When it rains, it pours, or so the saying goes. We experienced so many unexpected expenses in July. It started with us deciding to refinance our home, which is a story all on its own. Our dishwasher died. Then Dr. SoS’s car started gushing oil. Lastly, our air conditioning went out and we need to replace the outside unit and the air handler, but not before dishing out one last nearly $500 electric bill trying to keep up with the summer heat.
There was plenty of good that came from the bad. Our home appraisal came in $95,000 more than our previous estimate and we scored a sub-three percent rate on a 30-year mortgage. We found a working dishwasher on the side of the road while on a walk. The mechanic estimated Dr. SoS’s car would be $800 to fix, but they fixed it for only $500 and we had the money saved to pay for it. Thanks YNAB! Finally, we are experiencing some cooler than normal summer weather, so I am sitting here at my desk with the windows open and a nice breeze blowing in off the lake. Shall we review the numbers?
Monthly Net Worth Update
I updated our home using the new appraisal value from July 10th. Once we take our home out of the picture, we still managed to increase our assets by $7,077.88 during the month. Let’s break it all down.
After the dip in cash savings last month, we are back up to a new high of $22,589.37. The $2,662.34 increase is partially due to Dr. SoS taking some extra income this month. We steadily stash cash each week into our American Express Personal Savings account. We also save a little money each month in our Synchrony Bank High Yield Savings account. The main reason that we keep that account is now that we hit our five-year account anniversary, we hit Diamond status. This provides unlimited ATM fee reimbursements, up to 3 free wire transfers per statement cycle, dedicated Diamond Rewards customer service phone access, and discount travel benefits. We do not currently use any of these features, but it does not cost any extra to keep the account open.
Cash Back/Gift Cards
We had a huge increase in cash back rewards this month from the charges we made in June. This account increased by $285.44 in the last month. We received cash back on our American Express Blue Cash card, Chase Amazon Prime, Citibank Costco, and Citibank Double Cash cards during the month.
The uncertainty in the market increased our balance in our Coinbase account by $2,067.80 in the past month. We hope this trend continues.
I added $1,255.23 to our retirement savings including my 403b, 401a match, and HSA. Quite some time ago, I read the Mad Fientist’s blog post HSA – The Ultimate Retirement Account. After reading that post, I began maxing out our HSA each year. Once we close on our new mortgage, I plan to use some of the monthly savings to really bump up my 403b contributions. Next year, I plan to max out my contribution to $26,000 or even $27,000, if they increase the limit again.
We are up another $0.07 for the month. I need a really compelling reason to begin contributing to this again. Do you have one to offer?
I originally purchase our house in August 2011 for $285,000. When I started this blog in June 2017, I used online estimates each month for our home. It started at $318,120. Then in July 2017, it dropped to $275,421. The months that followed caused so much havoc in my net worth, that in December 2017, I set the amount at $303,000. In October 2018, I increased the value to $305,000. After obtaining some comps in July 2019, I increased the value to $310,000. This month, our house appraised for $405,000, so I updated it again. I do not plan to change the value in the future unless we have another appraisal that convinces me otherwise or home values significantly drop.
Cars and Boat
I only drove 336 miles in July. Dr. SoS drove 398 miles. Kelly Blue Book liked the fact that we drove our cars less and increased the values by $807 for July. Our estimated boat value stayed the same.
We paid off an additional $2,491.16 in July. This will slow down now as we pay less on our mortgage principle. We are also going to take on some new debt at 0% with the new AC. We are doing great at saving for unplanned expenses, but I figure most people did not think to save for needing a new AC or needing a new roof. Both of these are very large home expenses. Speaking of a new roof, we should probably begin saving for a new roof.
I continue to pay our credit cards every Friday. We managed to finish the month again with a $0 balance. Looking back over our monthly credit card balances, we have not had a month-end balance above $0 since 2019. I call that a serious win!
Only 5 more $600 payments at 0% interest! I thought the last payment would be November 6th, but it appears that our last payment is December 6th. The good thing is that this will be here before we know it.
We had 8 years 4 months, which is only 100 payments to pay off the remaining $153,761.00 mortgage balance. As you know, we are in the middle of refinancing to a 30-year mortgage, which is 360 payments. This sounds like a bad thing, but it may turn out to be a really good thing. Our mortgage APR is going from 3.125% down to 2.875%. Our payment will be one-third of the current payment. Lastly, this frees up cash to stash or to enjoy our lives a little more.
Did I mention that in the heat of the summer our AC is out? We need to close on our house before we can finance the roughly $15,000 to replace it. We should be able to refinance by the middle of August. Then we can get a new air conditioner.
We have 22 years 7 months (271 payments) to pay off the remaining $200,616.69 balance. Hey, that is a shorter duration than our new mortgage will be!
We continue to calculate our savings rate each month in various ways. Here are the resulting calculations for the month.
- 19.95% – Percent of Debt Payments / Income earned
- 7.81% – Percent of Personal Retirement Savings / Income earned
- 2.35% – Percent of Employer Retirement Savings / Income earned
- 10.16% – Percent of all Retirement Savings / Income Earned
- 30.12% – 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. This should be significantly greater next month.
As of the first day of August 2020, we are up 15.72% to a new net worth high of $769,953.17 from our net worth of $665,384.13, from July 2020, and up 30.05% from our net worth of $592,066.49, from August 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!