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Our 2007 Goals Status, Part 6: Did We Reach Our Net Worth Goal?

Posted on January 04, 2008 by Him

This is the final part of our retrospective look at our 2007 goals. Here's part 1 (Roth IRAs), part 2 (Student Loans), part 3 (credit cards), part 4 (joint retirement portfolio), and part 5 (have more fun).

The answer to the question in the title: Hell Yeah.

See the chart below for a neat graphic on how our assets, liabilities, and net worth have progressed over the past two years. (If you're reading this in a feed reader or via email, it it seriously worth it to click to the actual post on our website to see the awesome bar/line graph. Seriously.)

...and without further ado, here is how the numbers look at the end of this year compared to the beginning...

January 2007 December 2007 % Change
TOTAL NET WORTH -$66,274.27 -$32,059.99 51.6%
TOTAL CHANGE FROM JAN 2006 +$66,555.40  
TOTAL CHANGE IN 2007 (Goal of +$32,000) +$34,215.27  
Assets
Cash $9,387.56 $29,024.39 209%
His SIMPLE IRA $6,670.08 $10,004.43 50%
His Roth IRA $6,470.53 $6,090.93 -5.9
His HSA $557.76 $172.07 -69.1%
Her 401K $10,605.57 $14,710.43 38.7%
Her Roth IRA $2,732.94 $7,062.83 158%
Automobile ? $10,080.00 $9,655.00 -4.2%
Household Items ? $25,000.00 $25,000.00 0.0%
Accounts Receivable NA $1,370.16 NA
TOTAL ASSETS $71,489.61 $103,090.24 44.2%
Liabilities
Credit Cards (Rewards) $4,276.06 $5,973.43 39.7%
Student Loans $133,487.82 $129,176.80 -3.2%
TOTAL LIABILITIES $137,763.88 $135,150.23 -1.9%

We ended up the year over $2,000 over our net worth goal. Not too shabby!

This wraps up our goals for 2007. We kicked ass a little, if I do say so myself. In fact, Her and I agree that 2007 was one of the best years of our lives. We totally kicked 2007's ass. 2007, you're a little bitch.

This weekend we're going to finalize what we want to accomplish for 2008. We don't think we'll do as much ass kicking, but it better be prepared.

December 2007 Net Worth

Posted on January 02, 2008 by Him

In 2008, we're going to update our net worth every quarter. Here's the update for the last three months of 2007.

September 2007 December 2007 % Change
TOTAL NET WORTH -$41,303.44 -$32,059.99 22.3%
Assets
Cash $21,470.97 $29,024.39 35.1%
His SIMPLE IRA $8,637.33 $10,004.43 15.8%
His Roth IRA $6,552.56 $6,090.93 -7.6
His HSA $244.71 $172.07 -29.7%
Her 401K $13,825.35 $14,710.43 6.4%
Her Roth IRA $4,798.93 $7,062.83 47.2%
Automobile ? $9,715.00 $9,655.00 -0.6%
Household Items ? $25,000.00 $25,000.00 0.0%
Accounts Receivable $1,130.42 $1,370.16 21.2%
TOTAL ASSETS $91,375.27 $103,090.24 17.6%
Liabilities
Credit Cards (Rewards) $1,439.08 $5,973.43 315%
Student Loans $131,239.63 $129,176.80 -1.6%
TOTAL LIABILITIES $132,678.71 $135,150.23 1.9%

First things first: the credit card balance. Yes, it is high. We're starting to make major wedding payments (like for my wedding ring). We've also put Christmas presents and the cost of entertaining guests on the cards. We still pay off the cards every month though and are not paying interest on that debt.

The student loan debt is slowly, but steadily decreasing due to our goal to increase our student loan payments. A few months ago, we put a good chunk of it on a credit card at 1.9%; that balance is reflected in the student loan category, not the credit card category.

Of course, if you look at the amount of cash we've stashed away these past three months, you'll see that we have made more than enough to cover what we've put up on our cards. We've also seen some good increases in our retirement plan balances

Overall, we've increased our net worth by $9,243.45 in the past three months. That is a little lower than what we're used to seeing. With the upcoming nuptials, it will be challenging to keep up a respectable rate of increasing the bottom line. We do have a few plans that we've put into place in order to keep everything going in the right direction, and we'll post about them in the upcoming weeks.

August 2007 Net Worth - Summer Totals

Posted on September 03, 2007 by Him

May 2007 September 2007 % Change
TOTAL NET WORTH -$59,594.76 -$41,303.44 21.6%
TOTAL CHANGE FROM JAN 2006 +59,832.48  
TOTAL CHANGE IN 2007 (Goal of +$32,000) +$29,487.50  
Assets
Savings $9,846.07 $21,470.97 118%
His SIMPLE IRA $8,205.01 $8,637.33 5.3%
His Roth IRA $6,815.28 $6,552.56 -4.0%
His HSA $285.22 $244.71 -14.2%
Her 401K $13,428.01 $13,825.35 3.0%
Her Roth IRA $4,267.95 $4,798.93 12.4%
Automobile ? $9,970.00 $9,715.00 -2.6%
Household Items ? $25,000.00 $25,000.00 0.0%
Accounts Receivable NA $1,130.42 NA
TOTAL ASSETS $77,817.51 $91,375.27 25.7%
Liabilities
Credit Cards (Rewards) $4,837.58 $1,439.08 -70.3%
Student Loans $132,179.04 $131,239.63 -0.7%
TOTAL LIABILITIES $135,530.21 $132,678.71 -2.0%

It has been an interesting summer for our finances. Obviously, our savings accounts have grown a lot in the last few months, mostly due to work bonuses for both of us and some well-received cash gifts.

