Net Worth

2014 Net Worth Recap By Month

3 Comments

2014 net worth by month

I love reviewing our numbers to see how we got to where we are.  This screenshot is shows our net worth progress by month for 2014. Some highlights from include:

  • We increased our net worth from $245,457.24 to $296,126.38 ($50,669.14 increase), surpassing our 2014 net worth goal of $251K and our 2015 net worth goal of $296K (one year ahead of time).
  • We contributed $20,297.18 to our retirement accounts. Our total retirement account balance grew from $109,117.55 to $139,023.63 ($29,906.08 increase).
  • We increased our savings from $3,762.38 to $9,207.30 ($5,444.92 increase).
  • My wife took 3 months off (disability) for the birth of our daughter.
  • We opened a 529 Plan for our baby girl.
  • I left my company at the end of September to find a job that provides better work/life balance.
  • I rolled my 401(K) to a traditional IRA.
  • We sold “Car 2” and bought “Car 1”.
  • We put a couple of large purchases (including a $7K HVAC) on a 0% credit card.
  • We increased our debt from $390,184.30 to $400,314.63 ($10,130.33 increase).
Goals

2015 Financial Goals

1 Comment

Happy New Year!   The beginning of a new year brings the opportunity to set new financial goals. We had good success reaching most of our 2014 goals and hope to reach the five goals below by the end of 2015.

1) Pass our 2016 Net Worth Goal 1 year early Since we already passed our 2015 net worth goal of $296K (1 year early), we will shoot for hitting our 2016 net worth goal of $343K. I am not currently working this might a tough one.

2) Pay off credit card balance of $5,767.31 We charged a new HVAC system (~$6,400) to a 0% credit card in September and the remaining balance is $5,767.31. The 0% offer is good for 2 years, but we would like to get eliminate this debt in 2015.

3) Pay $3,000 extra towards mortgage principal We paid $1,200 total in extra mortgage principal payments in 2014 and would like to try to more than double that to a total of $3,000 in 2015. That is an average of $250/month in extra payments.

4) Contribute $4,000 to 529 Plans ($2,000 for each child) I feel like we have gotten off to a good start with saving for our kid’s college and want to keep up the pace. Our kids are young, so the more we can contribute now, the longer it will have time to grow. Our 3-year-old currently has a balance of $11,349.23 and 7-month-old has a balance of $3,673.32. In 2014, we contributed $3,365 to our daughter’s 529 and $965 to our son’s 529. We would like to contribute $2,000 to each of their 529 Plans in 2015.

5) Building savings account balance to $15,000 In previous years, I set a goal of reaching $20K in savings, but we repeatedly fail to get there. I hate lowering the bar, but I think we need a target that is more doable. I’m hoping that by reaching $15K in savings in 2015, we can get to $20K in 2016.

Goals

Review of 2014 Financial Goals

At the beginning of every year, we set goals that we hope to reach by the end of the year. Below are the goals that we set for ourselves in early 2014 along with our results in achieving them.

1) Increase net worth to $251,900 – SUCCESS

At the start of 2014, we were less than $7K from reaching our 2014 net worth goal of $252K. Reaching it was almost a certainty, but I was still surprised when we blew past it in February, reaching a net worth of $274K that month.

2) Pass our 2015 Net Worth Goal 1 year early – SUCCESS

We are roughly 1 year ahead of our net worth goal targets, so it made sense to attempt to pass our 2015 net worth goal ($296K) one year early. It came down to the buzzer but we hit the goal. Actually, we passed our 2015 net worth goal briefly back in August, but lost ground shortly thereafter. It wasn’t until the last week of December that we passed our 2015 net worth goal again and ended the year with a net worth of $296,126.38.

3) Building savings account balance to $20,000 – FAIL

Every year that we attempt to reach the goal of$20k in savings, we fail. Sad and frustrating. We ended 2014 with $9,207.30 in savings. On a positive note, when I quit my job in September, we only had $7,720 in savings, so at least we haven’t had to dip into it yet.

4) Pay off Car 3 – SUCCESS

We started 2014 with a $12K balance on our “Car 3” auto loan (monthly payments of $307.21). We paid the vehicle off in February, thanks to a large quarterly bonus that my wife received.

5) Open 529 Plan for new baby – SUCCESS

We believe strongly in saving for our kid’s college and were happy to be able to reach this goal. Our daughter’s 529 Plan account was opened in June (1 month after her birth) with a initial deposit of $3K. Her 529 balance is now $3,673.32, not too shabby for a 8-month-old.

I will post our goals for 2015 shortly.

 

Income Statement

December 2014 Income Statement

2 Comments

Dec 2014 inc state

December was an okay income month and a larger than expected expense month (see spreadsheet screenshot).

Our total income in December was $7,331.52. In addition to my wife’s paycheck, she received an $800 auto allowance and a $100 company reimbursement for internet service. We received $68.90 in cash back rewards, $130 in gifts for our kids 529 Plans, and earned $5.49 in interest income from our online savings account.

In December, we spent a total of $9,256.64 (nearly $2K more than our income).  Some of our larger non-standard expenses were $535 in gifts, $458.22 for vacation, and $960.50 in household items.

Next month should be a good income month with my wife receiving a quarterly bonus of approximately $15K.

Net Worth

December 2014 Net Worth Update (+2,376.30)

December 2014 net worth

With the new year approaching, I decided to change the format of our monthly net worth updates. The spreadsheet layout will stay the same for easy comparison to previous months, but the detail in the blog post will change. I am replacing my typical “What Worked”, “What Didn’t Work”, and “Next Month” sections with more detailed information on each line item on the spreadsheet.

