Another volatile month sees us end up …. exactly where we started?

Our assets decreased 0.07%

As I look over our asset accounts, it appears that every balance has dropped slightly except for my stock options.  My stock options value increased almost 14% and that just about completely balanced out all the other drops.  Actually, that’s not exactly true – somehow our retirement accounts managed to increase slightly this month as well.

Our cash accounts have been dropping pretty quickly the last few months as we continue to pay off the large expenses related to our baby’s birth and adjust to living on one salary.  Overall, it did decrease again this month but by a much smaller amount that the previous few months.  I’m hoping that’s a good sign that we’re starting to get our spending in line with out income.

Our liabilities decreased 0.12%

Our mortgage dropped the standard 0.12% again this month.  I mentioned previously that our mortgage payment is by far our largest payment each month (well, it still is).  I think we’ll need to do something about this to get our expenses to meet up with our income, but I’m not exactly sure what to do about it at this point as our home value is much less than our mortgage balance.

Our net worth held steady

Well, this is the first month that has happened – our overall net worth basically did not budge from last month’s value.  I guess that’s a good thing.  Of course, I’d like to see it increasing but after a significant drop last month, I’m just happy it did not head even further south this month.

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Thud! That’s the sound of our net worth crashing back down to earth after two strong and unexpected months of increase.

Our assets decreased 3.3%

For those who were not paying attention at the time, there was quite an interesting day in the stock market a few weeks ago. Unfortunately for me, that happened to fall on the day that I took our net worth snap-shot for the month! Our cash dropped significantly (almost 6%) again this month but our other accounts did not increase to offset that drop. As a result, things got ugly net-worth-wise this month. We are finally (for the most part) finished with the transition of adjusting withholding and savings to go to a single salary. Unfortunately, we are still finishing the bills from our daughter’s birth and I think it all finally caught up to us this month. We simply must decrease our expenditures to stop these significant monthly drops in our cash account balances. It’s gotten to the point that we are going to go to actual cash for more expenses next month.

Our liabilities decreased 0.12%

Our mortgage dropped the standard 0.12% again this month. I mentioned last month that our mortgage payment is by far our largest payment each month. We are in the process of evaluating whether something drastic has to be done about it over the next couple months. If you asked me right now, I’d have to say that, “yes,” we need to change the mortgage somehow. We are spending too much money on the mortgage and as a result are not able to do other things that we’d like to do. The final decision won’t be made until July though, so I won’t get ahead of myself.

Our net worth dropped more than 6%

Last month I mentioned that our net worth had reached its highest level ever….well, that’s no longer true! After this month’s significant drop, we’re well below that. It’s acted like a yo-yo this entire year. I’m not concerned about our stock market accounts, though, as I expect them to bounce around. I am concerned that our cash balances continue to drop and drop at a much higher rate that I anticipated. I’m trying to increase our income but we really should do something about our expenses as well…hence the decision to actually try the cash thing next month – I guess we’ll see if all the hype for using cash is justified!

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For the second month in a row, our net worth experienced a surprising bump.

Our assets increased almost 2%

Just like last month, our assets actually increased (Woohoo!).  Also just like last month, that increase was driven exclusively by the stock market.  It was a steady month as all of our accounts increased in the mid-single digit range.  As expected, however, our cash accounts dropped another 4%.  As I mentioned recently, my wife is not going to be going back to work.  Our reduced salary coupled with some temporary increased expenditures for the birth of our daughter has caused our cash accounts to drop almost 12% since the beginning of the year.  It would have been worse this month if I had not received my tax refunds and a small yearly bonus from work.  We have reduced some of our expenses, savings, and investing to get our budget more balanced so hopefully this downward trend will level off very soon.

Our liabilities decreased 0.12%

Our mortgage dropped the standard 0.12% again this month. We are no longer in a position to consider accelerating payments on our mortgage, however.  Our mortgage payment now makes up the largest of our regular monthly expenses by far.  We have decided to see how our new budget works for the next three months.  At that point in time, we will evaluate whether we need to make some drastic changes regarding our house payment (like trying to sell the house and buy a less expensive one).

Our net worth increased more than 4%!

