Net worth update – The month I became debt free…We did it, Hurray!
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March was a very special month for me. I turned 35, and three days later, I made my last student loan payment, making me 100% debt free. The feeling is still surreal but I have the $0.00 balance to remind me every day that yes, it is real. Also in the month of March, I came close, but failed to meet my net worth goal of $100,000. Keep reading to learn more.
NET WORTH UPDATE
ASSETS: $97,728 (↓)
- Cash ($213) – My savings account typically contains ~$1,000, that serves as my emergency funds. I desperately wanted to be debt free at 35 years old, that I transferred ~$800 from my emergency funds, and put it towards the last loan payment. While I do not recommend this approach, I took this risk because I knew, worst case scenario, I had to wait only two weeks before my next paycheck. Over the past few months, I noticed that the more financial literate I became, the less unexpected “emergency” expenses arose. I do recognize that some emergencies are truly out of our control, and I am indeed grateful for month #7 without a significant financial emergency. I am glad to say as I write this post, this bucket will be refilled in a few days.
- The next goal for this account is to build it into a 3-month emergency fund bucket, which for me is $6,000. Over the next year or so, I’ll advance the goal savings to a 6-month and ultimately a 12-month emergency savings bucket.
- Car ($13,947) – The value of my car from Kelley Blue Book decreased this month by $225. This car note was paid off in March 2016.
- Investments ($83,568) – Recall that in February 2017, I temporarily stopped contributing to my work 403B plan, to provide extra funds to pay off my student loans. Well, that plan paid off and with my loans gone, I can now save significantly more pre-taxed dollars, and make up for lost time. The other good news is that, even though I technically lost my employer 2% match for not contributing in February and March, at the end of the year, they average out my contributions and I do get back what I lost. I remain confident that I can and contribute up to the 2017 IRS limit of $18,000 starting in April 2017.
Overall, my assets did decrease by $1,029 or 1.04%
LIABILITIES: $0 (–)
- Student Loans ($0) – How in the world did I pay off $8,694 in one month? For the record, that is way more than I receive in one month’s paycheck! I’ll summarize how in this post but I will dedicate a whole separate post with the details, including of how I paid off ~$65,000 in 15 months.
- Firstly, I got more than I was expecting on my tax returns, likely because for three months in 2016, I was jobless. As soon as I received the deposit, every single penny (~$2600) went towards my loan payment. Secondly, like I discussed earlier, I temporarily stopped contributing to my work 403B plan, releasing ~$450 that went directly towards those loans. Thirdly, I received two small bonuses at work, ~$250 that also went into my loan payment, and finally $800 from my emergency funds made up the rest.
- To summarize, tax returns, small work bonuses, missed contributions to my 403B, emergency funds, and $4500 set aside from my paycheck added up to the final $8,694 payment. I made the payments in installments as soon as the funds were available to save on interest. The final payment (captured below) of $3,255.49 was made on March 23rd, 2017.
The feeling of clicking the payoff button and hitting submit, cannot be compared to anything I have ever felt before. I feel a huge sense of relief, as I close this chapter of my financial journey and start the next.
NET WORTH: $97,728 (↑)
Overall, my net worth (NW) increased by $7,664 or 8.51%. This is my 7th NW update and sixth consecutive positive growth in my NW. I did fall $2,272 short of attaining my March 2017 NW of $100,000. Nonetheless, the big win of becoming debt free 3 months ahead of schedule completely makes up for it. Besides, I am somewhat confident, that I’ll be joining the six-digit net worth club next by next month.
See you next month!