Net Worth: Why I Track It

There are a lot of arguments over what you should and shouldn’t track in your net worth. Your house value? Your cars? Shouldn’t you care more about your investments balance than your net worth? And yet I track my net worth every month, religiously, and have done so since I was 16. (It was a lot less impressive at 16, I promise you.) Shouldn’t you care more about how much you save in a month than net worth?

Why do I track net worth? I like that it is an overall picture of my finances. I’m a pretty detail-oriented person, which means that I’ll obsess over why I spent $5.32 on that random dinner and why did I not cook my own dinner at home instead of looking at the big picture. Tracking my net worth helps me to focus on the big picture. Sure, I haven’t gotten much of a paycheck since March and won’t get much of one until September, but I’m maxing out my 401(k) quite quickly, which is exciting in its own right. By looking at net worth instead of just cash flow, I am calmed to know that my net worth is still going up even though my cash flow is currently terrible. Money is fungible.

If I’m prioritizing paying down my mortgage, then my investments balance isn’t going to be nearly as exciting to track, but my net worth is still going to be doing great! If I’m bummed that I’m not prioritizing my mortgage at the moment, but I am stuffing my entire paycheck into investments, then my net worth is still going to be doing great. It is an overall snapshot of your finances at any given time.

It’s just like why I like to smooth my budget throughout the whole year. Monthly spending can get super lumpy. Some months this year I’ve spent $4-5k and other months I’ve spent $2-3k. That’s just the nature of expenses. There are more travel costs some months, insurance is paid out in one big lump sum, property taxes in two lump sums, sometimes my condo board does special assessments, some months have more presents to buy, and soon there will be grad school tuition (though I won’t be counting that in the spending that I report here). This year, I did a spending estimate for the year by breaking things down by category/item for the entire year and then estimated which month and quarter this spending would fall in. I expect some quarters/months to be more expensive than others. I can look at that and know that I’ll most likely spend less money in Q3 and Q4 than I did in Q1 and Q2 and that helps me not obsess as much over my spending being high in a particular month, unless there were huge unexpected expenses.

I also like net worth in that it is reasonably anonymous. Your income and some of your expenses aren’t that anonymous, nor is the value of your house (public records and all), but until my mortgage is paid off (as far as I know), that is reasonably anonymous, as is my net worth. My 401(k) provider doesn’t know my entire net worth, nor does my mortgage company, my savings account bank, my credit union, or my investments firm.

That said, even though I track net worth, I don’t make goals against it. I don’t set a goal to hit $N in net worth by the end of the year. That would be silly when my stock investments could drop 50% in a year. I set goals based on how much I want to put into savings in a particular year, broken down by category.

Readers, how old were you when you started tracking your net worth? Why do you track net worth?

,

18 Comments

Reflections on Homeownership: 3 Years In

It was three years ago this month that I bought my condo. I was pretty staunchly single then and life has definitely changed quite a bit, but the two bedroom condo that I bought has been able to evolve with my life, which is really great. We’re still working on the furniture tetris game from my boyfriend moving in. We at last know exactly what we’re doing with all the furniture, even if it hasn’t happened yet, and we’re planning on re-painting a room and have mostly picked a color. By the end of 2015, it should definitely feel like a shared living space rather than just my place. We both feel like we’ve finally found the right way to balance sharing living costs! I pay for all of the costs related to the condo, we both have separate insurance policies, and he covers a similar dollar amount in other costs, which right now works out to the internet and electricity bills, groceries, music services, small appliances and furniture, and eating out together.

I’ve stopped comparing whether renting vs buying is better because as of February, assuming I could sell my condo for the exact same amount I bought it for 3 years ago, buying was cheaper by $1,500. A realtor from the brokerage I used to buy my place contacted me in February and he mentioned that he would list my place at about 25% more than what I paid for it. Based on the emails I get about similar units near me, I think it’s up about 30% from purchase price now, but I’m going to leave it at 25% up in my net worth calculations. I am so, so glad I bought when I did! It has been such a slam dunk in terms of being cheaper than renting and the market is so much crazier than when I bought.

In 2015, I expect this condo to cost a total of $13,700 in housing expenses (mortgage interest, HOA dues, property taxes, condo insurance, electricity, repairs, interest lost from having the equity locked up, and tax savings. If we wanted to rent a similar place, we would be paying about $36,000 to $40,000 per year in rent between the two of us, so somehow I have a feeling we would have moved to a cheaper part of town if I hadn’t bought this condo.

