Our year started off great. Our newly developed budget system was implemented and ready to rock! Things were oddly busy at work despite everyone just coming off the holiday break. We made time to attend a few local festivals, hang out with friends, and travel to nearby cities. Near the end of January, I geared up for an almost month long TDY (business travel). It was a rough several weeks as it was the first time I was away from home after the birth of our new baby. When I returned, I was finally able take my paternity leave enabling Mrs. D to go back to work after her 12 short weeks of FMLA.
I truly enjoyed my time-off to bond with our child and help Mrs. D transition back to the daily grind at work. Being proactive, I used the time during my leave to get things done. I was able to complete tons of home improvement projects on Mrs. D’s list, and also get more organized. Our biggest accomplishment was taking the time out to finally develop and execute all of our estate planning documents (trust, wills, advanced directives, etc..). As I neared the end of my leave we were faced with the most difficult decision we had to make as new parents. What do we do about childcare? We were able to make a decision but I’ll leave out the details for a future post.
A Drastic Turn of Events
Just as we were both ready to be back at work full-time, in came…
Wow! No other word comes to mind to accurately describe the end of this past quarter. For a lot of people, the start of the new year was supposed to signify a new start. A chance to begin anew, set goals, and put plans in motion to accomplish said goals. We never imagined there would be a global pandemic (COVID-19) ravaging the world causing a massive economic downturn. Nonetheless, the world learns to adapt to change & move on; let’s see how well we did.
1st Quarter 2020 – Net Worth Update
Despite the COVID-19 pandemic turning our lives upside down, we were finally able to pay off our student loans! In about a year after we fully committed ourselves to paying it off, we’re finally done!
2020 Financial Goals Update
Goal # 1 of 5 – Increase our net worth by $100,000
For us to accomplish this goal we needed to average about $25,000 per quarter in net worth increases. We understandably fell behind a bit but confident that we’ll meet our goal if we stay diligent to our plan. Despite the market crashing, our overall net worth increased by a total of +$19,869.95, ($76,816.32 –> $96,686.27) this past quarter. We attribute most of the increase to a nice bonus Mrs. D received from her job and sticking to our budget.
Goal # 2 of 5 – Max out both Mr. & Mrs. Dollarman TSP/401k (total $39,000)
This is an easy one as all of our withdrawals are pre-programmed to come out both our paychecks automatically. Here’s the breakdown:
- Mr. D (as of 3/31/2020)
- Contributed $2,960.10/$19,5000 (15.18% complete)
- Military contributions hit my TSP a few days after the 1st of each month, so one of the contributions didn’t clear before the cutoff date for this net worth update
- Mrs. D (as of 3/31/2020)
- Contributed $8,327.89/$19,5000 (42.70% complete)
- Also received $1,191.61 in matching contributions from her employer
- Bonus Mrs. D received this past quarter resulted in a massive spike in her contributions
- We lowered her contributions to ensure she’ll still receive the full match bi-weekly, and also hit our goal by the end of the year
Goal # 3 of 5 – Max out both Mr. & Mrs. Dollarman Roth IRA’s $12,000
- Mr. D & Mrs. D (as of 3/31/2020)
- Contributed $3,000/$12,000 (25.00% complete)
- Right on target with this one since our contributions are automatically withdrawn from our checking account
Goal # 4 of 5 – Fully fund our lifestyle expenses solely using one paycheck
We managed to stay on-track this past quarter for this goal. Our expenses without taxes came in a few thousand dollars short of my income over the past three months (My Income: $27,241/Expenses:$24,191). Most of the excess income went to taxes, retirement contributions, brokerage investments, and then savings. On the expenses front, our top expenses were the remaining student loan debt, our mad rush to the super markets to stock-up on food & supplies, catching up on car maintenance we’ve been putting off, and finally buying Baby D’s crib.
Goal # 5 of 5 – Pay off remaining debt (non-mortgage) of $31,977.46
The table below depicts the current status of our debt free journey. We paid off $7,567.86/$31,997.36 of our debt during the first quarter or roughly 23.65% of our goal. A tad behind our goal, but as expected cash-flow was limited due to our other goals that we have in play. With the economic slowdown putting a damper on most of our travel plans, and some expected income increases we have coming our way this year we should still be able to accomplish this goal.
|Item||Interest Rates||Starting Balance|
|Current Balance||Running Total Paid|
|Student Loan||4.250%||$2,513.68||$0||$2,513.68||Paid Off|
|Student Loan||5.060%||$4,587.13||$0||$4,587.13||Paid Off|
|Credit Card #1||6.000%||$8,694.63||$8,042.48||$652.15|
|Credit Card #2||4.000%||$16,202.02||$16,387.12||-$185.10|
Although these are very trying times, we are truly grateful for the FIRE movement which has given us the mindset to save a bulk of our income and live way below our means. Our definition for our financial independence revolves around accumulating enough assets that can easily cover our expenses on its own. Additionally, when we talk about retiring early, we’re mainly referring to the goal of retiring from the rat race. Times like these truly solidify the need to accomplish this life goal. Until next time, hope you all are healthy and staying safe.