Happy September! This net worth update feels special, probably because I’ve reached some pretty significant milestones this month! First, my husband finished his first term at school, and by this time next year, he will officially be back at work – less than a year of one income life left, people!
Second, as I mentioned on Twitter, August was a busy month for me, freelance wise. In August I billed out more than I earned at my full-time job. Boom. While I only got paid about $2,600 from freelance in August, and I know that my clients will most likely take several months to pay for the work billed out this month, that still feels like a significant milestone for me. My freelance income is the only thing that lets us continue to increase our net worth while my husband is in school. Otherwise, we’d be treading water.
Speaking of net worth, this month our net worth has finally popped into the $130,000 range. This increase is only temporary, because we have to shell out about $4,800 in tuition this month, and, if you’ve been following my Instagram stories, you know I’ve been doing some renovation projects that will cost us a few thousand dollars. So we won’t be in the $130,000 range for long, but for now, it’s there, and I will forever memorialize it on this blog.
Finally, there’s my garden. This year I planted zucchini, tomatoes, and sunflowers, and we have perennial blackberries, beer hops, arctic kiwi, and grapes. After months of tending, this month my efforts started to pay off, and I’m literally enjoying the fruits of my labour. It feels great!
Ok, back to the money talk, here’s how my net worth faired in August:
(If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)
Net Worth: $130,005 (+2%)
A nice bump of 2% this month, or about $2,100. As I mentioned, the vast majority of that money is from the extra income I earned freelancing, and this month I also had an extra paycheque, which went straight to savings. I haven’t paid off August’s credit card charges yet, but I did spend a few thousand dollars on a renovation project. If you’ve been following my Instagram stories, you already know all about it. Those charges will be reflected in next month’s net worth.
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: $233,070
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, and 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: $24,129 (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. Without those regular contributions, this account dropped this month, which was depressing. I currently invest using Tangerine Investment Funds.
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: $19,943 (+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, cover any expenses that come up over the next 12 months, and finance some home renovations. 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.
So far I’ve been able to keep increasing this account. In August this account increased by $1,320, but in September it will take a dive when I pay for my husband’s second semester of tuition.
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 today I reached a net worth of $100,000 for the first time! What a milestone that was. I was in the midst of paying off my car loan ($8,575 to go) and owed $240,000 on my mortgage. My RRSP was a comfortable $26,000, my TFSA was a modest $2,000, and I had $8,500 banked for emergencies.
2016 (Age 26)
Two years ago my husband and I had been living in our new home for one month. I’d just painted my office, and my net worth was $64,400. I think that might be a new record for me. I had a shiny new mortgage debt of $248,000, and my retirement savings were sitting at $14,050 because I’d very temporarily borrowed $6,000 from my RRSP to cover closing costs.
2015 (Age 25)
In August 2015 I was returning from a trip to Ottawa that had caused my net worth to drop a little to $36,000. The stock market was struggling, and I was getting pretty depressed with throwing money into my retirement account only to have it disappear, but I kept at it because I knew it was only temporary. My house down payment fund was a humble $7,600.
2014 (Age 24)
In September 2014, I had a net worth of $24,500 and was gunning to hit $25,000 before age 25. My emergency fund was fully stocked, and my RRSP was closing in on $5,000, and I had a crazy $5,700 in my travel fund in preparation for my trip to New Orleans. That means I’ve improved my net worth by $105,500 in four years.
You can read all five years’ worth of my net worth updates; those early ones are hilariously poorly written.