For the past few year now I’ve tried to do something a bit more creative with my new year eve resolutions. With this being a personal finance blog, it’s probably no surprise that my resolutions are personal finance focused and secondly I try to force some accountability by doing a mid year check as well as an end of year check. The nice thing about my mid year check is that I have time to make changes if I need to adjust! With that let’s see how my 2023 resolutions have fared. 

Grow Net worth by 5% – AHEAD OF SCHEDULE

It’s generally a good goal I think to want your overall net worth to grow when you are a young professional. We’re in the working stage of our lives and as combining our new saving/investing contribution to the returns and re-investing we are doing, it shouldn’t be that hard of a goal to achieve. In 2020 and 2021 I saw our net worth grow 25% and 28% but then in 2022 our net worth fell 6%. That’s a pretty crappy feeling knowing that I’m saving 30% of my income via retirement and ESPP (employee stock purchase program). However 2022 was a pretty rough year for the stock market so all thing considered, only being down 6% didn’t feel too terrible.  

For 2023 I continued the same investing strategy, meaning I haven’t slowed down any of my investing and saving habits. We’re still putting away 30%+. Year to date, we’re currently up 17%. My go to benchmark, VTI, the Vanguard total market index fund is up 14%, so at least I’m beating that! 

So, I’d say this resolution is one we’re on track for…even a bit ahead of schedule!

Finish the tiny house construction – ON PAUSE

Oh what a difference that a few months can make. As it stands now (but hey we’ll see how the rest of the year goes), we are in a holding pattern with our tiny house. If you’re newer to the blog, in early 2022 we purchased a lot in a tiny house neighborhood in Tennessee. We bought it sight unseen but had stayed at a neighborhood similar right down the road, and this new one is being developed by the same developer. We had grand plans of renting it out via AirBnB and from what we could see, the tiny houses were not renting at tiny house prices – ie more like a full cabin rental – pricey! 2021 and 2022 had seen supply chain issues galore with construction in that area and we were waiting patiently to start construction. 

No tiny house in our immediate future

Spring 2023 rolled out around and we were starting the process of picking out the design of the cabin and all the fun features. Although we were prepared for it to be somewhat more expensive than we had initially planned for, we were surprised by how much more, with the price estimate being about 20% more than we were initially thinking when we bought it in 2022. It is what it is at this point and I think with inflation and high demand in the area that the 20% happened. Well, not to worry we said, these unit are still renting pretty well right?!? I had been tracking 2 different units and as I did a broader search and checked more of this year’s bookings, things were not looking as great.  I did the math and found we’d need to have it rented about 10 nights per month and with the ever growing competition in the area (we are in the 3rd and final neighborhood to be built), it was looking more on average that we might only get 5 nights per month. 

The first rule of making money is to not lose money and so I asked around a bit of people that I knew in the real estate business and apparently vacation rentals are not often money makers in terms of monthly cash flow, and it’s more likely to break even and/or make money from appreciation. This isn’t as ideal for Mrs Money and I, our goal is to have our real estate be cash flow positive. Based on 2021/2022 numbers things had appeared solid but less so in 2023. The other wrinkle is interest rates. In 2021-2022 rates were in the 3-5% range which helps out from a number standpoint as you’re paying less interest each month meaning you get to keep more of the rent money coming in.  When we called about getting a construction loan I almost fell out of my chair when I heard 8% being quoted to me. Apparently a construction loan I only for as long as you’re building the house and then you refinance into a conventional loan which at the time was 6% but now it’s more like 7-8%. 

So, all that to say we’ve decided to hold off on starting construction on our tiny house for the time being.  Not all is lost though as apparently we may have still made a good financial decision buying the lot as most people had built and/or are building on their lots now, and the neighborhood still appears desirable. Based on what other lots are for sale at, we may have seen a 45% increase in our land value.  Of course this is just a gain on paper and those lots haven’t sold yet and our realtor said things had slowed down quite a bit. 

We’ll see what the end of the year has in store for us with the tiny house!

Get Mrs. Money’s business income producing – BEHIND / ON PAUSE

Last summer, Mrs Money took a chance on a business idea and decided to go part-time at her job while she pursued growing her own business. She had some good initial success with a few free then paying clients but then thing really slowed down for her.  I loved the approach she took and she networked and advertised her services really well, but things never really took off from that initial wave.  I don’t think she’s quite ready to throw the towel in but she’s going back to her job more full-time and as such won’t be devoting as much time to her side hustle business. 

We were both quite a bit bummed by this but think it’s the right call. Starting a new business is always risky and it’s both quite a bit of timing, luck and skill. We try to take smart risks so thankfully this isn’t setting us back too much. 

Contribute to my IRA post-tax – ON TARGET

You can contribute $22,500 each year to your employer sponsored 401(k). In years past I’ve focused on contributing a percentage of my income and not worrying about the amount but this past year was the first year that I hit that maximum. I was pretty excited about it but then for the rest of the year I stopped contributing to my retirement…we had plenty of other things to focus on – being a parent of 2 kids is pricey!  However in 2023 I set a goal for myself to contribute more to my 401(k), there is an option that many employers offer called a ‘post-tax 401(k) contribution.’ I’m still wrapping my head around how it will work but typically you first need to maximize your 401(k) contributions. There may be a way around this but I’m not planning on figuring this out just yet not until I max out my 401(k). So for now I’m on track with thi goal!

Fully save for the holidays by the fall – NOT YET STARTED

Every year I feel like the holidays sneak up on us – in November and December. Before I know it it’s October and we’re suddenly thinking about traveling to see family, Christmas and a variety of other year end things that pop up for us to spend money on. In 2022 I made a goal of saving better for the holidays in the fall and somewhat met my goal! 

For 2023 I’m looking to start saving up again well in advance. This year I also know a bit better of an amount that I need to be saving for. I haven’t started saving yet, but have now been reminded that I need to start doing so probably starting next month!

The new Delta perk that got me to upgrade my Credit Card

Not open a new account – ON TARGET

I have had a habit (I won’t say it’s a bad habit) of continuing to try new investment ideas. I got started with BlockFi (and subsequently lost money there) and also tried out Fundrise (which has been fine I guess). I also love reward credit cards and am currently up to 6. Continuing to open up new accounts has started to pose a problem a) being a lot more to keep up with and in this stage of life I’m trying for a motto of less instead of more and b) more places that my money is kept, which can make it difficult for myself and also Mrs. Money if she had to manage it. So, for 2023 I set a goal of not opening any new financial type accounts.

So far it’s been good and I’m on target for my goal. I will say that I did upgrade my no-annual fee Delta Blue Amex Credit card to the $99 Gold Delta Amex Credit Card…so technically it’s not a new account but perhaps in some sense I’ve broken the spirit of my goal but maybe not! I upgraded as I was booking a big Europe trip on Skymiles and Delta had just rolled out a new perk whereby you can get a 15% Skymiles discount if you book with a Gold/Platinum/Reserve Delta card. It ended up saving me about 25,000 Skymiles so I thought it was a no brainer to upgrade. If you are considering doing the same here’s an referral link I would appreciate you using 🙂 Aside from that we’ll see how I do for the rest of the year in not opening new accounts!

Summary

Out of my 6 financial goals that I set for myself, I am on / ahead of target with 3 of them, 1 hasn’t started and 2 are behind/on pause. The 2 that I’m behind on / on pause are kind of a bummer but given the circumstances it is what it is! We’ll see how the 2nd half of the year goes for me!