While June technically does not end for one more day, I decided to go ahead and complete our monthly update since we have no additional spending planned for the rest of the month, and the markets are closed on the weekend. This will be our first monthly update since rebooting the blog a few weeks ago. Overall this was a pretty good month in both income and growth of our investments, but more importantly it is nice to have some focus back to our project! So for June 2019, here is our project update:
At the end of June 2019, our net worth is currently $922,414 which is up from $896,948 at the end of May. This includes both the savings deposited into our retirement accounts, and growth in our investments. While it would be amazing to have these types of gains in our accounts every month we know it can just as easily go in the opposite direction on a month to month basis, plus the summer months usually allows us to save a little bit more thanks to extra summer work!
For 2019 we are trying to save $50,000 inside our retirement accounts, with maybe a little additional amount in our after-tax brokerage account. Honestly, this is a little bit lower than when we started on the FI journey on a percentage basis, but we are trying to be a little more realistic in how we spend and save based on what we value. So far in 2019 we have saved $19,410 not including the amount we saved this month (June). This month we were able to save $4,368 bring our yearly total to $23,778. This means we are just a little under where I hoped to be at this point in the year, but not too far off from our target. Almost all of these savings have come from automatic deductions into 403b and 457b accounts as well as 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 $5,621 this month, which is just below our target of $6,000 a month. I always get a few comments when talking to others about how our monthly budget seems high, but we are very thoughtful in setting the budget based on our values, plus the cost of two kids. In two years this number will drop once both kids are in public school and we no longer have to pay pre-K tuition. I am also aware of how fortunate we are that we can have such a large monthly budget, and still save close to 40%-45% of our net income.
In the past I used to be more open about our monthly income, but honestly it tends to be fairly irrelevant to provide these numbers since I am providing both our savings rate and savings amount which is far more important, and if you are so inclined you could probably calculate our income with the available data. With my wife working for herself, our monthly income fluctuates widely anyway from month to month. I will say that this is the time of the year I love, because I am able to take on additional assignments during the summer months for extra money. As a faculty member, I am on a 9-month contract, so any additional work (mostly teaching) I do during the summer means extra money. For me this means about 20% additional money over my yearly income, for six weeks of additional work. A trade-off I am more than happy to make since I still have six more weeks of time off before the Fall semester starts.
Other Goals we set for 2019
I will be completely honest that until a few weeks before rebooting this blog we really did not take the time to set goals for the year. This was something we always did in the past, but for the last 18 months or so we have really just been on autopilot, at least when it comes to our FI project. That doesn’t mean we have been wandering around aimlessly, it just means that the finely tuned details were not a focus in our life. I think that is a common thing about our movement in that once you set up a plan and commit to working towards FI, so much of the process can be and should be automated. For me this is probably a good thing as it prevents me from obsessing too much and letting it interfere with enjoying life and what I value now. I will probably write more about this later…
Well it feels good to actually get an update out after such a long break from thinking about or writing about our FI project. If nothing else this has helped me think through a lot of issues and work on our numbers that has needed to be done for a while. I need to spend a bit of time calculating and modelling our trajectory to see if we are still on track to hit our new target date, but I am cautiously optimistic that even with a few setbacks over the last two years we will make it!