2015 In Review: Goals, Savings, Net Worth, Investments, and Charts Galore

Remember that time when I made paying off my mortgage my primary goal for 2015? Well, as you can tell, that hasn’t happened.

Also remember when I set out to spend $38,800 in 2015? That didn’t happen either.

2015 was however a pretty full year: I left my job of five years, took two months off unpaid including a month traveling with my boyfriend, applied to grad school, started a new job, got accepted into grad school, and started grad school. Most of these things I knew about at the beginning of the year, though I didn’t know if I’d get into grad school. The goals I set on the blog assumed I wouldn’t since I didn’t want to jinx it and tell you guys I’d applied. That fact clearly changed my 2015 a lot.

Goals review

1) Enjoy living together! Have an awesome trip to NZ!

Success! This has definitely been good :) It was more of an adjustment than either of us anticipated, but mostly it’s pretty awesome!

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.

Success! I made my 2015 Backdoor Roth IRA contribution in January, maxed out my pre-tax 401(k) with $18,000, and maxed out my after-tax 401(k). As I predicted, this accounted for about 2/3 of my savings in 2015.

3) Learn the ropes at my new company and have an awesome first year!

Success! This is definitely going okay. I think I’ll be here another year at the very least.

4) Exercise for at least 45 minutes per day. My phone is really helpful at tracking this for me!

This has not gone very well. And once I switched to an iPhone, I couldn’t figure out to track “active time” per day anymore without having an Apple Watch. I think I probably only got down to around 25-30 minutes on average. This was definitely a more sedentary year than usual for me.

5) Go to the gym (or run) three times per week.

Fail! This one fell pretty flat. It became really hard with grad school and my priorities which I did stay on top of fell to: sleep, eat, work, and grad school.

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

Success! I started out doing this and I ended up contributing the maximum (IRS maximum of $3,350 – my employer’s contribution = my contribution). So success!

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

Success! I applied to grad school and got in! Woo! And did quite well on my first course :)

8) Spend under $40,000.

Hah. Fail. I came in somewhere around $48,000 of spending.

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!)

Pass! It became difficult to track how much I saved of my net monthly income separate from my bonus income with the compensation structure at my new job. Overall, I saved 70% of my net income before grad school tuition withdrawals were accounted for or 61% after. This should even out in future years because a large portion of the withdrawals will be reimbursed, though there will be some income taxes to be paid.

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

Success! I mostly did this. One month I had too much go to my pre-tax 401(k) while I was frontloading it and missed out on a few dollars of ESPP contributions. I sold all of my ESPP purchases as soon as I could and then used the proceeds to fulfill other savings goals.

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

I made zero extra mortgage payments in 2015. Its natural amortization lowered the mortgage balance to less than my annual base salary, which is quite exciting!

Even if I make no extra mortgage payments, the mortgage will pay itself down by about $9,000 in 2015. I’m becoming much less concerned about the mortgage with the smaller balance and the likelihood of the interest rate jumping up to 7.5% when it resets seeming less and less likely. Right now, if it were to reset today, it would likely reset to 3.25%, which would actually lower my required payment by ~$460/month and increase the January 2015 interest cost by about $89 or about 30%. [note: updated this paragraph with the numbers as of mid-December 2015.]

Overall, I’m anticipating a net worth increase of about $100,000 to $120,000 for the year to increase my net worth to $630,000 to $650,000. I expect my gross income to be somewhere between $140,000 and $150,000 in 2015.

My gross income fell smack in the middle of that range, so that prediction was good. My net worth prediction fell pretty flat though:

  1. I had calculated that my investments would go up by about 8%, for a return of about $13,000. Instead they fell, meaning that they ended up about $22,000 lower than I had expected.
  2. I had planned on adjusting my condo value by 3% to account for inflation. I decided not to do that since it’s hard to know what it’s worth exactly. I may end up adjusting it in 2016.
  3. I paid out of pocket for grad school and haven’t gotten all of the funds back from my employer.
  4. The above three points account for $45,000. They would have gotten me from my actual end of year net worth to the high end of my anticipated range, a $115,000 increase.

