Ouch, a rough month after a long string of steady slow improvements. The S&P Index declined, and with it took down a great deal of my numbers…
For background on the methodology and definitions, see Net Worth: September 2013 Progress. I’m including the past two months for comparisons now, but the “difference” values are computed for the past month’s changes.
|Category||November 2014||December 2014||January 2015||Difference|
The S&P 500 Index was down 3.1% for the month of January and my portfolio closely followed that decline. That decline outdid any progress I made on building up my emergency savings, contributions to 401k/IRA, and principal payments on the mortgages and car loan. I guess that’s the lesson I learned long ago – once you build up enough money in investments, the markets movements start dwarfing your day-to-day and month-to-month cash flow moves.
Our credit card balance is up there for yet another month. Hopefully when I report back on February we’ll be past the year-end high spending. I made some small moves this year to try and make it easier to max out our retirements accounts. For the past two years I’ve scrambled to deposit lump sums in our IRAs to max them out, and done rough percentage contributions in my 401k and adjusted a few times through the year. Given my penchant for automating my finances, this year I’ve set my 401k contributions to be the exact amount (and the exact same every paycheck) to hit the $18,000 max. I’ve also set up automatic contributions to both mine and my wife’s IRAs at Vanguard. While I watch how this affects our monthly cash flow, I’ve dropped the additional ~$450 in principal we paid each month on our highest rate mortgage.
I’m waiting for a few more documents to file taxes, but I’m hoping for a nice refund again this year. Once I get that I’ll go back and adjust my paychecks to try and get the tax withholdings set to an exact per paycheck amount so I don’t over- (or under-) pay and hope for another big refund. Since I am expecting one this year, I’ll likely use the lump sum to hit the max 2014 Roth IRA contribution for me (I still need $2,500) and then possibly catch up on my emergency savings. It’s been a long time since I’ve been close to 6 months worth of expenses in cash in my accounts. Given last year’s car troubles, and the recent rental expenses (furnace replacement, A/C coil replacement, basement window replacements) I’m starting to feel a need for more of a safety margin there so I’m not forced to sell off stocks in my taxable investments and take a loss or taxable gain.