Welcome to the August 2020 edition of our net worth tracker, where we’ll track our net worth month over month. I first 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.
You can view Previous Net Worth reports HERE.
August is known to be the hottest month of the year, and it hasn’t disappointed. The weather is hot. Plain and simple. We have had several 100-degree days now, mixed in with some cool thunderstorms. September looks to start cooling off. Last year was a hot September, so we’ll see what happens this year. Financially, August was a tough month in terms of savings and income, but was good in terms of net worth.
And just like the rest of the summer months, I’m not going to talk much about what I did this month because we continued to not do much. It was an overall calm and relaxing month and we got to watch our baby grown and learn a little.
Monthly Roundup
The order continues. We are officially required to wear masks anytime we enter a business. Technically we aren’t required, but the business is forced to require it. Traffic on the roads is completely back to normal, and most things seem normal, except that we have to cover our faces. My wife continued into her second month a maternity leave while I worked. The baby is doing good, growing, and, overall, life is good.
If you recently had a child, don’t forget to fund their college education. I use the Vanguard 529 plan. I need to transfer money into before the end of the year, but after the hospital bills are paid.
August 2020 Net Worth
Here’s how August compares to last month:
August Account Breakdown
Let’s take a quick look at what happened in August.
Cash (-3,704.21)
Monthly Blurb: 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. As usual, I do the net worth report before transferring money to the appropriate accounts.
My wife is on short term disability, and received her last payment. Her PTO is out, so that is all we received from her. My paychecks went down slightly because of adding another child to our health plan. The end result is that we did not bring in as much, and therefore have less cash.
Investment Cash ($5,905.55)
Monthly Blurb: All of our cash leftover at the end of the month is transferred here and is considered part of our saving’s rate.
We have to pay for the delivery of baby #2, and the bills are starting to come in. That means all of our extra money is going towards investments this month, but the jump in investment cash is month transferred because of last months savings.
After we receive all the bills, insurance gets their part figured out, and we have paid all the bills, we finally get back to normal and start to save towards investing. I expect us to start paying the hospital bills in October, so maybe November will be more normal? Hopefully some opportunities come up this winter for investing. The foreclosure moratorium ended in July, but it seems like evictions are still halted. I forget what agency is controlling that.
Remaining Cash Accounts (Emergency and Sinking Funds) ($1,074.71)
Nothing exciting here. Just the usual. We are just saving up for our property tax bill and HOA fees for when they are due early next year.
Retirement Accounts
401(k)s (+$9,780.48)
Our 401(k) increased slightly less than our other investment accounts this month. They’re normally somewhat close, and this month wasn’t really different. They went up about 9%.
I didn’t miss it this month. The S&P and Nasdaq are at record highs. I know the S&P set a few records in July, and the momentum continues. The financial analyst keep talking about how September is historically the worst month for the stock markets. We’ll see. I’m more worried about the affect of the upcoming election.
IRA (+$15,898.84)
This increase is all due to the rise in the markets. The rise was more than double of last month, at about 12% this month. No complaints there.
College Fund (+$2,736.29)
Just like the other investments, the college savings rose as well. A little less than the retirement accounts at around 6%.
Net Worth (+$27,892.58)
I had to do a double take when I saw this number. I’m continually amazed seeing how much our net worth can change in a single month, especially when we brought home less money from our paychecks. My curiosity remains about what is going to happen around election time. Also, I’m still hopeful all the world’s problems will disappear after the election.
In total, our net worth increased by almost 6%.
Accessible Net Worth ($2,213.26)
Monthly Blurb: This is the money we are able to put away, not including the tax-advantaged retirement accounts.
Our income was a below average and our expenses were about average this month. Our accessible net worth increased mostly because we kept all the extra money we have made in our savings account, so we can squeak by in September.
Liabilities
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.
Passive Income
Can you feel all the tension? We have finally made it to September. It’s earnings season and time to see what kind of dividends come in. There are a lot of companies cutting dividends, but a lot of companies are reporting higher that expected profits. I really have no clue what to expect. I kinda expect that this will be my worst September ever, since I started keeping track in 2017. The other half of me wants to be optimistic, and hope for record breaking results, just like the markets are doing right now.
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 0.5%, down from last month’s 0.8%
Saving’s Rate
Monthly Blurb: 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.