Our retirement investment accounts have reflected the markets, only increasing in value because of the regular paycheck deductions for both of our accounts.

I've added an "accounts receivable" line item mainly so that we can track monies owed to us. At my job I've been using my rewards card for expenses instead of the card supplied to us by my employer. This way I can accumulate points really fast, meaning we can redeem rewards faster.

On the debts side of things, we're still paying off our credit cards every month and haven't paid a cent of interest on a credit card since we've paid them off. Whee!

That student load is going to be tough to shake off, but we're getting there slowly but surely. As we've stated at the beginning of this year, we're paying half of the monthly amount due plus $100 every two weeks, ensuring that we're putting an extra $3,200 towards the student loan.

As our accumulated totals for the year and since January 2006 indicate, we're doing okay but we still have a lot of work to do.

May 2007 Net Worth

Posted on June 04, 2007 by Him

April 2007 May 2007 % Change
TOTAL NET WORTH -$59,903.97 -$59,594.76 0.5%
TOTAL CHANGE FROM JAN 2006 +$41,538.16  
TOTAL CHANGE IN 2007 (Goal of +$32,000) +$11,193.18  
Assets
Savings $9,459.42 $9,846.07 4.1%
His SIMPLE IRA $7,759.60 $8,205.01 5.7%
His Roth IRA $6,616.65 $6,815.28 3.0%
His HSA $291.57 $285.22 -2.2%
Her 401K $12,650.54 $13,428.01 6.1%
Her Roth IRA $3,878.46 $4,267.95 10.0%
Automobile ? $9,970.00 $9,970.00 0.0%
Household Items ? $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $75,626.24 $77,817.51 2.9%
Liabilities
Credit Card 1 (~0%) $355.09 $395.65 11.4%
Credit Card 2 (Rewards) $2,681.96 $4,837.58 80.3%
Student Loans $132,493.16 $132,179.04 -0.2%
TOTAL LIABILITIES $135,530.21 $137,412.27 1.4%

On the surface, we're looking at our worst month since we've started our blog. What these numbers do not reflect are more reimbursements from my work for this month, to the tune of $1,500.

Also, you'll notice the very large balance on the rewards card for the month. In April we asked Citibank to change the due date so that the statement closing date would fall as close to the end of the month as possible. They complied with my request, but in order to do so the statement closing date was pushed back another month, thus our current statement now includes two months worth of purchases.

Yes, the other credit card balance went up. One of the stipulations of getting a 0% rate is that we have to make two purchases a month with the card. The month was winding down and when we did remember we needed to make a purchases on the card, we decided to just throw some parking and some groceries on the card. We're going to be paying this card off next month, so the purchases are pretty moot.

Our savings hasn't seen that much this month because of a little vacation we took. While we did spend some money, it was in conjunction with one of my business trips, so most of it is going to be reimbursed anyway. I'll explain the expenses of the trip in a latter post.

Looks like we're going to have to tighten up the wallet this month.

April 2007 Net Worth - Slightly Drunk Edition

Posted on May 04, 2007 by Him

Working overtime stresses us both out. So we went to the dive bar about 47 steps away from our front door. We saw an old man...an old very drunk and very fat man...spectacularly fall the way only a fat and drunken man can. Some Samaritan hipsters helped him up. That was totally worth the $14.50 we spent on some beers.

+
  March 2007 April 2007 % Change
TOTAL NET WORTH -$60,964.42 -$59,903.97 1.7%
TOTAL CHANGE FROM JAN 2006 +$41,228.95  
TOTAL CHANGE IN 2007 (Goal of +$32,000) +$10,883.97  
Assets
Savings $12,326.02 $9,459.42 -23.3%
His SIMPLE IRA $7,298.81 $7,759.60 6.3%
His Roth IRA $6,369.30 $6,616.65 3.9%
His HSA $683.94 $291.57 -57.4%
Her 401K $11,814.38 $12,650.54 7.0%
Her Roth IRA $3,442.79 $3,878.46 12.7%
Automobile ? $9,970.00 $9,970.000.0%
Household Items ? $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $76,905.24 $75,626.24 1.7%
Liabilities
Credit Card 1 (~0%) $3,730.20 $355.09 -90.5%
Credit Card 2 (Rewards) $1,381.52 $2,681.96 94.1
Student Loans $132,757.94 $132,493.16 -0.2%
TOTAL LIABILITIES $137,869.66 $135,530.21 -1.7%

This month was WEAK. We decided to liquidate a chunk of our savings in order to put a BITCHSLAP on the credit card debt. We'll knock the rest out when (if?!?!?) I get a summer bonus. IT'S TOTALLY WHEN AND NOT IF.

I am going to attribute our WEAK showing to a few factors. (1) I used the rewards card for a business trip. I am owed more than a thousand George Washingtons from my employer. (2) FOGO DE CHAO. Like I said in an earlier post, I SHOULD JUST EAT MY PAYCHECKS LOL. (3) I'm still paying for my BIONIC KNEE. (4) We paid the entire year's balance ($$DOLLAZ$$) for our renters and auto insurance. (5) Other reimbursable (GIMME DAT MONEYS BACK) medical expenses.

