Checkup – May 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.

I’m not sure when my last post with mention of COVID will be (obviously not this one!), but it feels like we may be close. Daily cases are down to 2 per 100,000 people in my county, which means the risk is almost nil. Everything is completely open and most businesses have dropped their mask mandates. Going to the store bare-faced still feels odd and probably will for a while, but I have so missed dining out and large family gatherings. We attended an entirely-vaccinated 22 person Memorial Day cookout at my mother’s this past weekend, and I can’t think of a better boost for the soul.

Budget/Cash Flow

We accomplished another ‘low’-spend month in May, clocking in at under $7,000 (as I continue to remind myself, this is way more than the average American household *makes* in a month!). Largest expenses were car property taxes ($440), a new website and host for my wife’s photography business ($336), and our first dinner date night out in…forever? ($175). Otherwise expenses were generally on the typical-to-low end of the scale.

I went ahead and increased my 403b contributions to 50% of paycheck which was more than enough to max it for the year. I intend to keep in this way and hopefully have all my annual retirement and 529 investments frontloaded into the first two months of 2022. We made our largest contribution yet to our taxable account. And I continue to trickle money down the drain of cryptocurrency. Hopefully at some point it produces a blog post, if nothing else. This all comes together to make a nice wealth-building rate.

PayItBack Progress

Rates remain at historic lows, despite the common wisdom that they ‘can only go up from here’. Paying minimums. Rinse repeat.

Net Worth

I wasn’t sure if we were going to hit $300,000 net worth this month, but the S&P pulled off a near break-even of +0.55% in May. I suspect the next milestone will either be assets of $500,000 or net worth of $400,000, hopefully by the end of the year. I don’t think we’ll get under $100,000 debts in 2021 unless interest rates skyrocket and I start paying them off more quickly.

We didn’t make any contributions to the house fund since I focused on topping off the 403b, but this should be rectified with improved cash flow over the coming months.

Financial Independence

Graph courtesy of Mad Fientist

I realized today that the way this chart estimates monthly expenses is with a 12-month rolling average. Even though our expenses were low this month, they displaced *last* May which was even lower, resulting in our FI date being pushed out to mid-2030. Sad.

Financial Goals for 2021

1) Max out 403b: $19,500 of $19,500 (100% 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: $25,000 of $68,500 (36.5% 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: $65,105 of $90,000 (72.3% 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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