We missed our 50% goal by a long shot this month, even though we spent below average. That’s what happens when the Short Term Disability runs out, and you start living on a single paycheck.
Our Year-to-date savings rate decreased a little, but is still pretty close to 50%. I still anticipate august and September to be our lowest months for our savings rate. After all, we are cash flowing the cost of a baby, and my wife is not bringing in any money in September. Hitting that 50% target in September is just not going to happen!
Here’s how we did this month.
Income ($7,137.09)
Right now, our only source of active income is through my full-time job. We received a little from short term disability in August, which boosted our income a bit, but not enough to match what we normally make.
This is what a below average month looks like for us. You’ll get to see what a one-income month looks like in the next Net Worth Report.
Expenses ($5,250.96)
Our expenses were below average this month.
Here is a quick break down:
1) Home Escrow ($1060.00)
The “new” normal amount we put aside every month.
We adjusted this due to an increase in home insurance. Without the increase, we would have a shortage come January if property taxes stay the same, or increase.
2) Giving ($713.71)
The usual 10% we give every month.
3) Cost of living ($2,835.56)
Previous Months: July: ($4,283.01) June: ($3,031.71), May: ($2,957.92), Apr: ($2,164.31), Mar: ($3,078.52), Feb: ($2,474.38), Jan: ($4,708.98), Dec: ($2,749.98), Nov: ($1,242.44), Oct: ($3,040.36), Sep: ($1,238.39)
Running Average: $2,815.45
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. Starting in July, we are going to use the dependent care account to pay for day care, so we should see a decrease in the cost of living after the medical bills are paid. We changed our mind about this and are just going to drain the account at the end of the year in one lump sum. This is less paper work for us.
Our gasoline bills continued to stay pretty low. We continued to see our water bill go up to keep the lawn green. It takes lots of water during the one of the hottest months of the year.
Also, my wife had to pay for some work related items, that we expect to get reimbursed for. That came out of our August budget, and hopefully we see the money back in our wallets in September.
Other than that, we tried not to spend too much, knowing that we will only be living on one income in September, and we have some big bills to pay.
August 2020 Vs July 2020 Expenses
We bought a cruise in July. We didn’t do this in August, therefore it was a lot easier to not spend as much.
Goals Progress
Financial Goals
We met our target to fund our Roth IRA’s by the end of March.
We met our target to fund baby #2’s 529 plan early, having finished at the end of May.
The remaining goals are year long goals. We’ll have to wait until the end of the year to see if we accomplish them.
As expected, I am on track to have a maxed out 401(k) by the end of the year. It’s all automated, so as long as my job status doesn’t change, we should be good.
I did not actively do anything to increase my passive income, other than contribute to retirement accounts. Hopefully this is happening passively. As expected, we saw a good portion in March, and a personal best in April. However, there are a lot of dividend cuts happening, and since this was a stretch goal to begin with, I’m not sure we will make this one. September will be a make or break month in terms of dividends, so I’ll have a better idea in the next report.
My goal of having a savings rate greater than 50% is very close. August through October are really going to drag that number down. We’ll have to see what the holiday months look like, and if they’re good enough to make up for it.
Blog Goal
Really, I haven’t been working on this blog this month. Life has me busy.
Personal Goals
I caught up on my reading goal this month. Woo hoo! I’ve finished four books. Now I just need to read two more books before the end of the year. Seems easy, right?
My weight slightly improved this month. I’ve continued running at the gym, and finally convinced myself to run d three miles. Running at the gym is more of a mental challenge than a physical challenge for me. I just can’t seem to go the same distance as I do outside, when it’s a reasonable temperature.
August 2020 Roundup
The month of August was a another good one. The weather was hot (Thank you A/C!), my net worth continued to grow substantially, and I got to spend a bunch of time with my family, and I still have a job with no real worries of it disappearing anytime soon!
We’ll see how September goes, as we squeak by on one income. Really, I’m a little nervous. It’s been a long time since we’ve had to do that, and are bills are a lot bigger than they were back then. To give you an idea, this could be are lowest monthly take home in a decade!
Stay tuned for next month’s New Worth update. In the meantime, comment and let me know what stats you would like to see.
FIRE Away!
Reminders:
- 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.