The month of May will be interesting. I will go back to being stressed and listening to Feist.

March 2007 Net Worth

Posted on April 05, 2007 by Him

  February 2007 March 2007 % Change
TOTAL NET WORTH -$64,178.27 -$60,964.42 5.0%
TOTAL CHANGE FROM JAN 2006 +$40,168.5  
TOTAL CHANGE IN 2007 (Goal of +$32,000) +$9,823.52  
Assets
Savings $13,109.32 $12,326.02 -6.0%
His SIMPLE IRA $7,009.68 $7,298.81 4.1%
His Roth IRA $6,232.81 $6,369.30 2.2%
His HSA $291.57 $683.94 134%
Her 401K $10,963.85 $11,814.38 7.8%
Her Roth IRA $3,051.99 $3,442.79 12.8%
Automobile ? $9,970.00 $9,970.00 0.0%
Household Items ? $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $75,629.22 $76,905.24 1.7%
Liabilities
Credit Card 1 (~0%) $4,198.68 $3,730.20 -11.2%
Credit Card 2 (Rewards) $2,517.53 $1,381.52 -45.1
Student Loans $133,091.28 $132,757.94 -0.3%
TOTAL LIABILITIES $139,807.49 $137,869.66 -1.4%

Slow and steady wins the race. Our retirement accounts keep growing, our debt keeps getting smaller. Here's the highlights:

Our cash flow continues to be irregular. Her received three paychecks this month. I received a tax refund and a work reimbursement. These all helped lessen the blow of paying off the rewards cards this month. Her's third paycheck also went towards paying off her student loans.

The retirement accounts are on auto-pilot. We get paid, we contribute. Fun.

My employer made their quarterly contribution to my HSA account.

We're thinking about paying off the non-rewards credit card this month, even if it is at ~0%. It would make life a lot easier in that we wouldn't have to remember to make two (small) purchases each month to receive the rate, plus it would free up $500 in cash immediately.

It looks as if we're a little behind to meeting our net worth goal for the year. I knew it would be tough as the goal we set was the upper amount of what we thought would be feasible.

I'm anxious to see if this month's newly formed budget will have a positive effect on our bottom line.

February 2007 Net Worth

Posted on March 12, 2007 by Him

  January 2007 February 2007 % Change
TOTAL NET WORTH -$66,274.27 -$64,178.27 3.2%
TOTAL CHANGE FROM JAN 2006 +$36,954.65  
TOTAL CHANGE IN 2007 (Goal of +$32,000) +$6,609.67  
Assets
Savings $9,387.56 $13,109.32 38.0%
His SIMPLE IRA $6,670.08 $7,009.68 5.1%
His Roth IRA $6,455.70 $6,232.81 -3.8%
His HSA $557.76 $291.57 -47.7%
Her 401K $10,605.57 $10,963.85 3.4%
Her Roth IRA $2,732.94 $3,051.99 11.7%
Automobile ? $10,080.00 $9,970.00 -1.1%
Household Items ? $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $71,489.61 $75,629.22 5.8%
Liabilities
Credit Card 1 (~0%) $4,276.06 $4,198.68 -1.8%
Credit Card 2 (Rewards) $0.00 $2,517.53 A lot
Student Loans $133,487.82 $133,091.28 -0.3%
TOTAL LIABILITIES $137,763.88 $139,807.49 1.5%

Those following our net worth statements will notice the introduction of the new credit card to the liabilities category. That card is our AAdvantage rewards card that will be paid off every month. The primary reason for the large balance on it this month is that I have paid for a business expense with the card and am waiting to get reimbursed. Otherwise the other stuff on that card are the things that I've discussed before.

The 0% credit card statement hasn't come in yet. In January when we paid off a large chunk of our credit card debt, we decided that we'd pay the minimum due for this card. In February we dropped another $500 on this card, and that should be reflected in next month's net worth statement.

This month has been quite a roller coaster ride in terms of cash flow. We received some income this month that we were waiting for last month, a tax refund, and a bonus. All of that has been nicely stashed away in our savings until the actual paper statements for the rewards card and 0% credit card come in.

Our retirement accounts didn't take as big of a hit as I thought they would, but we're still not as diversified as we'd like to be.

I've also added the change in net worth from the beginning of 2007. One of our 2007 goals is to increase our net worth by $32,000, so I thought I'd add a measure of tracking that. It looks like we'll be cutting it close, but I believe that we can get there.

One Year Of Make Love, Not Debt - A Look Back

Posted on January 30, 2007 by Him

The above chart shows our financial standings over the past year.

