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Financial Freedom Update: February 2017

Welcome to my financial freedom report. This is where I go back over the numbers from the past month and see how things went. I realize that what you focus on expands. So I am making a point to introduce a few new parts of my financial update. They are

Net worth

Expenses

Financial Freedom Factor

Online Income Report

Let’s get started and see what happened this month.

Changes in Total Net Worth

 

(As I mentioned in the inaugural net worth update. When it comes to monthly reports I’m going a different route than a lot of others. Instead of going through the nitty-gritty of every detail on my net worth statement. I’m taking a macro view so we don’t get bogged down by the details.)

 

Increase:

%

of Earned Income For The Month

 

The growth in our net worth this month was quite a bit smaller than past months. In fact this may be one of the smallest months since starting this site. Our spending had a lot to do with this months increase. Even though we have been saving for Disney, the time is slowly coming to pay for it and that is having a dent in our money cushion. Still I wouldn’t have it any other way.

Expenses for February

 

This month was a gong show of expenses. I hate to pin things on “Disney” because I’m so excited for it and it’s still a lot of months away. Once the trip expenses (flights and meals and few other things) are factored out our spending was pretty much average.

With both of the annual expenses we have separate accounts that we use to put money away every month so this isn’t a shock to our system.

Still it’s always a little painful (ok a lot painful) to have that money go out of our accounts that you watch grow over the year.

Luckily the money was available thanks to our money system. Which you should totally sign up for, because it’s free, and it changed my life, and others too. 

 

Compare February’s Spending to February of Last Year

One of the great things about tracking your finances for years with Personal Capital or Mint, is that you can go back and see how you did from one year to another.

This is month is completely out of whack (remember when we all used to say things were “Whack”?) with last year because of the trip, but I’m ok with it. I’m hoping in the coming months we can curb our spending a little more than

 

Financial Freedom Report

 

Total Expenses / Passive Income

This is the most important part of my financial plan. My net worth can go up and down, or stay flat. I don’t care. What concerns me more is my financial freedom factor.

This is when you take your expenses for the month and divide it by the income you are earning passively such as income through investments, real estate and business systems.

The idea of this number is that once it equals 1, you are financially free. Anything larger than 1 requires that you either increase your income or reduce your expenses. If the number is below 1, then you are doing even better, because you are taking in more income than you spent in the month.

Based on this month my Freedom Factor is

Egads! The 2nd month of the quarter is my lowest for passive income. So I will have to start thinking of ways to improve this part.  I have a long way to go before I reach financial freedom. If you are looking at your freedom number and thinking “There is no way I can do this!” You aren’t alone.

Financial goals don’t happen overnight. It happens a little bit at a time, month in and month out. Just like any big goal, give yourself time and permission to go after it.

 

Financial freedom doesn’t happen overnight. It happens a little bit at a time. Take continuous action towards your goal and give yourself time and permission to achieve it.

One Last Thing

 

If you would rather track your net worth with software Personal Capital or Mint.com are good choices. Both are completely free. 

If you are wanting to track your net worth either one is a good place to start. Personally, I absolutely love being able to see my net worth every day as it’s a huge motivator to keep making smart financial decisions.

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If you are needing a primer on net worth, you should sign up for our newsletter and get the Net Worth Template I have used for 10 years. It’s  absolutely free, plus I’ll throw in some other goodies too.

Have you calculated your net worth for November? I’d love to hear how your month went, post a comment below.

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