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Net Worth Update: December 2016

Welcome to my monthly net worth and financial freedom report for December 2016. This is where I go back over the numbers from the past month and see how things went. 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


Financial Freedom Factor

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.)



as a Percentage of Earned Income For The Month

The biggest impact was from being debt free. Now that we aren’t putting money down on our debt we are able to save a lot more. Going forward we will be trying to live off one income. If we can live off one income it will bring us towards financial freedom quicker.

Expenses for December

This month marks the second month in a row of bad expenses. Christmas and our annual car insurance payments are the culprits. There is no way around it, our car insurance for two cars is a lot. I have no clue what it is else where but for our two cars it’s just over $3000 for a year.  Thanks to this our expenses are definitely inflated this month.

With any of our annual expenses, we have a separate accounts that we use to stash money away every month so this isn’t a shock to our system. For example, with our car insurance, we put away $250 every month into a separate account so we aren’t scrambling come Christmas time.

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.

If you haven’t check out our money system yet, you should. It’s completely free, and it changed my life, and others too. 

Compare December Spending to December of Last Year

This has quickly become one of my favourite things to do. 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 month our spending was half of what it was last year. This is mostly due to no longer having mortgage payments. Factoring out the payments we are beneath my ideal spending limit (once you throw out the car insurance part).

Strange Way To Save Money

Another factor that cut out a lot of seasonal spending was illnesses. Our family caught the flu after Christmas, which really cut down on our going out. It’ s too bad in one sense but I’m trying to see the good in it.

As for our spending, I would love to see 20% cut from our current spending totals. I’ll be using my daily spending rate as a key factoring in my spending decisions. Not sure if it’s possible but I like to think about it (because I’m a nerd and that’s what us nerd think about, cutting costs and making more money)  😉

My big realization is that if we are going to change our spending habits, we are going to have to change a lot of our behaviours towards spending. More on that to come in the next few months.

Financial Freedom Factor Report

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.

When it comes to financial freedom, there is only one number that matters. 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.

Here is the formula

Total Expenses


Passive Income

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 passive 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:

This means 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.

One thing is certain, you will never get there unless you start.

Financial independence, debt freedom or mortgage freedom, doesn’t happen quickly. They aren’t overnight successes. These successes happen 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.

And yes, I remind myself of this every morning and every night.

Passive Income Additions

This month we were able to add an extra $38.66 a month to our passive income. It’s not a lot, but it counts. While I normally don’t share numbers I think sharing this little addition can help you realize that it’s not a huge sweeping motion that gives us our freedom. It’s more like building a brick house. You add one brick at a time consistently and eventually you get there.

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 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.




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 December? I’d love to hear how your month went, post a comment below.




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