I hope you all had a happy Halloween and aren’t too far into a sugar induced coma. This year we had three rounds of trick or treating between school, church, and neighborhood and I wouldn’t be surprised if we ended up throwing out some of the candy. Yes, we are those parents. The first of the month means it is a good time to reflect on how we are tracking towards our wealth building goals.
During the month of October, we lost a little bit of ground, but not because of any actions we took. Our net worth declined $4k to $580,516. Let’s dive in to see what happened.
Our cash balance increased by $1,900 but this is mostly timing. Going forward though, you should expect to see our cash balance increase. For a little while now, we’ve tried to keep our cash balance in the $20-25k range and put anything above that towards paying off the house. Back in April, we decided that we wanted to save up for the new Tesla as my next replacement car, but haven’t really started saving towards that goal yet. Since we are opposed to borrowing money for purchasing cars and still want to buy a nice car, we are planning to start adding to our savings account each month earmarking anything over $20k for the purchase of my next car.
Between now and the end of the year, we’ll have a few thousand in home repair related expenses (driveway leveling and hiring someone to paint the highest parts of the house we aren’t comfortable reaching ourselves). We have some travel plans for the holidays as well, but shouldn’t see very large expenses for them.
Nothing to see here – the S&P 500 was down nearly 2% for the month and our largest holding is IVV, the iShares S&P 500 ETF. We continued to add to 401k and haven’t made any changes to our allocations. I do have a small Robinhood account that I occasionally use for small trades but sometimes I question the benefit of using it for such small trades when I need to enter all my trades into TurboTax when I do my taxes.
My little Corolla is still chugging along and getting closer every day to 200,000 miles. I’ll need to get new tires here in the next few months but other than that there really isn’t much excitement in our garage at the moment. I expect the cars to depreciate and a $225 reduction for the month sounds about right.
I’m not surprised to see the house value come down this month. Not because anything had changed for the worse, but rather because the value had gone up so much in recent months. We’re only 2.9% higher than the value at the end of last year, and that feels like a pretty conservative growth rate for what we’ve been hearing. We also made the same extra mortgage payment amount this month as last month and were able to reduce the amount of our payment that went towards interest by a whopping $6! (What, that isn’t motivating?) Last year when we did our taxes it was a bit frustrating to see how much we had paid in mortgage interest and it will still be a huge amount this year even though we will have paid off over $15k during the same time period. The milestones that we can get excited about are each time we pay off $10,000 increments and we’ve got another one of those coming up soon. One of our 2017 goals will be to get the balance below $200k. This should be a very easy goal, so we’ll need to see how quickly we think we’ll be able to do it and set a more ambitious goal for the full year. As of now, we are tracking ahead of where I thought we would be in paying down the house for 2016.