January 1st Net Worth Update

Jordann Net Worth

Happy New Year! While my full year wrap up post is in the works, December was a solid month for me, net worth wise. I earned a decent amount of money freelancing, most of which I funnelled towards savings to get our fireplace in working order. While I restored the original brick almost two years ago, that fireplace has been inoperable, with nothing but a cheap electric insert to provide ambiance. I wanted to put money into getting the fireplace working since we moved in, but it’s an expensive process. Now that the weather has turned cold, it’s a priority.

In November I was able to save enough money to pay for my husband’s third semester of tuition in cash. I just made that payment yesterday, which felt really, really good. For the previous two semesters I had dipped into my RRSP via the Lifelong Learning Plan, so to leave my RRSP alone and let it grow (or continue to drop in value, as is the trend lately) felt like a huge accomplishment.

This month, I’m sitting down and setting money goals for 2019. While some of them are obvious, like saving enough to pay for my husband’s fourth semester of tuition, others, like whether I should start contributing to my RRSP again before he returns to work full time, are less obvious. I plan to write a 2018 wrap up and 2019 plan soon, at which point my goals will be settled.

While I don’t know what 2019 will hold, I do know how December worked out, net worth wise. Here’s the final tally.

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

Net Worth: $132,558 (+2%)

While my investments fell significantly this month (whose didn’t?) I was able to shore up cash both in my BPM and short term savings. December was the month of stashing cash, without any big outlays, which let me finish the year off strong with a net worth of $132,000. That number dropped almost immediately in the new year, when I shelled out $4,018 in tuition.

Liabilities

Consumer Debt: $0

December is usually an expensive month for Canadians, and I’m no exception. This year I was able to finance my Christmas spending by using the cash back I earned from my cash back credit card throughout the year. As a result, we ended 2018 with zero consumer debt.

Mortgage: $230,478

My regular monthly mortgage payment is $1,089, which uncovers about $645 per month in equity on my home. Right now about 45.5% of our net worth is made up of home equity.

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. I also don’t have the spare cash to make additional contributions, as long as my husband is still in school. The recent interest rate hikes have changed things for me a little though, and once my husband is back to work full time, we’ll begin making extra payments.

Assets

Home: $291,000

Two years ago we bought our home for under market value ($270,000) because it needed some work that the seller was unwilling to complete before sale. One year after that our real estate agent estimated our home was worth $285,000. This year I added the region’s growth of 2.1% to that number, bringing us to a home value of $291,000. This estimate is conservative and doesn’t take into account the thousands we’ve spent in home renovations over the past two years, but I’d rather be conservative than overly optimistic.

Car: $20,098

According to Canadian Black Book, my 2014 Subaru Crosstrek is worth $20,098. I’ll update the value for next month’s net worth update to reflect depreciation. 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: $22,291 (-4%)

One more month of no retirement contributions resulted in a 4% drop in this account. Fortunately, I won’t be tapping this account for January’s tuition, and I’m restarting retirement contributions for the first time in 8 months, which is super exciting.

TFSA Investments: $3,876 (-3%)

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, or, in this month’s case, dropped.

Big Pile of Money: $18,288 (+14%)

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. Right now the contents of the BPM are:

  • Emergency fund: $10,000
  • January’s tuition: $4,018
  • New tires: $1,000
  • Dresser for the bedroom: $1,000 (and lamp, and mirror, and desktop fan)
  • Fireplace savings: $2,270

This account is where the bulk of my freelance income is going every month, and most of it is planned spending that will happen in the next year.

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, budget deficits, mortgage payments, gas, the internet, etc.

Previous Net Worth Updates

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

2018 (Age 28)

One year ago I had just paid off my car once and for all, and my net worth was $113,209. We knew my husband had been accepted to school and would be starting in May, so I was busy devising a way for us to live on one income for 16 months. My retirement accounts had just breached the $30,000 mark and my TFSA was just a baby with $2,800.

2017 (Age 27)

In January 2017 my husband and I had been homeowners for a mere six months and were about to impulse-purchase a Subaru Crosstrek. We had a net worth of $73,741, a stocked emergency fund, and a mortgage of $245,739.

2016 (Age 26)

Two years ago my husband and I were starting out our second year living in Halifax. We were already in full-blown save-for-a-house mode and had a net worth of $44,905. We were living in our small two-bedroom apartment with our two cats and dog, and slowly adding cash to our house fund, which sat at around $16,000 on January 1st, 2016.

2015 (Age 25)

Three years ago my husband and I had just moved to Halifax. He didn’t have a job yet, and I was about to start working remotely full-time. We had no debt and a net worth of $26,000. $7,000 of that was an RRSP, $10,000 was an emergency fund, and another $7,000 was savings to get us through the transition.
You can read all of my net worth updates here; those early ones are pretty hilarious.

Photo by Nathan Wolfe