Welcome to the first TVM Financial Update of 2023.
The purpose of these quarterly financial updates is to crunch the numbers, visualize the data and share our progress towards becoming financially independent.
Let’s dive in.
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Life Update
In the last 90 days…
I earned my Master Gardener Certification! After a lengthy application process, two months of class, countless hours of volunteering & two final exams… I can say that I am a Florida Master Gardener! While I did get an associates degree in biology, it was nice to receive a formal education that dived into horticultural topics that I had no previous knowledge of including the soil food web, keystone species, etc. Fun Fact – Aspirin can make plants stronger!
The baby is walking now :O Our baby recently turned one and must have known it… almost over night they went from army crawling to walking around everywhere. This has resulted in the next round of baby-proofing the house… how do kids know exactly where NOT to go?! If you are in a similar situation, but don’t like the look of traditional cabinet locks, here are the invisible cabinet locks that we installed that have worked like a charm.
We learned the value of doing research when it comes to home contractors. Last year, we contracted a company to install brand new siding onto our home. A few months after they left, we discovered that they broke several main line pipes which lead to thousands of dollars of mold, drywall and plumbing damage to our home. Our takeaway: reviews can be easily faked, take the time to get real testimonials.
Mango season is just around the corner! For those new to the blog, one of my passions is growing tropical fruit trees, my favorite of which is mango. Due to the favorable weather this year, we are set to have hundreds of mangos this summer! Given that we only had 6 total fruit last year, to say that I’m excited is an understatement ๐
On to the moolah.
Financial Update
A quick note: Nothing on this site should ever be considered advice, research or an invitation to buy or sell securities, please see my โTerms & Conditionsโ page for a full disclaimer.
Letโs dive in.
Progress to Financial Independence
From Q4 2022 to Q1 2023, our % FI increased 0.4% from 13.3% to 13.7%.
As a reminder, our % FI is a function of two variables:
- Our average monthly spending
- The total balance of our FI Assets
From a spending perspective, there were two outliers that included a planned medical procedure as well as a few emergency home repairs. Furthermore, our car insurance premiums were due (we pay every 6 months). Other than that, our monthly spending was fairly vanilla (more on that later).
From a FI Assets perspectives, we had pretty solid growth despite the increased market volatility as a result of the Silicon Valley Bank collapse.
With that being said, let’s take a look at our FI Assets in more detail.
Asset Breakdown
The above table is a breakdown of our current FI Assets.
Looking at the 401(k), 72% of the growth came from automated contributions while the other 28% is from positive investment returns. Despite this being our largest account from a monetary perspective, I am always amazed there are still times that the account grows just from regular savings.
In terms of percentage growth, our HSA is the big winner. In the last quarter, 61% of the growth came from automated contributions while the other 39% is from positive investment returns. While updating our spreadsheet for this post, Mrs. TVM kept shaking her head in disbelief when she saw how much we’ve been able to put away in this account. However, we live in the ‘Land o’ Private Insurance’ and all this can disappear the second that we have a serious medical emergency… so the hoarding will continue!
Finally, the Roth IRA is the only account that didn’t end up positive. I’ve mentioned in a previous update that this is due to the rising interest rate environment’s impact on REITs. Given that we already have real estate exposure via our home, we are thinking about liquidating this position and going the ole VTSAX route. To be honest, I’ve just been lazy and haven’t gotten around to it yet ๐
Savings Rate
Our 2023 savings rate is currently at 25%.
This represents a HUGE improvement from previous Q1s. In Q1 2022, our savings rate was 8%. Additionally, our Q1 2021 savings rate was -1%. Let’s keep the upward trend going!
From an income perspective, there was nothing exciting in either January or February. I am particularly happy about January because that was just a “normal life” month with no emergencies or projects. This datapoint provided us some reassurance that we can meet our 30% savings rate goal by the end of the year if things just keep going smoothly… ๐
On the other hand, I received 3 paychecks and a work performance bonus during the month of March. As a result, it ended up being a strong savings month despite a 250% increase in spending relative to what we normally spend in a given month.
That leads us to our monthly expenses…
Monthly Expenses
Letโs take a look at our Expense Sankey, aka Mrs. TVMโs 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 some of the major spending highlights from this quarter:
- January
- Healthcare: We had some medical wellness tests done as a result of our physicals.
- Altruism & Relationships: We started doing birthday prep for our child’s first birthday party.
- February
- Transportation & Travel: 6 Month Car Insurance Premium was due ๐
- Household: Baby needed a bigger car seat (they grow so fast). We also made several additional principal contributions to our AC Loan. And I also finally repaired the screened back porch from the previous hurricane – that was not fun!
- Pet Care: TVM Pup had his physical. We also ordered more food as well as a 6 month supply of his heart worm and flea medication.
- Month to Month Discretional: Tuition was due for the Master Gardener class!
- March
- Healthcare: I had two planned medical procedures that we paid out of pocket for (unfortunately it was much cheaper than going through insurance).
- Household: We had to call an emergency plumber not once, not twice, but THREE times due to 3 seperate leaks that we found as a result of negligent work from the company that did our siding. It was bad – water was literally gushing out of the drywall in 3 separate areas… the only silver lining being that these leaks have been isolated to the garage and not in the home. We are in the process of trying to get reimbursed for these damages.
- Altruism & Relationships: Final stages of prep for baby’s first birthday ๐
Home Value vs. Mortgage Balance
From Q4 2022 to Q1 2023, our home value increased 2.3%.
I would argue our houseโs value should be significantly higher due to the money that weโve invested into it. However, Zillow doesnโt seem to think so ๐
Who knows, maybe the Zillow Gods will read these financial updates and continue to increase the value ๐
Final Thoughts
The last several months have been very rewarding.
From a life perspective, things finally have slowed down (except for the baby who runs around like Usain Bolt). Instead of house projects, the next few months will instead be writing more for TVM and using my newfound Master Gardener knowledge to step up my gardening game!
From a financial perspective, I’m absolutely thrilled that our savings rate is trending back to traditional FI levels. I pray that we don’t have any more plumbing emergencies and can instead focus that cash on paying down our AC loan and maintaining a solid emergency fund.
Thank you for reading! ๐
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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 โTerms & Conditionsโ page for a full disclaimer.
Sorry to hear about the water damage to the home with the contractors. That would not be a fun experience. We recently went through a similar experience. The home builder did a poor job on water line connection and 23 years later the line leaked. We found the damage just as we were about to list the house for sale. Fortunately no mold, but delayed listing for a few months. It all worked out though.
Glad life is going well for your family. Life is a journey.
You spend all this money just to spend even more money to correct their mistakes, it’s absolutely insane. Thank goodness you didn’t have mold or anything extremely serious… that could have gotten really bad really quick… we found the one hairline leak after 6 months, it did a number on the wall. Still getting quotes for a full fix.
Thank you! There is never a dull moment for sure. If you aren’t dealing with water leaks, you are dealing with little one year old gremlins that you have to always keep an eye on ๐