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.
Budget/Cash Flow
Back to normal two-paycheck months. We finally dropped the $4,000+ for our Disney trip, which will be our largest expense of the year after buying a house and a car. The next two were a ladder that is probably going to be my cause of death ($260) and my new running shoes ($170).
Restarted payments on student loans, at a reduced rate now that I’ve refinanced them out to 5 years again.
PayItBack Progress
The march to zero continues, with a shallower slope for now. My variable rate continues to climb precipitously, as expected and with more to come. But something tells me I’m not going to keep the loan around for that much longer. When the rate goes above 4% I’m going to look real seriously at getting ride of it.
Mortgage
Zillow says that our house has appreciated by $35,000 in the five months since we bought it. On $66,000 of equity, that comes out to about 130% leveraged annualized return. Sure beats the negative 8% from VTSAX in the same time frame.
Net Worth
Net worth has briefly bounced back up above $600,000, but I have no illusions it will stay there as I think there’s more market pain to come. That said, this month marks the first time that our assets are >10x our debts, which is pretty cool!
Financial Independence
Ouch. I’m not exactly sure of the backend equations here, but I think having reached a year since I received the inheritance from my dad caused it to drop out of the forward projections for expected savings. This had been shielding my FI numbers from the 2022 downturn, which is now rearing its head. My estimated FI date has pushed out from Feb 2032 to Dec 2037, a difference of 5 years and 10 months. As ever, this projection remains very sensitive to current conditions, and I expect that it will reel back in a little in the years to come.
Financial Goals for 2022
1) Max out 403b: $20,500 of $20,500 (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 $120,000 total for retirement: $110,000 of $87,500 (125.7% done) ✅
4) Max out 529s for state tax benefit: $16,000 of $16,000 (100% done) ✅
5) Continue to pay minimum on student loan as long as rate remains <4%
6) Finalize estate documents ✅
7) Purchase a house ✅
What great work setting up a successful plan.
If (when) you decide to pay off the last of the student loans, do you have plans for that extra ~$1200 a month?
Plan right now would just be additional taxable contributions. I’ve been trying to harass my organization into making the 457 less shitty (lump sum distribution only) cause I’d love to put money there instead.