I haven’t shared an update in a while about the status of our debt and I have never shared our net worth so I am going to dive into that today.
It’s been a year since we started our debt payoff journey! We have made some great progress this year.
I am excited to begin pairing our debt updates with our net worth updates because it gives a good overall picture of our financial situation. I think it’s also informative to see how assets and liabilities impact someone’s financial picture. We still have $259k worth of student loans… but that doesn’t mean our net worth is -$259k (It’s definitely still in the negatives though!)
I have these numbers plugged into Excel and I retrieved the numbers from Empower (formerly Personal Capital). Empower has a wealth dashboard where you can connect all your accounts and track your net worth. The only reason I am not using the number it has calculated for our net worth is because it’s not retrieving the correct numbers for Bret student loans, but everything else is correct!
***UPDATE 7/26/23: I was off a few hundred dollars in my initial May 2022 calculation of our total student loan balance. Our original student loan balance was actually $260,390.25, bringing our total balance to $277,721.41.
Student loans: We are currently taking the approach of focusing on my student loans since some of mine are back in repayment and Bret’s are on deferment since he is still in school.
This year, I was awarded money from the state health authority to assist me in paying back my loans since I am a behavioral health worker. So over the next two years, I will be getting $88,580.24 which will be dispersed to me on a quarterly basis ($11k per check.) This is going to make a HUGE dent in my student loans, since personally, I have a little over $125k! I have to continue to work in the behavioral health field for these two years, but I was going to anyway.
Mortgage: As you can see in the side-by-side comparison of 2022 vs. 2023, I did not include our mortgage number for 2022 because I don’t know what it was. I’m planning to track that number a little more closely now though. Although our mortgage is a large part of our debt, we are not those people who feel inclined to pay down our mortgage as soon as possible. This is not our forever home and we are fine with paying the minimum payment. AND our interest rate is 3%, so I’d just rather invest the extra money anyway.
Consumer debt: We have finally paid off all of our consumer debt! If you want to learn more about that payoff journey, read my last blog post of 2022, We Paid Off 17k of Debt in 2022. Our goal was to pay off all of our consumer debt and we got close but were short by about $340.
Cash: Our cash stash is a little low for my liking but our goal this year is to build up our emergency fund. Hoping to save about $12k-$16k!
Investments: We crossed the $20k mark this year and that makes me so proud of our progress! As you can see, we are investing and paying off debt at the same time. We are wanting to retire early and if we waited until all our debt was paid off, we would be very behind.
Many financial experts now recommend investing at the same time as you’re paying off debt if the interest rate on your debt is ~6-7% or lower. The debt that we have that is higher than 6% are Bret’s student loans that are on deferment until 2025 (or maybe later), so we aren’t worrying about them at the moment.
We are currently only investing in my employer 403(b) account while we build up our emergency fund. If you want to see a breakdown of all the other investing accounts we have, check out this Instagram post.
Home value: Last year we got an appraisal so we could get our primary mortgage insurance (PMI) removed early and it appraised at $415,000. We bought it in 2020 for $320,000. I know the housing market fluctuates throughout the years, but I will probably continue to use this $415k number to calculate our net worth for the foreseeable future as we don’t currently plan and/or have a need for getting an updated appraisal.
Cars: Bret and I both have cars that are paid off. They are both in good condition but I don’t really want to include that in our net worth right now, or ever honestly. They depreciate as the days go on… and I see them more as a tool to get us where we need to go and not as something I need to count into our net worth. However, I am open to hearing counterarguments to that point.
The main goals for 2023:
- Build an emergency fund ($12k-$16k)
- Continue paying on student loans
- Invest as much as possible (minimally get my employer match)
In April, our savings got depleted from an unexpected tax bill (~$3,829), so we are working to get back on track.
I am hoping to explore creative ways to decrease our tax bill for next year, so may be adding money to another investment account other than my 403(b) soon. My employer does offer a 457(b) plan and I have read those it is a great retirement account, especially for those who want to retire early so I have some research/numbers crunching to do there.
Excited to continue to be moving closer to our goals. Thanks for reading!