expenses.

Gah, things really added up this month. My estimate for April is to have net expenses of only $500 after the mortgage payment, HOA dues, and property taxes. (That figure assumes a bunch of returns of the clothing purchases this month.)

Savings: $61,900 (up $19,700)

These funds are spread across a checking account that gets free ATM fees anywhere in the world, my new and old health savings account, a savings account at my credit union, and a bit of a buffer in my credit union checking account.

Transferred a good chunk here from my paychecks this month! I was pretty excited to do that first savings transfer this month!! :D I think that was my first transfer to savings/mortgage/investments from income since November.

Investments: $176,200 (down $300 or -0.2%)

This includes my 401(k) from my former employer: Roth, Traditional, and employer matching (fully vested!), my Roth IRA, my taxable investments including stock index funds and Series I Savings Bonds.

The change here comes from:

  1. Q1 dividends
  2. Some healthy losses in the stock market
  3. The first contribution to my new 401(k)

My old 401(k) happily stayed above $100,000. I’m going to roll my old Roth 401(k) to my Roth IRA, but my new 401(k) should possibly still be above $100,000, assuming that the rollover manages to happen all within the month of April.

At the beginning of April, I will initiate the rollover of my old 401(k) and my new 401(k) will see a strong influx of new cash from my paychecks as well. I’ll also see my first employee stock purchase plan deductions happen in April.

Mortgage: $140,800 (down $700 or -0.5%)

Some statistics here:

  • 2.5%: the interest rate on my 5/1 ARM
  • January 2018: when the interest rate on my mortgage is set to reset, possibly to 7.5%
  • 0: months of payments eliminated with this month’s pre-payments
  • $0: extra payments made on the mortgage this month
  • $0: interest this month’s extra payments will save me on the next regular payment
  • 28.7%: portion of my regular payment went to interest (originally was 59%; down 0.2 percentage points)
  • 60.7%: amount of equity in my condo, assuming purchase price (up 0.2 percentage points)
  • 50.8%: amount of the mortgage I’ve paid down (up 0.3 percentage points)
  • $24,500: amount extra remaining to pay to be on track at the end of 2015 to pay the mortgage off before the rate resets in 2018

I’m just letting the regular, automatic payment go for now, until my cash savings is at the level I want and my 401(k) is fully maxed out.

TOTAL: $556,600 (up $22,800 or +4.3%)

I ended 2014 with a net worth of $531,600, so I’ve seen a change of +$25,000 or +4.7% so far this year. I’m going to set the y-axis on this graph to $650,000 so we can see how my net worth grows towards that throughout the year.

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Frontloading my 401(k)

I’ve often thought about front loading my 401(k), i.e. contributing the full amount at the beginning of the year in as few paychecks as possible, but never done it.

Why? My former employer, although they did a true-up match the following year, would only contribute the matching money each paycheck if you contributed at least X%. So if I front loaded my contributions, then I would possibly not get the full matching money if I was no longer employed with them when they did the true-up.

With my new employer, I can maximize the 401(k) match even if I front load my 401(k) contributions.

Why do I like the idea of front loading my 401(k) contributions? I like going through my list of savings goals for the year and checking off one at a time, only concentrating on one goal at a time.

1. Get my savings account up to $60,000. done with mid March paycheck
2. Contribute the full $18,000 to my pre-tax 401(k). will be done with end of May paycheck
3. Contribute the maximum I can to my after-tax 401(k) and then transfer it to my Roth IRA. will finish with a September paycheck
4. Contribute the maximum I can to the Employee Stock Purchase Plan. ongoing
5. Pay down the mortgage by $28,671.79. this one probably won’t get done, but I’m forecasting I’ll get 75% of the way there.

I used to not like the idea of the small paychecks, but it has grown on me since I have a nice cash buffer now. I plan to use the BrokerageLink feature of my new 401(k) to set up a three fund portfolio and I can’t set that up to automatically put money into a specific allocation like I can with the regular funds in the 401(k) plan, but by front loading my 401(k) contributions, the money will only be sitting in cash for ~2.5 months if I let it sit there until all the money is there and then invest it. If I wasn’t front loading, I would feel a need to log in more often and set up the money.

Why have I always wanted to do this? Over the last few years, I’ve often wanted to leave my job before the end of the year and it would have been nice to have already maxed out my 401(k), be on the path to get the maximum match, and not worry about that while I was contemplating quitting my job.