In the last year, the mortgage hasn’t moved nearly as much as it was in the past. Last June, it sat at $152,167.66. Now? It’s at $138,600.73. Meaning I’ve paid it down by $13,566.93 in the last 12 months, about 2/3 of which came from the regular payments. I have 13.25 years left on the mortgage and have paid off 51.5% of it. Why has the mortgage paydown slowed down so much? I’ve been prioritizing other things like changing jobs, taking a couple months off unpaid, setting aside money for tuition, textbooks, and a larger emergency fund in planning for grad school, and contributing even more money to retirement accounts. It’s still on my radar, but I doubt I’ll make any substantial progress on it until 2016.

I don’t care that much about how much my condo has appreciated (that’s just icing on the cake) because our housing costs are pretty much dirt cheap for how much money we make. My housing costs are approximately 9% of my expected gross income this year, which ignores the fact that my boyfriend also makes a decent income and he also has pretty minimal fixed expenses, which means that we have pretty decent savings power between the two of us.

As much as I like to run the numbers on buying vs renting, homeownership is also a lifestyle choice and I’m so glad I chose it. It is a really good fit for my personality and my boyfriend’s and I could see us staying in this condo for many more years. Neither of us are big on moving and keeping fixed expenses low is pretty sweet for being able to spend more money in other areas of your life, like travel and/or putting more into savings and investments.

13 Comments

I don’t want kids.

There, I said it. I am a late twenty something woman with no maternal instincts, no desire to have children, and no, your children aren’t cute. (And no I probably won’t like the photos of your kids on Facebook. Why do you post so many??? But get a puppy or kitten and I’ll like ALL of those photos. Because puppies are awesome, but I don’t want the work right now, so please do get puppies and post all the photos.) And I’m not sorry for saying this. I will congratulate you on the birth of your child because life changes are exciting and you are so excited about it. I will also get excited when your kids start learning math and you talk about that, because math is cool. Or when you talk about your kids doing things that I can remember doing as a kid. But that doesn’t mean I want kids.

Don’t tell me that I’ll change my mind. I know that you can change your mind on almost anything in life, later on. Maybe that’ll happen. But for the last 10 years, I’ve been confident that I don’t want children and I don’t see that changing any time soon.

Getting into my late twenties has been interesting, watching friends get engaged, decide to have kids on a specific timeline, and also quit their jobs and travel the world. Everyone has a different idea of what their ideal life looks like and there are so many options! There are people who have retired in their 30s and 40s and those who kept working and have donated good chunks of their income. It’s been pretty scary watching people make all of these life decisions as I’m a planner and I don’t have any timeline for my future like my friends do. It’s freeing in another way though as I have decades of life ahead of me to learn, to experience the world, and to enjoy life.

A lot of people buy into the American Dream of going to college, getting a good job, getting engaged, getting married, buying a house, popping out 2.5 kids, and then working hard until they retire at 65, all in that order. A lot of people aren’t just buying into it – it honestly seems to be what they want. But for those who start to question it, how much of it do you question? What path do you want to follow?

I don’t want to have kids.
I don’t want to quit my job and travel around the world.
I don’t want to work at a startup, unless it is my own and even then only maybe.
I don’t want to move to a small-town to downgrade my cost of living. I like how accessible living in the city is.
I don’t feel closed in by owning a condo already. I don’t mind having so much of my net worth locked up in either my condo or my retirement accounts because I don’t want to move. And if I did, I could sell my condo.
I don’t want to be self-employed. I like the routine of my job.
I would like to have more vacation time than I do. It does sound like it might be possible to get extra unpaid time at my current company, which would be pretty sweet.
I don’t want to live in a house. At least not any time soon. Maybe when we get a dog at some point in the future though and a yard would be cool, but there are parks nearby and off-leash dog parks.

When I was in my early twenties, a coworker told me that he missed being my age, that it was fun times. He spent his twenties partying it up, barhopping and checking out the latest clubs. Now he lives in suburbia with his wife and two small children. I don’t want either of those pictures – him in his early twenties or him in his early thirties.

So many people told me not to buy property when I did (at 23), that I would regret it. That I would regret tying myself down. I don’t, one bit. Buying this condo was an excellent decision and I love this place so much. I am super glad I bought a two bedroom condo with plenty of space for two.

