Welcome to the third financial update of 2021.
The purpose of these quarterly financial updates is to crunch the numbers, visualize the data and share our progress towards becoming financially independent.
If you are interested in the previous 2021 financial updates, you can find them here:
Letβs see what happened during the third quarter of 2021 π
Life Update
In Q3, I doubled down on writing and published a total of 9 articles! (July was INSANE)
Including this financial update, I have published 24 articles year to date. As a result, I am on track to exceed my 2021 goal of publishing at least 26 articles!
Other than dedicating more time to writing, life has been pretty normal over the last few months… except….
Mrs. TVM & I found out that we are having our first child π
To say that we are excited would be an understatement. This has been a dream we have had for a very long time. And that dream will become reality in Q1 of next year π
As a result, I have been stepping up my dad-joke game.
Knock Knock
Whose there ?
Baby Yoda
Baby Yoda who ?
Baby Yoda most beautiful thing I’ve seen today
TVM
That’s enough cringe for one post, let’s move on to the financials! π
Financial Update
Time to talk money.
A couple notes:
- The data visualizations are interactive; hover over sections of the graphs for more detailed information.
- Nothing on this site should ever be considered advice, research or an invitation to buy or sell securities, please see my βTerms & Conditionsβ page for a full disclaimer.
Progress to Financial Independence
Our % FI increased from 13.2% in Q2 2021 to 13.5% in Q3 2021.
As a result, we have increased our % FI by 2.3% in 2021.
This modest 0.3% quarterly increase is a result of how we calculate our progress to Financial Independence. We calculate % FI as a function of two variables:
- Our average monthly spending
- The total balance of our FI Assets.
As a result, despite our monthly spending being normal, our FI assets (and by extension our % FI) took a hit from the market meltdown towards the end of September.
So pending a fourth quarter market rally, we will likely not hit our 15 % FI Goal.
And honestly, we are OK with this.
We have done a great job with managing our monthly spending – the one variable we can control. Therefore we understand that if we don’t hit our goal of 15%, it will be because of factors beyond our control.
Asset Breakdown
The above table is a breakdown of our current FI Assets.
In Q1 & Q2, we saw double digit growth for each account.
However, the market slowed down in Q3. As a result, the bulk of the growth in Q3 was primarily driven by our saving contributions.
Again, we are OK with this. We are keeping everything in perspective by looking at our total YTD growth for each account, which has been nothing short of phenomenal.
Savings Rate
Our 2021 savings rate is currently at 27%.
This is major improvement from Q1, where our 2021 savings rate was -1%. If we can continue to save aggressively in Q4, we will likely hit our 2021 savings rate goal of 30%.
Despite some pretty big expenses this quarter, July + September ended up being solid months.
August on the other hand, holy smokes… we were a spending machine!
Monthly Expenses
Letβs take a look at our Expense Sankey, aka Mrs. TVMβs favorite data visualization.
The above graphic visualizes how our monthly expenses rank month over month. The percentages in the individual bubbles represent our % spending for each category for that month.
Here are the major spending highlights from this quarter:
- July
- Increased spending in the Household Category was a result of:
- Our AC died mid-month aka the last thing you want to happen during a Florida summer
- We hired a handyman to fix some porch screening after the TVM pup saw a squirrel and ran right through it (based on how much I laughed, this was totally worth it).
- We purchased a ton (literally) of rocks for a landscaping project.
- Increased spending in the Pet Care Category was a result of:
- The TVM pup now weighs 77 pounds (at freaking 10 months!), so we purchased his monthly medications in bulk for the next year.
- Increased spending in the Household Category was a result of:
- August
- Our Transportation/Car Category jumped back into Big 3 Expense territory:
- Our 6 month car insurance premium was due.
- Mrs. TVM’s car got damaged after running over a rogue tire in the middle of the highway that couldn’t have been safely avoided.
- Our Household Category reigned #1 again as a result of:
- We made a down payment on some fancy new windows. We are hoping this investment will make our home substantially more energy efficient (our insulation is a nightmare).
- We are not looking forward to the second window payment in Q4, but I keep telling myself that I won’t ever have to put up plywood again for hurricanes (impact resistant)
- Our Transportation/Car Category jumped back into Big 3 Expense territory:
- September
- Increased spending in the Pet Care Category was a result of:
- The TVM pup was having some stomach issues, so we had him checked out and got him some medication… he is doing better now π
- Increased spending in the Pet Care Category was a result of:
Home Value vs. Mortgage Balance
Since the beginning of the year, the value of our home has increased significantly (much more than we imagined it would).
In fact, if we would have had stuck to our original plan and waited to buy… we would have been priced out of our current neighborhood!
Furthermore, we have seen firsthand the impact of the current national housing supply shortage. In our neighborhood alone, the few homes that have sold were only on the market for an average of 3 days. Crazy.
Because we don’t plan on moving anytime soon, we will be leveraging the increase in home value in order to do a cash-out refinance. Our plan is to use that money to replace our home’s siding with something a little more sturdy and energy efficient.
Final Thoughts
From a life perspective, we are beyond blessed and looking forward to the new chapter of our lives that will be unfolding soon. I’ll be honest, it’s a little scary… but a good kind of scary π
Furthermore, we are happy with the financial progress that was made over the last 3 months. Despite our % FI only increasing by 0.3%, we are committed to trusting the process.
How did you do during Q3?
Thank you for reading! π
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Full Disclosure: Nothing on this site should ever be considered advice, research or an invitation to buy or sell securities, please see my βTerms & Conditionsβ page for a full disclaimer.