Welcome to the 2021 year-end edition of our net worth tracker. I’ll review our December net worth as usual, and then take a look at how 2021 treated us. I started tracking our net worth at the time this blog was started, which was the beginning of September 2019.
I started by creating the Net Worth Baseline report. If you’re curious about my net worth prior to September 2019, check out My Net Worth Story.
You can view Previous Net Worth reports HERE.
December, as usual, was a busy month for us. We did our normal work routine during the week, aside from Christmas week, and we had a few weekends that were filled with friends, family, and fun!
This year my kids are getting old enough that I can take them to shop for Mom a little, but let me tell you, there is no keeping a secret from Mom. One of the kids was so excited to tell Mom all about wrapping her present…and asking if she would share with her.
Well, my plans to make this a Christmas tradition failed. The previous two years I picked up some fancy root beer to drink during my week off, but this year I completely forgot!
December 2021 Net Worth
Here’s how December compares to last month:
December Account Breakdown
Let’s take a quick look at what happened in December.
This is where our paychecks get deposited. All our income goes into this account, then gets transferred to the proper accounts as set by my budget. The trend continues that I do the net worth report before transferring money to the appropriate accounts.
We made a good amount in December, better than November. This is what a higher than normal month looks like for us. The big increase in cash is from emptying out our Dependent Care FSA into our bank account and receiving an ‘extra’ paycheck.
Also, it’s a little higher than it should be because I forgot to transfer our investment money from last month. Oops.
Investment Cash ($0.00)
All of our extra cash is transferred here and is considered part of our saving’s rate. This is where our leftover income went from November. This is cash we plan on using to invest in real estate in the near future (less than 5 years). It’s getting close to the point where we could afford some fixer uppers, but it’s still not enough to buy a house and have enough left over to renovate it.
Starting at the beginning of 2022 we will pause transferring money towards this account and instead fund our Roth IRAs until they are maxed out. We try to save as much money as we can. Our future selves will thank us.
That means all our extra money from this month is going towards Roths, and you won’t see much of an increase in investment cash.
Remaining Cash Accounts (Emergency and Sinking Funds) (+$1062.03)
Nothing exciting here. Just the usual. The amount increased by about the same as last month since we’re just saving up for our property tax bill and HOA fees for when they are due in January. (This month! Yikes!)
The markets did better in December, reaching new record highs and recovering some of the losses from November. The 401(k)s’ increases were partly due to our contributions throughout the month, but mostly due to the market.
Another reflection that the markets had a positive month. The IRAs are all invested in mutual funds, which reflect the stock market’s growth for December.
College Fund (+$2,982.77)
The college fund is invested just like the IRAs. The 529s are fully funded and we don’t plan on putting in any more cash.
The gain is equal to about 4%.
Net Worth (+$33,388.33)
December was an excellent month for us, wiping out any losses we had in November. Shows how good of a month December was.
I wasn’t sure how this month was going to turn out because of everything that happened, but it worked out well for us. Most of our increase in net worth was from investments. Our net worth increased by over 3%. Feels pretty good.
Accessible Net Worth ($11,335.43)
This is the money we were able to put away, not including the tax-advantaged retirement accounts. Our income was great and our expenses were below average this month. Our accessible net worth increased because of the money we brought home, and we haven’t transferred any to Roths yet.
Status: None, as usual. They’re a burden, so I avoid them. The cars, the house, they’re all paid for. Student loans…never used them. Credit Card debt? I only use one, and it gets paid off every month, and often I’ll pay it off multiple times per month. Just depends on how many times I think about it.
September was a record month for dividend income. Well, December set a new record and blew the old one out of the water. I am happy to report a record monthly dividend & a record annual dividend income!
Woo Hoo! That puts us about one-third of the way to being financially independent based on our spending this year. Everyone says that it grows exponentially, so we’ll see how the next few years look for us.
For now, we begin the dividend lull until March.
The interest rate in my savings account is super low, as can be expected. My money is barely making any money sitting in that “high-yield” account earning 0.3%.
I track my savings rate in order to help keep my feet to the fire, so later I can be Gone on FIRE. As a bonus, you get a glimpse into my cash flow by looking at the income and expense rows.
Last year I adjusted my savings rate goal to 50%, down from 60%. It seemed like 50% was a more attainable goal.
This month, we beat that 50% goal! I mean we absolutely killed it. Enough so that it was sufficient to bring the average up to above 50%!
December was an extra paycheck month for us, and we received a bunch of money from the DCFSA, so that put us at over a 100% savings rate for the month.
Here’s how we did this month, and for the year. After being Sooooo close to reaching that 50% goal last year, we finally made it this year!
Right now, our only source of active income is through our full-time jobs.
This is what a high-income month looks like for us. That was a nice little boost.
Our expenses were well below average this month. In fact, we made more than we spent (outside of our normal paychecks) because of the dependant care FSA cash out and some things we returned.
