Welcome to the January 2020 edition of our net worth tracker, where we’ll track our net worth month over month. I started tracking at the time this blog was started, which was the beginning of September 2019. I started by creating the Net Worth Baseline report. We’ve finally made it into 2020, and can see some progress being made!
You can view Previous Net Worth reports HERE.
January was another busy month as usual around here. That seems to be our norm, although we did take one weekend to relax.
We were kept busy with good and fun things, but also kept busy with some expensive, not so fun things. For us, it was a rough month financially.
The Good, The Bad, and The Ugly
First, Gone on Fire Mom got a stomach bug that took a week or so to recover from. So even though we weren’t busy, it sure felt like we were.
Secondly, remember how in last month’s net worth report I said,
“About a quarter of our 2019 transportation spending was on tires for cars and other items that are not needed annually…. like a battery. I’m hopeful that this category will be 10% or less of our 2020 spending.”
Well, we had to take one of the cars to the shop this month to get the alternator and A/C compressor replaced. That bill was unexpected and was easily our largest expense for the month.
Lastly on the un-fun stuff list, January is when property taxes are due. I take a “small” portion out of the budget each month and save for when the taxes become due. It doesn’t impact our budget, but still, I get to see this huge amount of money go towards taxes in January. No Fun.
Enough with the bad, on to the mediocre….
January is one of those months where a lot of appointments are scheduled for us, resulting in lots of bills. I don’t mind it so much, because it’s planned.
We took our dogs in for their annual checkups. One of our cars was due for its annual inspection. An installment was due for Gone on Fire Mom’s baby doctor.
To learn why we’re paying for this big medical bill out-of-pocket, read $500,000 + 6 Reasons you need a Tax-Free HSA Today.
It’s also a new year, so we don’t have any money in our Dependent Care FSA (DCFSA) yet. That means we have a day care bill again. I like to build up the DCFSA for half of the year, then use the DCFSA to pay for daycare in the second half of the year. (Daycare expenses exceed the IRS maximum contribution limits to the DCFSA.)
That will change a little when baby #2 gets here. I’ll spend most of the year saving, and it will only take a few months to deplete the DCFSA completely.
I wish the allowed contribution to the DCFSA increased with each child. (Can the feds get on that please?!)
Okay, I’ve covered the bad and the mediocre, time to finish it off with the fun.
It was my dad’s birthday this month, so we got to go visit him and hang out with family for a bit. We also went and got BBQ at one of our favorite Texas BBQ joints: Hard Eight. If you haven’t been, maybe you should consider making it a FIRE goal. 😉. We also went to Jake’s Burgers with some friends from church. Delicious burgers, battered fries, and sweet potato fries (done the right way with marshmallow dipping sauce!) and some good company.
January 2020 Net Worth
Here’s how January compares to last month:
January Account Breakdown
Let’s take a quick look at what happened in January.
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.
I brought home some extra money this month due to cashing out some Paid Time Off (PTO). I still have plenty of PTO saved up for when, and if, I need it, and will still earn a week or so this year. This is just to take advantage of the PTO cash-out option.
Despite the extra income, the cash in the bank did NOT increase that much. That reflects our higher than average spending, mostly due to the auto repair bill.
Investment Cash (+$3,855.16)
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 December. It’s the beginning of the year, meaning we can start contributing to this year’s Roth IRA. The money will go into this account for now, and then when we have the maximal yearly contribution saved, we’ll move it to the Roth IRA accounts. You will hopefully see this happen in our March Net Worth report.
After that, we plan to start saving towards a 529 for baby #2.
Remaining Cash Accounts (Emergency and Sinking Funds) (-$10,423.23)
Phew… Take a breath… It’s really not as dramatic as it looks. This reflects the property taxes and HOA dues we had to pay this month. A completely planned expense that we save for all year. Still, it takes my breath away “spending” that much.
I learned something cool this month. Gone on FIRE Mom’s employer deposits the contribution match in one lump sum at the end of the year. Hence why her 401(k) nearly doubled.
Looks like we might have to get used to having volatility in the markets this year, after going all of 2019 without any. Even with the Dow Jones dropping over 600 points (2.09%) the last day of the month, our 401(k)’s are still positive for the year. Can’t complain about that.
We can’t say the same about our IRA accounts. A few are still up, but the negatives outweigh the positives. We are slightly down for the month.
College Fund (+$148.41)
The college fund is invested just like the IRAs; in mutual funds. However, we are still slightly positive for the year in the college fund.