Here's how did end of 2006 in terms of net worth compared to the beginning:

  January 2006 December 2006 % Change
TOTAL NET WORTH -$98,615.39 -$70,787.94 28.2%
TOTAL CHANGE FROM JAN 2006 +$27,827.45 28.2%
Assets
Savings $2,798.83 $15,330.33 448%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $2,945.29 $5,851.56 98.7%
His Roth IRA $6,373.72 $6,470.53 1.5%
His HSA $816.36 $1,030.93 26.3%
Her 401K $5,122.00 $9,531.94 86.1%
Her Roth IRA $1,276.00 $1,695.85 33%
Upromise $52.00 $12.00 -77%
Automobile ? $10,435.00 $10,045.00 -3.7%
Household Items ? $25,000.00 $25,000.00 -0.0%
TOTAL ASSETS $55,405.61 $75,518.14 36.3%
Liabilities
Credit Cards $18,054.88 $11,560.40 -36%
Student Loans $135,966.11 $133,931.93 -1.5%
TOTAL LIABILITIES $154,020.39 $145,492.33 -5.5%

I'm not going to write something reflective - if you want to know the details of how we got here, you can cruise the archvies. I just wanted an excuse to use that nifty graphing software. Oooh, look at the colors. Hit refresh and watch the chart in action.

In all seriousness, we'd love thank you, our dear reader(s). It it weren't for you, we would never have landed a lucrative deal with interest.com that will help us pay for our wedding off our debt. We hope you'll stick around until after our contract expires. Here's to a great 2007!

January 2007 Net Worth - Two Negatives Make A Positive

Posted on February 05, 2007 by Him

  December 2006 January 2007 % Change
TOTAL NET WORTH -$70,787.94 -$66,274.27 6.4%
TOTAL CHANGE FROM JAN 2006 +$32,341.12 32.8%
Assets
Savings $15,330.33 $9,387.56 -38.8%
His SIMPLE IRA $5,851.56 $6,670.08 14.0%
His Roth IRA $6,470.53 $6,455.70 -0.2%
His HSA $1,030.93 $557.76 -49.9%
Her 401K $9,531.94 $10,605.57 11.3%
Her Roth IRA $1,695.85 $2,732.94 61.2%
Automobile ? $10,045.00 $10,080.00 0.3%
Household Items ? $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $75,518.14 $71,489.61 -5.3%
Liabilities
Credit Cards $11,560.40 $4,276.06 -63.0%
Student Loans $133,931.93 $133,487.82 -0.3%
TOTAL LIABILITIES $145,492.33 $137,763.88 -5.3%

Bears lost. Boooooooooo.

This months was a crazy month for us in terms of moving money around. We were motivated this month by making progress on our 2007 financial goals. In summary, we had a net decrease in assets in order to get a large decrease in liabilities, thus giving us a nice increase in net worth this month. Some of the details:

Much of our increase in assets is attributed to our retirement funds. First, we decided to start contributing to our Roth IRAs - much of this month's increase is due to gift money and an unexpected settlement that Her received (I'm sure she'll write about that later). Second, the reinvested dividends from our mutual funds combined with rising NAVs for those mutual funds all provided a healthy rise the values in those accounts.

We've rid ourselves of the cash and upromise categories, and haven't added those values back in anywhere. It's nice to know that those categories don't really amount to much.

Of course, the main increase in net worth comes from the decrease of our credit card balances, at the cost of a large chunk of our savings. Because of that action, we've managed to get both of our bad debt ratios to under 15%. All we have is one card that has a 0% rate for the life of the card, provided we make two purchases a month on that card. We're going to pay off the card by the end of the year, so the interest on a few packs of gum is negligable.

So far, 2007 has been a pretty good year.

Financially, I'm Below Average

Posted on January 05, 2007 by Her

The median net worth for my age is $2,125. We're $70,000 short. My credit score of 725 gets a letter grade of C, and is higher than only 31% of households in the US. We seem to be parading through all our friend's houses at innumerable housewarming parties. Meanwhile, we're worried that our rent might go up next year.

I know it's not good to be comparing myself to the Jones', but sometimes it's hard not to notice that the double-whammy of student loan debt and financial ignorance is leaving us in the dust. I hope we can make up for lost time by making good decisions in the future.

2007 Financial Goals: We're On Our Way!

Posted on January 04, 2007 by Her

With some difficulty, we've already made progress on our 2007 financial goals.

One goal is to fund one of our Roth IRA's 100% for 2007. Tonight we selected my Roth IRA (Him also has one), since I have very little in there now. We set up an automatic transfer to maximize the contribution. To max out my contribution I will put $333.33 into the account every month. We also could have split the funds and funded each account 50%, but by doing it this way we will maximize the benefit. By this time next year, I will have enough money in my Roth IRA to qualify for a reduced maintenance fee (annual savings: $10) and also meet the minimum investment required for most of the no-load, low-fee Vanguard funds ($3,000). This will allow us to start investing more efficiently. Next year we will re-evaluate to see how much to contribute, and to which of our accounts.

Another of our goals is to pay off our credit card debt this year. Inspired by a comment from reader Mandy, we have decided to pay off some of them even faster. We're going to pay off all our credit card debt that has an interest rate above 0% (about $6,600 of debt) as soon as we get the bills this month. This will ransack our savings account, but will save us about $350 in interest this year. And since the remainder of the credit card debt will be at 0% indefinitely, we can pay that off at our leisure.

By taking these two steps, we have already ensured that our net worth will increase by about $13,000 next year. I feel good about that.

December 2006 Net Worth - Happy New Year, Happy Birthday To Us

Posted on January 01, 2007 by Him

It is hard to believe that we posted for the first time a year ago. This year we're not hungover (much), and we actually spent our New Year's Eve in our apartment with each other, bypassing much more expensive options. I'd love to say that was done on purpose, but we actually decided to wing it, and ended up not going out.

