Can you believe we're almost off of the wild roller coaster ride that is 2020? As the year draws to a close, I thought it would be useful to take a look at where we saved our money this year. I have the spend/expenses side covered elsewhere, but here's a look at how we saved our money. For purposes of this post, I'm considering mortgage pay down above & beyond our standard monthly payment to be "savings", although it's clearly an expense. It builds equity & net worth, & was an intentional spend.
We feel incredibly blessed that we were able to retain our employment during this time, and work from home safely. We know not everyone is in this position, and want to make the most of our assets & spend & live responsibly.
Here's how we did in 2020:
- Retirement. We fully maxed out both of our 401ks, including the additional amount as M is over 50. I also for the first time started a backdoor Roth savings (offered by my employer), at 5% of my salary.
- College savings. This wasn't a priority for the year, as the boys college accounts are in pretty good shape. In California, the option to attend a 2 year college & then transfer to a 4 year college is quite affordable. That's changed the landscape of our college saving plans a bit. But, we saved $5k this year, putting birthday & Christmas gifts into their account, plus they earned a bit & we require them to put a percentage of their earnings into their college savings.
- Health savings. We put in $7,100 this year, and didn't use much. We will both need to get some medical needs taken care of in 2021, but so far are spending much less than we are savings. We have a high deductible health care plan through our work.
- Other savings. Definitely not a priority in 2020. In fact, we moved money out of our savings to cover our remodel (it was originally intended to be used to pay down our mortgage). It was intentional, but our savings is lower in 2020 than 2019. Don't worry, we still have a very healthy emergency fund.
- Mortgage pay down. This was our top priority for 2020 & we paid down ~1/4 of our gross income into our mortgage (that's after our standard monthly payments). So, a pretty significant amount. We bought our house in 2017, and our goal is to be to the half way point on the mortgage in 2021. So far, real estate prices in the bay area near us have held steady/risen, but that could change given more flexibility in WFH due to COVID & tech companies adapting their policies. We are 78% of the way to the half way mark, as it stands right now.