Welcome to the 2022 year-end edition of our net worth tracker. I’ll review our December net worth as usual and then take a look at how 2022 treated us overall. I started tracking our net worth when this blog started, which was at the beginning of September 2019.
I started by creating the Net Worth Baseline report.
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. Our plans filled with friends and family were foiled by colds, fevers and Mr. 19. We’ll get together eventually and have Christmas in January. That said, my family still enjoyed our time together and we had fun!
December 2022 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. I typically do the net worth report before transferring money to the appropriate accounts.
We made a good amount in December, better than in November. This is what a higher-than-normal month looks like for us. The big increase in cash is largely due to emptying our Dependent Care FSA into our bank account and receiving an ‘extra’ paycheck.
Investment Cash (+$5,781.16)
All of our extra cash is transferred here and is considered part of our savings 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 now at the point where we could afford some fixer uppers. We have enough to buy a house and still have enough left over to renovate it. I’m starting to look, but whoknowns when we’ll pull the trigger.
Starting at the beginning of 2023 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) (+$800.00)
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 terrible in December, erasing any gains maid in November.
Another reflection that the markets had a negative month. The IRAs are all invested in mutual funds, which reflect the stock market’s decline 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 5%.
Net Worth (+$33,388.33)
December wasn’t a great month in terms of the stock market, wiping out any gains we had in November. However, we did bring home a decent amount of money, which helped offset the market losses.
Our decrease in net worth was solely from investments. Our net worth decreased by a little less than 1%. Doesn’t feel that bad considering some of my IRA accounts were down by 8%.
Accessible Net Worth ($11,860.60)
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 about 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… I 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.
Stocks and mutual funds did not payout as much in capital gains and dividends as they have for the last two years.
We didn’t set any records this year, like we did in 2020 and then again in 2021.
However, it was still a good year, putting us at 20% of our passive income goal. 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 in that “high-yield” account is now earning 3.3%. A full 3% than it was this time last year. I can’t complain too much about that.
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.
In 2021 I adjusted my savings rate goal to 50%, down from 60%. It seemed like 50% was a more attainable goal.
Last year, we barely met that goal. And this year… well… I don’t really want to talk about it. Haha.
It was terrible; Only a 35% savings rate. That was mainly due to us buying a house, and all the expenses related to that, and the costs of having two houses at he same time.
Without buying a house, we would have been right around 50%, so I’m going to keep the same goal for 2023.
Here’s how we did this month and for the year. After barely reaching that 50% goal last year, we fell off a cliff 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 breakdown:
1) Home Escrow ($965.00)
The normal amount we put aside every month.
2) Giving ($1,761.74)
The usual 10% we give every month. We started giving a little bit more, so it’s now 11%.
3) Cost of living ($253.45)
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 planned, 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.
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 when our gas bill starts to go up as we heat the house. We had a week or two of freezing weather, and the gas bill was through the roof.
Overall, December was still a relaxing month, although we managed to spend a lot of money.
From here on out, till we get to the next Christmas season, we will try not to spend too much. We always do, but it’s hard when you have kids. It will start to weight on me if our savings rate remains in the 30 percent range.
December 2022 Vs November 2022 Expenses
November and December were quite different months. The DCFSA wiped out all a lot of our expenses for December. November we just coasted along, without much of anything happening.
As a side note, I’m really not looking forward to returning to the office in January. I’m about ready to start counting the days till I retire from the office.
Aside from the Roth IRA contribution, most of the financial goals were year-long goals.
The Roth IRA contribution is done, and the money has been transferred to the proper accounts.
We missed our goal to save over $60,000 for real estate investing. We made it 74% of the way. and would have made it all the way if, ironically, we didn’t spend it on real estate.
Let’s see how much more we can put on top of that in 2023.
December was mediocre in terms of dividends, and we didn’t break any records in 2022.
A little crazy that 44% of the dividends come in the last month of the year! Even with that end of the year push, we fell about $1,000 short of reaching the passive income goal.
The savings rate goal became a joke after spending all that money buying a house.
For 2022, 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 ended up writing one article this year.
Honestly, I struggle to find time just to make these net worth reports, but I’m committed to doing it.
I did a reading goal again this year. 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, or in 2021, or in 2022. …We’ll try again next year. I’m really getting sick of not being healthy. Not literally sick, but I need to whip it into shape before I do end up getting sick.
I’ve been going to the gym again and running off and on. That’s been helping. I just need to be more consistent and I need to eat healthier.
