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We were supposed to be on a family beach vacation in Florida this month.  This was pushed back due to the virus.  On a lighter note, we did not spend money on the vacation.  This definitely helped maintain my net worth.

As day 3,126 (or so it seems) in quarantine wraps up, I wanted to take a moment to check in and share my net worth.  The chart that tracks my net worth was all over the place. Between the positive market movements and my daughter's delivery bills, that little graph was up and down throughout this month.

What a ride the stock market has taken us on.  I am not sure if we have reached the 8 seconds on the bull's back, or if we are in the pin preparing to go for a ride on that 1,500 pound beast.

After a huge drop in March, stocks made up a ton of losses.  Let's not forget that scary moment when the S&P 500 closed the first quarter down 20%.   What a turn around in a short period of time, as the S&P 500 has shot up from 2,237 points to 2,991 index points.  Thankfully, the positive market increase offset some hefty bills that I paid.

I have fought off emotions to make any moves to my portfolio.  In fact, I have continued to contribute to all investments more than originally budgeted for.   I find it important to always invest, especially when others are worrisome.

May 2020 Actual vs. Budget:

This month's spending is not as bad as it seems.  I invested in a beautiful website, which required a domain fee.  Starting a blog can be less expensive with some domain providers, but I wanted to use an entity that manages numerous sites and is well accredited.  It was also important to have a completely customizable website, with amazing framework.  In order to do so, I purchased a premium theme from Studiopress. The launch of the website was funded through my AMEX, so I could claim air-miles for my family's future travel (if 'Rona finally leaves us all alone).

In addition, I received a quarterly bonus from my employer.  This is not calculated into the Actual vs. Budget tables (shown below).  I have my yearly budget spreadsheet setup to track my spending based upon my monthly base salary.  Any other additional income would show up as an overrun in Actual vs. Budget tables (shown below) This is mainly to prevent lifestyle creep.  As a civil engineer, everything is ALWAYS over budget and behind schedule!

Now, let's take a dive into the variance in fixed costs!

Fixed Costs

I increased my contribution to my HSA account to revive the balance.  As mentioned previously, we paid for our daughter's medical bills in full this month.  By doing so, we received a 10% discount from the healthcare system!  Take note, as you could negotiate this through your own future medical needs.  Uncle Sam received his cut of my quarterly bonus (hence the overruns), and I did not properly budget for our car insurance at the start of the year.

We have been seeing a lot of commercials about our insurance provider returning dividends to their customers for relief during the pandemic.  I plan to call them this month to see where we stand on our payment (or credit)!  Numerous car insurance agencies are providing credits to existing customers.  Please do the same if you have auto-insurance through Geico, State Farm, Chubb, Liberty Mutual, Farmer's Insurance, or any other auto-insurer. Otherwise, this is money left on the table.

Next, let's dive into my Financial Goals.  This will be an interesting look into the juiced 529 investments.

Financial Goals

Whoa, I used my credit card? As previously stated, I invested in a domain and framework for this website.  I paid for it using my credit card in order to obtain more air-miles.  This actually sent my accrued air-miles over 100,000 (I am a saver)! My family and I will definitely use those miles when it becomes safe.

I love leaving my student loans in this section, as I completely paid them off last year.  This was 2 years prior to the maturity date!  It is my reminder of the successes I had so far.  This will fuel the drive to accomplish this year's goals.

I reallocated my vacation and emergency fund money to be placed into the short-term rental savings.  Although it appears to be an overrun, I added an additional $125 to my children's 529 plans this month.  It should be noted that the 529 accounts are not reflected in my net worth.  My net worth tracking page details why.

As the blown budget reflects, I had some spring maintenance for our primary residence.  This portion of my budget always seems to overrun in the spring.  I start noticing projects to do outside.

Finally, I will share the flex spending evaluation.

Flex Spending

I always try to meet budget in my flex spending.  This section consists mostly of wants, and not needs.  Can you believe I have budgeted for approximately a case of beer a month?  I failed miserably to meet this budget.  Alcohol sales can sky rocket in quarantine, ha!  It is good to track alcohol purchases, as it is a reflection on consumption.  This provides an opportunity to reflect on my health.

As most of you are aware, Mother's Day was this month.  The girls and I treated momma to a home made steak dinner.  We also made our annual purchase of outdoor flowers for her.  In addition, we bought some additional fishing supplies and took her fishing.

Thank goodness I did not have to drive much this month.  That is what saved the budget from being blown out of the water.

Overall May 2020 Net Worth:

The good news is most states are easing shelter-in-place orders.  This is showing promise to investors, which in turn is reviving the economy and markets.  As always, I have continued to put money into the 401k and IRA accounts, which helps the net worth increase.  I am staying the course and resisting the emotional decision pressing me to reallocate the investments.  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.