Front loading also means I don’t have to worry about getting the contribution % exactly right to max it out with my last paycheck of the year or worry if my last paycheck will actually come in the following year or if there are more paychecks than expected.

I had forgotten about this idea, even after thoroughly reading my new job’s 401(k) plan’s Summary Plan Description (SPD) in detail to learn as much as I could about the after-tax contributions and how the matching worked. But then I read Mad Fientist’s blog post on why you should front load your 401(k) and I was hooked!

Readers, have you ever considered front loading your 401(k)?

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An Ode to My Old 401(k)

When leaving a job, there are a few actions one can take with their old 401(k):

  1. Do nothing and leave it where it is, paying any fees your employer charges you now that you’re no longer with them
  2. Withdraw the entire balance, paying a 10% penalty and regular income taxes (ew, this would cost me about $40,000) based on the current balance
  3. Roll it over into the new employer’s 401(k) plan
  4. Roll it into an IRA

I definitely don’t want to withdraw the balance with how much that would cost in taxes and the fact that I would then lose the tax-deferral on my ~$100,000 for another 34+ years! I also don’t want to roll it into an IRA as then I would lose my ability to do a Backdoor Roth IRA. So there rules out half of my options!

The choice between the other two options depend on what the options look like in the new 401(k) compared to my existing one. My employer will charge a small quarterly fee that basically equates to a ~0.04% additional fee with my balance, which is actually a decent chunk considering that the funds in the new plan are cheaper than the equivalent funds in my old one.

When I first started investing, I posted a portfolio review on the Bogleheads forum and got some helpful feedback. Since then, I haven’t requested any feedback from them, but I still use their format to do a periodic review of my investments. I find it’s a great way to take an overall look at my portfolio. I follow the format right down to the questions asked. Here is the questions I asked myself this time around as I was figuring out what to do with my old employer’s 401(k):

  1. My old 401(k) will start to charge a quarterly fee at some point (turns out this kicked in last week) that equates to about 0.04% annually of my current balance. I don’t want to roll my old 401(k) to an IRA since that would cut off my access to the Backdoor Roth IRA, but should I roll it into my new 401(k) plan? The only catch I can see here is that if I roll the old 401(k) out of the plan, then if I were to return to that employer in the next few years, I would have to start the vesting period over again.
  2. My new 401(k) plan allows me to contribute after-tax in addition to pre-tax. It also allows me to do an In-Plan Roth conversion or I can instead move the money to my Roth IRA. Which is a better option?
  3. The international stock index fund I have access to in my new 401(k) doesn’t include small-caps, but the one in my old employer’s 401(k) does. Is that a deal breaker to me?
  4. I see a few options here:
    a) roll old 401(k) into new 401(k), do in-plan Roth conversions to keep things simple
    b) leave old 401(k) where it is until I don’t need it any more to keep my international stock allocation out of the new 401(k) and then roll it into the new one (move after-tax 401(k) contributions to Roth IRA)
    c) roll old 401(k) into new 401(k), but move after-tax 401(k) contributions to Roth IRA
    d) leave old 401(k) where it is and do in-plan Roth conversions

I then made a huge spreadsheet to compare options A, B, C, and D for question 4. B was much more expensive than A or C due to the fee my old employer will start charging soon, so I didn’t make a spreadsheet for option D at all. C ended up being cheaper than A for the first several years and then eventually A became cheaper, but not by a huge margin either way. This makes it a strong vote in favor of option C.

I’m about two months’ away from Vanguard telling me my 5 year return (it’s the small, psychological things…) and if I roll my old 401(k) out before then, I won’t see that number on Vanguard’s site…

I also decided that since the international stock index fund I have access to in my new employer’s 401(k) plan isn’t as complete as the Vanguard one, I’m going to try to keep as much of my international stock allocation as possible in my taxable and Roth IRA accounts. It’s currently the only fund in my taxable account, so I’ll do some rearranging in my Roth IRA at some point.

This also answers question 2, suggesting that I should move the after-tax money to a Roth IRA instead of doing an In-Plan Roth conversion. I’m going to see about rolling the Roth portion of my old 401(k) into my Roth IRA and otherwise, I’ll wait until early May to roll the pre-tax portion to my new 401(k).