2015 by the numbers

  1. My gross W-2 income was about $150,000, a drop of about 12% from 2014 after a similar 14% drop from 2013->2014.
  2. My gross income was about 301% of my spending for the year (my average since college is 317%).
  3. I paid down the mortgage by $8,900 from $143,000 to $134,100. That’s about 3% of the original mortgage balance, putting it at about 53.1% paid off, which isn’t bad for only having owned the place for 3.5 years.
  4. Increased my net worth by $69,100 over the course of the year to $600,700.
  5. I spent about $49,687, a 3.4% increase over 2014’s spending.
  6. I saved about $74,400, for an overall savings rate of about 64% of my net income.
  7. My investments (~30% fixed income, 35% US stocks, 35% international stocks) were down about $5,500 for the year, which was a return of -2.56% according to XIRR.
  8. Increased my assets and paid down my mortgage such that my assets were I to liquidate all of my retirement accounts are worth more than the mortgage and I am only about $41,600 in already liquid funds away from being able to pay off the mortgage, a $29,000 improvement from 2014.
  9. Decreased the amount needed to save to be FI by $28,000 to $783,300.
  10. Increased the years of savings in retirement accounts from 2.89 years to 3.66 years, an increase of 0.77 years.
  11. Buying my place is now about $8,800 cheaper than continuing to rent would have been, ignoring the increase in value.

2015 in charts

2015 Savings Distribution

My savings was far more fragmented than in 2014. Contributions were split between: pre-tax 401(k), after-tax 401(k), tuition savings, Employee Stock Purchase Plan, regular mortgage payment principal, my 2015 Backdoor Roth IRA, and my Health Savings Account. I transferred a decent chunk from my general savings account to other goals such as my 2015 Backdoor Roth IRA, spending while unemployed or frontloading my retirement accounts, and my tuition savings account. I sold all of my ESPP purchases as soon as I could and used the funds to top up my general and tuition savings accounts.

December 2015 Net Worth Graph

I had my lowest net worth increase for the year since 2010 at $69,100, settling in at $600,700 at the end of the year.

Net Worth Since Dec09

To put things into perspective, above is a chart of my net worth growth since December 2009. I’ve increased it by about 20x in the last six years!

I really like the “Where in the world could I retire today?” game that Planting our Pennies have been playing. At the end of 2014 if I were to sell my condo and retire, I could have retired in Sofia, Bulgaria. I could now retire in Podgorica, Montenegro! I’m guessing that by some time in 2016, I should be able to retire in the lowest cost of living city in the United States or Canada on the Expatisan listing. This year, my expenses were about 8.3% of my end of year net worth (down 0.7 percentage points from last year).

4% SWR versus expenses over time

The 4% SWR on my investments is no longer near zero – I’ve been making some really great progress in this area in the last few years. I’m actually anticipating getting this figure up to $900/month by mid-2016, which is starting to become a pretty decent figure. With that, the vast majority of my fixed expenses will be covered (other than my mortgage) and it’s on to getting the discretionary expenses covered, which is pretty cool!

$ to FI vs net worth over time

I made yet another chart recently which shows the “$ to FI” figure vs my net worth over time. It’s pretty cool to see them converging, which I expect to happen sometime in 2016. It’s cool to see that even though I feel like this number is a huge moving target, there is still progress being made. This chart also shows that at current spending levels, I’m probably about halfway to FI, which is pretty awesome.

2015 Mortgage Paydown

I didn’t make any extra mortgage payments in 2015. The regular amortization still moved things along relatively well though thanks to the extra payments I’ve already made. If I had a normal 30 year mortgage and not a 5/1 ARM, then I would have 12.75 years left on the mortgage at this rate, which is pretty good considering that I bought my condo 3.5 years ago!

2015 Investments

My investments had a lot more ups and downs in 2015 than ever before. My employer and I contributed just over $50,000, which is double the 2014 figure. My 401(k) was above $100,000 for most of 2015 and my Roth IRA thanks to the after-tax 401(k) contributions is now above $60,000 – it almost doubled this year. I also saw just over $4,000 in dividends across all of my accounts and I’m estimating to get close to $5,000 in 2016. My largest one month gain was $9,132 and my largest one month loss was $9,988.

As my investments have grown, the monthly gain/loss has increased significantly as you can see with this chart:

Monthly Investment GainLoss

Here’s to a wealthful 2016!

