We’re off to a good start of the year here in the DIY$ household. We had a few large expenses come in this month, but still ended up growing our net worth by $8k to $610,843. We set an ambitious goal for 2017, and as good as this month was, we’ll need some even better future months to get to the goal. Fortunately, January is likely going to be our lowest income month of the year and we had some larger expenses that don’t happen every month. Let’s break it down:
Our cash balance basically didn’t move at all this month. We paid our normal extra towards the house, but also had some big expenses like our semi-annual car insurance ($800), and 2 new tires for my car ($200). Our insurance bill actually went down a little bit, but that’s only because I took full coverage off of my Corolla. I figured we’re at the point now that we can self-insure the cost of the car, since insurance would likely not give much more than $2,500 if it were totaled.
I don’t know about you, but whenever I have to pay for maintenance on my Corolla, it actually makes me happy. I probably shouldn’t be happy that I had to spend $200 to get 2 new tires, but I really was thrilled because I knew how cheap that was compared to what I would be paying if I drove some other cars. Not only were they cheap, but the tires I was replacing had been on for nearly 4 years and just barely could still pass the ‘penny test‘. Ever heard of it? Take a penny and stick Lincoln’s head in the tread in your tire. If his hair doesn’t get covered, you need new ones.
Just a few days prior to getting tires, I was talking to a co-worker who drives an expensive Italian sports car and lamented that he had to get new tires pretty much every year and they cost over $2,000 for a new set of tires. Hearing stories like that make me love my little cheap car and gives me additional motivation to defer an upgrade.
The coming months should boost our cash balance as we expect some bonuses to come in as well as a raise at work and our tax refund. We finished our taxes for the year and I’m pleased to report that we planned our taxes to the point where our federal refund was only about $600. I prefer to not let the government sit on my money interest free, and this was much better than in previous years when our refunds have been much higher.
The market continues to rally, boosting our investment portfolio by nearly $8k. We didn’t do anything more than our normal monthly 401k contributions and actually decided to take a break from additional IRA contributions while we focus on paying off our house. Between my contributions and employer match we are still adding 15% of my pay to my 401k, so feel that we’ll still be on track to reach our long-term goals even with temporarily reducing our retirement contributions.
One item worth noting is that we have an HSA account that I include in the total for the investments category. It’s currently all in cash and we had some baby related expenses that we pre-paid in January out of that account and expect to use it for the rest of the labor and delivery bills we’ll get in February/March. Eventually I’d like to invest funds within the HSA and cover actual expenses out of pocket, but until the house is paid off or the balance starts to be substantial we’ll be using it for current medical expenses.
Did I mention that I love my car? Stay tuned for a special announcement when I hit 200,000 miles later this year. The value of our cars moved in the expected direction this month but part of me thinks my wife’s car is undervalued. I saw a dealer selling a very similar car to hers that only had a few more bells and whistles and they were asking more than double the value KBB assigns to her car that I use here. I’m ok using the lower value here though since we aren’t selling so it doesn’t really matter.
I don’t have anything special to report on this front, other than the fact that we’ll be making a big extra payment on the mortgage very soon to get the balance under $200,000. Not sure why I’m so excited to see that ‘2’ go down to a ‘1’, but it’s a fun milestone to reach. We’ve got some house projects we’re planning on doing this year but are in a holding pattern right now until the baby is born.
We’ve come a long way and still have a ways to go, but as always, it helps to look back and reflect on the progress we’ve made to this point.