June is easily one of my favourite months because the weather is finally turning warm, and this month contains my wedding anniversary. Well, the weather is supposed to be turning warm, anyway. Last night there was a frost advisory that left me rushing around and covering up the seedlings in my garden. Most of them survived, for now.
May was an exciting month in my household, mainly because my husband and I are adjusting to the new normal of a one-income family. He has been in school for two weeks now, and the effect on our finances has already been noticeable, in a positive way.
Since we’re down to one income, I’ve been taking special care not to make any impulse purchases, and I honestly didn’t realize how many of those I have been making until I decided to stop intentionally. I can already tell that the next 16 months are going to be very good for our spending habits.
May was also not a bad month, net-worth wise. Despite paying for my husband’s tuition, his laptop, and some school appropriate clothing, our net worth went up! Here’s how it all breaks down:
(If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)
A 1% increase isn’t bad! Let’s dive into it:
Net Worth: $117,710 (+1%)
In May my net worth increased by about 1%. This increase came even though we paid out about $4,100 in tuition for my husband’s first semester. The fact that I was able to increase my net worth despite this cash outlay was mostly because this month was a five paycheque month for me, I recently received a raise (yay!), and I freelanced this month (although it was a slow month, freelance income-wise).
We also did not spend very much money aside from that big purchase. There were no big projects home renovation projects started, just a small deck update.
Liabilities
Consumer Debt: $0
We recently reshuffled our credit tools. I canceled one credit card, decreased the limit on my backup line of credit, and my husband opened a student line of credit for “just in case the furnace dies.” Despite our access to all of these credit tools, we do not carry a balance on any of them.
Mortgage: $235,001 (-0.27%)
So close to $50,000 in equity! 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: $285,000
I bought my home in July 2016 for $270,000. The home hadn’t been maintained properly for several years, and it was in need of a bunch of relatively inexpensive upgrades. As a result, the homeowner opted to sell the home for less than it was worth rather than negotiate and coordinate all of the work to be completed pre-sale.
Since then my husband and I have been working steadily to tick off every last item on the home inspectors report, and as a result of these fixes, the home is now worth more than it was when we bought it. On the anniversary of our home sale, I contacted our real estate agent who let me know that we could sell the home for $285,000, but that number is due to be updated in a few months.
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: $23,632 (-28%)
This month I withdrew $10,000 from my retirement savings under the Lifelong Learning Plan to pay for the first two semesters of my husband’s education, which means this account took a $10,000 hit. I plan to withdraw another $10,000 next year, and we won’t be contributing any money to it while my husband is in school, so expect this account to be looking pretty sad for the next 16 months or so.
TFSA Investments: $4,050 (+22%)
This account, on the other hand, is looking extra perky! Every month I have been contributing 10% of my freelance income to this account, and the value has slowly built up into something substantial. I don’t have any goals for this account; it’s just my emergency fund on top of my emergency fund.
Big Pile of Money: $16,619
Speaking of my emergency fund, I have temporarily renamed it to the Big Pile of Money. This is where I’m hoarding our money at the moment. This money is meant to pay for my husband’s education, cover the difference between our spending and my income, and cover any unexpected expenses that come up over the next 16 months. The BPM is also where the bulk of my freelance income goes, along with any windfall money.
Over the next 16 months, I’m hoping that the BPM grows instead of shrinks and that we’ll have money left over at the end of this adventure to repay the money borrowed from my RRSP. We’ll see if that ends up being the case, though.
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 previous net worth updates, along with my age, for reference.
2017 (Age 27)
On June 1st, 2017 I was in New York and had the credit card bills to prove it. My net worth had just popped over the $90,000 threshold, and my car loan sat at an ugly $12,000. I owed $242,000 on my mortgage, and I valued my home at $280,000. My retirement savings were bobbing around the $25,000 mark, and my TFSA was still a baby with a balance of just $1,500.
2017 (Age 26)
Two years ago I had a respectable net worth of $56,000. My retirement account was sitting at $16,000 and my house down payment fund was blooming to $28,000. Little did I know in less than a month I’d be putting an offer in on my home.
2015 (Age 25)
In 2015 I was getting into the swing of living in my new city. My net worth was a solid $34,000, and my retirement savings had just popped over the $10,000 mark (which made me feel like a big girl), my emergency fund was full, and I had $6,500 saved for a home.
2014 (Age 24)
In June 2014 I was debt free and had a net worth of $17,700. I’d just accomplished my goal of a $10,000 emergency fund and was working to fill up my travel fund for FinCon in New Orleans.
2013 (Age 23)
In June 2013, I was preparing for my wedding! I still had $8,000 in debt, and my net worth was barely positive at $3,894. My biggest goal in June 2013 was to get married without incurring any debt – which I achieved!
How did your net worth fair in May? I want to know!