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.
It feels like every time I write one of these recently, there is some new horror that makes me feel guilty about even putting these words to ‘paper’ when there are much more important things going on in the world. In May 2020, that of course refers to the nationwide protests against police brutality that have swept across our country and our consciousness.
As with the coronavirus crisis (which is, in fact, not over), I still maintain that this blog is meant to serve as a time capsule and a contemporary record of my financial journey. It is not intended to be a source of advocacy (after all, only about four people read this blog, hi mom!). Maybe this will change in the future.
Budget/Cash Flow
May 2020 represents our lowest level of spending since February 2019. This, combined with a three-paycheck month made for a truly impressive savings rate. This was almost entirely cash, and we now have a nice ~$30,000 cash cushion, enough to get us through any(more) unexpected loss of income, especially if I am able to get a student loan forbearance for a few months.
PayItBack Progress
Speaking of which, our student loans have continued to drop to downright ridiculous rates, to the point where I am honestly considering forbearance simply because our savings account would yield a higher interest rate. I probably won’t go that far, but I am putting exactly zero effort into paying off these loans one single second before they are due.
This doesn’t necessarily mean that they will stretch for the full five years, but I am not going to start shoveling money at them until rates rise again.
Net Worth
Having built up the aforementioned emergency fund, I felt comfortable finally starting to crush the 0% APR credit card debt that we have been holding onto for nearly 18 months. It’s technically not due until August, but I have decided to make payments with every paycheck as a steadier and less psychologically demoralizing alternative to a single $19,000 payment. I paid a total of $9,500 toward this bill in May.
The three-paycheck month, the high savings rate, and the rising stock market all came together to give us the largest one-month net worth increase yet, almost $32,000. I don’t need anyone to tell me how fortunate we are.
Financial Goals for 2020
1) Devote 2/3 (66.7%) of net income to wealth-building: 62.8% running average
2) Max out 403b: $9,658 of $19,500 (49.5% done)
3) Max out backdoor Roth IRAs: $0 of $12,000 (0% done)
4) Max out 529s for state tax benefit: $0 of $16,000 (0% done)
5) Save an additional amount to achieve 20% of gross salary: $27,300 of $28,500 (95.8% done)
6) Pay 2019 tax underpayment: $0 remaining ✅
7) Pay off all carried 0% APR credit card balances: $10,356 remaining
8) Pay off my car loan: $0 remaining ✅
9) Pay off Mrs. PIB’s car loan: $0 remaining ✅
10) Pay off Mrs. PIB’s student loans: $24,356 remaining