Even with the very small decrease in mortgage principal and large drop in cash, we still ended up with a net worth increase of more than 4% this month!  In fact, our net worth is currently the highest it has ever been.  As I mentioned last month, I am trying to not worry about the financial upheaval we’re experiencing and simply focus on God and rely on Him to meet our needs.  I must admit, however, that I am getting caught up in the daily checking account balance.  I’m still very much a work in progress.

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While last month’s net worth dropped quite a bit (almost 8%), this month’s included a surprise bump.  We’re not exactly back to where we were in January, but we are much, much closer than last month.

Our assets increased almost 3%

Somewhat surprisingly, our assets actually increased this month.  That increase was driven almost entirely by the stock market.  The market’s bump after last month provided my net worth with a bump as well.  Our mutual fund and stock accounts increased more than 10% while my stock options were up 15%.

Not surprisingly, our cash accounts dropped quite a bit (more than 6%).  My wife did not work the entire month of February and it took a bit of a toll on those accounts.  This will probably continue for at least the next month as she is still not working and we have started to pay the doctor and hospital bills for our daughter’s birth.  We also were slow to adjusting our budget to our new lower income, so that hurt us as well.  This month I’ll receive my small yearly bonus, a small federal tax return, and a sizable state tax return (I’ve played with the state withholding and it seems almost impossible to significantly drop that refund).  All that will hopefully add up to a less precipitous cash drop this month.

Our liabilities decreased 0.12%

Our mortgage dropped the standard 0.12% again this month. Last month I mentioned my frustration at the small decrease in mortgage principal we experience each month.  After doing my taxes and calculating how much interest we’ve paid over the past four years and contrasting that with how little the principle has decreased, it is beyond frustrating and almost to the point of painful.  I almost feel like I want to just sell the house and start all over with something that I can pay less on and pay for only 15 years.  My wife and I have started playing with a bunch of scenarios, mostly crazy ones, but I haven’t done any hard analysis to decide what is best at this point.

Our net worth increased almost 6%!

After the 8% drop last month, I was quite happy to see a 6% increase this month.  As I mentioned, we’re not back up to the high-water mark we experienced in January, but we are closing in on it. We are, however, now in the thick of a period of financial uncertainty marked by less income and some large expenses.  Frankly, this comes at about the best time of year for us with my bonus and tax returns.  God’s timing?  I’m really trying to focus on God and rely on Him and not worry about the financial stuff.  So far so good – though He is doing a better job of meeting our needs than I am of relying solely on Him.

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Yikes – I wasn’t really paying attention last month (probably because of the impending birth of my 4th child!) and I encountered a rude surprise when I updated our net worth this month.  Let’s get right into the carnage…

Our assets decreased almost 4%

Every single asset category dropped last month.  Some dropped a little (like our cash assets) while our assets exposed to the stock market dropped substantially.  My stock options dropped the most (more than 20%) while the rest of the categories dropped in the mid-single digits.  Our house value also continued to decrease – this is the fourth month in a row with a small (1-2%) decrease.  The net result of all of that is that we are even more underwater on our mortgage and have 4% less assets compared to last month.

Of course, all of this is now exacerbated by the birth of our daughter two weeks ago.  There, of course, will be many new expenses associated with that (hospital bills, we decided to do blood cord banking, truckloads of diapers, etc) while at the same time my wife won’t be receiving a paycheck for another couple months at least (or indefinitely if we decide that she should retire).  All that adds us to a few interesting months to come finance-wise!

Our liabilities decreased 0.12%

Our mortgage drops approximately 0.12% each month.  It is frustrating to me how small of a drop that is each month (I now wish I had followed Dave Ramsey’s advice to take out a 15 year mortgage but I hadn’t heard that advice when we bought our house!)  Unfortunately, it is difficult to do anything with our mortgage because we are under water with it.  With the next few months bringing increased expenses and decreased income, I am especially wary of making any big moves that would deplete our savings and investments significantly.  So we stand pat for now until we see how this all plays out.

Our net worth decreased almost 8%!

Overall, our net worth dropping a whopping 7.7% which is the largest single-month drop since March 2009.  Also, saying it in percentages doesn’t sound as bad as the actual dollar value that was lost!

