The Professor’s End of 2019 Financial Update

This will be my first post showing how I am saving money both in and out of retirement accounts. I always like to read blogs that give real-life examples of those people practicing what they preach. Going forward, I will try and give a quarterly update of our financial position and the thoughts that go into it. I will warn you, I don't have huge amounts of money socked away anywhere, but I think we have done a solid job in putting money aside. 

*Always keep in mind, these numbers DO NOT include my teacher pension. My goal is to make that money just a part of our financial future and NOT the entire amount we will have.

Assets:

Cash - $4,648

This includes all of our checking and savings account balances. I'm not a big believer in carrying 3-6 month emergency fund. We have enough room on credit cards to put any emergency purchases on and then pay them off with our other accounts before those bills are due. These types of accounts just don't return enough in interest to provide any value to me.

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TD Ameritrade (taxable) - $1,160

This is an account that I started so I could buy individual dividend growth stocks.

Vanguard (taxable) - $2,435

This is an account that I use to purchase Vanguard index funds.This is where I prefer to keep my "emergency" fund. I know that I need to grow this out more in case of any significant emergency expense. My plan is to get between $10-15,000 in this account and let it grow and replenish as needed.

My 403(b) - $74,563

This is my main retirement account. I have been paying into this since I started teaching. Our district currently matches $800 each year into this account. It is kind of small for having taught for 20 years, but my early years of putting money into this account robbed me of many gains. I was invested in annuities with heavy fees and surrender penalties. It's just been in the last 8-10 years that I have really become more knowledgeable about these accounts. They also say that your first $100,000 is the hardest to save. Once you hit that mark, your accounts grow much more quickly because you are getting that compounding snowball rolling. I'm almost there...

My IRA - $274

I opened this account because I was going to drop my contribution in my 403(b) down to the match. I will be contributing more to this as I go forward. The key reason is that I don't have to pay ANY fees in my IRA like I do in my 403(b). This is also where I will rollover my 403(b) money to when I retire.

Wife 401(k) - $143,699

My wife has a good job as a nurse and the organization that she works for contributes 9% of her salary each year into this account. She's also contributing 11% of her salary so about 20% of her salary goes here each year. This is the account that I learned first-hand the power of compounding.

My Health Care Savings Plan (HCSP) - $19,834

This is an account through our school that we both contribute to each month. It can only be used for medical expenses AFTER I retire. It has grown nicely the last 5 years.

Liabilities:

Clinic - $1,238

It sucks to have low-back pain.  I get a procedure done each spring that costs about $3,000 out of pocket. This is the paydown for that.

RAV4 Loan - $18,549

We had to add another vehicle to our "fleet" last spring due to another driver in the household. We also needed a little bit larger one with two teenage girls.

My Student Loan - $5,696

This is what's left of my loan for my Master's degree.

Mortgage - $107,469

This is the mortgage that we have on our home. The house currently appraises for about $160,000 so we do have some equity in it. I opened a $30,000 line of credit on it last spring just in case I found an investment property to purchase. I don't plan on touching that line of credit for anything but an investment.

Net worth (assets-liabilities) - $113,587

Key Points:

You'll notice that I don't have assets linked for our major liabilities. I do NOT believe that you should include the value of your house or vehicles as assets for your net worth. You only realize those assets if you sell them, and I don't plan on ever selling those things, but I DO have to pay off those loans. I think it gives a clearer picture of how much money you actually have.

Goals for 2020:

My biggest goal for 2020 is to pay off the clinic bill. Another big event that happened since the New Year was that we had to get a vehicle to replace my old 2010 Dodge Avenger that was totaled in an accident. Fortunately everyone involved was OK, but the insurance company didn't feel that spending $6,000 to repair a 9 year old vehicle with 210,000 miles on it was a good investment. We ended up purchasing a 2016 Toyota Corolla. We made a $3,000 down payment and I am planning on paying off the $11,000 loan within the year. Once that is completed, my goal is to fully fund ($6,000) my IRA for the year and increase contributions to my 403(b).

So how's your financial situation? Throw some thoughts down in the comments and as always....

KEEP STACKIN!