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December 2015 net worth update (+0.5%)

31-Dec-2014 30-Nov-2015 31-Dec-2015 MoM YTD
cash $12,300 $7,700 $7,200 -$500 -$5,100
savings $47,800 $62,700 $65,600 +$2,900 +$17,800
investments $164,500 $212,200 $212,000 -$200
-0.1%
+$47,500
+28.9%
mortgage $143,000 $134,900 $134,100 +$800
+0.6%
+$8,900
+6.2%
net worth $531,600 $597,700 $600,700 +$3,000
+0.5%
+$69,100
+13.0%
taxable assets – debts $70,600 $46,100 $41,600 +$4,500
+9.8%
+$29,000
+41.1%
$ until FI* $811,300 $826,900 $783,300 -$43,600
-5.3%
-$28,000
-3.5%

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

Happy new year, everyone! Here’s to a great 2016!

I managed to sneak in a “small” net worth increase this month. I say “small” because the entirety of my net worth increase can be attributed to getting my tuition reimbursement in 2015 instead of in 2016, which was more than the net worth increase in December. I paid January’s tuition this month and bought a textbook, which took a dent out of my savings accounts. I did surpass my $30,000 in general savings goal, however, which is quite exciting! Ignoring the tuition spending, my savings rate was 86% this month or 40% with the withdrawals. (It’s a bit higher than usual since I transferred the extra money in my checking account to savings.)

I also managed to sneak over $600,000! That’s pretty cool too. And “$ until FI” is finally under $800,000 again! Let’s see if I can keep it there :)

Expenses: I spent $2,807 in December including the mortgage or $1,780 without it. Some of my controllable expenses broke down as follows:

  • $156 Clothing
    • ($164) Athletic wear: returns from November shopping
    • $167 Bottoms: a pair of jeans, two pairs of corduroy pants, and a pair of colored leggings
    • ($89) Dresses: some returns and purchased 4 dresses, of which I hope to keep 1-2 at most, so I should see another credit here in January since they won’t get here until then.
    • $130 Shoes: bought a pair of ankle boots to replace my pair from 2010 that are a bit small
    • $13 Socks: bought a pair of ankle socks to go with the boots
    • $99 Tops: returned a long-sleeved top, bought a sleeveless top that was on sale, bought 5 long/three-quarter sleeved tops.
  • $3 Entertainment/Social [average so far this year: $116, average last year: $211] – Remember the Milk pro for two years ($48), dinner with a friend ($15), and spending some cash towards the facial listed below (-$60)
  • $2 Eating out by myself [average so far this year: $6, average last year: $18] – some gum at the airport, that I should have put on the shared credit card
  • $22 Work lunches [average so far this year: $39, average last year: $147] – I was lazy with some of the short weeks…
  • $376 Presents – finished my Christmas shopping and a couple birthday presents thrown in there for good measure
  • $395 Housing miscellaneous – two thermostats ($50 each), a new dual switch ($10), a timer for the master shower fan, and installation by an electrician
  • $62 Cell phone – $15 to Ting for my last bill and $47 to Cricket
  • $15 Medical – a prescription
  • $20 Eyebrows
  • $33 Toiletries [average so far this year: $48, average last year: $33] – cold medicine and clinical strength deodorant
  • $100 Annual facial
  • $123 Recreation – a new pair of running shoes
  • $82 Transportation: tolls replenishment (x2) and one tank of gas
  • $30 Travel: the food expenses that didn’t make it on the shared credit card

December was my lowest month of non-education spending this year!

Savings: $65,600 (up $2,900)

These funds are spread across a checking account that gets free ATM fees anywhere in the world, my current employer’s health savings account, a health savings account at my credit union, a bit of a buffer in my old credit union checking account, and general and grad school savings accounts at my new credit union (Alliant).

  • My grad school savings account is (as of October) at the amount I need it to be to pay for the rest of my grad school in cash, if necessary.
  • I’m contributing the maximum to my HSA this year.
  • The rest of the savings increase went to my general savings account.
  • Actions: I paid January tuition and bought a textbook out of my grad school savings account. I added about $2,200 more than that cost to my general savings account, which balanced things out.

Investments: $212,000 (down $200 or -0.1%)

This includes my pre-tax 401(k), employer 401(k) matching, my after-tax 401(k), my Roth IRA, and my taxable investments including stock index funds, Series I Savings Bonds, and ESPP cash/shares.