Much has happened in the past year, but I'll get to highlighting everything in tomorrow's post. Without further ado, here's our net worth statement for December 2006:

  November 2006 December 2006 % Change
TOTAL NET WORTH -$74,995.01 -$70,787.94 5.6%
TOTAL CHANGE FROM JAN 2006 +$27,827.45 28.2%
Assets
Savings $11,744.45 $15,330.33 30.5%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $5,820.05 $5,851.56 0.5%
His Roth IRA $6,330.24 $6,470.53 2.2%
His HSA $407.38 $1,030.93 153%
Her 401K $9,718.03 $9,531.94 -1.9%
Her Roth IRA $1,683.92 $1,695.85 0.7%
Upromise $12.00 $12.00 0.0%
Automobile ? $10,045.00 $10,045.00 0.0%
Household Items ? $25,000.00 $25,000.00 -0.0%
TOTAL ASSETS $71,311.07 $75,518.14 6.0%
Liabilities
Credit Cards $12,193.29 $11,560.40 -5.2%
Student Loans $134,112.79 $133,931.93 -0.1%
TOTAL LIABILITIES $146,306.08 $145,492.33 -0.6%

Yes, our savings went up drastically again this month, primarily because of my winter bonus. Instead of shoving that all towards wedding savings, we're plotting on how we want to make some good use of it.

My employer also deposited their quarterly contribution to my HSA. How nice of them.

Our investment accounts didn't do so well this month. Even more reason for us to get our asses in gear and work on the joint portfolio. Good thing we've already started.

So far we're starting the New Year on the right foot.

November 2006 Net Worth

Posted on December 11, 2006 by Him

  October 2006 November 2006 % Change
TOTAL NET WORTH -$76,811.85 -$74,995.01 2.4%
TOTAL CHANGE FROM JAN 2006 +$23,620.38 24.0%
Assets
Savings $11,734.31 $11,744.45 <0.1%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $5,353.93 $5,820.05 8.7%
His Roth IRA $6,162.98 $6,330.24 2.7%
His HSA $821.84 $407.38 -50.4%
Her 401K $8,762.37 $9,718.03 10.9%
Her Roth IRA $1,684.52 $1,683.92 -<0.1%
Upromise $12.00 $12.00 0.0%
Automobile ? $10,170.00 $10,045.00 -1.2%
Household Items ? $25,000.00 $25,000.00 -0.0%
TOTAL ASSETS $70,251.95 $71,311.07 1.5%
Liabilities
Credit Cards $12,802.33 $12,193.29 -4.8%
Student Loans $134,261.47 $134,112.79 -0.1%
TOTAL LIABILITIES $147,063.80 $146,306.08 -0.5%

This month wasn't as strong of a month for us, for a few reasons. We had to spend over $300 for some car troubles we had, we traveled to see family over the Thanksgiving holiday, and we started our Christmas shopping. My HSA took a hit as I'm still paying off medical bills from my knee surgery. These things got in the way of savings, but we'll catch up in the next few months. The important thing is that we haven't accrued any more debt.

October '06 Net Worth

Posted on November 06, 2006 by Him

  September 2006 October 2006 % Change
TOTAL NET WORTH -$79,013.54 -$76,811.85 2.8%
TOTAL CHANGE FROM JAN 2006 +$21,803.54 21.4%
Assets
Savings $11,288.69 $11,734.31 3.9%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $4,824.39 $5,353.93 11.0%
His Roth IRA $6,374.96 $6,162.98 -3.3%
His HSA $935.77 $821.84 -12.1%
Her 401K $8,300.50 $8,762.37 5.6%
Her Roth IRA $1,643.34 $1,684.52 2.5%
Upromise $12.00 $12.00 0.0%
Automobile ? $10,230.00 $10,170.00 -0.6%
Household Items ? $25,000.00 $25,000.00 -0.0%
TOTAL ASSETS $69,159.65 $70,251.95 1.6%
Liabilities
Credit Cards $13,523.20 $12,802.33 -5.3%
Student Loans $134,649.99 $134,261.47 -0.3%
TOTAL LIABILITIES $148,173.19 $147,063.80 -0.7%

Because this is the new-fangled internet, I've linked certain categories to posts that explain how we got those numbers.

UPromise has changed the way they report the balances accrued, so I've listed this balance the same as last months. In future net worth posts, this will probably disappear.

I've added the change from January 2006, and will continue to do so in future postings. Since household items, automobile, and cash haven't really changed, this gives a pretty accurate picture of how far we've come along. We tend to get a lot of "drive-by" visitors who don't click through the archives to see where we started from. Looking at that number pleases me, but I know that in the future we can do much better.

K-Fed on Bling as an Investment

Posted on November 10, 2006 by Her

Forget traditional investment vehicles such as stocks and marrying Britney Spears. In an interview with Salon last week, K-Fed explained how he's investing in bling.

Salon: The watch you're wearing is worth more money than I've made in the last five years.
K-Fed: That's my baby. Whenever I made some money that's the first thing I went and bought...My watch game is ridiculous -- just jewelry in general. It's an investment. I bought this [points to his watch], and it's already gone up in value. All the jewelry I'm wearing has already gone up in value.
Salon: You're not planning on selling it anytime soon are you?
K-Fed: Hell no. I ain't getting rid of it. I'm going to go out and get some more. It's great to be able to go and do that stuff, but you really sit back and think about it ...

