Income Statement

February 2011 Income Statement

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As I mentioned in our February Net Worth Update post, we were blessed to learn that my wife is pregnant. Our expenses are going to be higher than usual as we prepare for the new arrival (due in September). February was an outstanding income month and we did a pretty reasonable job managing our expenses (click on spreadsheet below).

Our total income in February was $10,614.56. In addition to our paychecks, my wife received a Q4 2010 bonus of $6,041.28 gross ($3,499.51 net). She received a $30.78 H.S.A. reimbursement and a $50 Chase credit card reward (her $75 company reimbursement for February will come next month). We also earned $15.11 in interest income.

Our total expenses were $5,394.78, not to much higher than our budget of $4,900. As first-time parents, we’ve been buying a few things for the baby’s room and also taking time to enjoy ourselves a little more while we have free time.

It’s hard to say what March may bring. My wife’s company may be doing raises in March, which would be icing on the cake for how well she is doing. We’ll be doing our taxes as well and I don’t have a clear picture at this time on what the outcome will be.

Net Worth

February 2011 Net Worth Update (+$10,191.88)

We were blessed with our 2nd largest net worth increase month ever. Our net worth increased $10,191.88 from last month, to a total of $130,665.13 (click on spreadsheet below). Our largest net worth increase of $14,753.11 was in March 2010. But more importantly, my wife is pregnant! We are extremely excited and will be “nesting” from now until the baby is due in September.

What Worked
In addition to the great news that my wife is pregnant, we also passed the net worth milestone $130,000 in February. This is largely thanks to my wife’s nice Q4 2010 bonus of $6,041.28 gross ($3,499.51 net). We contributed $813.00 to our retirement accounts and saw them increase $4,605.31 to $89,682.66. We also increased our savings account balance to $18,915.21.

What Didn’t Work
February was a perfect month.

Next Month
I don’t expect March to be able to compete with a month like we just had. The biggest unknown is our taxes. Last year we received a combines Federal and State refund of $4,111, but we have change a few things to reduce or possibly eliminate our refund. We will see…

Net Worth

2010 Net Worth Recap

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I know I’m posting this a little late, but I wanted to take the time to review our 2010 net worth. Below is a table of our net worth data for each month in 2010 (click on table to enlarge). 2010 was a strong year for us, even though we had a couple of close calls with the economy in terms of our employment. Some highlights from 2010 include:

  • We increased our net worth from $68,437.63 to $115,300.07 ($46,862.44 increase), surpassing our net worth goal for the year by $9,600.07.
  • We contributed $17,288.45 to our retirement accounts. Our total retirement account balance grew from $54,620.37 to $83,594.59 ($28,974.22 increase).
  • We increased our savings from $2,492.73 to $9,215.82 ($6,723.09 increase).
  • We reduced our debt from $4,148.46 to $3,127.35 ($1,021.11 decrease).
  • In March my wife was laid off, but in April she found an even better new job.
  • I survived a large layoff at my company.
  • We paid cash for an “extra” vehicle, primarily for recreation.

We already a couple of months into 2011 and things are looking great. Hopefully there will be exciting highlights to review at the end of the year.

Income Statement

January 2011 Income Statement

Thankfully, we made up some lost ground in January (click on spreadsheet below).

In addition to our paychecks, my wife also received $150 reimbursement from her company for cell phone for December and January. We earned a $175 Chase credit card reward and $50 from selling dog stuff on craigslist. As our savings account balance creeps up, we’re earning more interest income to the tune of $11.06 in January.

We worked hard in January to control our spending and it worked. After a HUGE expense month in December ($7,919.80), we righted the ship in January, only spending $5,591.83. Now we need to carry this momentum into February.

Next month is going to be a big income month. My wife is doing awesome in her job and, as a result, is receiving a Q4 bonus of $6,041.28 gross. Plus, we do not have any large expenses forecast for February.

Net Worth

January 2011Net Worth Update (+$5,173.19)

We had a solid increase start to 2011 in terms of our new worth. Our net worth increased $5,173.19 from last month, to a total of $120,473.25 (click on spreadsheet below).

What WorkedWe contributed $813.00 to our retirement accounts and saw them increase $1,482.76 to $85,077.35. We also dramatically increased our savings account balance by substantially.