I’ve started investigating how to do the rollover. I called the old 401(k) plan administrator and they said that I can roll the Roth portion into my Roth IRA and the pre-tax portion into my new 401(k), so long as I do it all at once. I can initiate leaving the old plan online and the funds should get to my Roth IRA within 2-3 business days. The new plan required me to request some papers to be mailed to me, which will take 3-5 business days, and then I’ll take a look at things again. The telephone rep from the old plan told me that the new plan will most likely require a check to get mailed to them, which will take about 2 weeks. My boyfriend and I were both pretty amused/confused at how much mailing was involved in this process despite the fact that it is 2015…

Yay for a plan (though still with some details to fill in) on this at last! It was stressing me out quite a bit to be unsure what to do with this, especially since my old 401(k) is worth about $100,000, which is about 55% of my overall investments.

Here’s a graph of my old 401(k) balance over the last ~5 years, as an ode to it. It has been a good 401(k) to me over the last five years and I will miss it. (I also refused to shred my old health insurance card. It’s with my previous health insurance card. Yes, I am a bit of a hoarder…) You can see that I didn’t contribute as much in the first year, but I started maxing it out partway through 2011 and it has grown quite nicely since then!

Ode to my old 401(k) balance

Readers, what do you usually do with your old employer’s retirement plan when you leave?

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2015 Savings Plan

Now that I’ve started the new job and have a pretty good understanding of all of the benefits available to me, I finally sat down and made a savings plan for the year. I feel so much better having done this! Usually I do this in November/December, so it’s been stressing me out a bit to not have this already done and be so far into the year.

Reminder: Savings Goals

First, let’s check in with the vague savings/investments goals that I made for the year:

2) Contribute the maximum to all tax-advantaged accounts available to me. This means $5,500 in a Backdoor Roth IRA, $18,000 in a pre-tax 401(k) and possibly some additional funds to the after-tax 401(k) and possibly my 2016 Roth IRA amount in a savings account ready to deploy in January. This will account for probably about 2/3 of my savings in 2015.

6) Contribute enough to a Health Savings Account such that Out Of Pocket Maximum ~= Current HSA balance + Employer contribution + my contribution.

7) Succeed at Operation Bayes – I’ll explain this later.

9) Save 70% of my net income monthly…and 100% of my bonuses. (Yay for a big raise that will allow me to save that much of my monthly income!)

10) Contribute the maximum that I can to the Employee Stock Purchase Plan.

11) Pay down the mortgage with any funds that are leftover after 2), including the proceeds of 10).

Plan

I already contributed $5,500 to a Backdoor Roth IRA at the beginning of January, so that’s checked off for sure.

1 – 401(k)

I’ve figured out how to maximize the match on my new employer’s 401(k) and it’s pretty easy. I just have to average X% or more of contributions over the course of the year and I’ll get the full match throughout the year. Easy peasy! I’m going to contribute to the 401(k) evenly throughout the year though. It’s only 90% clear still what they’ll take the 401(k) deductions out of (not sure if it includes my signing bonus or not), so I set the contribution % assuming it includes my signing bonus and I’ll adjust it up later if it doesn’t.

My new employer does allow after-tax contributions to their 401(k) plan! There is a limit though that is less than the IRS limit and I plan to contribute their limit. I’ve set a % on this and if it doesn’t take any money out of my signing bonus, then I’ll increase it, just like with the pre-tax 401(k).

I also need to decide what to do with my old 401(k) and what I’m going to do with the after-tax 401(k) contributions, but I’m going to figure those out later. I still have some time to do that – it’s less urgent.

2 – Health Savings Account

My new employer contributes more generously to a Health Savings Account for me than my last employer did. I still have a small balance in my old Health Savings Account that I need to figure out what to do with. For now, I only want to have the balance in this account cover one year’s maximum outlay, so I set my contribution to meet that gap. I’ll re-evaluate this approach for next year.

3 – Employee Stock Purchase Plan

I’m pretty excited for this! I can contribute up to a certain % of my salary, then at the end of the offering period, the plan administrator buys shares of my employer’s stock at a discount to me! And the plan is pretty sweet in that I can sell the shares immediately with no holding period. I elected to contribute the maximum I can and I’ll use the proceeds from selling these shares to fund the next savings goal in my savings snowball, either cash savings or mortgage paydown.

