Net Worth Update for February 2016
This was one of those months that everything stayed relatively flat. Flat sucks when you are trying to build wealth. Obviously it’s better than a down month (no one ever likes those). Looking back at my numbers it’s evident why and I plan on changing how I calculate my net worth going forward. With that said I hope you enjoy my Net Worth Update for February 2016!
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.)
Since we wiped out our mortgage a month earlier than expected. We have been coping with (OK Absolutely LOVING!!!!) the new reality of being mortgage free. It’s not really much different from before day to day wise. We still haves some debt we need to get rid of. Looking at our timeline it should be the end of June that we are done, as long as there are no surprises or good investment opportunities like last month.
This month our net worth change was “Meh”. We grew our net worth by 19% of our take home income for the month, which is a lot lower than we usually like. We are aiming for a 50% of our income savings rate by the end of this year. This means we aim to start saving 50% of our take home income. 19% is one of the lower amounts we have saved/ paid down and it has a lot to do with the two purchases we made last month (phones and tv).
Every time I buy something new I love it… then the credit card bill comes and I love it a little less. I am contemplating a switch to a completely Cash based budget. We will see. There are benefits to having a credit card, but I think overall the cash would be a better way to live. It always has been when we go on a cash diet for a month
Trying something new
This month was a unique one for us. I used a line of credit to put money down on our investment accounts. It’s the highest interest rate out of the two loans we still have, so I was focused on paying it down quickly. The only reason why I did it was for the tax refund and the market was looking oversold. Our timing was great an most of the stocks have taken off again. Like anything in the stock market, you will be right and wrong on every investment, it’s all about the timing. So instead of using our money system, I put everything I could down on the line of credit to get it paid off quickly. It’s a mental thing. Everytime I opened up Mint and saw a negative cash value it drove me crazy. I started selling some thing
Change to My Net Worth Calculation – Drop Shock
This month is the anniversary of when we bought our new car. So to account for this I took down the value of it by a years worth of depreciation. I know there are some people that calculate it every month using Kelly Blue Book or a similar service but I didn’t really see the point in the past. Both of our previous cars were old and had little value. This time my car value dropped by $5000. Looking at the value of other cars in this range it will probably continue to drop around $5000 a year. So going forward I will start taking a monthly amount off of the car values. That should protect me from the drop shock that I had this month
Positive little change that will add up
I mentioned this last month but it’s something that I keep thinking about. A little change that will add up to a lot… We added our parents cell phones to our plan. This will give us a rebate of an extra $40 month. Saving $480 a year going forward. So it’s a good savings for years to come. I love this kind of savings because it is permanently on-going. I wish I could find more of these. I have been looking at more and more ways to cut our expenses. I’ll share them when I come up with more.
Passive Income for the month of February
Our passive income for January was from our dividends and some interest in our accounts.
Income from Dividends $62.75
Interest: $0 (It’s all going on the line of credit for this month)
Total Income $62.75
Passive Income and Expenses From Websites
Since this blog is also a business I need to be keeping track of all of my income and expenses come in. I have a threshold that once I hit I will start posting how much I am making from my online efforts.
A Few Other Notes
If you want to get started on your own net worth statement and take your first steps towards financial well being you can sign up for our mailing list here. It starts off with a mini course on calculating your net worth.
If you would rather track your net worth with software Personal Capital or Mint.com are good choices. Both are free. If you are wanting to track your net worth either one are a good place to start.
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Have you calculated your net worth for February? I’d love to hear how your month went, post a comment below.