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.
In terms of our finances, June was the most ‘normal’ feeling month since the beginning of 2020. A two paycheck month, modest stock market gains, and spending that was not drastically above or below out long-term average. A reminder that when it comes to money and investing, boring is good.
Budget/Cash Flow
The largest individual outlays this month related to travel and COVID-related disruption thereof. $908 for an August Airbnb in a very rural area that is hopefully far from any viral hotspots. And $800 paid back to some family members that we had yet to pay back for a prior trip cancelation. Other expenses included a new phone for Mrs. PIB ($270), a new carseat for #2 Son ($196), and web-hosting for a budding side-business of Mrs. PIB ($144). That all puts us just shy of the goal 2/3rds wealth-building rate, which is about what we’ve averaged for the year as a whole.
PayItBack Progress
Not much to add here, as we continue to make minimum payments on our insanely low-rate student loans. I adjusted the x-axis to convey the very real possibility that these do end up stretching out to the full five years if rates stay this low.
Net Worth
This is the big story, though I stole my own thunder with my last post. We’re back to broke! Net worth is finally positive! This took just under ten years from starting medical school, and ten months since my first attending paycheck. While I never set an explicit timeframe for this goal, it did meet the projection that I made last fall. It’s a great feeling to see that purple bar finally start to work for me.
Financial Independence
This is a neat tool from The Mad Fientest; it takes simple inputs of your monthly expenses, savings, and current net worth, and uses that to generate the date that your investments will be expected to throw off enough income to support your average spending level, also known as your Financial Independence Date. I’ve been keeping records on here for a while, but now with our net worth in the black, I will start incorporating it into my monthly posts.
Financial Goals for 2020
1) Devote 2/3 (66.7%) of net income to wealth-building: 62.9% running average
2) Max out 403b: $11,335 of $19,500 (58.1% 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: $34,390 of $28,500 (120.7% done)✅
6) Pay 2019 tax underpayment: $0 remaining ✅
7) Pay off all carried 0% APR credit card balances: $4,332 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: $23,924 remaining