As I’ve watched friends quit their jobs and go traveling for a year, my first thought is how cool and fun that looks (if I’m interested in the places they’re going) and after some reflection, I realize that that life of spontaneity isn’t really me. Our month-long trip to New Zealand this year was pretty fun, but I’m a homebody and by the time we left, I was looking forward to not moving around as much. It was so nice to come home to internet, our home, friends, and our city. Slow travel might be okay in my books, but too fast of travel isn’t. I don’t have much of an interest in traveling for months throughout Southeast Asia, which then makes travel more comparable in costs to living at home. I’ve had good luck in the past with working while traveling (e.g. an internship/study abroad type thing) as it gives me something to occupy my days and also allows me to immerse myself in the local culture and travel.

So what do I see my life looking like in 5 years? I see myself living in my condo with my boyfriend, working at a job, having my Master’s degree, and having knocked a few more items off of my travel bucket list. I’m not particularly concerned over when/if we get married, especially with the marriage income tax penalty we would incur and the fact that due to our incomes and asset levels (hello me being a half-millionaire at age 26 and our combined annual household income being around $300-400k – I love being able to check off the “other” box for household income now) would result in a pre-nup with marriage and a decent separation of his and hers accounts, maybe even of post-marriage assets. I would probably feel differently about marriage if I wanted kids.

Looking at the above list of all the things I don’t want, most people would then see no point in saving. No future goals? No reason to save. That’s not how I look at it. (Thanks to nicoleandmaggie for this tip several years ago – you can just save for the sake of saving and that buys you freedom later!) I can live a pretty luxurious lifestyle on $30k/year plus travel ($18k/year+travel if you take out my mortgage payments) and still manage to bank ~$100k/year. Keep in mind too that vacation time is more of a limiting factor in how much I can spend on travel than money too. Those savings will buy me options in the future for when I do end up making goals that I didn’t have the time to save up for (see grad school that I kept trying to save for, then never applying, and using the money for something else like mortgage pre-payments).

This isn’t an early retirement blog. That isn’t my plan. I’m just living the lifestyle I want, which happens to be relatively-frugal for my income level, and saving the rest.

41 Comments

May 2015 net worth update (+1.5%)

31-Dec-2014 30-Apr-2015 31-May-2015 MoM YTD
cash $12,300 $6,700 $7,100 +$400 -$5,200
savings $47,800 $59,600 $56,900 -$2,700 +$9,100
investments $164,500 $188,200 $197,900 +$9,700
+5.2%
+$33,400
+20.3%
mortgage $143,000 $140,100 $139,300 +$800
+0.6%
+$3,700
+2.6%
net worth $531,600 $564,400 $572,600 +$8,200
+1.5%
+$41,000
+7.7%
taxable assets – debts $70,600 $52,800 $53,500 -$700
-1.3%
+$17,100
+24.2%
$ until FI $845,000 $815,200 $806,000 -$9,200
-1.1%
-$39,000
-4.6%

This month was again all about the pre-tax 401(k). I have less than $1,000 to go and it’ll be done with the first June paycheck and then I’ll switch to maxing out the after-tax 401(k). My savings rate this month was 74%. My investments are up enough this month that a 4% SWR of them will now cover toiletries in addition to the budget items that it could cover last month.

Expenses: I spent $2,824 in May including the mortgage or $1,796 without it. Some of my controllable expenses broke down as follows:

  • $170 clothing – I bought one skirt that I will return next month, returned ~$70 of the tops I bought last month, and bought one more bra, two pairs of flats, and two pairs of sandals.
  • $36 Entertainment/Social [average so far this year: $163, average last year: $211] – this was all eating out with friends. I didn’t buy any books this month – I went through several library books though!
  • $9 Eating out by myself [average so far this year: $4, average last year: $18]
  • $92 Work lunches [average so far this year: $63, average last year: $147]
  • Birthday presents and Mother’s Day lunch
  • $40 Eyebrows – I budget $20 per 4 weeks and May happened to be the twice month.
  • $77 Hair cut
  • $145 Toiletries [average so far this year: $50, average last year: $33] – stocking up on a two year supply of conditioner and trying out some dry shampoo
  • $0 Fuel [$83 so far this year, $35 at this time last year]
  • $706 Shopping. There was a sale on a really awesome desk chair that I love and with grad school coming up, I decided I should grab it. My plan is to sell/donate the old one that isn’t a very good fit for me. I also replaced two of the light switches with our recent switch to mostly LED everywhere in the condo.
  • Topped up my prepaid tolls account

Savings: $56,900 (down $2,700)

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.

This is down since I didn’t get much of a paycheck in May and used funds from savings to replenish my checking account for June. My new HSA is all up and working now and growing! Near the end of May, I started investigating how to transfer my old HSA to my credit union and that should get going in June.