The change here comes from:

  1. Employer matching contributions
  2. A month’s ESPP deposits
  3. Dividends! About $2,000 across all of my accounts

Next month will be great for my investments with frontloading my pre-tax 401(k)!

Mortgage: $134,100 (down $800 or -0.6%)

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 for the year.

I’m really excited about the balance this month because it’s now lower than my annual base salary! That’s pretty exciting!

TOTAL: $600,700 (up $3,000 or +0.5%)

I ended 2014 with a net worth of $531,600, so I saw a change of +$69,100 or +13.0% in 2015. I set the y-axis on this graph to $650,000 so we could see how my net worth grows towards that throughout the year. Hah! I did not get there and I will discuss why in the 2015 wrap-up post that I will publish in January sometime. I did manage a pretty reasonable increase though! It works out to about $190/day.

December 2015 Net Worth Graph

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2016 Plan

Goals

1) Enjoy living together!

2) Do well in grad school and enjoy it!

3) Do well at my job!

4) 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), some additional funds to the after-tax 401(k)*, the maximum to the Employee Stock Purchase Plan (and selling that right away), and the maximum to my Health Savings Account. This will account for probably about 75% of my savings in 2016, though the ESPP funds will be reallocated once they’re sold.

5) 7,000 steps per day.

6) Spend no more than in 2015 ($48,000).

7) Save 70% of my net income before tuition savings account withdrawals. (This is achievable if I spend no more than $48,000.)

8) Increase my liquid funds (including my stock index funds outside of retirement accounts and my Series I Savings Bonds, but ignoring the grad school savings accounts) to two years of living expenses. This means adding $40,000 to my general savings account in 2016, some of which will probably be put into Series I Savings Bonds and/or CDs.

9) Pay down the mortgage with what’s left. I anticipate having about $0 left after all of the other goals in 2016. (I don’t anticipate being able to meet the liquid savings goal in 2016 – my current figures show me coming up about $5,000 short.)

10) Turn my “taxable assets – debts” figure around so that taxable assets are > debts. (This is my “golden” goal for 2016.)

I’m anticipating total compensation from work around $170,000 plus bonus for a net worth increase of around $145,000. I’m anticipating saving about $87,000 of that figure.

*I’ve debated increasing my liquid funds some more before contributing to the after-tax 401(k), but since those contributions are withdrawable with minimal penalties/taxes and I already have a decent enough for now amount of liquid funds, I’m going to do the after-tax 401(k) contributions first.

Spending

  • $23,000 Housing: mortgage payments, HOA dues, property taxes (assuming a 5% increase from 2015), condo insurance, cell phone bill, condo maintenance
  • $3,600 Travel: We both have a reasonable number of points to put towards a trip, but due to various circumstances, I’m not sure if we’ll be able to use them, so I have no idea how much we’ll spend here. I’m going to guess $300/month for now.
  • $3,000 Gifts and Donations: I donate 1% of my gross income to various charities and give about $100 at weddings, birthdays, and Christmas to each person on my shopping list.
  • $2,400 Transportation: car insurance, vehicle tab renewal, fuel, tolls, oil change and wiper blades
  • $2,000 Clothing: guess as to how much I’ll spend
  • $1,400 Entertainment: hanging out with friends
  • $1,000 Recreation: I’m guesstimating 3 pairs of athletic shoes of some sort, a punch card of yoga classes, and a few other activities.
  • $1,000 Medical: I seem to spend about this much per year
  • $900 Personal care: eyebrow waxes, toiletries, facials and massages, and hair cuts.
  • $600 Food: This is just lazy eating out including work lunches.
  • $275 Life: Umbrella insurance and NEXUS card as I renewed my driver’s license and passport in 2015, so they’re good until 2025!
  • $200 Shopping: I replaced my laptop and upgraded my desktop in 2015, as well as buying a new cell phone, two purses, a sunglasses case, and a new computer desk and chair. I think I’m doing just fine in this category, but I’ll leave $200 here as a buffer.
  • $39,375 Total

I’ve written this down as a spending plan, but honestly? These are just the things I know about. For the last several years, I have pretty solidly spent in the $45,000 to $50,000 range. 2014 fell pretty much spot on $48,000, as did 2015. So I honestly believe I will end up spending somewhere closer to that figure than this $39,000 figure. I have a guess I won’t be too spendy since I’ll be otherwise occupied with grad school and I hear that keeping busy helps you to spend less money, but we’ll see how that goes ;)

Instead of budgeting in 2016, I’m simply going to transfer (2015 spending – charitable donations) / 12 to my checking account each month. Why ignoring charitable donations? That budget goes to a savings account that when the budget gets large enough, I’ll switch over to a donor advised fund. I’ll check in in June to see if I am significantly under or overspending that and then I’ll reconcile in December.