4 – Cash savings

I’ve estimated how much Operation Bayes will cost if all goes according to plan and decided that I would like to have $60,000 in my savings to cover this and some cash reserves. This is the first item on my savings snowball, so I’m going to work towards this goal and then move back to mortgage paydown. If things don’t go according to plan, then the money here beyond my normal cash reserves will be re-purposed to mortgage paydown. It looks like I should meet this goal with using the ESPP proceeds sometime in July.

5 – Mortgage paydown

Last, but not least, I’ll continue to pay down the mortgage. It looks like this should get around $25,000 in 2015.

6 – Income allotment strategy

With the new job, I get paid twice a month instead of the once a month that I got paid with my last job for, oh, you know, the last forever since it was my only job post-college. This is super weird. My plan though is to continue living off of last month’s income like I guess I have been doing for the last five years, except that I get to earn interest on the mid-month income instead of my employer. I’m still figuring out the logistics of doing this. In a spreadsheet, I’ve portioned off my checking account into two accounts at the moment: buffer and cash flow. I’ll probably just add an income one and put the income as being deposited there until it’s “transferred” to cash flow / savings / mortgage at the end of the month.

7 – Overall

My current calculation shows that I’ll save about 79% of my net income this year! I think my spreadsheet might be a bit confused (I should fix that), but it’s definitely somewhere north of 75%, which is pretty awesome. Including my employer’s contributions to various accounts and expected market contributions, I expect the end of the year to look like:

  • $650,900 in overall net worth (a $119,300 increase)
  • $62,500 in savings (a $14,700 increase)
  • $230,100 in investments (a $65,600 increase)
  • $111,800 in mortgage balance (a $31,200 increase)
  • -$22,900 in taxable assets – debts (a $47,700 increase)
  • $495,700 until FI (a $349,300 decrease) *note to the naysayers: this is a target to shoot for and once I reach it, I’ll do some more exact calculations. Until then, I’m using a 4% SWR of my investments bucket, a paid off mortgage, and a rolling last 12 months’ of expenses to calculate my target.

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February 2015 net worth update (+0.7%)

31-Dec-2014 31-Jan-2015 28-Feb-2015 MoM YTD
cash $12,300 $11,400 $6,600 -$4,800 -$5,700
savings $47,800 $42,300 $42,200 -$100 -$5,600
investments $164,500 $168,600 $176,500 +$7,900
+4.7%
+$12,000
+7.3%
mortgage $143,000 $142,300 $141,500 +$800
+0.6%
+$1,500
+1.0%
net worth $531,600 $530,000 $533,800 +$3,800
+0.7%
+$2,200
+0.4%
taxable assets – debts $70,600 $75,400 $73,800 +$1,600
+2.1%
-$3,200
-4.5%
$ until FI $845,000 $713,200 $785,600 +$72,400
+10.2%
-$59,400
-7.0%

Well, the stock market reversed my net worth loss from January. I had no income in February as I spent most of the month in New Zealand. I did get an update from a real estate agent from the firm who helped me buy my condo and they confirmed that my place is worth about what the other real estate agent had told me last spring. We’ll see what this upcoming spring brings in that area!

Expenses: I spent $5,579 in February including the mortgage or $4,552 without it. Some of my controllable expenses broke down as follows:

  • $587 Clothing – Ahem. Some of this was in New Zealand buying cute summer clothes and some of it was some online shopping to stock up on some shorts and a new skirt after we got back, some of which I will be returning. So, estimate: $59 on three tops, $168 on three dresses, $18 for a pair of shorts in New Zealand, $74 for a new skirt in NZ, $X for hemming a pair of pants I bought in January, $42 on a new skirt that I’m 80% likely to keep, and $214 on some shorts in a bunch of sizes via online shopping of which I’ll probably keep 1-2, so $60 worth, so I really only spent $437 on clothing this month?
  • $31 Entertainment/Social [average so far this year: $146, average last year: $211] – Wasn’t here for most of February, so not much spending here.
  • $0 Eating out by myself [average so far this year: $6, average last year: $18]
  • $89* Groceries [average so far this year: $89, average last year: $185] – This was low since we were gone for most of the month. We somehow managed to spend exactly $0.09 more on groceries in February than in January, after spending $0.55 less in January than in December. That is crazy!
  • $6 Work lunches [average so far this year: $25, average last year: $147] – There weren’t too many work days in February :)
  • $96* Electricity – December/January [$240 at this time last year]
  • $5* Household goods – stocking up on Kleenex
  • ($16)* Internet – Negative because I overpaid in January.
  • $8 Toiletries [average so far this year: $15.5, average last year: $33] – vitamins
  • $22 Recreation – yoga
  • $X* Costco membership – we decided to try it for a year
  • $39 Fuel [$0 at this time last year]
  • $10 Taxis – home from dinner with a friend
  • $5 Tolls
  • $3,640 Travel – the rest of our New Zealand trip

