Welcome to the May 2022 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.
Let’s dive straight into this month’s report.
Monthly Roundup
Previously, I would go through my month, and go over the highlights. These days I’m doing it a little differently. Unless you convince me that you want to hear about my month, I’m not going to talk about it outside of finances.
May 2022 Net Worth
Here’s how May compares to last month:
May Account Breakdown
Let’s take a quick look at what happened in May.
Cash (-$3,995.26)
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.
It was a good month for us in terms of income but was bad in terms of spending. The difference in cash on hand is due mainly to the fact we’re buying a house! More on that later.
Our spending was well above average this month thanks to car insurance …and house buying expenses.
Investment Cash ($2,742.53 )
Monthly Blurb: All of our cash leftover at the end of the month is transferred here and is considered part of our savings rate.
This is where our leftover income went from April. It was an okay amount that we were able to put into our investment account, but nothing like last month. I wish I could say the same for next month (Our leftover money from May). We’re not saving anything this next month!
I’m still waiting for some opportunities to come up in the housing market. The interest rates went up a little more, and we’re starting to see the market cool just a tad, but the housing market is still red hot.
There is low inventory and most homes are going above list price in a matter of days. inventory did go up a decent amount this last month though. It’s hard to find a rental property to buy in a market like this. Plus, as I learned in the pandemic, I’m not sure I want a rental if I can’t evict a bad tenant.
Remaining Cash Accounts (Emergency and Sinking Funds) ($1,066.54)
Nothing exciting here. Just the usual. We’re back at it again. We are just saving up for our property tax bill and HOA fees for when they are due early next year.
Retirement Accounts
Things got really ugly for the month of April. May just kinda floated along, and most of the stock indices hit recession levels. I say May floated along because there wasn’t a lot of movement compared to April.
401(k)s ($1,889.96)
April was one of the worst months I’ve had, dollar-wise. Last month I mentioned the markets are headed toward a recession, and they got there this month. Fortunately, they didn’t have far to go.
Thanks to contributions, we were up about 1%.
IRA (-$3,119.67)
Again, all market performance. This is about on par with what I expected.
Overall, that’s a loss of about 2% between the 401k and IRA’s. Doesn’t seem so bad after last month.
Oh yeah, Inflation is still bad! It is still around 7-8% year-over-year. It’s been bad for several months now.
College Fund ($1,471.72)
The college fund is invested just like the IRAs; in mutual funds. The loss is equal to about 1%.
Net Worth (-$2,477.05)
In January, our net worth decreased by 10’s of thousands. In February, it decreased by ‘only’ a few thousand. It was followed up in March by a decent month in terms of market performance. However, it wasn’t enough to make up for the losses.
Then came April. Any gain we made in March was wiped out by our losses in April, plus a few thousand more.
I’m usually surprised at the end of the month to see how much our net worth has increased, but this month I’ll just have to be content with our net worth dropping only just a hair. We would have been positive if it weren’t for the cost of buying a house.
In total, our net worth decreased by approximately 0.38%.
Accessible Net Worth (-$1,247.34)
Monthly Blurb: This is the money we are able to put away, not including the tax-advantaged retirement accounts.
Our income was good and our expenses were well above average this month. In fact, I think it may be the highest we’ve had since starting this report. Our accessible net worth decreased as a result of …you guessed it… buying a house.
Liabilities
Status: (Other than the hospital bills.) 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
December was a near-record month for dividend income, and 2021 was a record year. We are about a third of the way to being able to live solely off the dividend. And it’s supposed to grow exponentially, right? So, Financial Independence here we come!
February and January are very boring months for dividends. It was a record-breaking March! And then there was April… Ugh!
I don’t really expect anything exciting to happen until September.
On the bright side, interest rates for my savings accounts have gone up a little more. The interest rate is still super low but continues to improve. My money is barely making any money sitting in that “high-yield” account now earning 0.7% APY.
Saving’s Rate
I track my savings rate in order to help keep my feet to the fire so that 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.
A couple of years ago, I had to adjust the savings goal to 50%, which we didn’t achieve. In 2021, we barely achieved that goal, only making it in the last month! I’m setting the same goal this year.
This month we were far from the goal, again! We spent 99.5% of our take-home pay this month. BIG Ouch!
This month we started the home buying process, which should ultimately reduce our expenses, but cost a bit of money upfront.
