Happy February folks! Are you ready for winter to be over already, because I sure am. That $350 oil bill I just received in the mail didn’t help much either. #homeownershipwoes
January was an expensive month for me, particularly because of a surprise purchase that I’ll be sharing below.
Let’s see if you can spot it in my net worth update snapshot below:
Can you spot the difference? Well, for one thing, my net worth did not go up at all. The reason it didn’t change at all this month was because I made a fairly significant purchase: a car.
That’s right, after one year of trying (and failing) to save for a car and six years of complaining about my 2007 Volkswagen City Golf, I finally bit the bullet and bought a new-to-me replacement vehicle. I’ll write a whole big blog post explaining the who-what-where-why of the thing, but right now all you need to know is:
- I bought a used car
- I’m selling the old car (in fact it’s already sold, but that is not reflected in this net worth update)
- I have a plan to pay off that loan very quickly.
Now let’s look at how each of these individual categories shake out, shall we?
(If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)
Net Worth: $73,135.59 (0%)
My net worth did not change at all this month, despite paying down my mortgage and earning a decent amount of income. This is because the taxes and fees I paid on the car I purchased depleted my cash reserves, which ate into my net worth. Usually you’ll see a monthly increase here of around $3,000. This month it was zero. Next month will be better (in fact it already is better).
Here’s how the individual accounts in the snapshot above faired:
Consumer Debt: $0
In May, I talked about my relationship with credit card debt, finding balance with my finances, and how I needed to give myself permission to spend money on myself. I’ve since paid off the credit card debt, and I’m happy to say I have not had a relapse. This month I did make some changes to my credit card routine, including upgrading to a better rewards credit card. I also checked my credit score through Borrowell.
Car Loan: $18,335
I put $5,000 down on the car I purchased, which, after taxes and fees left me with a car loan of $18,335. I’ll be paying this off quickly, you can be assured.
I made another $1,089 payment on my mortgage this month, which uncovered around $615 in equity. I’m not in a hurry to pay down my mortgage right now, so you can expect this section of my net worth update to be pretty boring for the time being.
I paid less for my home than what it was worth because my realtor is awesome and convinced the seller we were the best owners for this home. I also received my 2017 assessment in the mail this month, which assessed the home at $289,000. As much as I want to include that extra $9,000 in my net worth, I know it’s not necessarily a good indicator of the home’s value, so I’ll leave it at $280,000 until I get my realtor to come and do a walk-through about a year into homeownership.
I’ve never included my car in my asset mix before, because it was a beater car that wasn’t worth much anyway, and we need it, so it’s not a very liquid asset. With the new-to-me car, I’m including it in my net worth because while it is essential to our lifestyle, a car of this caliber is not essential, and we could easily sell this car and downgrade to a beater again if we needed to.
Retirement Savings: $22,026 (+2%)
I contributed my usual $550 per month to my Tangerine Streetwise fund, but this month I’m going to make a sincere effort to look into investing alternatives with lower fees.
TFSA Investments: $632 (+20%)
I contributed around $100 to this account this month and going forward I’m planning to contribute 10% of my gross freelance earnings to this account.
Emergency Fund: $6,605 (-37%)
Ooph. A big drop in that account! While I had been trying to save money to replace my car all year, numerous repairs had wiped out that account over and over, resulting in a whole year of saving yielding just $780. So the rest of the $5,000 down payment I put on the car came from my emergency fund. I plan to use the proceeds from the sale of my old car to completely replenish this fund and bring it back up to $10,000.
I now have some smaller accounts that I’m using to save towards various goals like travel, home renovations, and a new car. Instead of listing them all out separately, here is a summary of where they stand:
- Reno Fund: $1,352
- Travel Fund: $1,112
- Car Fund: $0
That reno fund is slowly climbing back up to where it needs to be. That account is slowly growing even though I’ve bought a few things here and there, namely a television and the DIY materials needed to make a custom TV stand (blog post coming soon!). The travel fund is also growing at a steady pace and the car fund has been put out of its misery once and for all.
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, taxes, etc.
Previous Net Worth Updates
Last February my husband and I had just celebrated one year of living in Halifax. We were saving diligently for retirement and had $13,000 put away, and also $17,000 tucked away for a house. Our net worth one year ago was around $44,000.
In February 2015, I had just moved to Halifax the month before and my husband was still jobless. We were living on one income and had a net worth of $27,715. We were also debt free.
In 2014 I was debt free for just two months. I had a net worth of $11,979 and was just starting to contribute to my retirement account and emergency fund.
You can read all of my net worth updates here; those early ones are pretty hilarious.