Investments: $197,900 (up $9,700 or +5.2%)

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:

  1. Good-sized contributions to my new 401(k) – I’ve now contributed ~95% of the pre-tax limit for this year.
  2. Employer matching contributions (almost double what I got at my last job!)
  3. ESPP contributions that are currently sitting in cash
Mortgage: $139,300 (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%
  • 28.4%: portion of my regular payment went to interest (originally was 59%; down 0.2 percentage points)
  • 61.0%: amount of equity in my condo, assuming purchase price (up 0.2 percentage points)
  • 51.3%: amount of the mortgage I’ve paid down (up 0.3 percentage points)

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: $572,600 (up $8,200 or +1.5%)

I ended 2014 with a net worth of $531,600, so I’ve seen a change of +$41,000 or +7.7% 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.

May 2015 Net Worth Graph

,

9 Comments

Operation Bayes: Revealed

While I was interviewing last year, one of my interviewers asked me what I would do if I was retired. I was surprised I got asked this question since the person clearly knew how long I’ve been out of undergrad and probably from that I’m still in my twenties! It’s not so crazy to hear people in their forties mentioning this, but asking someone in their twenties? That seems bizarre to me. Anyway, I thought about it for a moment (I was caught a bit off guard) and told the person that I would go to grad school in X subfield. They told me that I could do that while working for them, since their company has tuition benefits. That got me thinking and…

I applied to grad school for X subfield of my current field! I got in! I’m pretty stoked! And scared and nervous all at the same time. But very excited!

I’d been mostly putting off grad school because it seemed like a terrible financial move (it will cost money, have an opportunity cost, and will not increase my income) and it seemed like a lot of work. My last employer wouldn’t pay a cent towards grad school. My new employer however has a sweet tuition benefits program, with no waiting period, meaning that my Master’s degree will only cost me possibly very little (somewhere around one month’s average normal expenses is my estimate). And it seems that I’ll be able to pay for my tuition with a credit card, so I may try to pick some interesting credit cards to churn with tuition.

I’ve saved up enough to pay for the entire program myself in cash and have enough to cover a year’s worth of living expenses (by some definition). I figure I would recast the mortgage and reduce some expenses, so that amount would probably last me for a second year. I could cash flow this, but I decided I felt more comfortable saving up the whole amount so that I could quit my job to do this full-time if I wanted to. Why would I choose to keep this cash even though my now-employer will pay for basically the whole program?

1) I have to pay for each course upfront and then they’ll pay me back once I finish it successfully.
2) Options! This cash will allow me to quit and pursue the Master’s program full-time if I want to, if I decide I’d rather do that than stay in industry.

My plan is to use my tuition savings account to pay for grad school and then when my employer reimburses me for the courses, use that money for whatever my next savings goal is.

My family is blue collar millionaire next door raised in working class families and didn’t really value education (my parents didn’t realize that I would likely go to college if given the opportunity until I was in high school…), but did value good work ethic and holding a job at all times, so this plan to go to grad school when it won’t increase my income has taken a long time for me to be okay with. Plus, the requisite amount of time thinking about spending this much money (five figures if my employer didn’t pay for it) on something for myself.

This is a better splurge than a comparably priced car as it is an experience rather than stuff. If my employer wasn’t paying, I would pay for it in cash.

There are a few different paths my next five years could take financially at this point:

  1. I proceed through the Master’s degree part-time, my employer pays for it in full, and nothing changes in my job when I’m done the Master’s degree. I’ve gained some knowledge, but continue at my job.
  2. I proceed through the Master’s degree part-time, my employer pays for it in full, and I change groups/teams to do something more in line with this new specialization once I have my new degree. This would see most of my grad school savings tossed into other savings buckets as time goes on and my (cash) emergency fund reduced back down to $20k-ish.
  3. I proceed through the Master’s degree part-time, my employer pays for it in full, and I decide to pursue a PhD after I finish the Master’s degree. This would see most of my grad school savings tossed into other savings buckets as time goes on, but I would probably keep my (cash) emergency fund around $30-40k in this case to help with the lower income. The mortgage will very likely be paid off before this point, which will help keep expenses lower, and the SWR on my investment portfolio should be around $1,800/month, though I would try my best to keep my expenses under/around the grad student stipend and let my investments continue growing.
  4. At some point during the Master’s degree, I decide it’s far more interesting than my full-time job and decide to quit and pursue the Master’s degree full-time and then continue on to a PhD. If the mortgage isn’t paid off, I’ll recast it, and slash expenses like crazy in order to let my savings account last for a while and keep my expenses low in preparation for a grad student stipend once I start the PhD. The SWR on my investment portfolio at this point will likely barely even cover the HOA dues and property taxes on my condo, so I’ll definitely need to acquire some more income at a later point.
  5. I decide I hate grad school and skip out partway through with no/minimal money lost and continue saving and look for a new path to pursue after I reach FI.

