• Net Worth April 2012 – Disappointing 2 Years

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    It’s been about two years since I’ve updated our net worth on this website. Scratch that, it’s been about two years since I’ve updated our net worth period. Yes, it’s been THAT long since I’ve added up the numbers. I was frightened to see the numbers. Now I’m just disappointed. Here’s a rundown of why the numbers are the way they are.

    Automatic Savings is the Balls

    We suck at the whole willpower thing, so we increased our employee-sponsored retirement plan contributions to make up for it. It seems like it’s working well. See my SIMPLE IRA? Oh yeah, almost doubled in two years. I increased my contributions to 6% in 2011, and to 10% in 2012. My employer matches 3% of my contribution, so a total of 13% of my income is being contributed to my SIMPLE IRA.

    Her increased her 401(k) contribution to 10% a few years ago as well, and her employee matches 40% of the first 6% of her contribution (that math is dizzying), for a total of 12.4%. However, Her’s 401(k) balance is taking a mean hit because some of our more volatile stock holdings are in that account. We use a joint retirement portfolio where we’re diversified across all of our accounts, so individual account performance is less important than the portfolio as a whole.

    Capitalizing on Our Side Hustle

    Believe it or not, this website makes us money. In fact, it made us really f***ing good money for a few years. We were able to pay for a wedding without incurring debt, travel to Australia, not to mention pay off all of our revolving credit card debt. In order to avoid paying taxes on that money, we stuffed a bunch of it into a self-employed 401(k) plan we started a few years ago. Last year around this time we made a large contribution to it to shelter our 2010 earnings, but unfortunately we didn’t have much income in 2011 to put into that account.

    Our Car is a Decade Old

    This year our car turns 10 years old. It continues to get older, have more missing parts, incur minor cosmetic damage due to my poor driving, and rack up more mileage. Since the little one was born, we’re driving to work everyday instead of taking the train and our lives suck all the more because of it. I never realized the actual cost of having a car in the city, but it is a lot. Gas (almost $5 a gallon in Chicago), parking, and maintenance take up almost $500 of our monthly budget. Ugh. The good things about it are that it’s a reliable small Japanese car with decent gas mileage, it’s completely paid off, and insurance premiums are relatively low.

    No New Debt…

    While we’re still using our credit cards, we pay them off every month. Lately, we’ve gone to a more cash-based system to curb spending so the average monthly balance is relatively low. I’ve done a first-pass run of our taxes and it looks like we’re going to owe again, so the number is just an estimate. But, it is quite a hefty expense. The student loans continue to decrease steadily; we’ve increased the amount we’re paying on the 1.99% for life credit card to which the loan balance was transferred and it should be paid off by the end of next year. The federal loan payment is automatically withdrawn from our checking account so we don’t worry about it.

    …Be We Can’t Save Worth Sh!t

    I’ve been tooting my own horn for the last few paragraphs but overall our savings is pretty dismal. A $4,000 increase in two years is pathetic considering that we’re making a combined six-figure income. No excuses here – we really spent a lot of money on our hedonistic impulses the last few years. Combined with the ridiculous cost of good-quality daycare, we’re in a bit of a money crunch these days. We’ve started to take measures to remedy this, but it’s going to be difficult. We’ve been thinking of getting out of our ridiculously low-rent apartment and buying some real estate, but don’t have enough for a sensible down payment. We’re really going to have to hunker down and prioritize what’s really important to us so that we can move forward towards those goals.

    Wrapping Up

    I can’t believe that it’s been almost two years since I’ve checked our net worth. In postponing it, I’ve managed to turn a blind eye towards our finances for the past few years. But now that we’re parents, the stakes are much higher in terms of the consequences of our decisions. I was worried about our finances, and that’s why I started writing on the blog again. I hope that I can spark the momentum and enthusiasm that we had about our finances in the past few years. Because if we don’t, we’re screwed.


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