Net Worth (+$10,207.45)
Despite our unexpected expenses making it feel like a really tough month, January was actually another excellent month for us. Our increase in net worth was about the same as December. Mentally, I pictured this month being only slightly positive after all the “set-backs”. I’m excited to see that we squeaked out such a positive month, thanks to selling some PTO and getting the 401(k) contribution match. In fact, most of our increase in net worth was from our 401(k)’s.
In total, our net worth increased by over 2.7%.
Accessible Net Worth (+$4,537.48)
This is the money we were able to put away, not including the tax-advantaged retirement accounts. This was an extremely high expense month for us, with a somewhat high income. I’m happy that we are still able to contribute a decent amount of our income towards investing.
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.
January was not a very exiting month for dividends. Nothing really happened. I expect February to be very similar, followed by a strong March and April.
The bank where I keep my savings now has the interest rate at 1.5%. Not earning much, but at least it’s something.
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.
I set a goal this year of a savings rate of 60%. I’m off to a bad start. A really bad start. I’m gong to have to have a bunch of stellar months to make up for January. Maybe I was too optimistic in setting my goal.
Right now, our only source of active income is through our full-time jobs.
As I mentioned earlier, I received some extra income from selling PTO, resulting in a fairly good month in terms of income for us.
Though we had an unusually high income, our expenses were also unusually high this month.
Here is a quick break down:
1) Home Escrow ($1115.00)
The amount I put aside every month.
2) Giving ($1,127.06)
The usual 10% I give every month.
3) Cost of living ($4,708.98)
Previous Months: Dec: ($2,749.98), Nov: ($1,242.44), Oct: ($3,040.36), Sep: ($1238.39)
This includes all my bills (Gas, Electric, Water, Internet, Phone), transportation, food, shopping. And new for this month, daycare and auto repairs. There was no auto/home insurance bill due this month.
January 2020 Vs December 2019 Expenses
As you can see, our expenses were through the roof this month. January was the costliest month we’ve had since I started tracking back in September 2019.
As I mentioned early, we had to repair a car. The alternator went bad, so we literally had to repair it if we wanted to keep driving the car. The reason it went bad was because the air compressor was leaking on it, so that had to be replaced as well, resulting in a $1,600 bill.
Take that away, our expenses are around $3,100. That would still be considered an expensive month for us, but more on par with other expensive months. There are two reasons that it was still high.
First, we had to pay the doctor. Boom, $700 just like that. Second, we paid for Gone on FIRE Mom’s Christmas present, a glass blowing class. That cost around $600 for four weeks, in case you are wondering. She has only had one class so far. They made something resembling a cup, but were not able to take it home since the glass has to be properly cooled. I picture it looked something like one of these on Etsy (Not affiliated):
Or maybe it looked more like a deformed marble, according to her. It was her first time doing it after all. By the end of the classes, the outcome should be much more cup-like.
We are on track to fund our Roth IRA’s by the end of March, which keeps us on track to invest in the 529.
I changed my contribution rate for my 401(k) late in the month, so it’s a little below what you might expect. Next month it should be closer to 1/12 of $19,500.
I did not actively do anything to increase my passive income, other than contribute to retirement accounts. Hopefully this is happening passively, and we will see that increase reflected in March and April.
My goal of having a savings rate greater than 60% is the only financial goal really off track so far. I’ll have to see what the coming months look like before deciding if this was too aggressive of a goal. Stay tuned!
I’ve increased my presence on social media by being active most days of the week. Hopefully, you think this adds value. I’m also working on some stuff behind the scenes here, such as PDFs and calculators. Stay tuned for that as well!
I’m on track for my reading goal, having read about half of my first book. I normally go through books fairly fast once I start them, but I find myself falling asleep while reading this book. I’ll hold off on stating the title. The book does have some good info, and I’m learning from it, but I just can’t keep my eyes open.
My weight goal is already off-track. I definitely put on a few pounds this month. I have a cookie addiction, and someone has to eat all the cookies leftover from Christmas…even if I am the one who baked them. (Gone on FIRE Mom’s appetite has been weird since getting pregnant this time, and she DOESN’T want cookies!!)
January 2020 Roundup
Do I have to talk about January more? January was one of those high expense months, thankfully offset by bringing home some extra money. As a bonus, our 401(k)s are still doing decent for the year. I’m looking forward to seeing how well we can do in February.
- 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.