Here is a quick break down:
1) Home Escrow ($1060.00)
The normal amount we put aside every month.
2) Giving ($1,127.06)
The usual 10% we give every month. We started giving a little bit more, so it’s now 11%.
3) Cost of living (-$4,034.08)
Previous Months: Nov: ($3,703.00), Oct: ($3,268.10), Sep: ($3,968.22), Aug: ($3,532.91), July ($2,394.24), June: ($4,283.01), May: ($3,726.16), Apr: ($3,857.24), Mar: ($2,962.72), Feb: ($2,632.65), Jan: ($4,757.43), Dec: (-$1,132.39)
Running Average: $2,609.17
This includes all our bills (Gas, Electric, Water, Internet, Phone), transportation, food, shopping, and daycare. Home insurance is paid for out of our Home Escrow savings account.
As we had been planning, we drained our dependent care account at the end of the year in one lump sum. It was much less paperwork for us, and a really nice way to end the year. It feels like getting a big bonus.
Our gasoline bills continued to increase. We have a pretty good idea of what it will cost each month now with my wife going back to work, and me having to go into the office.
We have started to enter the cold part of the year (finally), so our water bills have decreased, and electric/gas bills have started to increase. The next few months are where our gas bill starts to go up as we heat the house. I haven’t had to do much of that throughout December with our weather being in the 80s.
December was a relzing month, and we didn’t have to spend much. I spent it all in November. Haha.
From here on out till we get to the next Christmas season, we will try to not spend too much. We always do, but it’s hard when you have kids.
December 2021 Vs November 2021 Expenses
November and December were quite different months. The DCFSA wiped out all our expenses and more for December. November was all about making sure we had done all court Christmas shopping, which we did a decent job doing.
As a side note, I’m really not looking forward to having to be back in the office in January.
Aside from the Roth IRA contribution, most of the financial goals this year are year-long goals.
The Roth IRA contribution is done, and the money has been transferred to the proper accounts.
In October, we met our goal to save over $50,000 for real estate investing!
Let’s see how much more we can put on top of that.
December killed it in terms of dividends and we keep breaking records. It took all year, as expected, but we met our passive income goal of $15,000.
A little crazy that almost 40% comes in the last month!
The savings rate goal of 50% seems unobtainable after November. For most of the year, I thought it was a stretch goal. We’re below 50% right now, but a perfect December may be enough to pull us up to that goal. We’ll have to work a lot!
For 2021, I wanted to create more content. My goal was at least one article a month. I failed to do that this year. I keep saying hopefully next month I’ll get an article posted, but life is just keeping me busy. I think I wrote one article this year.
Honestly, I struggle to find time just to make these net worth reports, but it’s something I’m committed to doing.
I did a reading goal again this year, but half the number of books as last yearr. I know 6 books aren’t much, but it felt like a lot. I thought I could do 3.
I read 2 books.
And then there is my physical health. I didn’t get to where I wanted in 2020, so we tried again this year. …We’ll try again next year
I’ve lost some weight this year, and I’ve been going to the gym again and running. That’s been helping. Just need to eat a little healthier.
December 2021 Roundup
The month of December was a another good one. It was nice staying home with just the immediately family on Christmas day. Also, we are so close to everyone getting vaccines and not having to wear these stupid masks! Ha, that’s what I said last year, but now we have mid-term elections coming up. I’m once again hopeful.
Our cash flow is maintaining a positive direction, and all the bills are paid. Aside from a world-wide pandemic, life is pretty much normal. Even the pandemic shouldn’t last too long into 2022, as we record a record number of cases (Like double and triple what they were last year).
2021 Annual Results
I’ve had another full year of tracking all this data, now it’s time to share it! As I promised in last year’s annual report, I now have exciting (to me) stats, like our net worth increase for the year.
2021 Net Worth Increase: $174,891.69
We ended 2021 with a net worth of approximately $687,860.35.
We ended 2020 with a net worth of approximately $512,968.66.
We ended 2019 with a net worth of approximately $365,787.79.
I’m still a little shocked when I see that difference. Let’s break down that net worth increase.
We saved about $72,000 of our take-home pay. That means from the money we brought home from paychecks, we put almost $56,000 towards investment savings, and about $16,000 in our Roth IRAs.
I maxed out my 401(k) for a total of $19,500.
Add what we contributed from our take home pay and what we contributed to our 401k’s, and that equals $91,000. The remainder, about $84,000, is all from market growth!
Last year, we made more from stock market growth than we did from our own contributions. However, this year we were able to contribute a lot more, and it topped what we earned from market growth. Barely.
The market didn’t perform quiet as well as it did in 2021, but we still made more in investment growth by about $10,000.
Secondly, we didn’t cashflow the birth of a baby this year, allowing us to contribute more.
