Graduated Learning: Life after College

I got my degree, I got a job…now what?

2019 Net Worth Update January 23, 2020

Filed under: Personal Finance — Stephanie @ 10:11 pm
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I went ahead and reviewed my net worth changes for 2019, just like I did at the end of 2018. Our net worth went up a lot more this time compared to last time. Which is exciting. But pretty much all of that increase was due to the stock market. In the grand scheme of things that seems good, because if I see significant gains in my investments, then I’m on track for being financially independent, right? Letting my money make more money for me?

Maybe.

So yes, the biggest increase in our net worth came from the gains in the stock market. And also from contributing to our 401ks and IRAs. When I logged into my 401k on December 31, 2019 (like the personal finance nerd that I am) it said my personal rate of return on that account was almost 26%. This is bonkers. It still slightly worries me seeing that growth because, hey, it could also have gone down 26%.  Volatility makes me nervous, but we’ll stick with it and keep investing through the ups and the downs.

Let’s review all the money categories:

Assets:

Total cash (checking and savings): went down. Which could be expected, since we made 3 big purchases and pulled money out of our “sinking funds” to do it.  The good news about this drop (if you can call it good news) is that the drop in cash was $X thousand (keeping it a mystery) smaller than the amount we spent on the purchases.  Translation?  If we hadn’t made these big purchases (and we don’t plan on these same expenses any time soon), our cash would have increased by about $X thousand.  (alternatively, we probably can put about that extra amount into retirement accounts next year)  So, here’s hoping we don’t have too many big expenses in 2020!

Investments:   went way up.  We contributed to our HSA, 401ks, Roth IRAs, and 529s.  Technically the 529s aren’t “ours” (they’ll go to our kids when they’re ready) but for now since they’re categorized as investments in Mint, we’re calling them that.  We contributed the maximum allowed for our HSA.  We contributed beyond getting the match but NOT maxing out 401k.  I plan on increasing my percent contribution by the same percentage as whatever my next raise ends up being, so I won’t see much of a difference in my paycheck.  We (kind of) maxed out our Roth IRAs (I think actually we both still need to contribute for 2019 (before tax day), but we contributed the max in 2019 for 2018).  We put some money into both kids’ 529s but nowhere near the max.  This is an area we need to re-evaluate, since at the rate we’re currently contributing, their accounts wont be super helpful when it come time for them to access the funds for school.

Car values:  went up.  Which is not surprising, since we bought a new car.  But since we don’t actually intend on selling the car, and we plan on driving it for as long as it will let us, it’s kind of a silly number for us to pay attention to.  My car has quite a few miles on it, but we’ll build up another sinking fund for when we eventually need to replace it.  Hoping both cars give us a lot of years of safe driving!

Overall, we could be putting more money into our retirement accounts, but of course we have two quite large monthly bills. Living in a high cost of living (HCOL) area like we do, things end up being a lot more expensive (plus, you know, a bit of lifestyle inflation).  Between our house and daycare, we spend A LOT.

In fact, a few weeks ago I tweeted out how much we spent on childcare in 2019:

Yep.  You read that right.  Almost $46k for daycare last year.  And it’s going to be similar again this year.  We wont see a big decrease in childcare spending until our son moves up to the next age group at daycare, or when our daughter starts kindergarten at the local public school.  So we probably won’t be maxing out our 401ks or paying extra on our mortgages until we have more wiggle room in our budget.

As a side note, that tweet generated A LOT of conversation.  “Conversation” may be generous in some cases, as a lot of comments came with some pretty rude remarks about me and my choice to work rather than stay home with the kids.  Many couldn’t believe daycare could cost that much.  Also a lot of people seemed to think I was asking for advice?  I was not.

Luckily, a lot of great people also came to my defense (and defended working parents, and working moms in particular).  They helped point out plenty of benefits of daycare.  And wrote about why they value daycare.  Some even just shared how exhausting being with your kids can be.

If you’ve been reading my blog for awhile, you know that we thought very carefully about what our childcare would look likeKids can end up costing quite a lot!  So it was definitely frustrating hearing from strangers passing judgement on our decisions as if I was being selfish and uncaring about my kids.  I love my kids so much it’s ridiculous!

Debts:

Student loans:  Completely paid offMy husband paid off his student loans! We are now student loan free!  Hooray!

Mortgage:  Only slightly less since most of what we paid was interest and taxes (oh, the pains of those first few years of a 30-year mortgage!).  I look forward to the days when our payments will go more towards principal than interest…

So, how do I feel about 2020?  We’ll be making a few small changes, but honestly I don’t have big plans to change things.  So much of my finances are on autopilot now, so we basically will keep on the same path for now.  I know we’re doing well, which is quite a lucky situation to be in.

How did your 2019 go, moneywise?  Or in other categories?  What are your big plans for 2020?

 

 

Net Worth Holding Steady February 7, 2019

Filed under: Personal Finance — Stephanie @ 9:13 pm
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Okay, so my last blog post where I said it was okay for me to spend money because what’s the point of saving money if you never spend it?

Well, I feel a little bit sheepish about it now. Why? I finally looked at how our net worth changed over 2018.

I used to do yearly updates on my net worth, but then I got married and we combined our finances and I didn’t feel like it made as much sense to share it. Well, I decided to check again.

