February 2013 Progress Report 4

Vacation Photos 015Vacation Photos 012

I track both my income and expenses monthly. I started this process over two years ago to provide a better picture of my financial standing, and do this in tandem with a monthly net worth update. This process paints a fairly clear picture of my financial status and helps me identify the savings I’m adding to my net worth snowball as well as the growing interest my net worth snowball is accumulating.

 February 2013 Income:

$5,096…Net Income

$1,455…401k Contribution

$6,551- Total Income

February 2013 Spending

$ 315… Housing

$   33… Utilities

$ 161… Groceries

$ 325… Restaurants & Bars

$ 437 … Entertainment

$ 298… Transportation

$ 319… Travel

$ 70… Cell Phone

$  61… Clothes & Shopping

$    0… Gifts

$  33… Gym/Fitness

$   0… Drugstore & Dr.

$2,052- Total Spending

$279,975 ….February Net Worth

Financially speaking, this month was so-so. I managed to save 69% of my income in spite of a weeklong, costly California vacation in February which I detailed in my previous post. This lags behind my yearly goal savings rate of 80% monthly, but I am satisfied considering I spent a sizable amount of money on my trip but still managed nearly a 70% savings rate. This is my lowest savings rate since July 2012, but next month I will hopefully climb back over 80% again.

My income did receive a boost from some compensation for extra hours worked; padding my income total this month by sacrificing a few weekend days spent working.

My monthly expenditures for February were much higher than my expected average month as they included travel, lodging, dining out, entertainment, and transportation for a weeklong California Disneyland and sunny beach vacation.  Other out of the ordinary expenses included the fees for my web hosting, and a replacement pair of New Balance Minimus  Cross Trainer Tennis Shoes ($60) for working out since my others were worn out. Excluding these extra purchases would lead to monthly spending around $1,100. This level of spending would represent an 83% savings rate, surpassing my goal.

On a net worth basis, February was lukewarm.  My net worth dipped 0.25% just below 280k. The drop itself isn’t very significant. However, it is disappointing considering that I added over $4k in capital to my net worth from savings and that the market indexes climbed as a whole during February. My underperformance falls on my brokerage account where a handful of my individual stocks were beat-down, accounting for the $4k loss. I am optimistic about my net worth prospects for March as I look to reign in my spending levels back to a savings rate surpassing 80% and I will hopefully receive a bonus between $3-4k.

My net worth will soon have a 3 for the leading digit! Hopefully I’ll cross this milestone by May of this year. My net worth remains at nearly 16 times my 2012 spending levels and would require me to maintain a 6.2% withdrawal rate of my net worth to fund my lifestyle with annual spending around $17k. 4% is considered the standard safe withdrawal rate across many personal finance circles, so I have some more ground to cover before financial independence. Based on a 4% withdrawal rate and $17,500 2012 spending, I would need to have a net worth of about $440k to be financially independent. I remain very excited  and confident about my prospects of attaining this figure before age 30.

4 thoughts on “February 2013 Progress Report

  1. Reply Chad Mar 8, 2013 6:32 pm

    You can’t really call a 69% savings rate with a week long trip to California a so so savings month. Any time you can hit a savings rate of nearly 70% with a vacation, that’s outstanding. Congratulations on the month. You’ll hit 80% for the year easily. And the 300k+ net worth will be here before you know it.

    • Reply Net Worth Snowballa Mar 11, 2013 9:22 pm

      Thanks for your continued support Chad! I was okay with the 69% savings rate, considering the vacation, but was just a bit discouraged that my net worth didn’t tick up at all despite my savings and the overall market move upward. But, March is shaping up to be a good month and my finances are in line to achieve my goals as we approach the quarter pole of 2013.

  2. Reply JC @ Passive-Income-Pursuit Mar 9, 2013 5:31 am

    What a great month considering all the additional expenses. It won’t be too much longer until that net worth starts with a zero. Mine will cross the $200k mark in March if the markets don’t have a huge drop.

    Keep up the good work!

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