This is my post showing how we are 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.
For as bad as Q3 was in 2020, Q4 was just the opposite! It was a great bounce-back for our stock accounts. We have continued to put money into these accounts, regardless of the direction the markets are headed. The paying off of debt has been slow and steady. We did not do a great job of reaching my goals for 2020, but it seems that there are always expenses that pop of out of nowhere.
*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.
| 9/30/2020 | 12/31/2020 | |||
| Assets | September | December | Change | % Change |
| Cash - All checking and savings accounts | $ 4,938.64 | $ 4,721.50 | $ (217.14) | -4.4% |
| Stock Account (TD Ameritrade) | $ 1,891.34 | $ 2,600.74 | $ 709.40 | 37.5% |
| Index Fund (Vanguard) | $ 3,688.47 | $ 5,314.19 | $ 1,625.72 | 44.1% |
| My 403(b) | $ 62,968.53 | $ 73,831.44 | $ 10,862.91 | 17.3% |
| My IRA | $ 278.84 | $ 305.32 | $ 26.48 | 9.5% |
| Wife 401(k) | $ 160,149.30 | $ 183,688.06 | $ 23,538.76 | 14.7% |
| My HCSP | $ 21,182.95 | $ 24,303.24 | $ 3,120.29 | 14.7% |
| Total Assets | $ 255,098.07 | $ 294,764.49 | $ 39,666.42 | 15.5% |
| Liabilities | ||||
| Current Debt (Credit Cards, Etc.) | $ - | 0.0% | ||
| Clinic | $ 4,323.24 | $ 3,587.24 | $ (736.00) | -17.0% |
| Corolla Loan | $ 7,442.44 | $ 6,075.97 | $ (1,366.47) | -18.4% |
| RAV4 Loan | $ 15,525.02 | $ 14,160.58 | $ (1,364.44) | -8.8% |
| My Student Loan | $ 5,559.16 | $ 5,559.16 | $ - | 0.0% |
| Property #1 Mortgage (Primary) | $ 109,470.15 | $ 107,930.72 | $ (1,539.43) | -1.4% |
| HELOC (Primary) | $ 8,000.00 | $ 8,000.00 | $ - | 0.0% |
| Total Liabilities | $ 150,320.01 | $ 145,313.67 | $ (5,006.34) | -3.3% |
| Total Net Worth | $ 104,778.06 | $ 149,450.82 | $ 44,672.76 | 42.6% |
Assets:
Cash - $4,721.50 Down $217.14
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. This account always seems to stay pretty steady.
TD Ameritrade (taxable) - $2,600.74 Up $709.40
This is an account that I started so I could buy individual dividend growth stocks. Bought a few more shares of Altria to fill out a full position. Very good growth here.
Vanguard (taxable) - $5,314.10 Up $1,625.72
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. We are putting in $500/month into this. Steady growth and savings here.
My 403(b) - $73,831.44 Up $10,862.91
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.
It's continuing to climb.
My IRA - $305.32 Up $26.48
This is where I will roll over my 403(b) to when I retire. Not putting anything in here at this point.
Wife 401(k) - $183,688.06 Up $23,538.76
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 11.5% 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.
Massive climb with the market rebounding. Closing in on that $200k mark! This account reinvests almost $2,500/year in dividends. The power of compounding!
My Health Care Savings Plan (HCSP) - $24,303.24 Up $3,120.29
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. It has also regained all its losses from the collapse and continues to grow and reinvest its dividends.
Liabilities:
Clinic - $3,587.24 Down $736
It sucks to have low-back pain. I just got my procedures done again. I'm paying $400/month at 0% interest until it's gone.
RAV4 Loan - $14,160.58 Down $1,364.44
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. Slowly working this one down.
Corolla Loan - $6,075.97 Down $1,366.47
This is the loan for the vehicle to replace our previous car that was totaled. It's a nice fuel efficient vehicle. My goal is to have it paid off in the next 12 months. Making good progress on this.
My Student Loan - $5,559 Unchanged
This is what's left of my loan for my Master's degree. With the pandemic, I was given forbearance on this loan.
Mortgage - $107,930.72 Down $1,539.42
This is the mortgage that we have on our home. The house currently appraises for about $207,000, so we do have some equity in it. We signed on our refinance at 15 years and 2.5%. We will have the house paid off just as I am ready to retire from teaching. Great timing!
HELOC - $8,000 No Change
This is money that we pulled out to pay for the update in our basement. We pay 4.5% interest-only on this for 10 years and then we pay over the next 20 years on the loan. My goal is to pay this off within the year.
Net worth (assets-liabilities) - $149,450.82 Up $44,672.46
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. My goal is to fully fund ($6,000) my Roth IRA for the year. I'm also going to continue to grow my Vanguard Index account to use as a down payment on a rental property. Our goal is to have one cash-flowing rental property by this time next year. I am currently looking at a couple properties in our small town. Prices are still a little high, so not willing to pull the trigger yet. Was not able to achieve the goals of paying off the clinic bill or funding a Roth IRA during 2020. Having two high school girls who missed all class trips during the pandemic and now they are trying to "catch" up really puts a dent in saving.
Goals for 2021:
I'm going to keep a couple of goals here. I definitely want to get that clinic bill paid off and also fund a Roth IRA ($6,000) for the year. I was able to continue to grow the Vanguard Index account. I am planning to continue watching the current rental properties available in my area. If I can get one at a fair deal, I will definitely pull the trigger. We do have a senior that will be heading off to college next fall, so that will be a BIG expense, but one that will definitely be worth it for her. We also have another high schooler that will be getting her license in March. I am currently looking for an older vehicle that I can pay cash for. I do NOT want to take on another monthly payment.
So how's your financial situation? Throw some thoughts down in the comments and as always....
KEEP STACKIN!