Side-hustles will soon fire back up, as I strive to increase income for the real estate investment. I have steered clear of some side-hustles to reduce my family's exposure.  As cases drop in my state, I will look for more ways to generate income quickly.  I believe a potential housing crisis looms.  This is an opportunity for investing into the real estate market. As most know, I am looking to invest in short-term rental property within a year.  The ripple effect from the 'Rona virus will create a buying opportunity.

The Financial Engineer's May 2020 net worth is now roughly $125,346. This was an increase of $1,724 from last month.  The change was driven by an increase of $3,076 in my 401k and $431 in my IRA.  However, medical bills from the little one's delivery offset a good portion ($2,352). The remainder of the changes were driven by paying off debt (mortgage and car loan).

Overall, I am happy with the slight change in my net worth.  My family does not have a burden of a monthly payment for the birthing costs, and the net worth increased!  Not to mention the increased in my daughter's 529 plans that are not reflected in my net worth.

How is you net worth looking during these turbulent times?  Any suggestions on how I could improve mine?

Before I dive deep into my net worth changes, lets take a moment to be thankful the 1st quarter of 2020 is over.  It was the worst first quarter since the 2008 financial crisis! The S&P 500 closed this quarter down 20%, ouch!  I hope to never see my numbers drop like that again.  Thankfully my net worth bounced back a bit in April, thanks to a hefty tax return.

2019 Tax Return

April is a great time of the year.  Flowers are blooming, trees have buds, and our anticipated tax return typically hits our accounts.  Many people debate on the best way to fill out your W-4 for withholding money for tax filing at the end of the year.  There are varying situations for everyone, but for the sake of time I will discuss my own.  As you know, I am a father of two (2 dependents) and husband to a amazing wife.  We choose to withhold quite a bit throughout the year on our paychecks, so we both have a withholding status of single with 0 dependents.

You may be asking, why would you do that?  You could be holding that in a high interest savings account accruing interest, or allowing it to make returns in you IRA.  This goes to the old saying, "you won't spend, what you don't see."  I find it as a way of managing the urge to spend money on frivolous items that are not needed.  If I kept the amount additionally withheld I would have built more wealth, and felt more financially secured.  This would then allow me to feel more secure about spending money on something my family or I did not need.  I find it as a way to prevent lifestyle creep.

I am sure you are wanting to know the juicy details of the return, and could really care less about the why.  My wife and I received $7,534 from the Feds and $796 from the State.  This was a hefty return that further cushions our financial status during a time of uncertainty.

What to do with the Tax Return?

This is a substantial amount of money that we look forward to receiving each year.  I am sure you all are asking the typical question, "What will you spend it on?"  Last year we used it on a home improvement project, but this year we plan to do so much more. Part of it will be used to place a down payment on our real estate investment, but a majority of it will go to pay off my wife's student loans used for her MBA. All but $2,330 will go towards paying off her student loans. We will make the student loan payment as a recovery further progresses.  I believe we are in a solid financial situation to afford a discounted purchasing price for the short-term rental property by the end of the year as we begin recovering.

April 2020 Actual vs. Budget:

This month's spending was an interesting one.  I invested in a deep freezer, as we have a new addition to the family.  A future engineer was born mid-March during the start of the Coronavirus frenzy.  My family wanted to minimize the amount of times we went out into the world after we received a shelter-in-place order.  This allowed us to stock up our meals in the freezer for the month of April.  Below are summaries of the variance in my Actual vs Budgeted Spending:

 

 

I am sure your eyes went to 2 or 3 line items under the Flex Spending Variance.  The $6,000 has been allocated to the wife's student loans.  The huge shopping number came from the roughly $650 deep freezer purchase, or was it the toilet paper? That was a joke, it was definitely the freezer that cost $650.  I did spend more on groceries this month to prepare for the shelter-in-place order.

April 2020 Net Worth:

The good news is the stock market didn't continue to plunge in April.  I also continued to put money into the 401k and IRA accounts, which helped the net worth increase.  I am staying the course and resisting the emotional decision pressing me to reallocate the investments.  Resisting the urge to take the losses and flee is tough, but I am into my early 30's.  I have quite a ways to go before retirement. I am looking at the significant drop in the market as equities on sale, and will continue to contribute my 8% into my 401k / IRA.

The Financial Engineer's April 2020 net worth is now roughly $123,550. This was an increase of $9,294 from March.  The change was driven by an increase of $4,443 in my 401k; $1,000 in my IRA; and the tax return funds that will have $2,330 allocated to the Real Estate investment savings.  The remainder of the changes were driven by paying the mortgage and my car loan.

Everyone's net worth will continue to bounce back and forth until the Coronavirus becomes a memory and the panic calms.