Overall

Overall, December was an okay month for our net worth. It increased $2,376.30, to a total of $296,126.38 (see spreadsheet screenshot). It might not be a huge increase, but it was enough to get us past our 2015 net worth goal of $296K one year ahead of schedule!

Retirement Accounts

Our retirement accounts are comprised of my wife’s 401(k), our Roth IRAs and our Traditional IRAs. My wife’s company matches up to 3% of her 401(K) contribution and deposits the sum once a year on January 1st (it is 100% vested when deposited). In December, we contributed $242.50 to my wife’s 401(k) and saw the total balance of our retirement accounts increase $1,001.86 over last month to $139,023.63.

Cash & Savings Accounts

Cash and savings accounts consists of a small sum of cash at home and our online savings account balance. It does not include our checking account balance that we use to pay our bills each month. This month, we had a tiny increase of $54.60 to our cash and savings bringing the total to $9,207.30.

College Savings Accounts

Our kids have 529 Plans through Vanguard. We contributed $165 to our son’s 529 Plan and it increased $314.84 over last month to a total balance of $11,349.23. We also contributed $165 to our daughter’s 529 Plan and it increased $216.25 over last month to a total balance of $3,673.32.

Home

We use the $489K purchase price that we paid in January 2012 for our home value. Current comps in the area are ~$650K. The current balance on our mortgage loan is $368,895.17. We paid $100 extra to mortgage principal this month.

Cars

“Car 1” is a 2011 SUV with 53K miles and “Car 3” is a 2004 SUV with 99K miles. We no longer own a “Car 2”. When calculating our net worth, we depreciate the vehicles 1% per month. Car 1 has a current loan balance of $25,652.15 and Car 3 is paid off.

Credit Card Balance

The $5,767.31 credit card balance is from a new HVAC that we installed in September 2014. It is 0% for two years.

Money Musings

No Love On Craigslist?

2 Comments

craigslist-logo

I was inspired by a number of recent posts on various blogs about selling extra “stuff” on craigslist.  J. Money at Budgets Are Sexy turned a few interesting items into cash this month including Shakespeare books and a sword.  Yes, a real sword!

We have TONS of things that we no longer use (baby stuff), barely use (wireless keyboard), or have never use (huge vase).  So, I took a few nice photos, wrote some compelling ads, and posted 10+ items on craigslist.

Guess what I heard.  Crickets.  Very quiet crickets.  I reposted the ads this morning and…even more crickets.

I know what you’re thinking, “he overpriced the items”.  Heck yeah I overpriced the items!  Lol!  Most of the people that I have sold to on craigslist offer a lower price and being the sucker that I am, I accept.  So, I’ve learned to price my items a bit high.  Guess I’m getting what I deserve.  Next time I repost, I plan to include a note explaining that the prices have been reduced.  This technique generally works on me at the mall, so I’ll give it a try.

What’s your craigslist strategy?  Do you start with a high price like me?  Do you go with a low price to sell quickly?  Or, maybe some other technique that helps turn your trash (nice trash) into someone’s treasure.  Help me!

Career, Income

Quarterly Bonus Update

I am so proud of my wife for passing her quarterly goal yesterday.  Her goal seemed unreachable at the beginning of the quarter, but she made it happen.  Besides the sense of achievement, this is great news for three reasons:

1) Her bonus plan pays $9,000 for reaching 100% of goal.  She passed 100% and is already up to ~$10,000 in bonus.  Plus, she still has the rest of December to add to the total.

2) After reaching her goal, she became eligible for other performance incentives offered by her company.  By way of these extra incentives, she has earned another $1,500 in rewards.

3) Due to her stellar performance all year, she made President’s Club!  The reward is $2,500 and an all-expense paid trip to an exotic locale.

In total, she has made ~$14,000 in bonus this quarter!  It will be exciting to see where the total ends up at the end of the month.  The bonus will be paid in February and will be a huge blessing to our family.

Debt

Extra Payments to Mortgage Principal

6 Comments

We bought our house in January 2012 for $489,000. It’s a renovated two story 5 bed/3 bath with a good sized pool in a nice, quiet neighborhood. We put 20% down ($97,800) and received 3% from the seller towards closing costs. We scored a good interest rate of 3.75% for a 30 year term. The home has appreciated considerably since we purchased it, with comps in the area valued ~$650,000. Our current mortgage balance is $368,895.

I feel good that we bought at a very fair price (for San Diego County) and locked in a good rate. We would have loved to have secured a 15 year loan, but the monthly payment would have been tight for us. Instead, our plan was to make extra payments to the mortgage principal as funds allow, while having the flexibility of paying the lower payment when necessary.

Over the past three years, we have failed to make progress paying extra to principal. It simply hasn’t been as much of a priority. That changed last month when we made our first extra mortgage payment of $1,100 and we paid an extra $100 this month.

Needless to say, we have some ground to make up.   One of our goals for 2015 will be to refocus on accelerating our mortgage payments. To that end, a portion of my wife’s future bonuses will be diverted to the mortgage.

Early Retirement, General

Life is Short…Don’t Forget To Live

My friend’s father has owned a shoe repair shop as long as I have known him (30+ years).  He was always so nice to us kids when we were growing up, that it didn’t surprise me to learn that he would bring coffee every morning to the owner of the gun store next to his shop.

On Friday, he stopped by the gun store with coffee and interrupted a robbery in progress.  One of the two robbers pushed my friend’s 85-year-old father to the ground, fracturing his skull.  He was pulled off life support today and his soul is in heaven.

Whenever someone in my life passes away, it reminds me to quit taking life for granted.  I love early retirement planning, but it’s important to balance planning for the future with living today. None of us knows when our time will be up.

Rather than read multiple finance blogs tonight, I think I am going to spend a little more time playing “Batman” with my son, daughter, and wife.

Our path to financial independence and retiring early.