So, we enter a period of uncertainty with the changes in our finances and I’m not sure right now how it will all play out.  I will be trying hard to focus on God and rely on Him and not get too worried about all of it.  Now, I don’t want to overplay it – it’s not like we are in dire circumstances or anything like that.  We have been saving and investing for a while and also have a healthy emergency fund.  For me, however, I just really don’t like the idea of spending more money than we bring in each month.

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The holidays have come and gone (the decorations have been taken down already and that Christmas Yule Log fireplace show we watched so much has disappeared from our cable), 2009 is history and we are already a few weeks into 2010!  Thus it’s time to take a look at our net worth here in early 2010 and investigate what happened during December and what happened throughout 2009.

Monthly Wrapup

Our assets increased almost 1.7%

Just like last month, all of our assets increased a bit except for our house value which dropped again! Most asset categories posted mid-single digit growth so at least this month their increases were enough to offset another drop in house value.  I am a bit disappointed in our house value continuing to drop.  We were so close to being in a positive position a few months ago but now it’s back down near its nadir  Doh!

Our liabilities decreased 0.5%

Another month, another drop of about 0.5% on our liabilities.  I haven’t done anything with the mortgage, I have no immediate plans for the mortgage, and I haven’t figured out how to get to where Dave Ramsey recommends we should be with our mortgage.  Apparently I’m just waiting for divine intervention (c’mon, it was a very busy month!).

Our net worth increased more than 4%

After last month’s drop which followed so many months of growth, our net worth has returned to growth again.  Actually, I could have massaged the numbers last month and kept the streak alive.  After the fact, I noticed that if I would have waited another day or two before logging all the data, my wife’s paycheck would have come in and that would have tipped us back to the positive.  Oh well, streaks and such don’t really make a difference – what matters most when calculating your net worth is…..well, your net worth.

2009 Wrapup

2009 was quite a year for our family in a number of ways.  I’m sure you don’t want to hear all those details however, so I’ll stick to the net worth!  Overall, our assets increased 15%. This was lead by strong returns in investments (170%) and retirement savings (55%).  Our most impressive percentage gains were found in stock options (458%) and college savings (272%) but the overall values were fairly small for those categories so they did not sway our actual net worth significantly. Our home value did decrease 5.6% throughout the year and that was on top of a 7.2% decrease in value throughout 2008!  Now, it had gone up in value previous to 2008 so that is maybe not as bad as it sounds but we are definitely underwater on our mortgage right now.

Our liabilities decreased 6% during 2009. This was fueled mostly by the decrease in my wife’s contractual liability that we track as a debt (since it restricts our freedom of action somewhat).  In fact, our mortgage decreased a whopping 1.2% – that’s only a few thousand dollars!  Looking at these numbers is best argument I’ve seen yet for a 15 year mortgage.  It is startling to think of how much money I sent to the mortgage company throughout 2009 and to see the actual principle only decrease that little!  Argh!

Overall, our net worth increased 61% during 2009. That was very encouraging to me.  Granted, this was on the heels of a stock market drop in 2008 but I’ll take a 61% increase every year with no complaints!  As long as this trend continues, we should be millionaires in just a few more years  (as long at the 2009 trend of +61% and not the 2008 trend of -1%, that is!).

So, 2009 turned out to be a very positive year in so many ways for me and my family.  And our plan remains basically the same as we embark on 2010.  One significant difference that will be need to be addressed, however, is a new addition will be arriving in a few weeks – BorrowFromNone Junior #4.  As a result, our expenses will obviously increase but on top of that, my wife will not be working for at least 2.5 months.  Currently, nothing major is planned finance-wise other than a little belt tightening to get our budget cut down to be able to live on one salary for a while.  That tentative plan may need to change as we get into it, though; we will revisit it after a bit and see if any more significant changes are necessary.

Well, I hope 2009 was prosperous for you as well (money-wise and especially other-wise).  May God bless you as you seek to honor Him throughout 2010!

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Well, we are into the full swing of the Christmas holiday season here.  I’ve finally gotten most of our decorations up, we’re having a little party at our house on Sunday, we’ve been listening to lots of Christmas music, we found the “Yule Log” station on our TV which it shows a burning fireplace with Christmas music playing (it might not sound terribly exciting, but we watch that program A LOT).  So, let’s see how the net worth is looking through early December.

