Welcome to my 9th Financial Report Update in a row! With a $15.5k increase since I started tracking my Net Worth (which was in August 2016) and a $12.5k Net Worth increase since the end of last year, 2017 is definitely starting great for us. We’re finally switching to a single income couple for a few months, until my SO finds a new job after completing her PhD in early May.
With May already behind us and still 7 months to go before the year ends a lot can still happen. But we’re definitely on our way to crushing our goals, with a whoooping 59% Savings Rate this month (38% on average for the year) and a $4.1k Net Worth increase since last month.
Sometimes, when writing up these financial reports I find myself wondering if it’s worth it to detail my personal experience, as not so much happened in the span of a single month. Fortunately this is not one of these months because we have so many big changes happening this month! Some already did while others will be coming very soon… ! The main one would be that I’m now the single income provider in our couple, as Mrs. FFG successfully finished her PhD (with a nice $2k bonus for finishing quickly). Another BIG one is that starting in a couple of weeks, there will be one more people in our household as we are expecting our first child! That’s something which will change everything for sure, socially, professionally as well as financially!
Also, as Mrs. FFG was not allowed maternity leave as a student (I mean she was allowed to have it, but that’s without pay), I took the benefit of our wonderful parental leave in Quebec, and will take 6 full months of paternity leave with around 75% of my paycheck being paid by the government. This is something that we planned, so that’s not a big surprise, but I can’t wait for the next few months, so many things happening it’s definitely exciting! Finally, as if all of these changes were not enough, we finally decided to buy back our car at the end of our lease, which I know that some people advise against doing so, but after calculating different scenarios we chose to do so because it was the best one in our case. So we’re owners of our car now (as well as the car loan haha!), but I’m already planning on paying down this bad boy in a one year time-frame.
If you have already read the following introduction section at least once, feel free to skip down to the juicy new content starting here: Financial Report May 2017.
Once a month I’m publishing a detailed report regarding my financial stats, in which I try to reflect over the past month – what went well or what didn’t go as planned. This also allows me to stay motivated towards the dream of being financially independent someday. My goal with these monthly reports is also transparency and I’d like my readers to emulate my successes and avoid my failures.
It feels kind of strange to publish all my financial details here, but it’s also a very motivating feeling. We have all pretty much different backgrounds regarding our personal finances, but hopefully my detailed reports will motivate you to keep on pushing harder. Whether it is to start a blog, or at the very least to start tracking your Net Worth, you can’t go wrong here as there are no bad choices! You can check out my favorite resources if you don’t know where to begin with.
My go-to tool to track all the data to generate these reports are extracted from my Mint account. I find it really easy to budget / analyze and visualize the trends, and I’m also a big fan of their iOS App! A nice feature is that it can be integrated very easily with Wealthsimple (where I have my RRSP account), giving me a complete overall view of my finances. Since early January, Wealthsimple is now also available to people living in the US! Feel free to read my complete Wealthsimple review here, if you want to start investing easily.
If you’re living in the US, you should also definitely check out Personal Capital. I have many friends back in the US using it and they absolutely love it! Basically it’s like Mint, still totally free, but more focused on investments, and it allows you to see your checking, savings, investments and retirement accounts in one secure, convenient place. Unfortunately, it’s not available in Canada (hopefully this will change someday).
All stats on this report are combined for Mrs. FFG and I, and are in Canadian dollars, as we’re currently living in Canada. Here is a list of the sub parts of my report (you can click on each link to reach directly one specific part):
- May 2017 Income
- May 2017 Expenses
- May 2017 Investments & Savings
- May 2017 Net Worth
- May 2017 Savings Rate
- May 2017 Summary
If you’re interested, all the reports I have written since I started this website are listed on my financial stats page!
So here it is, my complete financial report of May 2017. I hope you’ll find it inspiring, and perhaps this will motivate you to start your own website.
