Checkup – January 2021

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.

As we enter the new year, work life continues to normalize. I’m near the case volume that I was at prior to the pandemic, my health system appears to still be financially solvent, and I am fully vaccinated! Masks will probably be with us for a while and I suspect handshakes will be dead for the next 50 years, but it finally feels like we are turning a corner.

Budget/Cash Flow

January 2021 Budget

Something of a ‘lean’ month; the first third of the year always has slightly smaller paychecks until I hit the Social Security cap ($142,800 in 2021). Of course this is still more than I took home in 4 months as a resident and more than half of what many people in this country make in a year. My largest asset by far continues to be the privilege of earning a high income, and it’s something I’m grateful for every day.

We seem to be settling into a fairly consistent average spending of about $8,000 per month. This is higher than my original goal of $6,580, but not terrible. Back of the envelope, this is what we would take home if we we made $125,000 annually pre-tax. That would put us in the top quartile of US households, which feels reasonable.

I successfully front loaded a number of investment accounts this month. Roth IRAs and both boys’ 529s are done for the year. I’m contributing 10% of each paycheck to my 403b, so that should be done by a little more than halfway though the year. And I’m going to be throwing a few grand into the taxable brokerage each month going forward. I did pilfer the savings account quite a bit for all this, but since home buying doesn’t seem to be on the immediate horizon, this is a worthwhile tradeoff.

PayItBack Progress

January 2021 Debt

Rates on our loans have reached new record lows, with my medical school loans currently at 0.19%. This is somewhat less impressive when federal loans are at 0%, but it still means payments above the minimum won’t be prudent any time soon.

Net Worth

January 2021 Net Worth

Net worth has crested $200,000 for the first time. I’m still far behind most of my peers who didn’t go into medicine (that I know about anyway), but the gap is shrinking. The S&P was down a little over 1% on the month, but we still increased net worth by over $10,000.

Financial Independence

January 2021 FI

Financial Goals for 2021

1) Max out 403b: $2,942 of $19,500 (15.1% done)
2) Max out backdoor Roth IRAs: $12,000 of $12,000 (100% done) ✅
3) Use taxable brokerage in addition to 1) and 2) to save $100,000 total for retirement: $3,000 of $68,500 (4.4% done)
4) Max out 529s for state tax benefit: $16,000 of $16,000 (100% done)
5) Save 20% down payment for a $450,000 house: $49,910 of $90,000 (55.5% done)
6) Continue to pay minimums on student loans as long as rates remain <4%
7) Finalize estate documents

How Far I’ve Come

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