The bad news that just keeps on coming, jeez…
Half of which is out of my control, and the other half I’m trying to KEEP in my control. Though obviously not as well as I’d been wanting… I’m just glad I’m so freakin’ positive or I’d be going on a major rampage right now! ;)
Lots of different variables came into play last month, but the majority of them fell into these three categories:
- I didn’t store enough aside for this last quarterly tax period
- We’re no longer getting our 2nd income of $1,300/mo
- Our house went down in value by $15,000
Now we already talked about #3 there yesterday, and how that’s pretty much out of my control so I’m not gonna dwell on that one anymore, but #1 is most CERTAINLY my fault and caught me off guard. I don’t know how many of you pay your taxes quarterly, but for those who don’t know they aren’t spread out evenly across the year like you’d think every 3 months. Instead, they’re a bit funky and the first two of the year are due on April 17th and June 15th – two months apart. Now over the year it works out perfectly fine and other payments cover 4 months instead of 3, but the part where I went wrong this month was that I didn’t account for the quicker tax payment in June forgetting that it wasn’t in July (and thus, not setting aside the appropriate money – which I don’t include in my net worth updates). So long story short, I had to front myself the $2,675.00 that was missing which pretty much accounts for the $2,500+ loss in cash you see up above. I’ve def. learned my lesson ;)
And then to top it all off, of course, we’re now living on a one paycheck budget. No longer bringing in the $1,300 each month like we used to when the Mrs. was working for her school. I’m not sure how drastic or not this will change things in the very near future, but seeing these numbers definitely helps make it all more “real.” And as a finance guy (or any guy, really?), it’s never fun to start losing streams of income when you’re working so hard to do the opposite
I just gotta keep reminding myself that it’s all just a phase right now, and sooner or later we’ll be back on track and ready to start seeing tons more growth again. I’ve got faith!!
Here’s How The Rest Played Out in More Detail:
CASH SAVINGS (-$2,580.48): Nothing much to say again other than *vomit*. And that I’m an idiot for messing up tax stuff this quarter :( I’ve also decided that I need to step back a bit and re-assess how we’re managing all of this stuff again. So many new things have come into play since our last budget reorganization and goal/dream planning, that we gotta get back in there and make the appropriate changes – whatever that ends up being. Look for some new posts on it all soon :)
EMERGENCY FUND ($0.00): My goal was to start upping this back to the $10,000 mark, but due to obvious reasons it didn’t happen this month. I’m 99% sure we’ll be scrapping this department altogether though and just keeping one major savings account that houses ALL of our cash instead of having it divided all over creation. It’ll be another thing that we talk about in our future “get our $hit together” plan. I think it’ll streamline things a LOT.
PHYSICAL GOLD ($33.40): Of course this is the only area going up ;) I think I’m done trying to figure out gold for the time being, haha… and I’m still REALLY really wanting to pick up some of that old silver scrap too for the metals collection here, but that’ll have to wait until we get this ship all fixed and straightened up. I can’t wait!
IRA: SEP (-$912.56): A lot better than last month’s $2,000 loss, but nothing to write home about just yet… it’ll be back up again later on.
IRA: ROTH(s) (-$38.22): Same here, nothing new to report really.
IRA: TRADITIONAL(s) (-$51.26): Last month we lost $10,000 here, so I’m not gonna front about the $50 bucks ;) And just like the others, it’ll all go up eventually and make us all very happy campers… Stay tuned for our 1-year wrap up of our IRA Game though! I think I’m tired of having my main portfolio of investments there split into 3 like that… it’s pretty obvious which account is crushing the others, so we’ll be making a final decision on that here shortly.
- IRA #1 (NOT Managed): $58,366.96 **Still the leader
- IRA #2 (Managed, USAA funds): $56,501.78
- IRA #3 (Managed, ALL funds): $56,800.22
AUTOS WORTH (kbb) ($807.00): Oh jeez… last month we lose $800, and this month we get it back? Car stuff is silly… or maybe KBB is, but I still love ’em ;) And just like with our house’s value, none of this stuff really matters until you go to SELL them.