May 2017 Income
As expected our income was nearly the same as last month, and it was our last month with a dual income. Mrs. FFG successfully achieved her PhD and her grants have stopped since a few weeks, but as she finished her PhD much faster than expected, she was awarded a nice $2,000 bonus, which was really cool and unexpected.
Once again, I chose not to count the money I made with this blog as direct income (it was $250 as of early May, which you can find summarized on my detailed analysis of my first six months of blogging), because I’m still reinvesting everything directly in this blog (advertising, plugins, etc.) This might change in the next few months, as I plan to reorganize all of this
if (when!) I’ll reach $1,000 income from this blog (this summer hopefully).
Total Gross Income May 2017: $7,479
- Previous Month: $6,119
- Difference: +$1,360
May 2017 Expenses
We did a bit better on the expenses side this past month as we were way below our estimated average of $4,000 per month. That was also a win on our Food & Dining budget, which we managed to keep below $1k per month, not far from our goal of $800. With 41% of the year already behind us, we’re at a total of $17k expenses, which adds up to 35% of our projected $48k expenses per year. So far so good, we still need to tweak it down a little bit but it should definitely be achievable before the year ends!
- Home: $1,175
- Bills & Utilities: $340
- Auto & Transport: $350
- Health & Fitness: $75
- Food & Dining: $900
- Travel: $50
- Shopping & Entertainment: $250
Total Expenses May 2017: $3,140
- Previous Month: $3,452
- Difference: -$312
May 2017 Investments & Savings
For the past few months, we’ve been investing and saving in
four (five since last month) different ways which are completely on auto-pilot:
- My Simplified Pension Plan (SIPP), where my employer offers a 100% match of my contributions, up to 2% of my salary (pre-tax), in which I contribute 2% (pre-tax) per paycheck.
- My Registered Retirement Savings Plan (RRSP) account with Wealthsimple, in which I contribute $100 per paycheck (post-tax).
- Our emergency fund in an High Interest Savings Account (HISA) with Tangerine in which I contribute $100 per paycheck (post-tax). I’ve switched a couple month ago to Tangerine, mainly for the 2.40% interest rate.
- Our vacation fund with Mylo (Non-Registered Account). For those wondering it’s the Canadian equivalent of Acorns. Basically, it’s an app which automatically rounds up everyday purchases and invests the spare change. So far the last few months, Mylo has invested $148 from rounding up my usual transactions, which I think is awesome as I didn’t even notice it!
Since early May, our three-year car lease came to an end. As I need a car for my work (I happen to travel a lot) we had three choices: buying another one for something around $10k, leasing a brand new one, or buy back our current lease for around $15k (which is valued around $15k on Canadian Black Book). As we pretty much enjoy our current car, and since it has a low mileage (around 25k miles), we chose to opt for a car loan and keep our current car. We also chose to increase our repayments to avoir costly interests. So we’re now the proud owners of a $15k car loan (already down to $12.5k as we speak)!
- Since we bought back our car lease in early May, I’ve decided to add a fifth saving category here, which will include our accelerated car loan repayment. Technically not really a saving, but kind of as this will allow us to be debt-free once again faster, and will save us some interests (we managed to get a 4.7% interest rate, which is fine but could bet better). Just one week before signing up four our car loan, Mrs. FFG received her unexpected $2k bonus, so it felt kind of like a no-brainer and we directly put this $2k towards our loan repayment. I’m unsure as to how much yet, but I’m already planning to make another big lump-sum payment next month to keep it below $10k.
Also, for the fifth month in a row I’ve decided to make two lump-sum contributions to both my RRSP and my emergency funds accounts ($500 in both). Having done this every month since the beginning of the year, I might as well up my recurring contributions, some would say. The problem is that as we’re back to a single income and since I will be on parental leave at the end of June (coming with a pay-cut of 25%), I still need to reevaluate our savings needs. More on that on my next financial report!
