To be honest I have been very hesitant to post anything on my blog or on social media over the last month. Every time I get close to writing or publishing something I hesitate and wonder if my writing will contribute positively to any segment of the personal finance community. Like many during this coronavirus pandemic our family has had many challenges, while at the same time being in a fortunate position to have fairly stable employment, savings, food, shelter, and other things that so many have lost during this time. Every time I read or follow social media, especially twitter, I am immediately turned off by the nature of some of the posts and comments. This has led to a cycle of just shutting out social media for long periods of time, and a general avoidance of writing about anything regarding personal finance or financial independence. I have a lot I want to say, but I am not sure if now is the time to say or publish anything.
I have been overwhelmed with work, home schooling a three year old and six year old, a health scare with one of our kids (thankfully only RSV), and trying to explain to my extended family back in Florida how important it is to follow the stay at home orders. I, like many I know, have a heightened fear of catching the virus because I do not trust all of the health care providers where I live to provide adequate care if I am not able to select the medical professionals that would be helping me (based on past experience). Even with all of this, I finally decided to at least sit down and write my monthly update so I did not break my streak of consecutive updates since starting this blog. From a financial perspective we are in a place where yes our net worth has declined a lot over the last two months, but we are doing so much better than many during these challenging times. To be honest I struggle with a bit of guilt while at the same time processing with other negative emotions that include the losses in our investment accounts. At the same time, and following our predetermined investment plan, we are continuing to follow our plan without making major changes to our strategy. Yes we have made some investment changes, but these were all part of our prior plan based on certain scenarios, mostly related to the approximately 10% we invest outside of index funds. So with some of the rambling out of the way here is how we did in March 2020. At the end of March 2020 our net worth was $885,889 which is a loss of $51,050 in one month. Over the last two months we are down $128,073 for a two month loss of around 13%. This is of course a significant amount, but we are at least ahead of the S&P 500 that we sometimes use as a comparison.
Looking at the changes in March we are now back to where we were in early 2019. Even as the the market has dropped and been varying wildly we are still working on our goal this year to save at least $50,000. At the end of February 2020, our net worth was $936,939 which means our net worth decreased by $51,050 this month even after contributing $4,959 into our retirement accounts. While we know to expect these fluctuations they are still challenging to see, but surprisingly I am much more calm about it than I was last month.
We calculate our net worth by adding all of our pre-tax retirement accounts (403b, 457b, Traditional IRAs, and ORP), our after-tax retirement accounts (Roth IRAs), and our after-tax brokerage and savings accounts together. We also include real-estate equity (i.e. our home) discounted to a price we think we would be able to get after closing costs if we needed to sell the property as quickly as possible. After we add up all the assets above we subtract our current mortgage (our only debt) to arrive at our current net worth.
This month our income was $11,492 which was an increase of $2,248 from February. The additional income is usually from my spouse’s self-employment income, but this time it is mostly from a consulting job I did a month ago for an organization.
We calculate our income by taking our net income (after tax income) and adding back the amount that was withheld/saved in our retirement accounts, including the 6% of my salary contribution I get from my job in my ORP account (I mean technically it is income).
We spent $6,533 this month, which is close to our targeted average budgeted amount each month. On a category basis however the monthly spending was quite unusual. we have a lot of expenses that are no longer occurring because of changes related to stay at home orders while at the same time we are spending a lot more on groceries and eating out. We do not regret this one bit since we are trying to support local businesses and delivery workers with really large tips. This is absolutely the least we can do given our current position.
Our goal we set for 2020 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 met our goal last year (barely) and saved $50,414 and are off to a good start this year. This month we again saved $4,959 in our pre-tax accounts, with a little bit in our after-tax savings as we work to increase our cash buffer during these uncertain times. We have more than an adequate emergency and cash fund, but we decided to add to it a little bit if we make more than our targeted retirement account contributions.
Some Closing Thoughts
As I try to finish up this short update post I am tempted to write so much more on so many things, but as I mentioned in the opening I think I would rather wait. Wait until timing is better, wait until things are more calm in our household (at some point), and wait until I have the energy to get out all of the things I have wanted to say over the last few months. I do applaud those in our PF and FI community that are writing some outstanding posts and tweets during these times. These voices are needed to counter some of the less than ideal or outright arrogant privileged voices that tend to shame, take advantage of, mislead, or out right lie to others during this time of crisis in many lives. At some point I hope to get back to writing more and that I will be one of the voices that positively contributes to others in some way. Until then I hope everyone remains safe, healthy (physically and mentally), and finds something positive in each day.