April is gone, and May is upon us. Spring finally feels like its underway, and the grass is finally growing in my backyard – and so are the weeds.
April would have been a decent month for me except for one thing – taxes. I had to pay almost $5,000 in taxes this year because of the freelance money I earned on the side. All in all, my side hustles brought in about 50% of my gross full-time income, so a $5,000 tax bill isn’t the end of the world. I’m glad to have earned that money, and I’m happy that I put enough away in a savings account to pay the taxes.
But still, ouch. That was expensive, and not good for my net worth. Let’s look at how my net worth decreased in April.
(If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)
Not pretty. Let’s dig into it.
Net Worth: $115,995 (-1%)
In April my net worth decreased by $1,657, or around 1%. This was entirely due to paying my taxes. Aside from that, I actually had a decent month. I earned over half of my gross income from freelancing, the markets performed well, and we were able to add money to the emergency fund. We also spent money to improve the house (my office is finally coming together) and property.
Let’s break it down this month:
Liabilities
Consumer Debt: $0
We have no debt on our line of credit, and no debt on our credit cards except for work expenses, for which I’ll be reimbursed. I’m pretty diligent about paying off our purchases every month and earning cashback rewards with our credit card.
Car Loan: $0
This will be the last month I keep the car loan section here. I paid off our $18,500 car loan at the end of 2017, so it’s time to move on.
Mortgage: $235,642 (-0.27%)
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%, but I have to admit that I’m a little impatient to see my mortgage equity bump over the $50,000 mark – which should happen this month!
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.
We’ve been steadily ticking off every last flagged item on the home inspector’s report, and in July of 2017 I contacted my real estate agent who let us know we could sell our home today for $285,000, or $15,000 more than we paid. I’m excited to see how this number changes for our next update in 2018.
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: $32,763 (+3%)
Every month I send $600 to this account, and the past few months have been disappointing. This month turned things around though, and it is a delight to log in and see more money in my account that the day before. I use Tangerine Investment Funds for both my RRSP and TFSA.
TFSA Investments: $3,317 (+2%)
Every month I contribute 10% of my freelance income towards my TFSA. This account is my emergency fund on top of my emergency fund, my early mortgage payoff fund, and my early retirement fund.
Emergency Fund: $9,043 (+7%)
Building up my emergency fund is my current financial goal and where I’m throwing a decent portion of my income every month. I’m slowly rebuilding my emergency fund; I had borrowed money from it to pay off my car loan. With any luck, I’ll reach my $10,000 goal for this account within a few months.
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.
My “Other Money” accounts took a massive hit this month because I withdrew a chunk to pay off taxes. In fact, by massive hit, I mean 74% drop. Ouch. As I earn more money going forward this year, these accounts will build back up, but still, that hurts.
Previous Net Worth Updates
Here are my previous net worth updates, along with my age for reference:
2017 (Age 27)
This time last year my net worth was $88,332 ($27,000 less than today) and I’d just managed to increase it by almost $4,000 the month before. My husband and I were deep into our backyard renovations and were diligently paying off our car, which had a remaining balance of $13,600. Our mortgage sat at $243,243, and we had $25,000 saved for retirement. My TFSA investment account was still a baby at $1,300, and our emergency fund was fully funded at $10,000.
2016 (Age 26)
In 2016 I had a very respectable net worth for a 26-year-old. I was sitting at $53,000. $15,000 of that was in my retirement savings and $25,000 made up my blooming house down payment fund. I was still living in my third-floor apartment and had recently returned from Mardi Gras in New Orleans. I also had a newly minted New Car Fund with $292 in it. Little did I know that after trying to save for a new car for 20 months I would only end up with about $700 saved, thanks to a litany of car repairs in my future.
2015 (Age 25)
On May 1st, 2015, I had a net worth of $30,305. I had started saving for a home in earnest, and my house fund was sitting at $2,938. My retirement account was nearing the $10,000 mark, and I had a tiny bit of debt from booking a trip to New Orleans.
2014 (Age 24)
On May 1st, 2014 I was still living in New Brunswick. I had a nice little net worth of $17,599 and was working on building up my emergency fund to $10,000. My RRSP was teeny-tiny at just $2,827.
2013 (Age 23)
In 2013, I was madly preparing for the most frugal wedding on the planet. I had $11,470 in debt, mostly car loans, and a barely positive net worth of $1,760. I had no real savings beyond money for the wedding, and I still lived in a 400 square foot cottage in the country.
You can read all of my net worth updates here; those early ones are pretty hilarious.