Last updated on January 1st, 2021 at 05:16 pm
Welcome to my net worth update for August 2020! For those of you that don’t know, these numbers describe my wife and I’s net worth as of August 1st, 2020. As always, I try to round numbers to the nearest $100 to make them easier on the eyes. I encourage you to check out my first net worth update so you can see how we started.
This recent month was a great one for our net worth. Although we didn’t do as well as I had hoped, we were able to keep our expenses mostly under control and save over $3,000 in employment income. As you’ll read below, this contributed significantly to our net worth increase for the month.
Budget in Short
We did an okay job of controlling our spending last month, with approximately $1,600 in variable spending accounted for. To give you some more context, I count anything that’s not a bill as “variable spending”. So food, clothes, gas, dining out, gifts, digital goods, electronics, car maintenance, furniture, etc. all fall under variable spending in my family’s budget. Now, $1,600 in variable spending is a little over budget for us in a regular month, but during COVID-19 I consider $1,600 to be WAY over budget. For example, last month our variable spending was just $1,000. So what happened?
A Month of Splurging
Like many millennials, we recently started to get itchy feet over this whole COVID-19 thing. Quite literally. For one thing, we splurged and bought some nice hiking gear from our local MEC. This came to just under $400 for two pairs of hiking shoes and a decent hiking backpack. On top of that, my wife spent about $200 on clothes (which is actually a rare thing for her), and I picked up an $80 replacement power supply for my computer. So yeah, quite a bit of splurging took place last month.
It’s worse than that, though. We also went well over our gas budget (at least as far as COVID-19 is concerned) and spent $100 on gas. I attribute this to putting some miles (ha) on our new hiking shoes. We also entertained for the first time since lockdown by having our friends over not once, but twice! We socially distanced in our backyard, of course, but this still meant doing a lot of extra cooking. In the end, this pushed up our grocery spending to $350! Compare this to last month’s grocery bill which had our friend Chris at TicTocLife commenting on how little we spent:
It suffices to say that we weren’t too happy with our splurging last month. Given COVID-19 cases are rising quite rapidly in our province, we plan on hunkering down even more. No guests, and perhaps only a solitary hike or two on an uncrowded trail.
Last month was relatively eventful on the investment front. We contributed $1,700 to our registered accounts – $1,000 into my TFSA and $700 into my wife’s TFSA. In my account, I bought a little over $300 of VCN (Vanguard Canada Index), VEE (Vanguard Emerging Markets Index), and VIU (Vanguard Developed Index Excluding North America). Meanwhile, in her account, my wife added to her XDIV (iShares Canadian Quality Dividend Index) position.
Since none of our quarterly dividends paid out, we found that our dividend income was greatly reduced. We only earned $39 in dividend income for July, down from $175 in the previous month. If you add the income we earned from our savings (mostly our emergency fund), we totaled $80 in passive income for the month.
Other than the $80 in passive investment income, our net worth was buoyed by some solid investment returns. Overall our portfolio returned 3.5% in July. This resulted in a gain of approximately $1,200 to our net worth.
Net Worth Update
For our August 2020 update, I’m happy to report that our net worth increased to $301,600 from $295,100 the previous month. This is an increase of $6,500 which represents a 2.2% increase in our overall net worth. That’s not too bad when most of your net worth is locked away in your home equity. Here’s a breakdown of how our net worth is distributed across the various assets we own:
It’s nice to see that our investment and savings accounts have both grown a lot over the past month. This is mostly thanks to the income we saved, but it’s also thanks to some of the better than usual investment gains. Note that since we bought our home just last year, the home equity portion only includes our down payment and our principal payments towards our mortgage. There hasn’t been any gain in our house value since we purchased it. If and when there is a gain, I plan on being conservative and not including this paper gain (or loss) in my official net worth calculation.
In the following chart you’ll see exactly where our net worth gain came from:
As you can see, the biggest contributor to our net worth this month was our savings of employment income. In the previous period, our savings of employment income was reduced by a lot because we paid our property tax bill. This month we didn’t have that problem, and so our savings of employment income contributed significantly to our net worth. Making our regular mortgage payment also made a sizable contribution, increasing our net worth by $1,300.
Hopefully next month we’ll do a little better savings-wise. My goal is to reduce our variable spending to where I wish it was this month – closer to $1,000.
Thanks for Reading!
Thank you so much for reading my net worth update for August, 2020! If you enjoyed this detailed look at my finances, please leave a comment, follow AnotherLoonie on social media, or sign up for my monthly newsletter! If you’re interested in reading more, please check out some of my other recent articles. Some interesting examples include my post on the best gold ETF in Canada and my post on how I save 20% off pretty much everything on Amazon Canada.
What do you think about my spending this month? Am I spending too much, or too little on groceries? How has COVID-19 impacted your budget? Drop a comment below and let’s chat!