Welcome to my 2020 Year in Review! 2020 flew by like nothing. It seemed like it was just yesterday that I was excited to see 2020 roll around. A new decade, a new start. Well, as we all know, that didn’t pan out quite as planned. Instead, a pandemic struck and before we knew it, we were just waiting for 2020 to finish to get to 2021.

With that said, I wouldn’t say 2020 was a complete disaster. While many would consider 2020 a wasted year, I did hit a few financial and career landmarks in 2020 that made this year not so bad. So let’s get to it and begin the recap, shall we?

Excited for the New Year

I started 2020 feeling excited to refinance my student loans with First Republic, known for their low interest rates, after years of debating whether refinancing would be a good option. 

In January, I was ready to start the year off without procrastinating and right away went through with the student loan refinance. I recapped my refinance process here and was excited to finally cut my interest rate in half with a very low 2.2% interest rate by February.

No one could’ve predicted that COVID-19 would happen or that the government would halt student loan interest for the remainder of 2020. But I still found it ironic that after 3 years of debating whether I should refinance, the month right after I refinance would be the very month that interest payments would be halted and I would no longer qualify.

I’d consider this my biggest money mistake of 2020. Because of this refinance I’ve lost around $900 in interest payment thus far. But there’s no use crying over spilled milk so I had no choice but deal with the choice I made.

With my new low interest rate and the uncertainty of the economy during the pandemic, I decided to only make minimum payments to my student loans for the foreseeable future. Because of this decision, 2020 is now marked as my lowest debt-reducing year since I started debt repayment in 2017.

What Goes Down Must Come Up?

While I slowed down my debt payment, I was able to build a nice sum of savings throughout 2020. And because I had continued to put money into my retirement accounts during the market downturn in March, I was able to take advantage of the 32% drop and invest through its recovery.

By May, I had maxed out 3 out of 4 of my retirement vehicles. I maxed out my Roth IRA, HSA, and company stock match which would enjoy a continued market recovery till the end of the year.

Slowly but steadily, in August, I found my way to under $50k student debt. As a reference, the last landmark I made in tackling my debt was getting under six-figure debt which I accomplished way back in July of 2018.

Admittedly I felt that this landmark of getting under $50k took a lot longer than I had anticipated. It took me double the time (2 years) to get from $100k to $50k than it did going from $150k to $100k (1 year) so that was a hard reality to settle.

While I haven’t been making extra debt payments, I was still saving like crazy in hopes of being able to purchase my own home in 2021.

In the midst of my disappointment over my student loan progress, I encountered the most exciting financial outcome to come out of 2020. I hit $100k net worth!

While I was still in $50k debt, my assets which consisted mostly of my 401k, Roth IRA, and savings account hit over $150k, officially giving me a six-figure net worth.

Let the Good News Roll

It really seemed like things were starting to take a nice turn just in time for the end of the year. I had applied for a new job mid-year but had heard nothing from them for a month. Just as I was losing hope, momentum picked up and I received an interview offer followed by a job offer.

While hitting $100k was financially satisfying, hands down the most exciting personal development of 2020 was getting a new job in my dream field. Better yet, this field allowed me to work from home during the pandemic which would not have been possible in my old retail job.

Needless to say, I was ecstatic to not only quit my retail job but to save on time and money on commuting.

So that’s a wrap for my little recap of 2020. Without further ado, let’s get into the breakdown of the numbers of 2020!

Debt Review

Total 2020 student loan payments made: $9,075

Total 2020 interest paid: $985.28

Remaining balance: $46,360.72

Wow, I knew I made only minimal payments to my student loans this year, but seeing the numbers really hit me. Less than $10k total payment to my student loans this year?! To say, it is a bit lackluster would be an understatement. It’s a tragic, absolute disappointment that I hope I’ll do better on next year.

I am ending 2020 without quite making it 3/4 of the way done to paying off my debt and a far cry from my very initial goal of paying off all my student loans by 2020 that I set back in 2017. In fact, I’ve had to completely take that goal off my debt progress page which is embarrassing to say the least.

Spending

Total 2020 Spending: $23,553

While I don’t have many good things to say about the COVID-19 pandemic, my wallet begs to differ. All the social distancing and staying home has really allowed me to keep my spending low as reflected in my spending number. In fact, I spent $4,400 less this year compared to last year.

Off the top of my head, I know that I definitely saved from not going on any international travel this year compared to last year. I also saved quite a bit in entertainment/dining out category since I spent most of the year staying home.

I certainly don’t expect my spending to always stay this low in the future but it certainly is a silver lining in a year that has wrecked havocs on many of our lives.

Net Worth

As I previously mentioned, my favorite financial moment to come out of 2020 was finally hitting the elusive $100k net worth mark. But it turns out the year had another surprise in store for me. And for once, it’s a good surprise.