2021 Passive Income: $21,418.31
My goal was to have passive income over $15,000, so I’m really excited to see it at over $20,000. It should probably make the 2022 passive income goal $20,000, but I’m going to leave it at $15,000. The same as 2021.
I just feel like the market has to take a break sometime soon.
2021 Savings Rate: 52.0%
2020 Savings Rate: 48.5%
2019 Savings Rate: 57%
This is the one goal I didn’t think we would achieve this year, but we did it! Yay! Again, not cashflowing a baby helped. I’m keeping the goal at 50% again for 2022 to make sure we can sustain it. If we do, I’ll bump up the goal to 55% for 2023.
2021 Expenses: $66,285.45
2020 Expenses: $58,433.45
2019 Expenses: $47,676.12
YoY increase ($): $7,852.00
YoY increase (%): 13.4%
We didn’t have to cashflow a baby, but we did have to put a second child in daycare. Turns out that is more expensive.
Here are some charts to help visualize our 2021 expenses, with a comparison to 2020 as well. Notice the spike in day care compared to 2020, when we only had to pay for one child.
In case you’re wondering why miscellaneous is negative, it’s because we put the income from the monthly IRS Child Tax Credit in that category. We’ll be paying it back come tax season, so we didn’t count it as income.
2021 was another great year for us, in terms of income and all around. Our income ticked up slightly and both of us are still in jobs and workplaces that we both enjoy AND we were employed full-time through the year.
Also, I got the promotion at work I had been hoping for for a couple years now.
This was the third full year of having to pay for daycare, but now we have to pay for two kids. It’s a big chunk of our budget, nice to know that it doesn’t eat up too much. At least not enough where it would be better for one of us to stay home.
Let’s take a look at how our expenses break down.
Housing: Home Escrow (26 %) & Utilities (7%)
Home Escrow continues to be the biggest slice of the pie. Texas has high property taxes. I expect that taxes and other minor home expenses will continue to be about a quarter or more of our annual expenses.
I already know what our property tax bill looks like for 2022. Assuming taxes don’t have a substantial increase in 2023, this expense (our escrow savings) will remain about the same for next year.
We have a big house. Therefore, utilities cost a decent amount. We try to be conservative with our usage. Turning off lights and bundling up in blankets for the winter, but there’s only so much you can do.
Previously I expected that utilities would hover around the same amount for the foreseeable future, and last year I anticipated a slight increase because we have two kids we have to provide for and keep comfortable.
The actual cost did tick up ever so slightly, but it stayed the same percentage of our take home pay.
We really like our house and where we live. Also, we don’t want to move too much with the kids. We like the daycare and we live in a great school district. That said, we are always looking for a property with some land. We would like to have some space between our neighbors and ourselves.
Nothing popped up in 2021, but I’ll continue looking in 2022. We’ll see how it plays out over the next couple of years.
Also, we would love to build our dream home one day. FIRE Goal!
It’s awesome to see that giving is our second-highest “expense” and we were able to give a higher percentage than last year (19%). It’s a reflection of how good we have it and that we are being good stewards of what we have.
Hopefully, we can continue the trend and increase our giving for 2022. It really is a lot of fun to be able to give.
Last year I said, ” This is one category that I expect to be a higher percentage by the end of 2021. I’d be happy if it was only 9% next year!”
It’s true, I would be happy it were only 9%. Paying for two kids at day care is not cheap. I anticipate this will be continue to be somewhere between 15-20% of our annual spending until the kids are old enough to go to elementary school.
That means we have another full year of day care at about this cost, and then we will start seeing a drop. I know two years will fly by, but it seems like a long time right now.
Prior to Covid I said, “As long as we are working, this is going to be a decent slice of the pie.” Well, I’m back in the office, which means driving again.
Last year I also said, “However, I don’t expect it to be this high every year. … I’m hopeful that this category will be 10% or less of our 2020 spending.” At least I got that part right! And I think that’s the more important part to get right. Haha.
This is the category where we put all our medical expenses. We had fewer medical bills than in previous years, but there were a few. However, this is a one-off year where we received Child Tax Credits every month that offset those expenses, ultimately bringing this category negative.
All the other categories
The rest of our expenses combined are less than 20% of our total outgoing expenses, with shopping accounting for 8% of that. I think we are doing a decent job in these areas.
We could do a little better in the shopping category, but I’m trying to balance savings with what the kids need. And it’s worth noting that I did spend less in 2021 than I did in 2020. I’m still finding the balance, but kinda expect I’ll have to spend more in 2022.
Otherwise, sure, we could trim a little here and there, but it wouldn’t really move the needle much for us.
- 2 big items not included in my net worth:
- House & Cars – Their value will be added to my net worth if and when I sell them.
- 2 accounts not included in net worth total (even though they’re listed):
- 529 – This is my baby’s money. Consider it her net worth summary.
- Home Escrow – This is Uncle Sam’s money. We don’t mess around with him.
- Total income only includes our active income, which is currently our full-time jobs.