All these numbers are in U.S. dollars so a portion was converted from Swedish krona to dollars on Nov 30th. Since conversions fluctuate and because I have to budget in 2 currencies, I only do the conversions on the last day of the month so I know the numbers are true.
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A great month
So, this last month was great for me. I finally have my normal income and am no longer on sick leave. I received some reimbursements for my medical care, which was nice to have since I used my savings to pay for it. The stock markets were great and it is really the reason my net worth increased so high, and I am just so close to finally having positive net worth for the first time in years.
The net worth numbers
It is still negative by $592.52. The amazing part is that I am on track to have positive net worth by the end of December.
Over the past year I have increased it by $22, 236.00. That is nearly my entire years salary, This means that I barely spent money on living expenses. Although, I obviously have spent money to live, the increase was because my investments really took off in November, as did many others.
How to calculate your own net worth
You can read more here.
However, it is essentially your ASSETS – DEBTS. So subtract the debts from the assets and you will have your total. If it is negative then you have more debts than assets but you can change that by either increasing your assets or decreasing your debts. I did both slowly and I let the assets grow and compound on their own while paying down my debt (more than the minimum).
income Allocation
I get paid in krona but I have debt in USD so I have to continually exchange currencies. However, due to the CARES Act and Trump’s executive order, I did not have to pay or accrue interest on my student loans since March. Instead, I have held the money in krona waiting for an optimal time to transfer it and to save money on transfer fees.
I use Transferwise to do this. It has the best transfer rates and the lowest fees. I used to pay nearly $30 in fees when I did the international transfers through the bank. I would also get a terrible exchange, I was losing so much money until I used this service and I have not looked back since.
Anyway, because I have to budget with 2 currencies, I have kept it simple. I allot a certain amount of money per month for spending. This includes, groceries, eating out, clothes, etc.
Saving a high percentage is important to me because I need to make sure I have a financially safe future post-Ph.D. I do not want to take the first position that comes along.
In September I moved to a new apartment, it is a studio but it is a little more expensive. The peace of mind that I get by having this new apartment has an increased price tag of $120.00 a month. That is an increase that I can handle.
How did I increase it by so much? On a lower income?
1. Create a plan. I either cut or lessened the purchases of expensive items. Sweden did not go into a lockdown and life went on as normal so we were still able to socialize but I kept it to a minimum.
2. Began investing a higher percentage when the savings interest rates began dropping. I had a bit in a HYSA but when they began dropping I started moving more money into the markets. It is riskier and so far it has paid off. However, I am ready if it drops again.
3. Began reselling again.
4. Live in cheap housing. Rent had to be a maximum of 25% of my net income. This is what I decided, and this number includes utilities. This is really good in Stockholm. If I did not live in student housing, I would be paying 50% or more of my income to rent.
Next goals?
1. Achieve positive net worth next month and then work to keep it, even if the market drops.
2. Make a lump sum payment to my student loans before Dec. 31st. I have about $10K saved up for it but I decided to only do half, I want to see what happens in the next few months with Biden’s new presidency. He has spoken about forgiving student loans. I doubt mine would be since it is from graduate school but I would like to wait and see.
3. Begin saving for a down payment on a house. The location of it is up in the air but I would like to have it saved up for when I am ready. I know I would like to buy a place, depending on the position I have, within the next 5 years.