On the last day of every month, I take an assessment of all of my financial accounts and calculate my net worth. It allows me to get a detailed look of how my savings accounts are growing, my investment accounts are changing, and how much longer I have until I hit each of my financial goals.
July 2017 was a great month for the New Father Finance family. Our net worth increased by 10% this month, growing by $39,467! A large part of this is owing to my wife’s grandmother, who generously contributed $25,000 for NFF Jr.’s college education. However, even without the gift, we still were able to grow our net worth by over $14,000, putting July as one of our best month’s ever. Here is a breakdown of he we did in each savings category.
Emergency Fund: In The Emergency Fund: Insurance for your Financial Life, I talk about why you need an emergency fund, and how I determined what our emergency fund amount should be. I think that $24,000 should be enough for us to cover 6 months of living expenses, and have just been letting the interest on the account sit there. It is sitting in a high-yield savings account with Capital One 360, earning 0.75%.
Working Capital: This category includes our checking account and credit card accounts. My goal was to have enough money here so that if all of our credit cards were paid before we got our paychecks for the month, we would have enough to cover them. I believe the lowest balance we’ve ever had in this account is ~4,000, so I may need to re-evaluate how much short-term capital we actually need.
Down Payment: My wife and I are actively saving for a new house to buy. Therefore, all of our savings at the end of the month goes into this category. Our target down payment goal is to hit $150,000 before NFF Jr. turns 1 years old, so we have about 13 months left to achieve our goal. Because we anticipate needing the money in the next year or 2, we keep this money in safe, high-yield checking accounts at Capital One 360.
Education: I mentioned at the beginning of this post that my wife’s grandmother made a generous gift to us for NFF Jr.’s education. Because the little guy needs a social security number before we can invest it, the money is setting in a savings account for the time being. I anticipate doing a lot of research soon to figure out how best to save for his education, so expect a post in the near future about it.
Retirement: My wife and I have always been very good about putting money aside for retirement. We both max out our 401k contributions and both contribute about $1,500 each every month. Therefore, $3,000 of the increase was from our contributions, while the rest of the +$6,000 is from gains. I have lots of different investment accounts in this category, and will go into a little more detail in future posts.
I hope July was as generous to you as it was to us!