Time for an update, it seems!
From the personal life side of the house– I have been moved back home for the last year after an off-and-on year-long separation. Life has been good, and it’s been fun making future plans as partners again. In 2024, I established a really consistent yoga practice, started yoga teacher training, went paddle boarding a lot during the warm months, read 30 books, and just enjoyed my life.
In 2025, I plan to do much the same by prioritizing a goal of reducing screen time (on my phone specifically– I am a financial analyst by trade, so I am in front of a screen all day for work). If I’m not scrolling Instagram and rotting my brain with YouTube videos all the time, I will be able to better fill my time with more enriching activities.
Those activities 2025 include reading 31 books, teaching 40 yoga classes, and reducing our mortgage principle by 15%. Amongst other things.
To kick off the year, our net worth is currently $630,800. About $387,600 of that is in investments. That makes for a net worth increase of almost $100,000 for the year. It’s hard to believe, since it took us about 5 years to save our first $100,000.
Financially, we’re setting and forgetting investments. Roth IRAs got their full contribution amounts on January 1, and the rest comes direct out of the paychecks into 401(k)s and and HSA.
What has shifted from previous years is that we’re taking swings at the mortgage.
Yes, I completely understand that our net worth would grow more long-term if we just took the extra we’re throwing at the mortgage and invested it. I 100% don’t disagree with that.
But at a few points over the last year or two, my husband expressed interest in paying off our mortgage early. Investments still come first– contributing to 401(k) matches, maxing out HSA and Roths, etc. But last year, I started adding principal payments on top of our monthly mortgage amount to the nearest $1,000. For instance, if $500 of my mortgage payment went to principal, I would send in another $500 in a principal-only payment. At the end of the year, we sent in an extra principal payment of about $4,500 to get our mortgage balance under $150k.
It feels good, it’s a way to honor my husband’s wishes in our financial planning, and the idea of saving thousands in interest and just not having to pay a mortgage for another 20 years is nice. Reducing the mortgage by 15% equates to $22,500 towards principal in 2025.
If you were wondering if we’ve drifted into Dave Ramsey territory, you’d be right. Goodness gracious, his whining and complaining gets on my last nerve, but I really like the Baby Steps approach. Sure, there are plenty of points to argue how to do it better (like not pay off the mortgage early, save more than $1,000 in Step 1, etc.), but I really feel like if most Americans just followed the steps, they would be in way better financial shape. You can get fancy when your net worth is moving in the right direction.
So for net worth, we’ll likely stick with Baby Steps. For budgeting, I think I would still like to explore Ramit Sethi’s Conscious Spending Plan, where budgets are broken into fewer categories for faster tracking.
- Fixed costs (mortgage/rent, utilities, debt payments, etc.)
- Investments
- Savings goals (emergency fund, vacation, home improvements, etc.)
- Guilt-free spending (restaurants, clothes, entertainment, etc.)
I meant to get into this last year, but I was trying to put our life back together and got sidetracked. I’m trying to set up a system for this year that lets me keep tabs on month-to-month spending but doesn’t take me forever. Unfortunately, Personal Capital (now Empower) is kind of unreliable in linking to certain accounts, so I’ve gotten frustrated with it not showing accurate numbers at the end of the month.
So that’s where things are now. I am kind of thinking of getting into my old blog style posts where I was doing grocery hauls and stuff. We’re trying to be little more conservative with mindless spending this year in order to hit these goals.
Anywho, happy new year!
-K