After not getting my net worth blog post published for last month until the last day of the month, I decided to get it done immediately this month. With as much money as we spent over the past month, I am quite surprised that our net worth went up. Here are the updated numbers.
Monthly Net Worth Update
Assets
Despite our massive spending in June, our assets increased by $1,197.30. We managed through some credit card rewards trickery, adding to my 403b retirement account, and maintaining our debt payments.
Cash Savings
Our cash took a big hit last month. A couple months ago we took over our Escrow account from our mortgage company. An Escrow account is an account mortgage companies set up to make sure you have the money to pay your homeowners insurance and real estate property taxes. These are both substantial payments and if you do not pay them you could lose your home. Once you can manage your money well enough, though, you can take these payments over, save for them, gain interest on the savings, and pay them when they are due possibly earning even more money through credit card rewards.
Our first major payment came due last month, but we planned and saved the $2,234 to pay the homeowners insurance before the due date. Not only that, but we paid it with our Citibank Double Cash credit card earning 2% back on the payment. Had I planned better, I might have opened a new credit card account and obtained a signup bonus. However, we still earned $44.68 on the transaction because we paid it off the day the charge hit our account.
Cash Back/Gift Cards
To help pay for all our spending last month we cashed out some of our credit card rewards. We used $100 from our Amex Blue Cash card to pay for some extra grocery (“hic”… alcohol) spending. We switched internet providers from Spectrum to AT&T and received a $100 gift card. I loaded it into Amazon and used it with $44.45 from our Chase Amazon card to buy a worm farm. We also cashed out $200 from our Double Cash card to help pay for organic soil for our flower and vegetable gardens.
Now for the trickery. Due to the pandemic in the US, the Federal Government allows small business owners to compensate their living expenses at 100% for two months. Dr. SoS does not have the cash in her business to do this, but she could still pay herself in a roundabout way.
Credit Card Rewards through Business Expenses
Our Amex Blue Cash card pays 1% back on Gas, Groceries, and Pharmacy for the first $6,500 spent in a calendar year. After that, it pays 5% back on these same three categories. This was the first card I obtained after my divorce. In early June, Dr. SoS paid her business more than $6,500 to cover living expenses using our Amex Blue Cash card. She then deposited the cash into her checking account. I then used that money to pay off the bill. In fact, I paid it before it even hit the account. This transaction only generated $37.40, but it ensured we will received 5% back on all our groceries for the entire year, which is HUGE!
On June 1st, I applied for the Chase Sapphire Preferred credit card. This card has an introductory offer paying 60,000 Ultimate Rewards points after spending $4,000 in the first 3 months after obtaining the card. We received the card the second week of June. We did the same thing we did with the Amex Blue Cash card for the second month of expenses. However, this generated an estimated $1,011.69 in Chase Ultimate Rewards points we can use for travel.
Although we cashed out a nice chunk of our credit card rewards in June, we finished the month increasing our rewards by $583.25. We also managed to do that without increasing any credit card debt. What about those pesky credit card processing fees Dr. SoS’s business has to pay? They are treated as a business expense. This is why business owners have such an advantage over the rest of us.
Cryptocurrency
Our Coinbase account shows we are down $128.24. With all the ups and downs in the market, I consider that pretty good in the grand scheme of things. We will hold on to our Ethereum and Bitcoin and maybe someday we will get our money back out.
Retirement
My employer matched my deposits into my 403b and including my HSA, we added $1,272.41 to our retirement in June. This helped increase our net worth.
529
We are up $0.07 for the month. The account is small and not invested, so it will only continue to increase in pennies for the foreseeable future.
House
Last month I said, “With only eight and a half years left on our mortgage, I doubt we will refinance. I do not believe the benefit would outweigh the costs.” I stand by the fact that the “monetary benefit” does not outweigh the costs, but we are in the process of refinancing anyway.
Our credit union was able to offer a no cash-out refinance option at 3%. This will cost us more than $4,000, which we will not make back lowering our interest rate from 3.125% on a 15-year fixed loan when moving to a 30-year fixed loan. However, due to the uncertain times we now live, this reduces our mortgage payment by over 61%. Our plan is to stash the extra cash until the uncertainty subsides. This is one topic that I have to write about because it has been quite a crazy experience.
Update: I received an email today that said mortgage rates hit an all-time low. I forwarded the article to our loan agent and we are going to refinance to 2.875% for a 30-year fixed loan.
Cars and Boat
I drove 155 miles in May, but drove 536 miles in June. In May, Dr. SoS drove 420 miles, and drove 460 miles in June. Kelly Blue Book increased the value of my car by $532 and amazingly Dr SoS’s car increased $1,151. With all the temporary tags I see on the highways during my minimal driving, I imagine that people using their stimulus money to replace their older cars with newer models. This drove up the price of used cars. That is just a guess on my part, though.
Liabilities
We paid off an additional $2,481.43 during the previous month across our auto, home, and student loan debts. Oh, and check this out. We were able to color in another line of our Debt Free Chart now that our debt is down to $359,868.85! I let Dr. SoS choose the colors. She colors the paper version on our refrigerator and I match it in my Photoshop file. We have a LONG way to go, but we are making progress.
Credit Cards
Despite all our spending on our gardens and some fun stuff, we managed to keep our credit cards regularly at zero balances throughout the month. I love seeing all those zeroes too much to do it any other way.
Car Loan
Only 6 more $600 payments at 0% interest and then we will add that extra cash to our savings!
Mortgage
We have 8 years 5 months (101 payments) to pay off the remaining $155,105.57 balance. This is about to change back to 30 years (360 payments) in the next couple months. As I mentioned, I need to write an entire blog post on why I believe this is a good idea. Would you read it, if I did?
Student Loans
We have 22 years 8 months (272 payments) to pay off the remaining $201,163.28 balance. It’s a long slog, but that may be the price for hopeful untold riches in the future from my wife becoming a Doctor.
Savings Rate
We continue to calculate our savings rate each month in various ways.Here are the resulting calculations for the month.
- 27.21% – Percent of Debt Payments / Income earned
- 10.74% – Percent of Personal Retirement Savings / Income earned
- 3.24% – Percent of Employer Retirement Savings / Income earned
- 13.98% – Percent of all Retirement Savings / Income Earned
- 41.19% – Percent of Savings + Debt Payments / Income Earned
The debt payments are for our home mortgage, my car, and Dr. SoS’s student loan. The savings is only what I and my company contribute to my company 403b and HSA, excluding any cash savings.
Summary
As of the first day of July 2020, we are up 0.55% to a new net worth high of $665,384.13 from our net worth of $661,717.74, from June 2020, and up 12.59% from our net worth of $590,977.43, from July 2019.
We compile this information each month to keep us accountable and to hopefully inspire others to spend less than they make, save more, and make wise investment choices. If you have any comments or questions, please leave a comment.
Thank you for reading!
Mr. SoS