See? Jewelry is an appreciating asset, even if you have no intention of selling it.

Okay, so I really can't write this with a straight face. We've learned two things here today:
1. Jewelry is not an appreciating asset.
2. Don't take personal finance advice from Kevin Federline.

We're Not on Crack: Our Net Worth Formula Examined

Posted on October 17, 2006 by Her

Lots of our readers want to know more about the formula we use to calculate our net worth. Since our readers have been posting these questions for months now, perhaps it's time to fully answer them!

Why do you include your household items/jewelry/cars/etc in your formula?
We are using the net worth formula found in Jane Bryant Quinn's book, Making the Most of Your Money. This very-thorough formula classifies assets as "Quick Assets," "Restricted Assets," and "Slow Assets." Jewelry and cars are considered "Quick Assets." Household items are considered "Slow assets." There are many variations on net worth formulas. Quinn notes that while cars and jewelry are not part of your usable net worth, they should be included to be sure you have enough insurance to protect all your assets. Some formulas, such as the one in Rich Dad, Poor Dad, limit the definition of an asset to "something that makes money for you." Both definitions are accepted standards and are valid ways of classifying assets.

Why did you choose this formula over other formulas?
This formula was appealing to us because it allows us to include the value of many of the items we own. Because our net worth is negative, it is important to us not to be too negative ourselves. Each month we chart our current net worth against our desired net worth of zero. There is a huge gap between the two, but we can see the lines slowly starting to converge. It is hugely important for us to be able to see the light at the end of the tunnel. Calculating our net worth as even lower could make the situation feel overwhelming and hopeless. In order to increase our net worth, we need to have a reasonable starting point.

As I mentioned above, some net worth formulas focus more on income-earning assets. This type of formula will be much more appropriate for us once we pay off our debt and are focused on increasing our income-earning assets.

Why do you continue to use this formula even though many readers have questioned it's accuracy?
The most important data that our net worth chart reveals is "trends over time." We have been tracking our net worth for almost a year using this formula. Changing the formula now would give us "apples to oranges" information which would prevent us from analyzing trends over time. When we hit our net worth milestone of zero, our net worth goals will change. This would be an opportune time to choose a new formula to reflect our new goals.

Why do you include the value of your engagement ring, even though you say you would never sell it?
Because the Quinn formula includes the value of jewelry. Interestingly, one of the original purposes of the engagement ring was to provide the woman with something of value that she could sell (as a last resort) in the event her husband was unable to care for her. It was a sort of insurance against starvation. Though the tradition is different today, engagement rings were at one time intended to be a saleable asset.

Why do you list the value of your household items at $25,000? Is this what you paid for them?
With the exception of jewelry, we are listing our estimation of the resale value of our items, not the price we paid for them. The Quinn formula uses the appraised value of jewelry. The $25,000 total includes the appraised value of our jewelry plus an estimate of the yard sale value of our other household items.

What was your net worth when you first calculated it? Is it going up?
Our initial net worth was negative $98,615.39. It is increasing. Our goal is to hit zero, then re-assess.

September Net Worth

Posted on October 03, 2006 by Him

It has only been 21 days since the last time we've done this, but I thought that maybe I can actually get back to keeping track of our net worth on a regular schedule...

  July-August 2006 September 2006 % Change
TOTAL NET WORTH -$81,480.59 -$79,013.54 3.0%
Assets
Savings $10,718.58 $11,288.69 5.3%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $4,612.10 $4,824.39 4.6%
His Roth IRA $6,367.83 $6,374.96 0.1%
His HSA $411.55 $935.77 127.4%
Her 401K $7,715.83 $8,300.50 7.6%
Her Roth IRA $1,593.93 $1,643.34 3.1%
Upromise $9.61 $12.00 24.7%
Automobile $10,230.00 $10,230.00 0.0%
Household Items** $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $67,209.43 $69,159.65 2.9%
Liabilities
Credit Cards $13,932.61 $13,523.20 -2.9%
Student Loans $134,757.41 $134,649.99 -<0.1%
TOTAL LIABILITIES $148,690.02 $148,173.19 -0.3%

Our net worth continues to increase due to many factors. We're agressively paying off our credit cards and student loans, putting money into our retirement accounts and letting them grow, and most importantly NOT ACCRUING ANYMORE DEBT. Yeah!

*Cash: This variable doesn't change month-to-month since that's about how much we have in our checking account, couch cushions, wallets, etc., at any given time. I'm thinking this category may just disappear in future iterations.

**Household items: Just let us have this one, okay? BACK OFF BITCHES.

July-August Net Worth

Posted on September 12, 2006 by Him

Oops, we didn't do a net worth post in August. Whoopie doo. Here are the numbers for the last two months:

  June 2006 July-August 2006 % Change
TOTAL NET WORTH -$84,918.71 -$81,480.59 4.1%
Assets
Savings $9,821.97 $10,718.58 9.1%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $4,186.59 $4,612.10 10.2%
His Roth IRA $5,981.17 $6,367.83 6.5%
His HSA $837.09 $411.55 -50.8%
Her 401K $7,189.46 $7,715.83 7.3%
Her Roth IRA $1,546.25 $1,593.93 3.1%
Upromise $8.85 $9.61 8.6%
Automobile $10,115.00 $10,230.00 1.1%
Household Items** $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $65,236.38 $67,209.43 3.0%
Liabilities
Credit Cards $15,210.22 $13,932.61 -8.4%
Student Loans $134,944.87 $134,757.41 -0.1%
TOTAL LIABILITIES $150,155.09 $148,690.02 -1.0%

The summer months have been slow. Summertime is a huge black hole for money. Now that the weather is turning cooler, we're tightening up the wallets. We've been steadily chipping away at the credit card debt and continuing to save in our retirement accounts.