What Didn’t Work
Everything worked out great :)!

Next Month
February looks like it is shaping up to be a great month. The main reason being, my wife made 120% of her sales goal for Q4 and will be getting a large bonus check. We’re going to use this extra money to continue increasing our savings.

Goals

2011 Financial Goals

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We did pretty well knocking down our 2010 financial goals. Now it’s time to set the bar a little higher for our 2011 financial goals.

1) Increase net worth to $138,100
We have a good head start on our 2011 net worth goal because we passed our 2010 goal by $9,600.07. If we stick to our plan, this goal seems very doable.

2) Increase savings account balance to $20,000
We haven’t been able to hit $20,000 in savings as a goal the last two years. Let’s give it a try again in 2011. We are starting 2011 with $9,215.82 in savings, so we’re already ~1/2 way there. The challenge with this goal is that we will plan to start a family in 2011 and private adoption is very expensive.

3) $100,000 total balance in retirement accounts
We’re starting 2011 with $83,594.59 total balance in our retirement accounts. My forecast shows that we should end the year with less than $100,000 total balance in our retirement accounts. So, achieving this stretch goal will require extra effort and determination.

4) Decrease debt by $1,000
Our only remaining debt is $3,041.81 in student loan debt. We successfully reduced our debt by $1,000 in 2010, so we’ll try to knock it down another $1,000 in 2011. Cash flow may be tight in 2011, so this goal may be harder than it looks.

5) Start a family
We hope to start a family in 2011, whether naturally or through private adoption, or a combination of the two. While this isn’t a financial goal in the traditional sense, it does have big financial commitments. The private adoption is ~$30K, so we need to plan, save, and make it happen.

Okay, now we wait 12 months to see our results.

Goals

Review of 2010 Financial Goals:

We set five goals for ourselves 12 months ago. Here’s how we did relative to each one:

1) Increase net worth to $105,700 SUCCESS
We blew right past this goal in November and didn’t look back. We finished 2010 at 109.08% of our goal with a net worth of $115,300.07, $9,600.07 over our net worth goal. This feels great after missing our net worth goals the past two years. We are 4 years in to our 21 year plan to retire early and so far, we’re on track.

2) Increase savings account balance to $20,000 FAIL
We would have probably achieved this goal, but in March we paid $12,000 cash for a vehicle. Even so, we were able to get our savings back up to a pretty respectable $9,215.82.

3) Contributing at least 15% of income to company 401(k) SUCCESS
I’m going to say we met this goal because we contributed 15% to both of our 401(k) accounts until my wife was laid off. We have continued to contribute 15% to my 401(k) account, but my wife’s new company does not have a 401(k) plan. To make up for this, we have contributed an additional $4,000 total (2K each) our Roth IRAs.

4) Decrease debt by $1,000 SUCCESS
We pulled this one off at the buzzer. We increased our student loan payments slightly at the end of the year so that the balance dropped to $3,127.35. That’s $1,021.11 less than what we owed last December.

5) Increase tithe $25/month SUCCESS
Thankfully, we were able to increase our tithe not just $25/month, but $35/month to $835/month. Taking this step in faith and giving back a portion of what we are blessed with has continued to reward us.

So, it looks like we reached 4 of our 5 goals. Not perfect, but not too shabby. I’ll be posting our 2011 goals shortly.

Income Statement

December 2010 Income Statement

If I had to pick one word to describe our personal finance in December, it would be “excessive”. We had one of our best income months of the year, but ended up spending most of it (click on spreadsheet below).

In addition to our paychecks, I received a third “extra” paycheck for $1,775.43. My wife also received another special bonus of ~$500 gross ($280.10 net). We earned a $75 Chase credit card reward, a $25 HSBC credit card reward, sold a speaker for $40, and sold an old bond my wife had for $49. My wife’s $75 reimbursement from her company for cell phone won’t come in until January.

We were the perfect model of consumerism in December. We spent $7,919.80this month on everything ranging from $150 for my resume to $2,100 for a beautiful bracelet for my wife. We spent $361.12 on gifts (I thought we got most of our Christmas shopping done last month, guess not).

Next month should be a typical income month and, God willing, a low expense month. We need to do some catching up to ensure we start 2011 off strong.

Our path to financial independence and retiring early.