- Pimp Daddy Caddy: $2,115.00
- Gas Ticklin’ Toyota: $9,427.00
HOME VALUE (Realtor) (-$15,000.00): The biggest change since our house dropped $60k 3 years ago. To see my complete thoughts on this one, check out the post I did on it yesterday: I hate home ownership (it’s true). The only positive thing here is that at least we now KNOW 100% what we’re dealing with, which makes future planning a lot easier.
MORTGAGES (-$1,212.52): I took y’all’s advice and cut myself some slack from the hardcore house payments I’ve been doing every month for almost a year now. Instead of the $2,000 extra this round, I only paid off around $700 or $800 and took it easy… it was REALLY hard to do it, but with all the cash issues lately, and my stress levels going up higher than normal, it was definitely the right move for me… and now we’ll try getting back on track again :)
- 1st Mortgage: $284,458.49 – 30 year conventional @ 5.5%
- 2nd Mortgage: $44,018.45 – Maxed out HELOC @ a variable 2.8%
And that about wraps it up… Not the prettiest of months I’m sad to say, but a huge reality check to stop us in our tracks and get a new game plan going on here. Just like everyone else, I can get stuck in MY head too and blissfully ignore the factual numbers being presented to me over time… I knew things weren’t going 100% as planned, but my goodness did I need to be shaken up! Just goes to show how important paying attention to all this stuff is, and that tracking it gives you the *proof* you need to see your financial reality!
Hope you guys did a lot better than I did last month :) Here’s to a redempful July!
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PS: Thinking of creating a new site called BudgetsAreHard.com, who’s with me?
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Empower account instead (formerly Personal Capital)
Empower is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Empower - check it out here: Why I Use Empower Almost Every Single Day.
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The good thing is that house values can go back up pretty fast too especially in DC. Tax payments can be tricky but I know you’ll never make that mistake again. I’m sure it’ll all work itself out in the long run and I’m sure you’ll be fine with the wife at home. Time to crack down a bit though and stick to that sexy budget :)
J – Never get too high — Never get too low, stay persistent in your tracking of sexy budgets like you’re doing and you will most certainly reach your goal. Life brings about set backs in order for us to make major comebacks. Ok enough of speech.
Have you guys considered college funding since the Mrs. is getting ready to have a baby? If so are you guys going towards the 529 plan, Pre-paid etc?
My wife is due next month and I’m just waiting for my little guy to have a SSN so we can start funding his 529 plan. Kids will cost, you will need to also start factoring in that as well even though the Mrs. will be home there will still be cost. But you’re doign well – nothing to hang your head about — continue to plug along. These post motivate/inspire me with my net worth. I started following this site 4 months ago and every since then I’ve been tracking my Networth every month.
I’m working on my net worth update now (which will be posted tomorrow), and surprised that your investment accounts (IRAs) didn’t go up in value during the month of June with the broad market rally up 6% or so?
We’re definitely budgeting more this month than we have. Something went awry over the past 2 years (new baby, new job, school for me, slacking on household stuff for everyone) and we’ve got to get back on top of things. We’re hoping to start a side hustle soon too.
For the quarterly tax payments, in the first part of the year, why not just do them every 3 months anyway? Being an accountant and having done the 941 payments before, it’s easier if you just schedule them regularly like a dentist appointment and do them.
Our house has dropped in value as well, and it didn’t help that I was unemployed for 4 months and we had to have a modified loan payment for 6, which the mortgage company then rolled all the unpaid amounts into the refinanced amount, eliminating our equity. We don’t owe nearly as much as you (about $145K) but our house isn’t worth nearly as much either (about 100K). It still sucks rocks that we’ve lost 20-40K in value. But, like you said, the only time that the value really matters is when you’re trying to sell it, or refinance. :)
Let me know if you need any advice on the baby – I’ve had 2 so I’m well versed in it! :)
Hi J — by scanning the numbers (and depending, of course, where you bought in at), it appears you have 1 (?) oz of gold? Just curious; are you planning on expanding upon your physical metal allocation at all?
Even though your house value went down, I’m sure it’ll pop right back up quickly!
What’s worse is that you just wrote about quarterly taxes a few weeks ago! But turn that frown upside down! Every one makes mistakes. And you are still sitting on a stockpile of cash, and if you don’t include the home valuation, your net worth is still UP.
I’m absolutely sick of looking at my retirement accounts. They finally gained this month, but I’ve basically thrown away about 10% of what I’ve contributed this year.