Our assets decreased almost 0.5%

Uh-oh, our assets are down this month…that’s not a good start.  Why are they down?  What are we doing wrong?  We followed a budget last month just like Dave Ramsey said!  Actually, all of our asset values increased this month…except for the house value.  The house value dropped.   A lot.  Its value dropped 2.5% which was enough to offset small to modest gains in the other categories.  I mentioned last month that I was getting my hopes up for not being underwater on the mortgage, but now we are more underwater than ever!

Our liabilities decreased 0.5%

Another month, another drop of about 0.5% on our liabilities. And now we are even farther away from being able to do anything with the mortgage without a significant outlay of cash.  We just had the Financial Peace University class on mortgages and are not exactly doing what Dave recommends (basically none of it, in fact).  Now we have to figure out if we want to get more in line with his recommendations and, even more daunting, how we are going to accomplish that.

Our net worth decreased!

Well, it had to happen sooner or later in this volatile economic environment – our net worth has decreased.  Now, it decreased less than 0.5% so it’s not exactly terrible news.  It decreased mostly because the value of our house, according to Zillow, dropped a fair chunk. But the end result is that my iPhone fueled net worth increase streak has come to an end.  Hopefully we will bounce back next month…but it is the Christmas month.  We do have money saved up for Christmas so we will not  go into debt buying gifts but we will spend that money (or most of it) so that will adversely impact our net worth next month too.  Hopefully the house price will rebound….

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It’s that time again – time to start listening to Christmas music! Woohoo!! (Yes, I know it’s early…my wife has been resisting as I move the start date up earlier each year. I hit November 1st one year, but this year she didn’t let me start until now). Actually, it’s also that time of the month – net worth update time.

Our assets increased almost 2%

The overall numbers are almost a duplicate of last month. All of our categories showed moderate growth with the exception of my stock options,  which went up a chunk (40%), and the house, which dropped a bit after climbing for a few months. We were getting close to being above water on the mortgage after the past few months and I got my hopes up for this month, but alas, still upside down…

Our liabilities decreased 0.5%

Another month, another drop of about 0.5% on our liabilities. I still haven’t done anything with the mortgage. I was getting excited about the possibility of a refinance with the house value climbing up. This month’s drop, however, has cooled my enthusiasm a bit. I think we’ll probably hold the plan steady as we go through Dave Ramsey’s Financial Peace University. When we finish that, we’ll take stock of where we are and see if the plan needs to be updated.

Our net worth increased almost 5%

We again hit another new all-time personal net-worth high this month. Our cash position has been roughly the same for the past few months while our investment accounts continue to grow. I’ll take it! This month the plan remains the same: earn some, give some, save some, invest some, and stay out of debt.

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This month marks the seventh month in a row of increased net worth for us.  It was not a huge increase, but it was as solid increase and in light of the fact that we paid for our vacation to Disney World during this past month, I’m quite happy that our net worth increased.

Our assets increased almost 2%

This month all of our asset categories increased except for our liquid accounts.  Those dropped 3.5% probably due mostly to the vacation we took.  Just like last month, there were no huge gains like those seen in previous months; the biggest increase was about 10% in my stock options.  The remainder of the accounts produced a steady percent increase in the single digits.  Our house value again increased this month and is now quite close to the amount we owe on our mortgage (man, how sad is it that I’m excited just to be getting close to not being upside down on the mortgage?!?)

Our liabilities decreased 0.5%

Another month, another drop of about 0.5% on our liabilities.  I have been giving more serious thought to accelerating or refinancing the mortgage (or possibly both).  I think if I did refinance it to get a lower interest rate and smaller payment, I would continue making the same payment that I do now in order to accelerate the payoff.  We’re still a very long way from paying off the mortgage, but it would feel good to at least be moving in that direction.  Alas, I still have not done anything substantive though.

Our net worth increased almost 5%

We hit another new all-time personal net-worth high this month.  Another month, another increase – so far I am on plan to increase it every single month.  That might not be a very realistic goal, but I’ll continue to do what I can by earning, saving, investing, and staying out of debt.