I didn’t have exact numbers handy from last year (since I only just decided I should do a comparison to last year). So I logged into our joint Mint account (does anyone still use Mint? I’m too lazy to try out something new). And looked at what our assets and debts were at the end of last year and compared them to 12 months later.

And…they’re not great. Well, actually, it’s better to say, they look great at a glance, but compared to last year, they look not so impressive. Because we pretty much held our net worth steady (it grew by about $10k).

$10k growth over a year is also nothing to sneeze at when you’re just starting out. Or if you don’t have a high income. Back before marriage + kids + house, I was increasing my net worth by $40k, $50k, or $60k.   But expenses now have had a significant impact.

So, by comparison, this smaller increase for a family with two incomes later in our careers should mean we should be growing our net worth even more.

But we didn’t. Ready for my reasons (excuses?)?

  • The stock market has been all over the place. I saw a lot of folks talk about how their portfolio dropped a lot due to recent stock market losses. So even though we maxed out our Roth IRAs and contributed to our 401ks (including getting our matches) our retirement portfolios didn’t do so well.
  • Our house lost value. Honestly, I include the house value (as estimated by Zillow) on my net worth as counter to our mortgage, but since we’re not planning on selling it any time soon, I’m not too worried.
  • Speaking of our mortgage, one of our major expenses every month is our mortgage payment. Between the cost of the house itself (principal and interest) plus our high property taxes, we spend a lot every month.
  • I made less than my full salary. I’m lucky enough to have a flexible schedule at work, so between my doctor appointments before the baby was born, the extra time needed each day for pumping after the baby was born, plus the general chaos of being a working mom, I don’t get my 40 hours of work a week. So, I get paid less (for working less). In addition to my schedule, I was also on maternity leave for 12 weeks, which was only partially paid.
  • Healthcare. Having a baby is expensive, even with health insurance. We easily hit the family deductible in our High Deductible Health Plan, then had other medical expenses beyond that for the whole family.
  • Daycare. We paid for a full year for my daughter and 5 months for my son. We spent about $36k on childcare in 2018.

How do we expect to do in 2019?

  • The stock market is still uncertain. But we’re in it for the long haul and actually in the process of rebalancing our portfolios, so we’ll see how it goes
  • Home value? Another one we’re not sure about (but not significant unless we wanted to sell it)
  • We still will be paying down our mortgage at the same rate
  • We should have a higher income this year. Between a raise for my husband, and me working more hours, we should be making more. No maternity leave, plus once my baby turns a year old he can start drinking cows milk so I won’t have to pump at work anymore. With my daughter, I ended up fully weaned from the pump by 13 months.
  • We hope to have much lower healthcare expenses this year, but will still be maxing out our HSA contribution.
  • Daycare will cost us even more this year with two kids in full-time care all year. Luckily when the baby moves to the toddler room his “tuition” will drop somewhat but we’ll still be paying around $45k in 2019 for childcare.
  • Going to try to look at other ways to save money. While we’re stuck with some large fixed expenses every month, there are still some things we could cut down, like lunches out and lowering our cable bill.

So, a lot of unknowns in terms of how our investments will look at the end of this year, with an increase in income but also an increase in childcare expenses. But we knew that daycare would be a lot, and we’re grateful that we have this care and can (sort of) afford it for the next few years until the kids start going to the public school.

We also realize that personal finances don’t always go on a straight path. Everyone encounters ups and downs, whether due to luck or conscious decisions. Having kids was important to us, and we wouldn’t trade them for anything. So these next few years of high expenses are worth it to us (and one of us staying home with the kids would cost us more, especially in the long run, and we find tremendous value in having them go to daycare).

How did your net worth fare this past year? Were you hit hard by the stock market mess? Any unexpected changes (big money or life wins/losses)? If you wrote about your net worth recently, feel free to share a link to it in the comments.

 

The good kind of impulse spending? February 23, 2009

Filed under: Personal Finance — Stephanie @ 10:55 pm
Tags: , , , ,

I just set up two extra payments towards my student loans.  One to my ~$15k  at 4.5% loan, and one to my ~$44k at 4% loan.  And it was kind of on a whim.  I was visiting my mint page (as I do, perhaps too often) and saw the reminder to pay my student loan bill.  And technically, I don’t have to schedule payments, as I’ve signed up for their automatic bill pay setup (which I believe gives me a .25% interest rate deduction).  But I can still manually set up payments.

Why did I do this?  I think it was due in part to realizing that my savings account at ING is making pretty crummy interest(1.835% (1.85% APY)), compared to back in the heyday (only a few years ago!), though I will admit it’s still much better than the tiny rate I used to get at my brick and mortar bank.  And so my money is going to do a lot more for me (net-worth speaking) paying down my student loans than it would be sitting in savings.  And I actually didn’t move any money out of my savings account, I just took some out of my checking to pay these extra payments.  So I’m not saving any less.

So, while I feel a bit anxious about the fact that I’ve reduced my liquid assets by ~$1k, in the long term, my net worth will thank me.

In the meantime, I’m also wondering if I should start “shopping around” for better savings account interest rates (or signing up for a CD ladder, which I’m still not very familiar with).  I have heard good things about Emigrant Direct, but I’m not sure how much of an impact a slightly higher rate will have on my savings.  What are you doing to counteract this crumbling economy of ours?

 

 
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