End of year forecasting

Including my employer’s contributions to various accounts and expected market contributions, I expect the end of the year to look like:

  • $735,200 in overall net worth (a $143,700 increase)
  • $95,900 in savings (a $36,100 increase)
  • $280,000 in investments (a $71,000 increase)
  • $125,000 in mortgage balance (a $9,000 decrease)
  • -$4,500 in taxable assets – debts (a $43,500 increase)
  • $644,600 until FI (a $116,700 decrease) *note to the naysayers: this is a target to shoot for and once I reach it, I’ll do some more exact calculations because until I reach it, I’m definitely not FI :) Until then, I’m using a 4% SWR of my investments bucket, a paid off mortgage, and the rolling last 12 months of expenses to calculate my target.
  • A split of 14% cash / 48% condo equity / 38% investments (changed from the 2015 EOY of 11% cash / 53% condo equity / 35% investments). At its highest, my condo equity was about 60% of my net worth.

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Envisioning the future of my finances

Some day, my pre-tax 401(k) will be worth more than one year’s annual salary.

Some day, withdrawing 4% of my investments could cover all of my needs. That some day will be sooner than you think – it’ll come in 2016.

Some day, my liquid assets will be worth more than my mortgage.

Some day, my pre-tax 401(k) will gain or lose more in a year than I can add myself, likely in the year I turn 30. My Roth IRA is already at this point.

Some day, my mortgage will be paid off, reducing my expenses by about $12,000 per year. Then I will increase my donations budget from its current 1% of my gross income to 2% of my gross income.

Some day, I will be a millionaire on paper.

Some day, I will start adding to my taxable account at Vanguard, beyond just adding to my retirement accounts. At the point that I start doing this, my retirement accounts will already be worth almost half a million dollars.

Some day, I will learn about tax loss harvesting.

Some day, my investment accounts will be worth enough to sustain my lifestyle indefinitely with a 4% withdrawal rate. Then I will increase my donations budget to 5% of my gross income, at which point I could open up a donor advised fund. Those seem cool! Also, simpler come tax time.

Some day, my investment accounts will be worth enough to sustain my lifestyle indefinitely with a 3% withdrawal rate. Then I will increase my donations budget to 10% of my gross income, at which point I would definitely open up a donor advised fund.

 

There are all sorts of levels of financial freedom that I look forward to discovering in my future. The level I’m at now is pretty cool too.

Happy holidays, everyone!

Readers, what levels of financial freedom do you look forward to in your future?

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2016 Investment Planning

I’ve been doing some planning for 2016 and decided I should take a gander at my investment plan. Apparently I’d already made a spreadsheet for 2016 months ago and so it took me all of about 10 seconds to estimate things – I just had to update the current balances.

I’m working with a target asset allocation of 30% fixed income (age in bonds + 2 percentage points for having > $200,000 in investments) and then the stocks split 50/50 to US and international.

Category Current Value To Add EOY 2016
Total $209k $52.5k $261.5k
Fixed income $60.8k $17.6k $78.4k
US stocks $77.7k $13.8k $91.5k
International stocks $70.5k $21.1k $91.5k

US and international stocks are somewhat out of whack, so I’ll add more to the international stocks in 2016 than to the US ones.

I started out with adding all of my fixed income ($17.6k) with my pre-tax 401(k) contributions (including employer match) and then will put the remaining 401(k) money to US stocks. I’m still undecided on this, but I may make it international stocks instead. I like the Vanguard international fund better than the Fidelity one, but it might be more worthwhile to get things less out of whack. I still have a few weeks to think on this and it’s not a super big deal either way. I’ll update this so it all happens automatically on January 1st.