*Cash: This variable doesn't change month-to-month since that's about how much we have in our checking account, couch cushions, wallets, etc., at any given time. I'm thinking this category may just disappear in future iterations.

**Household items: Just let us have this one, okay? BACK OFF BITCHES.

June Net Worth

Posted on July 11, 2006 by Him

  May 2006 June 2006 % Change
TOTAL NET WORTH -$90,945.05 -$84,918.71 6.6%
Assets
Savings $5,824.10 $9,821.97 68.6%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $3,695.59 $4,186.59 13.3%
His Roth IRA $6,174.57 $5,981.17 -3.1%
His HSA $454.41 $837.09 47.5%
Her 401K $6,625.53 $7,189.46 8.5%
Her Roth IRA $1,504.00 $1,546.25 2.8%
Upromise $62.97 $8.85 -89.9%
Automobile $10,090.00 $10,115.00 0.2%
Household Items** $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $59,981.17 $65,236.38 8.8%
Liabilities
Credit Cards $15,777.77 $15,210.22 -3.6%
Student Loans $135,148.45 $134,944.87 -0.2%
TOTAL LIABILITIES $150,926.22 $150,155.09 -0.5%

Yeah, GO SAVINGS GO. Bonus-a-roo, bitches.

My HSA went up because my employer loves its employees, and funds our HSAs 100% of the maximum amount in quarterly installments. Unfortunately, that money will soon disappear to pay the remaining deductable for my new knee.

UPromise balance is now in our HSBC account.

Our investment accounts are doing surprisingly well. Except for my Roth IRA though, reporting its second loss in two months. Boooo.

Out car seems to be an appreciable asset. GO CAR.

*Cash: This variable doesn't change month-to-month since that's about how much we have in our checking account, couch cushions, wallets, etc., at any given time. I'm thinking this category may just disappear in future iterations.

**Household items: I'll repeat what I said last month: We know we're going to get shit about this category again, so in the next month or so I'm going to actually try an assess what all of our crap is worth, along with asking you guys whether or not it should be included. Until then, it stays. Anyway, we like the fact that we can get a little help from it, you know?

Almost Seven Months of Making Love, Not Debt - A Retrosepective

Posted on June 26, 2006 by Him

It took a lot of badgering to get Her to buy my idea about starting a personal finance blog that deals with money and relationships. Her finally bought it, and on the first day of 2006, we wrote our first post. Ironically, the current majority of posts on this blog are written by Her.

Back then, we were merely beginners in the game of personal finance. We erroneously included our non-wealth building life insurance as a part of our net worth, putting our net worth in the positive. When we realized the error, we truly realized how much work we have to do, not to mention how much we are in the negative.

Since then, about seven months have passed. We've been steadily making our way into the positive net worth, but more importantly, we're steadily getting out of debt. It is easy to see that from the numbers, though. Here's a smattering of things we have also improved upon since we've started this blog:

-- The interest on my credit card debt now ranges from 0% (until April 2007, and will be paid off in September 2006) to 2.99%; a far cry from the 12.99% to 20.99% that I had. For all of our credit card debt, we're paying 5% interest or below.
-- Her dropped the interest rates on her variable interest rate student loans by a few percentage points.
-- We've maximized the use of coupons.
-- We haven't accrued any new debt. Anything that we put on a zero balance credit card is paid off ASAP, and only put on that credit card to reap the rewards. We're still committed to not going into more debt for the wedding.
-- We have both received raises. (hmm, I realized that our income isn't up on the site anymore...we'll have to look into changing that)
-- We've planned to get out of all credit card debt by the time we get married.
-- I sold my car a few months before I started this blog. Now we only have one car that we seldom drive, saving us tons of money of insurance, maintenance, gas, and other automobile related expenses.
-- Most importantly, we've been able to manage our debt so that it is not a barrier to the things we like to do everyday. This past weekend we've enjoyed the first of three summer music festivals, Intonation Music Fest. We're headed to Cirque Shanghai, Ravinia twice, and other Chicago Festivals this summer. By squeezing our budget on most days, we've figured out how to enjoy life and pay off debt. We're only in our 20's once, so we figure we'll enjoy it while we're living in a big city such as Chicago and can physically and mentally tackle everything. We figure that we'll be out of debt by the time we have kids, and then we'll have no time for all of the things that we're doing today.

We've been at this for seven months, and we're exited to see our progress. We can't wait to see what's coming up.