- SIPP Account (employer & employee): +$166
- RRSP Account (Wealthsimple): +$700
- Emergency Fund (Tangerine): +$700
- Vacation Fund (Mylo): +$40
- Car: +$2,305
Total Investments & Savings May 2017: +$3,911
- Previous Month: +$1,632
- Difference: +$2,279
May 2017 Net Worth
Long-time no see “liabilities” categories! We sure didn’t miss you since crushing our student loan debt. Hopefully this won’t last long, as I’m planning to kill it in maximum one year. Anyway, that’s the only debt we have and I’m still contributing with every paycheck and with lump-sum contributions to both my RRSP and our Emergency Fund accounts, so that’s ok to have *some* debt. I’m still very satisfied with my Wealthsimple experience so far (and enjoying my 20% time-weighted return). I’m already looking at opening an RESP for our soon to be born child, which I might add to my Wealthsimple portfolio (already planning a detailed post about that in the next few weeks). Anyway here are the details of our assets and liabilities as of early June.
- SIPP Account (employer & employee): $11,411
- RRSP Account (Wealthsimple): $5,451
- Emergency Fund (Tangerine): $5,312
- Vacation Fund (Mylo): $148
- Car: $14,800
- Car Loan: $12,360
Net Worth May 2017: $24,762
- Previous Month: $20,585
- Difference: +$4,177 [+20.3%]
My short-term goal is to reach a Net Worth of $100,000 (which we should be able to reach before 2019). We’re currently at 24.76% on this goal.
Net Worth short-term goal: 24.76%
May 2017 Savings Rate
In terms of savings, we were aiming at a 15% Net Savings Rate last year, and an average of 20% for 2017. So far this year, it’s been five months in a row that we’re crushing this goal (29%, 39%, 32%, 32 and 59% as of this month!). With all of the changes happening this month and the next one, we’ll see how that goes, but I’m pretty confident that with such a good start 2017 should be great overall!
Regarding our Net Savings Rate calculation, here is the breakdown of the formula that works for us:
Net Savings Rate = Savings / (Gross Income – Taxes + Pre-Tax Contributions)
My pre-tax contributions (employer) are included in both sides of the equation to have a better view of our *real* savings rate.
- May 2017 Savings: $3,911
- May 2017 Gross Income: $7,479
- May 2017 Taxes: $1,038
- May 2017 Pre-Tax Contributions: $166
Net Savings Rate: 3911 / (7479 – 1038 + 166)
Net Savings Rate May 2017: 59.19%
- Previous Month: 32.10%
- Difference: +27.09%
Even counting our new car loan, this was an awesome month when it comes to our savings rate! We’re currently sitting on an average 38.5% Savings Rate for 2017 which feels so great when I remember that one year ago it was more like 5%. We’ll see in the next few months how it goes, now that we’ll be three (ok two and a half) and with only a single income!
May 2017 Summary
I’m always planning ahead with a zero-based budget in mind. This is an easy way to figure out where everything we’re earning is going. Keeping this in mind, let’s summarize where our gross income for the month of May 2017 went to:
- Gross Income (I): $7,479
- Expenses (E): $3,140
- Investments & Savings Post-Tax (S): $3,911
- Taxes (T): $1,038
- Transfer from Savings (TR): $0
As a zero-based approach, here are the details:
I – E – S – T + TR = $7,479 – $5,110 – $3,911 – $1,038 + $0 = $0
And this wraps up my detailed financial report of May 2017! I hope I’ve inspired you with this report (my complete list of reports are listed on my financial stats page), and that you had as much fun looking at mine as I had looking at others! Remember that it’s not a race though, even if the journey seems like a marathon sometimes.
It took me a few months before deciding to start a blog, but this really helped me to focus on my long-term goal of reaching financial independence. Everyone has to take the first steps if they are willing to reach financial freedom, and I’m convinced that everyone with the right resources and some reading can reach its goal. I personally think that it does not take more that 15 years of consistent and diligent saving & investing to be able to reach financial independence even without a very aggressive strategy!