June seemed to fly by for us. Most of the restrictions in our area have been lifted, as new case numbers drop in our state. This past month was a good one.
There were numerous things we were finally able to do this month. First, our 4 month old baby met close relatives. As little as it seems, it was extremely rewarding to see loved ones meet our newest family member. The second, we were able to congratulate a relative on graduating high school. Congrats to all graduates of 2020! Do not be discouraged by the current economic conditions! Lastly, I went golfing with a good friend I have not seen in a while (yes, we maintained our distance). He was on a 9-month deployment overseas. It was great to see an old friend while shanking golf balls into the woods.
Also, I was a featured guest post on a great blog. Her website focuses on fitness and financial independence. Please take the time to read it this weekend. The content focuses on my journey and goals toward financial independence. I discuss my why, and how I plan to achieve the goals.
As the 2nd quarter of 2020 comes to a close, I wanted to take a moment to check in and share my net worth. I am surprised at where the stock market stands at this point. The S&P 500 is actually up 200 points from June 2019 (+6% Year over Year). Undoubtably, the shutdown's ripple effects will take time to show in the stock markets. In the meantime, we will enjoy the positive growth!
After a stagnant May, my net worth increased. I am pleased to see continued growth in my net worth during a recession. This ended the longest period of expansion on record. The 128 month record was stopped in February of this year. Subsequently, my net worth increase is not significant, but it's positive (keep reading to find out)!
June 2020 Actual vs. Budget:
This month's spending was similar to last month's. Please note, each budget section (listed below) is based upon my salary. It does not include any other income sources. The thought is to save all other income 100%, and not include it in the annual budget. As a reminder, I break out my budget into 3 categories:
- Fixed Costs
- Financial Goals
- Flex Spending
Now, let's take a dive into the variance in fixed costs!
The continued contribution to my HSA is definitely help increase the net worth. I will be taking some of this and investing it once the balance reaches a certain amount. My employer completely pays for my medical insurance. That is unheard of in the U.S. of A.
As promised, I emailed my car insurance provider this month. Great news, they are making the dividends available May 31st. Those dividends will be applied to my July payment. This will cut my monthly rate in half for the month of July! Not only am I receiving 50% off in July, but my insurance provider will be reducing rates by 11% in the fall.
Again, please reach out to your insurance providers! Otherwise, you could be leaving money on the table.
Next, let's dive into my Financial Goals.
Dang, websites can be expensive! As previously stated, I invested in a domain and framework for this website. A company was also created for the blog, which was assisted through an attorney. Those expenses were paid for through my credit card. In addition, I accumulated more air-miles.
I reallocated my vacation and emergency fund monies to the short-term rental savings. Although it appears to be an overrun, I added an additional $50 to my children's 529 plans this month. It should be noted, the 529 accounts are not reflected in my net worth. Curious to know why? My net worth tracking page explains it all!
There were no home improvements made this month. Even though there is no overrun this month, I do plan to construct a storage shed before the end of the summer.
Lastly, I will share the flex spending evaluation.
I always try to meet budget in my flex spending. This section consists mostly of wants, and not needs.
Great news, I did not completely blow the alcohol budget again! Last month I completely failed at this. Although, we spent entirely too much getting take out. This will be reduced in the month of July.
As mentioned previously, my buddy arrived back to the states from deployment. I bought him a round of golf and beers. This was well deserved.
My driving was minimal this month, as I am still working from home. For this reason, I reallocated the funds. I am curious to know when my company will allow our office to reopen. The state has been doing well the last couple of months. Our area is slowly opening back up, which I believe has kept the new case count low. Although I am ready to get out of my makeshift office, saving on gas is a huge perk.
Let's wrap this month's overview up!
Overall June 2020 Net Worth:
The good news is most states are easing shelter-in-place orders. The bad news, some states are seeing huge spikes of new cases. We will see what changes will occur next month in the saga of the Coronavirus. I have concerns that the market may correct itself again.
As always, I have continued to put money into the 401k and IRA accounts. This helped the net worth increase. I am staying the course and resisting the emotional decision pressing me to reallocate the investments. Who knows what will happen in the next month. It seems like the world is in complete chaos. However, I WILL NOT allow the emotions alter my plans. There is quite a way to go before I retire.
My current contribution to my 401k will remain at 8%. I will also continue to place 2% into my Roth IRA. These percentages will remain the same until we purchase our first investment property. After, I will throw fuel on the 401k investment FIRE!
The Financial Engineer's June 2020 net worth is now roughly $130,395. This was an increase of $5,049 from last month. The change was driven by an increase of $3,073 in my 401k and $321 in my IRA. My HSA grew by $236, respectively. The remainder of the increase came from paying off debt (mortgage and car loan).
Overall, I am ready to add additional income streams with side hustles to increase the net worth. This will allow us to achieve our financial goal. After reaching the goal, my focus of saving will shift to investing into the retirement funds. It should be noted, the increase to my daughter's 529 plans are not reflected in my net worth.
My June 2020 savings/investing rate is approximately 21%. I plan to increase the rate of saving/investing in the coming months.
July should be a great month. I have started side hustling again, which is not reflected in June 2020's net worth update. Previously, I have steered clear of some side-hustles to reduce exposure to others. Come back next month to learn more about one the most underrated ways to generate income!
How is you net worth looking? What are you doing to bring in other streams of income?