Checkup – November 2019

Welcome to another Dr. PayItBack monthly checkup! I use this space to remain accountable to our expenses and goals, track net worth and debt, and muse on what was done well and what can be improved.

November was a month full of friends and family, and a promising hint of things to come now that we 1) are closer to where we grew up (after years of training hundreds of miles away) and 2) have the means and time to both travel and host. Medical training can be an exercise in deferred joy, but it finally feels like we have a home and are living life.

Budget/Cash Flow

November 2019 Budget

One thing that people of all professions and income levels can agree on is the magic of the three-paycheck month. When most expenses are budgeted monthly, having an additional 50% bolus of cash goes a long way toward meeting financial goals. We were able to make incredible progress in saving/investing this month, simply by virtue of this extra cash flow.

Backdoor Roth IRAs: funded.

529 accounts: funded.

All while continuing to max out 403b contributions and make more than minimum payments on my car loan. This dug into the emergency fund a little bit, but filling those investment buckets is more than worth it.

On the expense side, the largest outlays were a new laptop for Mrs PayItBack ($1,445), residual hospital bills for Number Two Son ($705), and a session of professional photos now that we’re a complete family of four ($375). All of these represent thoughtful, worthwhile purchases, and I’m so thankful that we have the means to make them without worrying if they’ll break the bank.

All told, November was enough to get us almost back on track to goal wealth-building rate of 66.7% for 2019.

PayItBack Progress

November 2019 Debt

Now that our catch-up investing contributions are done for the year, it’s time to begin living up to my namesake and tackling debt. To that end, I’ll be keeping track specifically of our progress toward eliminating our loans/non-revolving debt. The graph above has our expenses split up individually for ease of tracking, but of course it is all ‘our’ debt.

Due to massive discrepancies in minimum payments vs. balances across the 4 loans, I’m not really using a pure snowball or avalanche method, but am instead going after the loans in a sequence that most facilitates cash flow: my car –> my wife’s car –> my wife’s loans –> my loans.

I plan to aggressively pay off the first three but in the current low-interest-rate environment, it may make sense to stretch my refinanced loans out as long as possible. Stay tuned!

Net Worth

November 2019 Net Worth

Unsurprisingly, almost all progress this month was made on the asset side of the balance sheet; in fact there was actually a small backslide on the debt front (as predicted). My 0% APR credit balance is getting a little out of hand – even though it’s not costing us any interest – and I plan to rein that in starting next month.

S&P was up 3% in November alone, so that also contributed to the huge net worth gain. Obviously annualized 36% returns won’t continue indefinitely, which is why I don’t have an explicit short-term net worth goal.

Overall, the single most productive month of my financial life. Happy Holidays!

Wealth Building Goals for 2019

1) Devote 2/3 (66.7%) of my net income to wealth-building: 66.0% running average
2) Max out 403b: $15,570 of $19,000 (81.9% done)
3) Max out backdoor Roth IRAs: $12,000 of $12,000 (100% done)
4) Max out 529s for state tax benefit: $8000 of $8,000 (100% done)
5) Pay off personal family loan: $6,060 of $6,060 (100% done)
6) Build up emergency fund (checking and savings): $15,380 of $30,000 (51.3% done)
7) Put whatever is left toward paying off my car loan at 3.99%

How Far I’ve Come

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