I can’t believe this is finally happening! I’m so excited!

,

39 Comments

April 2015 net worth update (+1.4%)

31-Dec-2014 31-Mar-2015 30-Apr-2015 MoM YTD
cash $12,300 $9,300 $6,700 -$2,600 -$5,600
savings $47,800 $61,900 $59,600 -$2,300 +$11,800
investments $164,500 $176,200 $188,200 +$12,000
+6.8%
+$23,700
+14.4%
mortgage $143,000 $140,800 $140,100 +$700
+0.5%
+$2,900
+2.0%
net worth $531,600 $556,600 $564,400 +$7,800
+1.4%
+$32,800
+6.2%
taxable assets – debts $70,600 $53,700 $52,800 +$900
+1.7%
+$17,800
+25.2%
$ until FI $845,000 $826,000 $815,200 -$10,800
-1.3%
-$29,800
-3.5%

This month was all about the pre-tax 401(k). It’ll be done with part of the first June paycheck. I also realized that one quarter’s ESPP contributions + discount is about equal to two months’ spending, so to max out the 401(k) while doing a lump sum to the 401(k), I really won’t use up that much of my buffer. Sweet! Thanks to not paying taxes on the income going into the pre-tax 401(k), I managed to get my savings rate up to 83% this month!

My investments are up enough this month that a 4% SWR of them will now cover the following expenses: passport replacement, condo insurance, property taxes, and HOA dues. I anticipate adding toiletries, cell phone, driver’s license renewal, vehicle tab renewal, and bras to the list of items in my budget that a 4% SWR would cover this year. Pretty exciting to watch!

A metric I was tracking was liquidated assets – debts. I’ve been counting down the tax advantaged assets until I don’t need to liquidate them to pay off the mortgage and I no longer need my traditional 401(k)! I still need the following assets to pay off the mortgage: Roth IRA, taxable investments, checking accounts, and cash savings. I forecast that by the end of next year, I would just need my cash savings accounts to pay it off!

Expenses: I spent $4,214 in April including the mortgage or $3,186 without it. Some of my controllable expenses broke down as follows:

  • ($534) Kept one pair of jeans from all of the online shopping
  • $288 Annual refresh of regular bras and a new sports bra for running
  • $128 Tops – stocked up on t-shirts when I found a great sale and will return ~$50-60 of these
  • $118 total clothing
  • $39 Entertainment/Social [average so far this year: $195, average last year: $211] – this was one book and two years (only meant to pay for one of LastPass. I need to get some e-books from the library instead of buying books for the commute.
  • $0 Eating out by myself [average so far this year: $3, average last year: $18]
  • $88 Work lunches [average so far this year: $56, average last year: $147]
  • Half of annual property taxes (only up 9% from last year, not the 20% I had budgeted for!)
  • Passport renewal!
  • $344 Medical
  • $62 Toiletries [average so far this year: $26, average last year: $33] – stocking up on a year’s supply of shampoo
  • $294 Yoga classes – bought a multi-class pass
  • $155 Pillow – it was past time to replace the one I bought five years ago…
  • $9 Taxis – I had to run an errand after work and decided it was better to cab home and cook dinner than to eat dinner out and bus home.
  • $20 Fuel [$83 so far this year, $35 at this time last year] – So apparently Costco has super cheap gas?
  • $0 Travel – first month with $0 spent on Travel this year!

Spending looks high this month since I paid property taxes, meaning that ~75% of this month’s spending was on housing. My discretionary spending this month was actually pretty good. Most of the clothing purchases were necessities (bras), I didn’t eat out by myself at all, I’m on track to spend ~half of what I did last year on work lunches, even my entertainment/social spending was pretty low, and work reimburses me for a certain amount of fitness spending.

You might notice a few of the usual categories missing. I mentioned last month that my boyfriend and I were trying something different with how we share expenses. That means that going forward he’s paying for groceries, date nights, electricity, internet, household goods, and some other items, depending on how the numbers work out. I’m still making spreadsheets about the electricity bill even though I’m not paying it, don’t you worry ;)

I predict that my total May spending will be…$1,611. Let’s see how this goes!