December 2022 Roundup
The month of December was another good one. It was nice staying home with just the immediate family on Christmas day.
Our cash flow maintains a positive direction, and all the bills are paid. Aside from everyone still being on edge from a worldwide pandemic, life is pretty much normal.
2022 Annual Results
This is the third 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 stats to share. Unfortunately, our change in net worth for the year isn’t very exciting this time around.
2022 Net Worth Decrease: $174,891.69
We ended 2021 with a net worth of approximately $598,826.13
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 can’t say I’m that shocked when I see the decrease. The markets were down about 20% for the year, so I’m grateful we’re only down 13%. Let’s break down that net worth decrease.
We saved about $46,000 of our take-home pay. That means from the money we brought home from paychecks, we put almost $34,000 towards investment savings and about $12,000 in our Roth IRAs.
I maxed out my 401(k) for a total of $20,500.
Without those contribution, we would be even more negative. Eek!
Last year, we made more from stock market growth than we did from our own contributions. This year, we finally got to see a strong bear market, and how that feel emotionally.
As anyone who pays attention to the news, all the experts are predicting 2023 will be a rough year financially.
2021 Passive Income: $14,119.08
My goal was to have a passive income of over $15,000, two years in a row. In 2021, we received over $20,000. Unfortunately, we barely missed that goal, by less than $1,000.
I’m going to leave the passive income goal set to $15,000. The market had a lot of volatility, so I don’t know what to expect.
2022 Savings Rate: 34.5%
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, and I was right. What I didn’t realize is how far off we would be. It hurts.
I’m keeping the goal at 50% again for 2023, because I think we can sustain it as long as we don’t have any majoy expenses. Like buying a house. If we meet the goal in 2023, I’ll bump up the goal to 55% for 2024. (Hopefully, I’ll be retired after 2024.)
2022 Expenses: $88,261.70
2021 Expenses: $66,285.45
2020 Expenses: $58,433.45
2019 Expenses: $47,676.12
YoY increase ($): $21,976.25
YoY increase (%): 33.1%
We didn’t have to cashflow a baby, we took the second child out of daycare, yet we still spent a ton more. Turns out buying a house is expensive. Lesson learned.
Here are some charts to help visualize our 2022 expenses, with a comparison to 2022 as well. Notice the spike in home escrow compared to 2021.
In case you’re wondering why miscellaneous was negative in 2021, 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.
The government didn’t pay that in 2022, so hopefully we see a lower tax bill.
2021 was another great year for us all around, although it was rough financially. Our income wasn’t quiet as high, but both of us are still in jobs and workplaces that we both enjoy, AND we were employed full-time throughout the year. Their are no foreseeable job cuts coming up this year either
This was the fourth full year of having to pay for daycare. For a while we had to pay for two kids, but now we only have to pay for one. We’ll be done with daycare in 2 years for the most part.
It’s a big chunk of our budget, but 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 (28 %) & 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 even though we downsized.
I already know what our property tax bill looks like for 2023. Assuming taxes don’t substantially increase in 2023, this expense (our escrow savings) will drop next year since we have a smaller, cheaper house.
We had a big house and now we have a medium sized house. That said, it’s an older house, so, utilities will still 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.
I predict utility prices to continue to climb as the cost of natural resources goes up.
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.
I don’t see us moving while the kids are little, but maybe by the time they reach high school. 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 more than last year, although it was less percentage wise (21%). It reflects how good we have it and that we are good stewards of what we have.
Hopefully, we can continue the trend and increase our giving for 2023. It really is a lot of fun to be able to give.
In 2020 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 am happy it was only 9%. Paying for two kids at daycare is not cheap.
We have another full year of day care at about this cost, and then we will see a steep drop. I know one or two years will fly by, but it seems like a long time right now.
Driving is pretty much back to normal for everyone.
This year we expensive due to all the extra driving from moving, and having to repair our car twice. One of those repairs was over $2,000.
All the medical bills were gone in 2022. 2021 was a one-off year where we received Child Tax Credits every month that offset our expenses. 2022 was back to normal, except we put some house buying expenses in this category. It would have been close to 1% without adding the earned money.
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, although I need to reign in shopping a little.
We could do a little better in the shopping category, but I’m trying to balance savings with what the kids need. I’ll admit that I probably went a little overboard in 2022. I’m still finding the balance, but kinda expect I’ll have to spend about the same in 2023 because of inflation. I’m just hoping my paycheck goes up with inflation as well.
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.