Honestly, not my favourite month. After the riot of colour that is October, November is decidedly brown. It’s also decidedly close to the holiday season, which means I need to get my frugal butt in gear and start buying some gifts for my friends and family. Fortunately, I’m at an age where gift giving has slowed down, so I don’t plan to spend more than $500 on the holidays this year.
October was a busy month on my end. I spent time in New Brunswick, enjoyed both a birthday (hello, 28!) and an anniversary. I also replaced my home’s aging hot water tank with a shiny new all-electric tank. The old one was a rental costing me a whopping $27 per month and was leaking fumes out into the mechanical room – not a useful feature. Replacing it was not cheap, and there was an extra cost to convert to electric, but it was worth the extra money to:
- eliminate that monthly payment
- eliminate my dependence on fossil fuels for hot water
- eliminate the dangers associated with burning fuel
According to my calculations, it’ll take just over six years for the new hot water tank to pay for itself, and they last at least ten years.
Between the birthdays and the expense of a new hot water tank, October was an expensive month. Here’s how things were looking at the end of November:
As you can see, despite the big expense of a new hot water tank, my net worth still increased by about $3,000, or 3%. You can see a more detailed breakdown below:
(If I say “my” below, I mean “our” because my husband and I have combined finances, including retirement savings.)
Net Worth: $107,389 (+3%)
Since I had a big cash outlay this month, I’m happy with a $3,000 increase. Most of this came in the form of paying down my car loan.
Consumer Debt: $0
We are consumer debt free at the moment, and it feels good.
Car Loan: $5,208 (-27%)
Almost down to the $5,000 mark! This month I was able to decrease the balance owing on my car by $1,977, or about 27% of the remaining balance. Every month I pay $685.00 from my budget towards the car, along with 50% of my freelance income. October was also a five paycheque month for me, and I sent the bulk of that extra paycheque towards the car loan since my bills were already handled for the month.
Mortgage: $239,464 (-0.26%)
My regular monthly mortgage payment is $1,089, which uncovers about $630 in equity. I’m not in a hurry to pay down my mortgage right now because my mortgage interest rate is just 2.29%, and instead I’m focusing on paying down my car loan and investing.
I bought my home a year ago for $270,000. I was able to get this lower price because the home hadn’t been maintained properly for several years, and there were a ton of relatively expensive upgrades that needed to be done. 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 completed most of the work within the last year (for about $5,000), and according to my real estate agent, we could sell the home for $285,000, or $15,000 more than we paid.
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: $29,323 (+6%)
Every month I contribute $550 to my RRSP which holds Tangerine Investment Funds(the Balanced Growth Fund, to be specific). The Tangerine funds are considered an excellent, low-fee option for beginner investors and I’ve been investing in them since I was 24. If you’re interested in investing for your future but you’re confused about how to get going, this is a great place to start! If you sign up and use my Orange Key: 38939199S1 you’ll receive a $25 bonus!
TFSA Investments: $2,551 (+4%)
Every month I contribute 10% of my freelance income to my TFSA which also holds (surprise!) Tangerine Investment Funds with the same asset allocation as my RRSP. This account is my emergency fund on top of my emergency fund but might also someday be early retirement or early mortgage payoff fund.
Emergency Fund: $8,368
My emergency fund usually sits pretty at $10,000, but I’m letting it slide a little in the name of paying off the car loan. Once my car loan is paid off, I’ll top up my emergency fund. I needed to access my emergency fund once this month because the blower motor on my car’s climate control system died. It cost about $200 to fix.
Reno Fund: $0
So sad! I had to empty my reno fund to pay for the new hot water tank. So this account is looking pitiful right now. I still budget $200 per month for small DIY projects, but hopefully, once the car is paid off I’ll be able to top this account back up.
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 October 2016 I was lamenting the cost of car repairs and nursing a net worth of $68,000. My “new normal” for a monthly net worth increase was around $2,000 per month, and I’ve since improved upon that. In fact, my net worth has grown by almost $40,000 since this time last year.
Two years ago I had a net worth of $40,000. My retirement account was starting to look like a real retirement account at $12,000, my emergency fund was around $10,000, and I was in full house saving mode, with $13,875 in my house down payment fund.
Three years ago I was finally getting to a point where I was comfortable with my money. I felt like I had some real cash saved, and my daily anxiety about job loss or injury was starting to subside. I had a net worth of $26,000, having just reached my goal of hitting $25,000 before age 25. My retirement account had almost $6,000 in it, and my travel fund was sitting pretty at $3,000 in preparation for my trip to Paris. I had also officially announced my plan to move to Halifax and had $2,000 in a moving fund.
Another net worth update down! You can read all of my net worth updates here; those early ones are pretty hilarious.