* indicates expenses that were in the joint account. I calculate my expenses by tallying up all of my individual expenses for the month, adding in my mortgage payment, and adding in half of the joint expenses.

Savings: $42,200 (down $100)

These funds are spread across a checking account that gets free ATM fees anywhere in the world, my health savings account, a savings account at my credit union, and a bit of a buffer in my credit union checking account.

This is down from an ATM withdrawal in New Zealand. It should be down a bit more, but I didn’t transfer the money to my checking account to cover my March spending until March 1st.

Investments: $176,500 (up $7,900 or +4.7%)

This includes my 401(k) from my former employer: Roth, Traditional, and employer matching (fully vested!), my Roth IRA, my taxable investments including stock index funds and Series I Savings Bonds.

The change here comes from:

  1. My former employer depositing the matching money I missed out on – I was not expecting this!
  2. Some healthy gains in the stock market

My former employer 401(k) account is back above $100,000! And my Roth IRA is now worth just over $40,000! Woo!

Mortgage: $141,500 (down $800 or -0.6%)

Some statistics here:

  • 2.5%: the interest rate on my 5/1 ARM
  • January 2018: when the interest rate on my mortgage is set to reset, possibly to 7.5%
  • 0: months of payments eliminated with this month’s pre-payments
  • $0: extra payments made on the mortgage this month
  • $0: interest this month’s extra payments will save me on the next regular payment
  • 28.9%: portion of my regular payment went to interest (originally was 59%; down 0.1 percentage points)
  • 60.5%: amount of equity in my condo, assuming purchase price (up 0.2 percentage points)
  • 50.5%: amount of the mortgage I’ve paid down (up 0.3 percentage points)
  • $24,500: amount extra remaining to pay to be on track at the end of 2015 to pay the mortgage off before the rate resets in 2018 (no change from last month)

I’m just letting the regular, automatic payment go for now. Nothing special to see here.

TOTAL: $533,800 (up $3,800 or +0.7%)

I ended 2014 with a net worth of $531,600, so I’ve seen a change of +$2,200 or +0.4% so far this year. I’m going to set the y-axis on this graph to $650,000 so we can see how my net worth grows towards that throughout the year. The graph is still boring, but I’ll post it once it gets interesting.

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Frugal Periods: Menstrual Cup

I don’t really talk much about being frugal here – I mostly talk about where to save your money. A few years ago now, a friend of mine convinced me to try a menstrual cup. It took many months before I actually bought one and a few more before I was really using it, but it is AMAZING ladies. It’s also a magical unicorn of savings, but that’s mostly besides the point.

Cramps, migraines, so many PMS symptoms were reduced. I forget I have my period for most of it. I forget about it. At first, I was super worried about needing to rinse out the cup at work, but I’ve managed to not need to do so, which is amazing! (Your body may vary.) I super hated dealing with my period while at work. And it’s totally safe to put in before your period gets there too. I used to plan trips around when my period was because I always found that traveling threw it out of whack and was super annoying, but traveling with a menstrual cup is SO much easier. Also great in summer and hot yoga!

It’s also environmentally friendly. And way better for your body than pads or tampons. No itchiness or bad reactions. I clean it with boiling water after every period to keep it clean. Plus, it came in a cute little bag. The internet seems torn on how long you should use a cup for before replacing it – I’ve seen anywhere from 2-3 to 10 years suggested.

I still spend about $10 on liners every two years, but I only spent $35+tax on the cup and will probably use it for 3ish years before replacing it mid-next year, which means my period now only costs me about $17 per year. Not bad, considering that I was spending about $80/year before. I’ve definitely noticed that spending reduction and plus, my period is much less annoying!

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