July is over and and I have this odd excitement when it is time to review the month from a financial perspective. Recently I have tried to make this the only time that I really take a look at net worth, investments, and other large picture items. Part of the reason is that I know myself and I want to avoid my tendency to obsess over changes on short time periods. So I essentially allow myself one day a month to sit and review everything, make sure we are on track, make any adjustments that are needed, and then just simply try to put everything on auto-pilot. This keeps it from consuming all of my time, and adding to my cognitive load on a daily basis. Well the good news is that on a monthly basis July turned out to be a good month for growth and staying on track, and here is our monthly update…
This will be our second monthly update since rebooting the blog last month. Overall it was a great month, but it is also the last income bump I will have until next summer. At the end of July 2019, our net worth is currently $949,906 which is up from $922,414 at the end of June. This growth came primarily growth in our investments with a small part from the monthly additions to our retirement accounts. I wish our growth like this was every month, but I know this current market streak can not continue for long.
For 2019 we our goal is to save a minimum of $50,000 inside our retirement accounts, with maybe a little additional amount in our after-tax brokerage or savings account. We are well on track to meet that goal even with our youngest daughter’s pre-school tuition starting this month. So far in 2019 we have saved $26,734.20 including the amount we saved this month (July). Starting next month my contributions will increase in my 403(b) account by an additional $1,000 a month as my spouses income tends to increase in the later part of the year from her contract work. It is still crazy to think about the good fortune we have with retirement savings accounts at my job. Currently I contribute to both 403b and 457b accounts as well as having a separate ORP account funded by my university. By far the 457(b) account is our favorite account since it has no early withdrawal penalties and gives us an extra $19,000 each year that can be deferred pre-tax.
Spending this month was $8,130 this month, which is well above our average target of $6,000 a month, but not unexpected. For the next several months our expenses will be higher because of our youngest daughter’s pre-K tuition, but this is an expense that we will only have for the first several months of the academic year as it is paid off, and then we will only have to do this one more time next year before they are both attending a public elementary school.
Last month I wrote about how we were not going to be as specific about reporting our income on the blog, but I have had a complete change of opinion on this topic. I think it is important for the few people who read this blog to understand our journey and path as we work towards financial Independence and see our progress from both an income, savings, and spending perspective. One of the other reasons I changed my mind on this is that even though I am staying semi-anonymous for the time being while writing this blog, in my non-blogging life someone can just look up my name on our state website and see my complete salary for every year I have been a public employee (public university). So I essentially have to decided, at least for now, to be open about our income, not to be used for comparison purposes, but to show how we are doing it based on being very fortunate in our lives.
This month our income was $10,710 that was calculated by taking our net income (after taxes) and adding back the amount that was voluntarily withheld into our 403(b) and 457(b) accounts. Some of this income includes the last amount of additional summer pay that I receive from teaching additional courses during the summer while I am off-contract.
Other thoughts on July
July is the last full month before work starts getting a lot busier, and the kids are back at school full time. For me it is really not the classes I teach or the research I conduct that makes the academic year busier, it is the endless number of meetings and scheduled events that start populating my calendar. I certainly hope to not only be able to keep up with this blog once the school year is underway, but hopefully expand the content beyond only writing about our personal story.