Net Worth: August 2020
Welcome to my monthly net worth August 2020 edition. Another month has come and gone, which indicates a need to review the change in my net worth. For all of the new followers, welcome! I track my net worth monthly to see where I am in comparison to my annual short term goals. Additionally, it is an opportunity to see my progress towards reaching my long-term goals.
August 2020 Personal Update
What happened in the month of August for The Financial Engineer? Further progress!
As mentioned last month, my company introduced employees back to the office space. I started working back in the office at the start of last month. However, this only lasted a couple of week as the company needed space for new hires. The company I work for implemented new office standards to maintain adequate social distancing. As a result, this reduces the office employee occupancy count. Shortly after, they opened the office to 75% capacity. I was included in that 75% capacity count.
I honestly do not know what next week holds in a pandemic world. It would not be a surprise if things changed next week. We must all roll with the punches.
Even though I am working in the office, I have been assisting a separate regional office with projects. It is extremely impressive to see amount of work the midwest region is doing. Accordingly, the new contracts from numerous clients are aiding in the firm meeting it's financial goals for the year. The firm's financial health has even allowed them to make slight increases to salaries!
The month of August held many firsts. August has never seen Indy cars race the Indianapolis 500, until this year. In fact, this was the first time the greatest spectacle in racing did not occur in the month of May. Thankfully, the world's largest single-day sporting event occurred in the month of August. Even without the fans, it is still considered the largest single day sporting event in my eyes. I was thankful to watch this event, even if it was not in person. We hung out in the back yard and smoked chicken wings while watching them turn left.
August was also the first time our second born rolled over! It was awesome watching her big sister cheering her on. She will be crawling before we know it.
Similarly to July, my net worth increased. My side hustle income helped fuel the increase. As a result of this, I am pleased to see continued growth in my net worth during this pandemic. Subsequently, the month-over-month percent change is steadily increasing.
August 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 difference 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. The investment of the funds will occur by the end of the year.
I truly wish my car insurance would be the same rate as last month's! Our July rates were half of what we typically see. We will be shopping for new auto insurance in the near future. Come back next month to read about my game plan to lower this cost.
Reimbursable work costs line item increased from expenses incurred as a result of renewing my professional engineer license. Every biennial year I have to renew the license. This costs approximately $100 for the state renewal fee. Not to mention, I have 30 continuing education hours I must meet. Those courses can really add up, at an average of $85/hr. Thankfully, my employer covers all costs associated with this.
Next, let's dive into my Financial Goals.
Dang car maintenance! I had a close overrun in the car maintenance line item. This was due to my break pads. Luckily, my rotors were not in terrible condition. I was able to salvage them and only replaced the break pads on all four wheels. This line item could have ballooned to $400+ overrun! Undoubtedly, I anticipate new tires before snow miser shows up and flips my vehicle upside down.
As previously mentioned, I reallocated my vacation and emergency fund monies to the short-term rental savings. I messed up the reoccurring contribution to my children's 529 plan. August is the start to depicting an overrun for the remainder of the year on the children's 529 line item. This is due to poor planning for contributing to our new addition to the family's account. 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!
Hooray for our home improvement line item! If you recall, I mentioned our water heater was leaking last month. I planned the replacement to perfection and kept the costs near zero! It cost us a total of $150 to replace. This included the cost of disposal! How did I do it you ask? Well, we did the replacement on our own. Luckily the water heater was still under warranty! That means we got a replacement at no charge! Not even a handling or shipping fee. One Saturday morning we picked up the new heater after the manufacturer provided us with a replacement number. We emptied the heater using a garden hose hooked to the valve. Then a couple of sharkbite couplers later, the heater was up and providing cold water. I mean hot, hot water.
After a couple of hours, we were back to drinking beer and watching baseball!
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. However, the payment for numerous birthday gifts in one month can take a toll. It always increases this month's flex spending. We have a big family with a lot of birthdays between us and the end of the year.
Great news, I did decent on the alcohol budget yet again. This is a decent sign I am not consuming too much. It keeps the numbers in check. As such, it keeps the costs low.
Contrary, I spent too much on eating out. We ran over our budget by way too much. I will get this back into check next month.
Let's wrap this month's overview up!
Overall August 2020 Net Worth:
We are seeing more trends of the economy opening up. However, I think there are unfortunately more layoffs in the future. I recently read an article on major airlines laying off thousands of workers. On the other hand, I was informed that Southwest Airlines (LUV) was not planning to have any layoffs. As a result, they now have my loyalty.
We will see what changes will occur next month in the saga of the Coronavirus. I am excited to see how the economy opens up for the last stretch of the decade long year of 2020.
As always, I have continued to put money into the 401k and IRA accounts. I have focused more attention into the short term savings for the real estate investment. This is primarily funded through my side hustles. This helped the net worth increase. I am staying the course and resisting the emotional decision pressing me to reallocate the investments. Who knows when or how the stock market correction will happen? This is why I am not trying to time the market.
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! This should occur sometime in the 3rd quarter of 2021.
The Financial Engineer's August 2020 net worth is now roughly $144,802. This was an increase of $7,851 from last month. The change was driven by an increase of $4,915 in my 401k and $677 in my IRA. My HSA grew by $236, respectively. I also added approximately $950 from a side hustle. The remainder of the increase came from paying off debt (mortgage and car loan).
Overall, I am happy with the increase to the net worth. The side hustle income is increasing month over month, which means I am becoming more efficient. As a result, this will allow us to achieve our financial goals. After reaching the goal, my focus of saving will shift to investing into the retirement funds. Again, it should be noted, the value in my daughter's 529 plans are not reflected in my net worth.
My August 2020 savings/investing rate is approximately 31%. This will continue to increase in the following months.
Sadly, I anticipate September to be a stagnant month. This will be from the side hustling and reduction in costs balancing the payment for a family vacation and automobile maintenance. I may smooth the costs into October. Maybe the stock market will rocket 20%!? The deranged year of 2020 has no limits!
How is you net worth looking?