I would not be stressed about short term swings, particularity on the real estate. You have not intentions of moving in/out so can easily forget the $15 K.
The Europe seems like resolved its crisis, most of my stocks rebounded. From $63 K almost to $67K this month. So you are going to be OK. The most important thing is that you do have right philosophy and strategy.
Over the period of time it will come around nicely.
I keep seeing that you hate the house or is it the mortgage? Either way what options do you have because if you sell now you will take another 40K hit difference between mortgage and home value. Maybe if you do a short sale you can be less stressed and sell and be free of the mortgage. Then the 2K or is it now 800 extra mortgage payment can go to a category you love better like gold buying or following buffet accounts. LOL. Anyway good luck.
Sorry to hear that J. Lately, I just avoid updating the house value because I don’t want to deal with it. We are not planning to move so it doesn’t really make much difference to us right now. I’ll have to withhold tax next year and I’m not looking forward to it at all.
What is in your IRAs that you lost money this month? The S&P was up 3.5% from June 1 to June 29. One of the biggest things that helped my net worth this month was a gain in my Roth IRA and 401k.
I’m not necessarily saying a “good” portfolio is one that mirrors the S&P 500, but I would be interested to see where your money is that it would be essentially flat when the market is up 3.5%. Especially considering the fact that you’re paying for some actively managed funds, you might want to start asking some questions.
J., I think your ‘big picture’ is very positive! A solid net worth, and most importantly a plan to grow it over time. Bad months (even bad years!) happen. Looks to me like a lot of the negatives are ‘on paper.’ That tax thing is only about timing–moving money from one month to another, so really not too meaningful (not that it feels good!). The market value of the asset dropped, but what really matters is the value when you want to sell, no? I gotta believe the house and the investments in your retirement accounts will be worth a lot more when you want to sell than they are today. So you’ve got a solid foundation. And paying off that debt will save you huge bucks in interest expense, and that’s a sure thing, not dependent on the ups & downs of stocks or housing. Hang in there, man!
I hate including the things that aren’t in my control in my net worth, but it does paint an accurate picture. ;-)
I did our net worth again yesterday, it was WAY better than last month’s. It’s hard to tell because KBB dropped the value of our car $1k, but it’ll probably go up again next month.
For those of us who track our budgets to the most minute detail I do have to say that any loss is a serious aggravation. I was a bit bothered by the fact that I did not remember that we had our $80 AAA membership due nevermind a 2k loss in taxes and a 15k housing drop in value. However, you are still beating that debt down and have a much higher net worth than most so you will get through this pretty easily.
Budgets ARE hard! Especially sticking to them when the unknown oopsies come in. I haven’t redone our budget yet now that the truck and loan are paid off. I should probably get around to doing that one of these days.
Tough month J, but out of your control.
The good thing is, the stock markets are EN FUEGO again w/ the Dow back to 12,900! 50% of your NW should therefore by loving it!
Budgets aren’t hard. Just the output is hard during rough months. Set it and forget it!
Thanks for all the support guys! It always helps hearing from y’all :)
@Lance@MoneyLife&More – You know it bro! Nothing like a good decrease to wake my ass up!
@Devan – Good!!! I’m so glad you’re tracking it too :) And so far that means you’ve only seen my net worth go DOWN! haha… I think it’s on a record now ever since starting to track it all 4+ years ago. But a comeback it shall be!! Thanks for all the support and kind words too, appreciate it. As far as 529 stuff – yup, we’re waiting for the ss# too and will then start filling it right up. I’ve already got $350 earmarked for it from a contest I won 2 months ago :) Congrats on your new baby too!
@Jake – Yeah, who knows… it usually follows suit, but every now and then it’s a lot higher or lower – I’ll have to get a re-check on everything sometime in the next few months to make sure I’m still where I should be with those.
@Laura Brown – You know, I’ve never thought of just doing them every 3 months anyways – that’s not a bad idea? I guess it would work out too since you’d be paying that first one earlier, I’m gonna think about that one, thanks :) And hopefully both our homes go up too by the time we want to get out of them! I have faith that they will, just a matter of time.
