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.
Q1 in 2020 was good for us financially. We still aren't as "liquid" as I would like. We need to increase our savings to be able to weather any financial storms, but we are working to get there.
*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.
| 3/31/2021 | 6/30/2021 | |||
| Assets | March | June | Change | % Change |
| Cash - All checking and savings accounts | $ 3,442.64 | $ 4,050.56 | $ 607.92 | 17.7% |
| Stock Account (TD Ameritrade) | $ 2,936.92 | $ 3,171.68 | $ 234.76 | 8.0% |
| Index Fund (Vanguard) | $ 6,708.94 | $ 6,003.14 | $ (705.80) | -10.5% |
| Stock Account (M1 Finance) | $ 163.56 | $ 307.96 | $ 144.40 | 88.3% |
| My 403(b) | $ 80,516.82 | $ 87,355.43 | $ 6,838.61 | 8.5% |
| My IRA | $ 401.28 | $ 418.65 | $ 17.37 | 4.3% |
| Wife 401(k) | $ 198,779.61 | $ 216,150.84 | $ 17,371.23 | 8.7% |
| My HCSP | $ 25,642.17 | $ 27,582.39 | $ 1,940.22 | 7.6% |
| Total Assets | $ 318,591.94 | $ 345,040.65 | $ 26,448.71 | 8.3% |
| Liabilities | ||||
| Current Debt (Credit Cards, Etc.) | $ - | 0.0% | ||
| Clinic | $ 2,387.24 | $ 2,436.30 | $ 49.06 | 2.1% |
| Corolla Loan | $ - | $ - | $ - | 0.0% |
| RAV4 Loan | $ 13,467.50 | $ 12,425.89 | $ (1,041.61) | -7.7% |
| My Student Loan | $ 5,559.16 | $ 5,559.16 | $ - | 0.0% |
| Property #1 Mortgage (Primary) | $ 106,381.55 | $ 104,822.88 | $ (1,558.67) | -1.5% |
| HELOC (Primary) | $ 10,000.00 | $ 17,800.00 | $ 7,800.00 | 78.0% |
| Total Liabilities | $ 137,795.45 | $ 143,044.23 | $ 5,248.78 | 3.8% |
| Total Net Worth | $ 180,796.49 | $ 201,996.42 | $ 21,199.93 | 11.7% |
Assets:
Cash - $4050.56 Up $607.92
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.
We need to build this up more. My goal is to build this to $10,000 by the end of the year.
TD Ameritrade (taxable) - $2,936.92 Up $234.76
This is an account that I started so I could buy individual dividend growth stocks. I've sold some of my dividend stocks and put more into growth stocks. This is the reason for the increase in this account.
Vanguard (taxable) - $6003.14 Down 705.80
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. We did have to pull out some to pay for some oral surgery for our youngest's wisdom teeth.
M1 Finance (taxable) - $307.96 Up $144.40
This is an account that I started so I could buy high growth tech stocks. It allows you to build a portfolio and put money into it and buy fractional shares instead of having to wait to save enough to build a position for each stock. Will add some as I can to this. Was able to dump in $100 and these tech stocks recovered nicely in Q2.
My 403(b) - $87,355.43 Up $6838.61
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 - $418.65 Up $17.37
This is where I will roll over my 403(b) to when I retire. No money added this quarter.
Wife 401(k) - $216,150.84 Up $17,371.23
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 12.5% 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.
Market continues to go up. We did up her contributions to 12.5% from 11.5%.We were able to BLOW past that $200k mark! This account reinvests almost $2,500/year in dividends. The power of compounding!
My Health Care Savings Plan (HCSP) - $27,582.39 Up $1,940.22
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 - $2,436.30 UP $49.06
It sucks to have low-back pain. I just got one of my procedures done again. I think I will be able to skip the other side though. We are still paying $400/month on the payment plan. There is NO interest on this so I am in no rush to pay it back.
RAV4 Loan - $12,425.89 Down $1,041.61
We had to add another vehicle to our "fleet" in 2019 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 - $0 Down $0
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. ACHIEVED! Used part of our most recent stimulus check to completely pay this off! One yearly goal accomplished.
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 - $104,822.88 Down $1,558.67
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 - $17,800 Up $7,800
Ughh. This is my biggest regret this quarter. We pulled money out to completely pay off a couple of random credit cards that had been hanging over us for a bit stemming back to my basement remodel last spring. One positive is that we are now COMPLETELY credit card debt free as we make our payment in full each month. We only use 2 different cards now for the bonus points that they give us for travel.
Net worth (assets-liabilities) - $201,966.42 Up $21,199.93
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 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 are still debating if we will take out a parent loan or pull money from our HELOC to cover her tuition each quarter. We are looking into interest rates on school loans for parents. Whichever way we go, that will eat up our cashflow for a few years.... It's always somethin....
Quarterly Comments:
Another big quarter in the market. It's amazing to see how money compounds once you reach that 6-figure mark. It grows by itself far more than we could ever contribute to it. This area continues to be our shining star, but it also highlights the trouble with how "illiquid" we are. Like most middle-class Americans, the vast majority of our net worth is tied up in our home equity and our retirement accounts. The home equity really means nothing because we aren't using that to create any income, and our retirement accounts are pretty much untouchable until age 59.5, so we will just continue to plod along and make every effort we can to break out of the rat race.
I was very disappointed in those two credit cards that we had to pay off. We should NEVER have to carry a credit card balance again, but now we have to focus on starting to pay down that HELOC. I am working shifts at our local golf course this summer to try and pick up some extra cash to build up for the college payment in the fall, so we don't have to pull "as much" from our HELOC for that big tuition bill coming due.
We are STILL trying to begin saving up money for a rental property, BUT the housing market is just too damn hot right now. There are no deals out there that aren't gobbled up before they even get on the market. I would love to have a rental property or two for the cash flow, but it's just not in the cards at this point. Someday......
So how's your financial situation? Throw some thoughts down in the comments and as always....
KEEP STACKIN!