May Net Worth - Strong Month

Posted on June 08, 2006 by Him

  April 2006 May 2006 % Change
TOTAL NET WORTH -$94,405.24 -$90,945.05 3.7%
Assets
Savings $4,428.30 $5,824.10 31.5%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $3,619.25 $3,695.59 2.1%
His Roth IRA $6,491.96 $6,174.57 -4.9%
His HSA $449.59 $454.41 1.1%
Her 401K $6,375.00 $6,625.53 3.9%
Her Roth IRA $1,300.00 $1,504.00 15.7%
Upromise $57.26 $62.97 10.0%
Automobile $9,595.00 $10,090.00 5.2%
Household Items** $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $57,866.36 $59,981.17 3.7%
Liabilities
Credit Cards $16,865.20 $15,777.77 -6.5%
Student Loans $135,406.40 $135,148.45 -0.2%
TOTAL LIABILITIES $152,271.60 $150,926.22 -0.9%

May was a pretty good month for us. Her worked a lot of overtime, and I got a modest raise. That allowed us to pay off more credit card debt, and will also allow us to put more towards that debt on a regular basis. We're also beefing up the wedding fund with some of that money as well.

The value of the car...went up. I'm thinking there was something I did wrong last month on Kelley Blue Book that I fixed this month. Whoops.

*Cash: This variable doesn't change month-to-month since that's about how much we have in our checking account, couch cushions, wallets, etc., at any given time. I'm thinking this category may just disappear in future iterations.

**Household items: We know we're going to get shit about this category again, so in the next month or so I'm going to actually try an assess what all of our crap is worth, along with asking you guys whether or not it should be included. Until then, it stays. Anyway, we like the fact that we can get a little help from it, you know?

April Net Worth - Indifferent

Posted on May 08, 2006 by Him

  March 2006 April 2006 % Change
TOTAL NET WORTH -$95,577.26 -$94,405.24 1.2%
Assets
Savings $4,089.82 $4,428.30 8.3%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $3,402.15 $3,619.25 6.4%
His Roth IRA $6,425.45 $6,491.96 1.0%
His HSA $720.62 $449.59 -37.6%
Her 401K $5,922.92 $6,375.00 7.6%
Her Roth IRA $1,265.00 $1,300.00 2.8%
Upromise $56.00 $57.26 2.3%
Automobile $10,110.00 $9,595.00 -5.1%
Household Items $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $57,541.96 $57,866.36 0.6%
Liabilities
Credit Cards $17,324.58 $16,865.20 -2.7%
Student Loans $135,794.64 $135,406.40 -0.3%
TOTAL LIABILITIES $153,119.22 $152,271.60 0.5%

Nothing much to say about this month's net worth, just that it's a little late.

My HSA took a hit because of expenses related to my ACL reconstruction surgery.

Oh yeah, I got a raise. Go me. That'll be nice to put towards some of this debt.

Financial Milestone Achieved!

Posted on April 19, 2006 by Her

Today, for the first time in my life, the total value of my investments (Roth IRA, 401K and ING Direct Savings) surpassed $10,000! I track these accounts in an Excel graph every day but it was still a big surprise to see it cross the $10,000 mark. For all those who have commented on our blog that we aren't walking the walk as much as we talk the talk...well, stuff it. I am $10,000 richer than I was 18 months ago, and richer than I have ever been before. I feel like I won the lottery!

How I accomplished this goal:
• I contribute 6% of my salary to my 401K. My employer matches 40% of my contribution.
• I bought a few shares of a few stocks when they were at rock bottom. For example, I bought shares of Boeing shortly after 9/11. I bought shares of GM the day it was downgraded. The Boeing has done great, the jury's still out on GM.
• Every Saturday after we pay bills, part of what's left goes into my ING Direct account. Most monetary gifts also go straight in.

That's Right BusinessWeek Readers, We're Actually Poorer

Posted on April 05, 2006 by Him

In the BusinessWeek article that mentioned us a few weeks ago, the author incorrectly stated that we were $98,615.39 in debt, when in fact, -$98,615.39 was our net worth at that time.

The actual amount of our debt at the time of the article was $154,020.99.

Yes, I actually emailed BusinessWeek in order to have them correct that.

Lo and behold, they did.

Thanks BusinessWeek.

March 2006 Net Worth - A Few Days Late

Posted on April 09, 2006 by Him

  February 2006 March 2006 % Change
TOTAL NET WORTH -$96,722.28 -$95,577.26 1.2%
Assets
Savings $3,078.00 $4,089.82 32.9%
Cash* $550.00 $550.00 0.0%
His SIMPLE IRA $3,141.30 $3,402.15 8.3%
His Roth IRA $6,451.78 $6,425.45 -0.4%
His HSA $801.36 $720.62 -10.0%
Her 401K $5,313.62 $5,922.92 11.5%
Her Roth IRA $1,265.00 $1,265.00 0.0%
Upromise $53.03 $56.00 5.6%
Automobile $10,435.00 $10,110.00 -3.1%
Household Items $25,000.00 $25,000.00 0.0%
TOTAL ASSETS $56,089.09 $57,541.96 2.6%
Liabilities
Credit Cards $17,727.61 $17,324.58 -2.3%
Student Loans $135,083.76 $135,794.64 0.5%
TOTAL LIABILITIES $152,811.37 $153,119.22 0.2%

* The "Cash" category now consists of all of the cash between Her and I. Month-to-month, it will be static because that's about how much cash we have between the two of us at any given time.

Some points to note for this month:

Our student loan balance went up this month because of a late payment made before the birth of this blog. We got hit with a $600.00+ penalty since we paid for lost interest. Ouch.

Our savings went up because we both got bonuses this month. We did splurge on some stuff and put it on a credit card, so that money will come right back out to pay for it.

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