It’s October, and the weather has officially turned cool here in Halifax, although we’re still getting warm days which makes trips to the Annapolis valley for pumpkin picking possible.
September was a busy and expensive month for our household. My husband’s second round of tuition was due at the beginning of the month, which immediately blew a $4,800 hole in our Big Pile of Money that we keep in an EQ Bank high-interest savings account. It was hard to watch that money go, but on the positive side, we’re officially halfway through the financial carnage that is post-secondary education.
We also tackled a large renovation project this month: building a shed! The new shed will replace the current shed, a teeny tiny Canadian Tire special with a door that flies off at the slightest gust of wind. Honestly, this project was not on my radar for another year or two, but we had an opportunity to take advantage of some free expert labour in the form of my husband’s step father. He is an experienced builder and was visiting the city for several weeks and offered to complete the project for us (with my husband’s help) with our only cost being the materials.
Generally the rule is, if someone offers you free labour, you take it! So far we’re out of pocket between $1,000 and $2,000, I’ll do a total cost breakdown in a few weeks when the project is complete, but you can check out the progress on Instagram.
Finally, $400 in car repairs completes the damage done to our net worth this month. Our Subaru Crosstrek is holding up well at four years old, the repair was routine.
Let’s see how the damage affected my net worth in September:
(If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)
Net Worth: $126,108 (-3%)
This month was a down month for our net worth, overall it dropped around $3,897. Most of that was from paying tuition, and another few thousand for the shed project. I’m still not using to the yo-yo-ing my net worth is doing while we’re living on one income, and a drop like this is a little disheartening, but I know it’s temporary and we’ll work our way back up slowly.
Let’s look at how each individual account faired:
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: $232,423 (-0.28%)
My regular monthly mortgage payment is $1,089, which uncovers about $645 per month in equity on my home. Right now about 44% 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.
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 actually 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 that overly optimistic.
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: $24,036 (0%)
A slight dip in this account of less than a percentage point, this account has been stagnant since 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.
I’m currently invested in the Tangerine Investment Funds, which is an excellent option for new investors with less than $25,000 invested.
TFSA Investments: $4,123 (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: $15,430 (-23%)
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 12 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 12 months.
This account took a serious hit this month as I withdrew almost $5,000 to pay for the second semester of tuition. On top of that, I also shelled out some money for a shed project. As a result, this account is seriously depleted this month. Even though the majority of the depletion was planned (I knew the tuition was due in September) it still hurts to see that money leave my account.
The next few months will be spent, hopefully, rebuilding this account before it is depleted again in January, yay!
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)
In October 2017, I’d just reached a net worth of $100,000 the month before. I was agressively paying down my car loan with $7,185 and owed just over $240,000 on my mortgage. My retirement savings amounted to $27,577, my TFSA was slowly growing at $2,100 and my emergency fund held $8,800.
2016 (Age 26)
In September 2016 I was slowly making my new house a home. My net worth was sitting at $66,291 and my retirement accounts were temporarily depressed since I had borrowed money from them to cover my closing costs. My TFSA sat at just $500 and I owed $248,000 on my mortgage.
2015 (age 25)
Two years ago my net worth was $38,163. I had $11,400 saved for retirement, and was depressed because the markets were swallowing up all of my retirement contributions and I had nothing to show for it. I was saving for yet another trip to New Orleans, and my house down payment fund was blossoming to $12,743.
2014 (Age 24)
In the Fall of 2014 I was still living in New Brunswick and preparing to move to Halifax in a few short months. I had paid off my debt the year before and had a solid emergency fund built up and a blooming retirement account. I was closing in on a net worth of $25,000. I remember being obsessed with the idea of hitting a net worth of $25,000 before age 25, and I did it!
Another net worth update down! You can read all of my net worth updates here, those early ones are pretty hilarious.