As far as timing goes, my pre-tax 401(k) contributions will be spread out over the first 5 pay periods of the year, finishing up in mid-March. I will make the full Roth IRA contribution once I have $5,500 in earned income, so sometime in February or March, and the after-tax 401(k) money will be invested in Vanguard in July once I’ve maxed out my contributions there.

I plan to use my 2016 Roth IRA contributions to open up the Vanguard Total International Stock Market Index Fund there. I’ll then finish up my international stocks allocation with my after-tax 401(k) money in the summer and the last dribble of it to US stocks.

Easy peasy after many years of doing this!

 

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November 2015 net worth update (+1.1%)

31-Dec-2014 31-Oct-2015 30-Nov-2015 MoM YTD
cash $12,300 $6,600 $7,700 +$1,100 -$4,600
savings $47,800 $59,600 $62,700 +$3,100 +$14,900
investments $164,500 $210,800 $212,200 +$1,400
+0.7%
+$47,700
+29.0%
mortgage $143,000 $135,600 $134,900 +$700
+0.5%
+$8,100
+5.7%
net worth $531,600 $591,400 $597,700 +$6,300
+1.1%
+$66,100
+12.4%
taxable assets – debts $70,600 $51,000 $46,100 +$4,900
+9.6%
+$24,500
+34.7%
$ until FI* $811,300 $851,300 $826,900 -$24,400
-2.9%
+$15,600
+1.9%

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

The stock markets seemed mostly flat overall for November, so this month came out nicely. (And I haven’t registered for January grad school yet, so those thousands of dollars haven’t come out.) It’s looking like I’ll hit my $30,000 in general savings goal in January, rather than in December at this rate. My savings rate was 63% this month.

It looks like I’m on track to have my smallest annual net worth increase since 2010 this year. My net worth went up $22,000 in 2010 and then about $78-79,000 in 2011 and 2012. My estimate at this point is that I’ll fall just short of $600,000 this year for an increase of $67,000 for the year. Pretty much all of that went into my retirement accounts. This year feels like it was all about being slow and steady and not concentrating on money, which is probably for the best to do every once in a while.

Expenses: I spent $4,469 in November including the mortgage or $3,622 without it. Some of my controllable expenses broke down as follows:

  • $519 Clothing
    • $126 Athletic wear: online shopping for some base layers and return from last month ($164). Final cost from this month’s items should be $167.
    • $22 Bottoms: 2 pair tights
    • $105 Dresses: some returns and purchased 8 dresses, 6 of which I returned. Cost of those 2 dresses I’m keeping is $174
    • $240 Shoes: 3 pairs of new flats ($110, $54, $77) to replace ones that don’t fit anymore
    • $26 Tops: two long-sleeved tops
  • $78 Entertainment/Social [average so far this year: $126, average last year: $211] – some cash (~$20) and eating out with friends ($55)
  • $0 Eating out by myself [average so far this year: $6, average last year: $18]
  • $15 Work lunches [average so far this year: $39, average last year: $147] – I was lazy during the short week…
  • $109 Presents – starting on my Christmas shopping. I’m now done with 4/9 people! And I did not finish the rest in November, oops!
  • $6 Housing miscellaneous – a couple light bulbs and some pins
  • $78 Cell phone – This is the first time I’ve paid for my cell phone bill other than new SIM cards since June 2013 thanks to a healthy stream of referral credits (thank you readers!). It feels strange to pay for it again. This covers the $25 activation fee on Cricket (oops at poor planning on that), $40 for the “Basic” plan which gives me 2.5 GB of data (more than enough as I’ve averaged ~200 MB over the last 4.5 years) and $9.99 for a Cricket SIM card. Next month, I’ll pay $35 to Cricket and a small amount to Ting for my last bill.
  • ~$100 Dentist
  • $20 Eyebrows
  • $67 Toiletries [average so far this year: $48, average last year: $33] – Stocked up on bra washing soap, bought another cleanser to try, and bought a moisturizer.
  • $2,000 Shopping – new laptop (it was time to replace my 2011 model) and parts to upgrade my desktop computer
  • $102 Transportation: tolls replenishment (x2) and two tanks of gas

Yes, I’ve been spending a lot on clothing this year. But a) I can afford it while still having a healthy savings rate, b) I’ve been changing sizes a lot, which has resulted in not a good selection of clothes, and c) my overall spending for the year should still come in under (or around) last year’s. For example, I found myself getting dressed to go to an event with a closet full of dresses (about 10-15 that I’ve bought over the last ten years) and only one fit. I’ve remedied that now, so I’m hoping that I’ll manage to slow down my clothing spending.