In a normal month, of that 50% we are spending, Housing and Daycare alone eat up about 30%. We give 10%, so that means we are living on 10-15% for everything else.
There is a light at the end of the tunnel for daycare, but these Texas property taxes kill me. They will be the reason I move out of the state. Is that Tennessee I see in the future???
I expect moving to Tennessee would at least cut property taxes in half, but I don’t see us moving there anytime soon.
Daycare will decrease every year until it’s gone in about 2 or so years. Hopefully, we can get our savings rate up to 60 or 70% by then.
I wonder what other expenses will pop up once daycare is done.
Here’s how we did this month.
Income ($11,182.94)
Right now, our only source of active income is through our full-time jobs.
This is what a slightly above-average income month looks like for us. My wife works really hard and was able to pick up a bit of work this month.
Expenses ($11,100.92)
Our expenses were way above average this month. Thanks to inflation, I see a lot of categories going up even though we didn’t necessarily buy more than normal. Not a whole lot we can do about that.
Also, did I mention we’re buying a house? Haha.
Here is a quick breakdown:
1) Home Escrow ($1,763.46)
The normal amount we put aside every month, plus paying for house things like a gardener and cleaners. In May we paid for tree trimming as well.
2) Giving ($1,211.56)
The usual 10% we give every month. Plus 1% that we started to give on top of that.
3) Cost of living ($8,107.34)
Previous Months: Apr: ($5,767.97), Mar: ($2,486.92), Feb: ($3,306.12), Jan: ($3,409.65), Dec: (-$4,034.08), 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)
Running Average: $3,544.24
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. Like last year, we are going to drain our dependent care account at the end of the year in one lump sum. Doing it that way is less paperwork for us.
Our gasoline bills continue 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. On top of that, gas prices are just going up. In May, all we heard was a new record pretty much every day it seemed.
I mentioned that after February, I should have a pretty good idea of what a normal month looks like. And I’ll know if a savings rate of 50% is likely.
Unfortunately, after seeing what a normal month looks like for us, I think a 50% savings rate is a little bit of a stretch for us. Sure, our income has increased slightly, but inflation is rising even faster. I’m not going to change it though, because it will be a good challenge to see if we can make it like we did last year, just barely.
Also, buying a house is going to kill the savings rate. Wasn’t exactly planning for that when I set the savings rate.
April 2022 Vs May 2022 Expenses
April was a crazy above-average month for spending. I guess we thought that was a challenge because we beat that in May. I thought things would settle down in May, but nope. Hopefully, we get back into our routine for the year, and things keep going great.
Goals Progress
Financial Goals
Aside from the Roth IRA contribution, most of the financial goals this year are year-long goals.
The Roth IRA contribution is done, and I have transferred the money.
Aside from the 401k, which is on automatic contributions from my paycheck, I’m still not sure how the other ones are going to turn out. Time will tell.
I have to wait till dividends start coming in to know how the passive income goal will turn out. March was good and April was bad, but who knows what the rest of the year will look like.
The savings rate goal of 50% is a stretch goal, and I’m not sure we can do it anymore. It was at 99% in March, and due to our expenses over the last couple of months, has dropped significantly.
Blog Goal
For 2022, I want to create more content. My goal is at least one article a month, or 12 total in the year. I didn’t get any posts created this month. I now have 8 months left to write 11 more articles.
Personal Goals
I’m doing a reading goal again this year, with the same number of books. Last year I only read 2, but I know I can do 3. I’m over halfway through the first book.
And then there is my physical health. I didn’t get to where I wanted in 2021, so we’ll continue to try again this year. I want to lose fat, and part of that is going to be by eating healthier.
May 2022 Roundup
The month of May was exciting because we’re buying a house, but not a real mover in terms of finances.
The Kids didn’t have any unplanned days off school, we all stayed relatively healthy, and pretty much life ran smooth.
The weather is heating up, and we’re getting to spend more time outside.
Even after a somewhat bad money month, I continue to be excited as we progress into June, and for the rest of the year.
There’s really a lot to be thankful for.
Stay tuned for next month’s New Worth update!
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 the net worth total (even though they’re listed):
- 529 – This is my money for my babies. Consider it their net worth summary.
- Home Escrow – This is Uncle Sam’s money. We don’t mess around with Uncle Sam and his money.
- Total income only includes our active income, which is currently our full-time jobs.