@Jennifer Lynn – Yup! You’re right – I have a 1 oz gold coin I picked up a few months ago to diversify a bit (and to keep something in PHYSICAL form over electrnic). I do plan on picking up more metals in the future, but next on the list is silver. Probably another $1,500 worth or so and then I’ll call it quits from there for a while. I just wanted a few thousand in something “real” in case of a crazy apocolypse ;)
@Michelle – Thanks, us too!
@Edward Antrobus – Aww, well you keep your yead up too, good sir! Maybe it’s better if you look at them every quarter instead of every month? Maybe that’ll make you feel better?
@Financial Independence – Thanks, appreciate that :) I have faith in myself longterm, but I do let it get to me every now and then. Guess it’s a part of life, eh?
@RichUncle EL – Haha, I cannot WAIT until I don’t need to mess w/ a mortgage anymore :) Whether that means we’ve sold it or that we’ve paid it off 100% – which I’m equally excited about, it’s just a matter of what happens first. Though it’s true I’m not the biggest fan of home ownership just in general – too much responsibility for me.
@Joe @ Retire By 40 – Oh yeah, get in a good habit of it too so you don’t make stupid mistakes like me! Although I will say they do kick your ass in gear too ;)
@Kevin @ Thousandaire.com – Yeah, I def. need to re-look at it all here sometime soon just to double check I’m at where I should be still. It’s on the to-do list in the next few months :)
@Kurt @ Money Counselor – Thanks Kurt! It’s too bad you don’t live closer cuz I’d totally treat you to some beers to get more of those pep talks when I need them! Haha… thanks for always looking out :)
@Jen @ Master the Art of Saving – I know, the stuff out of your control is always the hardest to deal with but it’s gotta be done! That’s how the world works :)
@Adam Hathaway – That is frustrating! I don’t track every penny any more (not worth the time to me at this point), but I’m sure you remember a lot more about that kinda stuff than I do “generally” overseeing everything. I’ve been known to forget bills worth $200+ sometimes, haha… but then I figure out a system to not let it happen again in the future. Always tweaking!
@Miriam – That’s the FUN part of budgeting – when you have less debt and more cash flow to apply towards new goals! You def. gotta adjust your budget for that :)
@Financial Samurai – Thanks man, and you’re right! I know the market and real estate will be up long term for sure (or else I’d never be investing in either), so right now it’s just all fluff numbers giving me a run for my sanity. In the end we’ll all be winners! :)
J:
Sorry to hear about the home appraisal, but you’re in excellent company with most of us I think these days. :)
I wanted to say good for you on continuing to do the mortgage payoff despite the fact that it wasn’t as much as you wanted to. Doing anything is better than nothing (as my partner would tell me every time *I* would whine about it not being the exact same amount each month). You’re still chipping away at that interest and getting closer to mortgage freedom!
Take care!
Hey J$! Reading your blogs inspired me to do some better net worth tracking too. I’ve been watching it on mint.com for the past couple years, but decided to make a spreadsheet so I can see the trends a little more clearly. In my first month of “official” tracking, my net worth went up $2500! Yay! It’s really encouraging to see that number and stay focused on my financial goals. Thank you!
Up 15k this month! However, we’re trying to refinance our house and had an official appraisal last week. So I think next month’s number will be much more accurate as we’re finally going to know the value after spending the last five years watching it sink like a stone on zillow.
Just think soon, you’ll have a new baby and they won’t care that the house they come home too is worth $15,000 less than last month :)
J, I don’t think you should track the monthly value of your home in these calculations since home values are not an exact science and the market is pretty volatile right now. I would just maintain a conservative price and keep it through out the year, evaluating it annually. Either way, you are way ahead of the curve to begin with.
@Emily – Thanks!! It’s so hard to do that, huh? I always feel like I’m failing if I don’t get it PERFECT like that, but you’re totally right – Something IS usally better than nothing. Thanks for the reminder!
@Randall – COOL!! I’m so glad to hear it my friend – that totally makes me happy :)
@Jennifer Lissette – Haha, there you go :) I’d tend to go w/ the appraisal as the closest to value on the site too – so hopefully it goes in your favor!
@Jenna, Adaptu Community Manager – Indeed! As long as it has plenty of toys and shiny things he’ll be one happy little boy ;)
@BryanM – You could have a point there. Though I think it’s the first time I’ve changed it in like 3 years, haha… I only do it when I get super good intel on it ;)