August 1st Net Worth Update!

Jordann Net Worth

It’s August, and we’re now entering month four of single income life as my husband works on completing his first semester of education upgrades. Fortunately, time is flying, which means before we know it, he’ll be back in the workforce and we’ll be back to making two incomes – with a little pay bump.

Living as a single income household continues to be an adjustment. I have to be extra careful about our spending since just a few splurges could be the difference between breaking even in a month and staring down a decreased net worth. That means my renovations have significantly slowed down, which is fine because it’s too hot to paint right now anyway.

Speaking of the heat, it has been incredibly hot in Halifax the past two weeks. The humidity is making everything sticky, and it’s killing my productivity. It’s just so hard to sit in front of a computer in a stifling office. Despite the heat, I still managed to bring in my target volume of freelance with a solid August lined up. Since freelance money is what enables me to increase my net worth every month, a busy August is good news.

Speaking of net worth, July was an excellent month for us. Check out how our net worth as faired below:

(If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)

Net Worth: $127,904 (+6%)

That, my friends, is a nice net worth increase for a single income household. Over $7,000 in one month! Now, it’s not as amazing as it looks at first glance, I haven’t discovered the key to living on one income or anything. Instead, it’s mostly due to real estate.

July marks two full years since we bought our house, and on the anniversary of the purchase, I update the home’s value. This month I did that, which account for about $6,000 of that increase. The other $1,000 came from freelancing and putting money away in my BPM – a high-interest savings account with EQ Bank. I’ll go into more detail about how I valued the home in the real estate section.

Liabilities

Consumer Debt: $0

Right now I’m rocking the Scotia Momentum Visa Infinite for cashback with the Tangerine Money-Back Credit Card as a backup/Costco credit card. My husband and I live on a cash diet for our weekly spending, but all other purchases and bills are charged to our credit card and paid off once a month. I’ve had some ups and downs with my relationship with credit card debt in the past, but I’ve been credit card debt free for a while now, and the streak is still going strong.

Mortgage: $233,715

With the increase in my home’s value we’re bearing down on $60,000 in equity in this house, but it’s a slow process. I’m not making any extra payments on my mortgage, and my regular monthly mortgage payment is $1,089, which uncovers about $630 in equity every month. I’m not in a hurry to pay down my mortgage right now because my mortgage interest rate is just 2.29%, so I’m not making any extra payments.

Assets

Home: $291,000

Two years ago we bought our 1932 one-and-a-half story home for $270,000 with a 10% down payment. We did some aggressive negotiating to get down to this price, the home had originally (and fairly) been listed at $289,000. Last year my real estate agent recommended I use a home value of $285,000, since that was, in her opinion, what it could have sold for in July of last year.

Our house is located in an interesting part of the city. It’s sandwiched between an established and sought after residential neighbourhood that has seen some impressive price increases (and even bidding wars – unheard of for Halifax) and an up-and-coming hipster mecca. If you throw a stone in this neighbourhood, you’ll hit a craft brewery, restaurant, or boutique shop.

When it came time to update the pricing for the home this year, I did a lot of research. I took into consideration the average price per square foot for this neighbourhood and the long list of renovations we’ve done in the past year. I concluded that the average price increase of 2.1% in the city sounded about right – if not conservative.

A 2.1% increase brings our home value to $291,000, which is still below the assessed value, still below the average price per square foot in our area, and even below what I think it could sell for based on my anecdotal observations of the local markets (I’m a little obsessed with real estate and check the listings in our area weekly). I’d rather be conservative in my worth estimate than overly optimistic, especially because when we do eventually sell this home a good portion of the value will be eaten up by fees anyway.

Car: $20,098

According to Canadian Black Book, my 2014 Subaru Crosstrek is worth $20,098. I’ll update the value once a year in January. Some people don’t include their car in their net worth updates because they “need it” and while I do need a car in my life, I don’t need a $20,000 car. If I needed to, I could sell this car and buy a beater.

Retirement Savings: $24,175 (+0%)

In May I withdrew $10,000 from this account through the Lifelong Learning Plan to help cover the costs of my husband’s return to school. It was painful to watch this account drop by a third, especially because I’m not making any contributions while we’re living on one income. It did a whole lot of nothing this month, which I suppose is better than a drop. I currently invest using Tangerine Investment Funds.

TFSA Investments: $4,134 (+0%)

I opened this account last year, and it has slowly grown as I’ve contributed about 10% of my freelance income every month. Since my husband has returned to school, I’ve suspended those contributions, and growth within this account has ground to a standstill.

Big Pile of Money: $18,623 (+3%)

The Big Pile of Money (nicknamed the BPM) is a no-fee, high-interest savings account at EQ Bank earning 2.30%. EQ Bank is where I’m hoarding cash at the moment. This money is meant to pay for my husband’s tuition, to bridge the gap between my income and our budget, and cover any expenses that come up over the next 13 months. I’m contributing the bulk of my freelance income to this account with the hope that the balance will go up instead of down in the next 13 months.

This month the BPM increased by about $500. We had some pet expenses this month that prevented the account from growing any more, despite a healthy freelancing month. As long as it keeps increasing, we’re moving in the right direction.

Other Money

If you’re doing the math, you know that there is some unexplained money in my net worth. I’ll tell you where that money is: in my planned spending account for taxes, mortgage payments, gas, the internet, etc.

Previous Net Worth Updates

Here are my past net worth updates, along with my age, for reference.

2017 (Age 27)

One year ago I had a net worth of $91,000, or $36,000 less than this year. I was still trying a balanced approach to paying off my car loan, which had a balance of $10,000. My RRSP stood at $26,000, and my TFSA was still just a baby at $1,700. My emergency fund was nearly fully funded at $8,670.

2016 (Age 26)

Two years ago I had a very comfortable net worth of $60,000. I was debt free and had just finished moving my belongings into my new home. I owed $248,000 on my mortgage and had recently said goodbye to my consumer debt for good.

2015 (Age 25)

Three years ago I’d been living in Halifax for six months and had a net worth of $37,074. My house fund was at just $7,400 and my retirement accounts had crossed the $10,000 mark for the first time.

2014 (Age 24)

Four years ago I was debt free and had a net worth of $23,000. My RRSP was still a baby with only $4,400 in it, and most of my extra cash was going to my travel fund to pay for my trip to France in December.

You can read all five years’ worth of my net worth updates; those early ones are hilariously poorly written.