Savings: $62,700 (up $3,100)

These funds are spread across a checking account that gets free ATM fees anywhere in the world, my current employer’s health savings account, a health savings account at my credit union, a bit of a buffer in my credit union checking account, and general and grad school savings accounts at Ally.

  • My grad school savings account is (as of October) at the amount I need it to be to pay for the rest of my grad school in cash, if necessary.
  • I’m contributing the maximum to my HSA this year.
  • The rest of the savings increase went to my general savings account, which I’ll be focusing on for the rest of the year.
  • Actions: I bought $10,000 of Series I Savings Bonds with part of my general savings account and transferred part of my grad school savings account somewhere else to get a deposit bonus.

Investments: $212,200 (up $1,400 or +0.7%)

This includes my pre-tax 401(k), employer 401(k) matching, my after-tax 401(k), my Roth IRA, and my taxable investments including stock index funds, Series I Savings Bonds, and ESPP cash/shares.

The change here comes from:

  1. Employer matching contributions
  2. A month’s ESPP deposits

It’s hard to believe it’s almost time for another round of 401(k) contributions. It feels like I just finished this year’s!

Mortgage: $134,900 (down $700 or -0.5%)

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 for the year.

TOTAL: $597,700 (up $6,300 or +1.1%)

I ended 2014 with a net worth of $531,600, so I’ve seen a change of +$66,100 or +12.4% 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. (Hah!)

I’m feeling lazy with the chart tonight. I promise one next month.

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Why Frugal Blogs Are Terrible For Me

Some people are inspired by uber frugality blogs. For me? They make me feel guilty that I spend too much money.

MMM, I can sort of handle. I just look at the parts about relative frugality, renting vs buying, how expensive cars are, savings rate time to retirement, etc. I don’t look at how much his family spends each year.

Other blogs in which people rave about how little they spend are really counterproductive for me.

I inherited the money scarcity mindset that my mom has or maybe had as she seems to be spending money more easily these days than she used to. When I was younger, I refused to let myself spend money and would guilt myself over it. I’ve finally mostly acquired a healthy relationship with money, thanks in part to my spending plan and in building a good nest egg.

I’ve never had a need to have the money scarcity mindset. Yet I’ve had it for most of my life, feeling like I can’t afford to buy a pair of pants I really want or a nice purse or to refresh my wardrobe. In high school, I saved 80% of my paychecks by transferring 80% of my income to my savings account immediately. That much was probably a bit excessive.

I would play games with myself as to how cheap I could get my grocery bill.

I would tell friends I couldn’t afford to do X activity when really it was that I didn’t want to.

I hated buying good bras because they’re really expensive. Eventually, I set myself a budget for bras that allowed me to buy 4 per year (now it’s up to 5) and not worry about the cost.

I set aside the cost to renew my passport, my Nexus/Global Entry card, and my driver’s license every month, despite the fact that I could easily cash flow any of these things.

I’m only just now in my late twenties starting to take care of my hair and skin because it seemed expensive and complicated.

I didn’t have a texting plan on my cell phone at 22 because I was too cheap. So one of my friends texted me repeatedly to try to convince me to get one. I eventually got one when I started dating someone and texting more.

I agonized and agonized over how expensive my rent was after college. I mean, I went from my parents paying my $350/month in rent in college to me paying $1,500/month in rent, which is definitely a huge jump.

I hate buying cell phones, computers, and electronics in general. Decision paralysis totally kicks in, plus spending guilt. I guilted myself when I replaced my four year old iPod that would no longer hold a charge several years ago. Mine wouldn’t hold a charge! And I still guilted myself!

There’s a difference between being frugal and cheap. I’m finally frugal and I’m proud of it. Some people have a terrible relationship with money in their 20s due to overspending. Mine was from unnecessary financial guilt and anxiety.

We all have to find our own level of frugality and then not let lifestyle inflation kick in from there.

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