Happy May everyone! It has been quite a month in this household. There was a lot of spending on backyard projects, but due to when the charges were applied they won’t be reflected until next month’s net worth. I also brought in less freelance income than last month (about 60% on top of my gross income) which meant I was working less which was a nice change of pace.
The big projects my husband and I completed around the house in April included:
- Changing out the lockset on the front door (I got the new one 70% off and sold the old one for $30)
- Demoing several old railings from our back deck to prep for adding steps
- Prepping our backyard for sod (turning over the existing grass, weeding, adding three yards of new soil)
- Sodding the yard (pics and cost breakdown to come)
- Patching the damage to the front yard by sidewalk plows
- Sewing and hanging a tapestry I bought back in February (check it out on Instagram)
- Getting a new-to-us (free) couch from my sister, steam cleaning our old one and selling it on Kijiji
Sidebar: If you want to follow along with my home renovations in real-time, I document everything on Instagram Stories.
Most of the work mentioned above (except for the yard) was inexpensive and but required a significant time commitment. Those are my favourite types of projects: low on cost, high on elbow grease.
So how did this relatively frugal month affect our finances? The answer is kind of amazingly.
Somehow in April, without really trying my husband and I managed to increase our net worth by a whooping $4,478. I don’t even know how this happened without our noticing, but it happened.
That increase comes without an income tax return or a selling a car to buoy our accounts. After looking into it a bit to make sure I hadn’t made an accounting error somewhere, I confirmed that this increase is due to the habits we’ve had in place for a long time.
The biggest reason for the increase is that my husband and I have a habit of saving 34% of our net income every month. On top of that, I save 90% of the income I earn on the side (and spend 10% – I’m not perfect). That means on average we tend to spend about 50% of our total income, and we bank the rest.
On top of that, some money that I’ve categorized as “spending” still increases our net worth. For example, our mortgage payment ($1,089) is an expense, but we uncover about $615 in equity every time we make a payment.
The same goes for paying off the Subaru, which we bought on New Year’s Eve. Every time I make a payment on that vehicle, I’m not saving the money, but it’s still increasing our net worth since I’m counting this car in our net worth.
So all of that to say, the first four months of 2017 have been killer for our net worth, increasing it by about $14,591 during that time. I have no idea if it will continue to rise at such a blistering pace (I doubt it) but I think it’s safe to say that the $100,000 threshold is within sight now.
Ok, let’s take a look at how my individual accounts panned out:
If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)
Net Worth: $88,332 (+5%)
So close to $90,000, and then the big six figures is right around the corner. In April I earned about 60% of on top of my gross income for freelance, and 90% of that either went to debt repayment or savings, which accounts for some of this boost. On top of that my husband and I save 34% of our net income every single month either in various renovation accounts, for retirement or other goals.
Consumer Debt: $0
I’ve been playing fast and loose with my personal spending money this month because I’ve had a few events come up, but I’m keeping my credit card debt on lock down and trying not to fall into old habits. It’s easier said than done, but currently, I’m keeping my debt monster at bay.
Car Loan: $13,669 (-8%)
This month I managed to pay $1,235 onto the loan that financed the Subaru. The loan was originally for $18,335 and with the primary lender offered by the dealership, with a laughably high interest rate of 6%. I’ve since moved the loan to my personal line of credit with a lower 4.7% interest rate and have been throwing money at it ever since. Every time I get a spare $20 I throw it at the car loan. I also budget 25% of my freelance income to go towards paying down the car and my husband and I jointly budget $495.75 in payments per month.
At this rate, it looks like I’ll have the car paid off in early 2018. I’d love to get it done by the end of 2017 (“How I Paid Off My Car in 1 Year” just has a nice ring to it), but I don’t want to prioritize it at the expense of saving, traveling or renovating.
Mortgage: $243,243 (-0.26%)
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.
So I got my assessment from the city, and they assessed my home at $289,000. As tempting as it is to match the value here to what the assessment says, a quick check of recently sold homes on Viewpoint indicates that homes in my area sell both wildly above and below assessed values. So I’m going to leave the value at $280,000 for now and get my real estate agent’s opinion after about a year of homeownership.
According to Canadian Black Book, my car is worth $20,634. I’ll update its value once per year to reflect wear and tear on the vehicle. 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 needed it, so it’s not a very liquid asset. With the new-to-me car, I include it in my net worth because while it is essential to our lifestyle, a car of this caliber is not necessary, and we could easily sell this car and downgrade to a beater again if we needed to.
Retirement Savings: $25,022 (+4%)
This account increased by almost $1,000 this month. $550 of that was regularly scheduled contributions, and the rest was the market. I do like when the markets are up. I started saving for retirement when I was 24, and now, three years later I’m finally crossing the $25,000 mark. That feels good, especially for someone like me who doesn’t know what the term slow and steady means.
TFSA Investments: $1,305 (+22%)
I usually contribute around 10% of my freelance earnings to this account, which is not designated for anything in particular except to grow my net worth and maybe act as an emergency fund on top of my emergency fund. I’ve officially got enough in this account for an extra mortgage payment, which for some reason is how I’m quantifying the value of this account in my head. Maybe it’s subconsciously my early-mortgage-payoff account?
Emergency Fund: $10,026
Nothing exciting to see here, just $10,000 sitting around losing value. But I’ve used this $10,000 once or twice in the last few years, so it’ll continue to sit here in case I need it in the future.
Reno Fund: $3,158 (+30%)
While I did spend a few dollars on renovations in April, those charges haven’t been paid off the credit card yet, so this account is temporarily inflated. I budget $400 for this account each month plus 25% of my freelance earnings, but I also spend from this account regularly.
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
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.
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.
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.
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.
Check out all of my net worth updates (including my very first blog post!) here.
How did your April affect your finances? Share your big wins and losses below!