Savings: $59,600 (down $2,300)

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.

This is down since I didn’t get an April paycheck and used funds from savings to replenish my checking account for May. My new HSA is all up and working now, so one of the items on my to do list for May will probably be to try to figure out what to do with my old HSA.

Investments: $188,200 (up $12,000 or +6.8%)

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:

  1. Good-sized contributions to my new 401(k) – I’ve now contributed 50% of the pre-tax limit in the last month :D
  2. Employer matching contributions (almost double what I got at my last job)
  3. ESPP contributions that are currently sitting in cash

The rollover from my old 401(k) completed successfully. The old Roth 401(k) money is now in my Roth IRA and the old pre-tax 401(k) money is in my new 401(k).

Mortgage: $140,100 (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%
  • 28.6%: portion of my regular payment went to interest (originally was 59%; down 0.1 percentage points)
  • 60.8%: amount of equity in my condo, assuming purchase price (up 0.1 percentage points)
  • 51.0%: amount of the mortgage I’ve paid down (up 0.2 percentage points)

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: $564,300 (up $7,700 or +1.4%)

I ended 2014 with a net worth of $531,600, so I’ve seen a change of +$32,700 or +6.2% 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. I finally updated the graph this month!

April 2015 Net Worth Graph

,

3 Comments

Q1 2015 Update

Whew, that was a busy Q1! I quit my job, had ~1.5 months unpaid between jobs, went on an awesome trip for a month with my boyfriend, and started a new job.

Income

Things were actually not too bad in terms of income in Q1. I only got paid enough in January to cover February’s budget, saw no income at all in February, and then saw a full month’s paychecks at my new, increased salary, plus my signing bonus in March. Thanks to the signing bonus, my Q1 net income was (by a small margin) the largest I expect to see this year, though each quarter should be reasonably similar.

Saving

In Q1, I saved 79% of my net pay, which amounted to a bit over $20,000 in savings. I’m hoping I’ll be able to hit 80% overall this year :)

My savings was split to the following accounts:

  • 86% Cash savings
  • 10% Mortgage payment principal
  • 4% Traditional 401(k)
  • < 0% HSA

I made my 2015 Backdoor Roth IRA contribution on January 2nd, so that is done already! Next up is maxing out the pre-tax and after-tax 401(k). I’ll finish maxing out the pre-tax 401(k) in Q2 and the after-tax 401(k) in Q3.

I haven’t made any extra mortgage payments this year and it’s looking like I might not end up making any. I’ll talk about that a bit later.

Giving

I think the idea of Fidelity/Vanguard Charitable is really cool (but expensive at my donation amounts…), so I’m doing something similar with a savings account at my credit union. I have automatic transfers set up for every paycheck and I’ll do manual transfers when I get a bonus. This account’s purpose is to get me to give my money to other people for causes that I deem worthy. I’m trying to let the account build up a bit so that I have enough to pay for my January donation next year instead of not having enough money in the account for a bit to take the donation out and so that I can make larger donations. I plan to increase the % within the next few years.

In Q1, I made my annual January donation as usual and made another couple donations for causes friends were supporting. Not all of my donations are tax-deductible, but that’s totally okay!

Spending

Q1 2015 SpendingWhen you see that I spent more money on Travel than on Housing, you know it was an expensive quarter. I had budgeted for this quarter to be the most expensive of them all.

All in all, I spent $14,271 in Q1, about $5k of which was spent each on Travel and Housing. Another $2k on Clothing and everything else is tiny in comparison to those three. On the plus side, I have no more big travel expenses for the year.

I am going to try to reign in my clothing spending more in the rest of the year.

I was underbudget in a few areas:

  • I only spent $355.09 on groceries, of $600 budgeted.
  • I only spent $136.91 on work lunches, of $344 budgeted.
  • I only spent $63.52 on fuel, of $144 budgeted.
  • I had planned on replacing my passport in Q1, but that got pushed off until Q2. I replaced my driver’s license though, which countered that somewhat.
  • I only spent $13.46 on dining out, of $40.00 budgeted.

I’m still on track to spend under $40k in 2015 (my goal for the year) – I’m expecting the other quarters to be an average of $8k apiece. I’ll check in on that again at the end of Q2.

Readers, how was your Q1?

, , ,

10 Comments

Follow

Get every new post delivered to your Inbox.

Join 146 other followers