Not only did I hit $100k net worth this year but my net worth also increased by $100k in a one year span as well.

Ignore that random spike in net worth at the beginning of the year. I use Personal Capital to track my net worth and there was a delay in updating my accounts after I refinanced my student loans. It momentarily simulated how my net worth would look if I didn’t have any loans. Wouldn’t that be nice.

December 2020 Net Worth: $127,163

Year-to-Date Change: +$104,562

My unwritten goal in 2020 was to keep a better financial record of my savings, spending, and net worth change. So I’ve gone back as far as I can to track my net worth growth for the past 4 years.

Some noteworthy remarks on this graph:

1. It took me almost 2.5 years to go from negative net worth to finally being in the positive net worth territory.
2. It took me only 1 year to go from $0 net worth to $100k net worth.
3. This just goes to show how much compound interest can work for you (when you invest it) versus how much it can work against you (when it’s in the form of student loan interest).
   
   

2020 Goals Review

Drumroll please… now it’s time to evaluate how I did on my 2020 goals. I started 2020 with four goals. Two were what I considered “small” goals and two were what I considered “big” goals.

1. My first “small” goal was to change jobs and that definitely happened! Changing jobs is by no means a small feat. I vaguely remember the reason I considered this a “small” goal then was because at the end of 2019, I had just gotten a phone interview with my then dream company and was moving forward with an in-person interview.

I made this goal in mind thinking I’d get that job. That clearly didn’t pan out and I spent more time than I’d like to admit being devastated, but I am happy to be with my current company so I can say that everything worked out in the end.


2. My second “small” goal unfortunately came true as well. And I say unfortunately because this goal was to refinance my student loans to a private loan. While this goal did come true, as I mentioned, it was clearly the wrong timing as I missed out on the COVID-19 forbearance offered by the federal government.

3. The first of my two “big” goals of 2020 was to hit $100k net worth and I’m happy to say I accomplished that goal. I had to take a look back and take a snippet of what I wrote last year.

“My first big audacious goal for 2020 is to reach $100,000 net worth. I know that this isn’t all up to me, but hopefully the market will be favorable this year as well and allow for my net worth to grow.”

I’m thankful to say that not only did I meet this goal that I didn’t think would even happen but I did it with a couple months to spare.

4. My last goal of 2020 was to buy a home. Sadly, it didn’t happen this year. The housing market is crazy especially with interest rates being so low right now.

While I didn’t get to buy a home this year, I haven’t spent this year in vain. I have been saving all year and am more confident than ever that this goal will come true in 2021.

It looks like I will end 2020 with 3 out of 4 goals met. Not too shabby, I’ll take it.

2021 Goals

Now, on to the exciting part. I don’t know why but I always find making goals the most exciting part of my year-end reviews. It’s the anticipation of the year to come, all the opportunities and possibilities. Let’s just keep our fingers crossed that it won’t be a complete 2020 repeat.

1. Hit $200k net worth: They say the first $100k is the hardest so I am hoping that the next $100k will come sooner than the 3.5 years it took me to get from negative net worth to $100k.

I’m definitely hoping to hit $200k in 2021. But if I dare dream big, I am hoping to not only hit $200k but to actually double my net worth by the end of 2021 to $250k. That’s a huge stretch goal so I don’t really anticipate getting there but hopefully I will get close to it.

2. Buy a home: My second goal should be of no surprise. It is a repeat of last year’s failed goal of buying a home. While I do want a starter home, I am admittedly an introvert and a homebody. So I want to find a home that I’m comfortable staying in and that I can feel safe coming home to at any time of day as a single woman.

I live in a HCOL city so I expected a hurdle in buying a home but this has been a goal in the making for the last 3 years since my first goal post in 2018. They say third time’s a charm right? Hope this is true for me.

3. Pay off federal loans and bring down student loan debt to under $30k: I had planned on paying off my remaining $4,300 federal loans that did not get refinanced to private loans this year. But since it is currently under COVID-19 forbearance I delayed making any payments.

Paying off the $4,300 federal loan should be very doable. But to get to under $30k debt, I will have to make at least $17k in student loan payments.

I was deeply unsatisfied with only making minimum payments to my student loans in 2020 and don’t want that to become the norm so in 2021 I plan to go back to making extra payments.

4. Travel internationally: I went on my first international trip in 2019 and had a blast! I’m really hoping that I’ll have an opportunity in 2021 to go abroad again.

I debated if I should make this a goal since between trying to save up for a home, aggressively paying off my student loans, and trying to hit a new net worth high, I didn’t exactly leave much room for extra spending.

But at the end of the day, money doesn’t buy you happiness. So I’d rather spend my money to do the things that make me happy like traveling even if it takes me a step back from my financial goals.

Well that’s a wrap for 2020! Here’s to 2021!