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.
December was a successful a capstone on my first calendar year out of training and enacting our personal financial plan. As ever, it is a convenient time to review the past year (in this case, past four months where I was actually earning an attending salary) and set sights on the year ahead.
Budget/Cash Flow
December
December comes in almost perfectly on budget, just a hair over our monthly spending goal of $6,580. This is what happens when your (thankfully!) Type A spouse gets all of the holiday shopping done in November.
Despite the minor overspending, the little bit of extra income earned over and above my base pay still put us at a 70% wealth-building rate.
2019 (Sep-Dec)
This our sum total budget for the past four months. We came in exactly at goal, with two-thirds of our money going toward wealth creation rather than consumption.
PayItBack Progress
I paid aggressively toward our car loans this month, with the goal of getting rid of one by next month and the other by mid-spring. Both are sub-4%, but I really want this coming year to be about crushing consumer debt.
Net Worth
December
Net worth progress from both sides this month, thanks to aggressive debt pay down and the inexorable(?) march upwards of the S&P, gaining almost 4% in December alone. In a few months some of those debt categories ought to disappear completely.
2019 (Sep-Dec)
Assets:
$103,380 –> $153,620 = +$50,240
Debts:
-$252,420 –> -$236,700 = +$15,720
Net Worth:
-$149,040 –> -$83,080 = +$65,960
Financial Goals for 2019
1) Devote 2/3 (66.7%) of net income to wealth-building: 66.9% running average ✅
2) Max out 403b: $19,000 of $19,000 (100% 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): $16,600 of $30,000 (55.3% done) ❌
7) Put whatever is left toward paying off my car loan at 3.99%: $19,490 paid ✅
Really proud of this. I think we did an excellent job in my first few months out of training of ‘living like a resident’ (with a few minor splurges), and it’s already easy to see what a good road it is putting us on. We far surpassed the White Coat Investor recommendation of saving 20%, and on top of that made a sizable dent in our massive debt. And we never felt like we were being deprived or miserly. The only goal not met was the emergency fund, which honestly did not probably make much financial sense in the context of so many other good uses of our money.
Financial Goals for 2020
1) Devote 2/3 (66.7%) of net income to wealth-building
2) Max out 403b: $19,500
3) Max out backdoor Roth IRAs: $12,000
4) Max out 529s for state tax benefit: $16,000
5) Save an additional amount to achieve 20% of gross salary: $28,500
6) Pay 2019 tax underpayment: ~$9,000
7) Pay off all carried 0% APR credit card balances: ~$19,000
8) Pay off my car loan: $4,140
9) Pay off Mrs. PIB’s car loan: ~$11,000
10) Pay off Mrs. PIB’s student loans: ~$30,000
Whew! That seems like a lot, but should all be easily achievable if the past 4 months have been any indication. This doesn’t account for any sort of bonus at my job, which if history is any indication should be very much 🤞 in the cards.
I’m so grateful for all the knowledge and inspiration from the physician personal finance community (and the greater personal finance world!), and I wish you all a very happy and successful new year!