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Woohoo – our net worth increased again this month to another all-time high.  In fact, something crazy that I realized when logging this month’s information is that our net worth has increased a total of 62% since the low point in March 2009.  Another crazy thing that I realized is that the low point coincides with about the time I bought my iPhone….now, I don’t know if having an iPhone accounts for all of the increase – you can draw your own conclusion.   ;^)

Our assets increased almost 2%

This month, we had moderate increases across the board for our assets (except for my stock options which dropped slightly).  There were no huge gains like those seen in months past; the biggest increase was about 10% in our 529 college savings accounts.  Other than that, most accounts saw a nice steady increase of about 2-3%.  Of note is our house value increased again – it’s now rising up close to the value that we owe on our mortgage (it certainly would be nice to not be underwater on that anymore)!

Our liabilities decreased 0.5%

Another month, another drop of about 0.5% on our liabilities.  One thing of note is that the contractual obligation that my wife would have to repay if she stopped working before the end of the year (which we are treating at debt in our net worth calculations) is almost down to $0. That will be a great relief to have that satisfied and not hanging over our heads.  Of course, after that, the only decrease each month will, in fact, be the 0.11% that our mortgage is reduced each month.  I gotta start accelerating that thing or refinancing or, or, or something!

Our net worth increased more than 5%

As I mentioned, our net worth is up to another new high.  Hopefully that trend will continue forever (hey, a guy can dream!) but of course there will be hiccups along the way.  Again, the plan stays the same: earn, save, invest, stay out of debt.

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Another increase in our net worth this month pushes us to a new all-time high for our net worth (Ok, so I’m not exactly making Bill Gates worried but I am happy that it continues to increase).

Our assets increased 4.4%

Last month I mentioned that our assets grew mainly due to an increase in our liquid account balances after a few months of stock market returns driving our assets upward.  It looks like that might have been a bit of an aberration as this month our asset growth was again driven heavily by market gains.  In fact, our liquid assets decreased more than 8% but that was more than offset by strong increases in investments (15%), stock options (51%!), 529 plans (16%), and our retirements funds (10%).  Even our house value, according to Zillow.com of course, increased again.

I like the increase we’re seeing though I’m not counting on the upward trend continuing.  The market has been doing well recently but I’m still concerned about volatility going forward.  That being said, the plan stays the same.  I am also not too concerned about the decrease in liquid assets.  We have started to pay for our upcoming vacation and also paid some big yearly bills last month (life insurance premiums, for instance) so that accounted for a good portion of the drop.  We had saved up for those things though so they were in the plan.  And I’m continuing to save up for next year’s big bills too so it is hopefully not a cause of stress when they are due.

Our liabilities decreased 0.5%

There is absolutely nothing out of the ordinary to report for our liabilities as they again dropped the typical monthly rate of 0.5%. I still do not have any concrete plans to do anything interesting to try to rid myself of the mortgage early.  I was playing around with Dave Ramsey’s mortgage calculator though and found out that starting next month, even putting in as little as $100 extra per month will save me $48,000 in interest over the rest of the 27 years of the mortgage.  Wow!  I have to get more serious about this mortgage prepayment stuff.  In fact, the mortgage company just sent me an $85 check for an escrow adjustment…maybe I should start with that (and throw in $15 to make it an even $100) and do something….still pondering…

Our net worth increased more than 11%

Overall, our net worth shot up more than 11% pushing it to the highest it has ever been.  The previous high point was June 2008 before all the uncertainty in the US economy and stock markets starting take its toll.  I think it’s too early to say that we have weathered the financial storm as we are heavily exposed to the stock market right now.  That being said, I am happy with our current plan and we will continue to follow it for the foreseeable future.

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I am glad to report that this month marks four in a row for increased net worth.   Though unlike the past few months, this increase was not driven by stock market growth.

Our assets increased 1.3%

Last month, all of our accounts except our liquid assets increased in value.  Quite the opposite occurred this month as the lion’s share of our asset increase was driven by a 10% increase in liquid assets.  I fear a good portion of this increase was just good timing (right after payday but before paying our credit card bill).  Also unlike the previous few months, our stock market accounts were actually quite flat.  Interestingly, for the second month in a row the value of our house, as estimated by Zillow.com, has increased. Now, it increased a whopping 1%, but I’ll take it!

Our liabilities decreased 0.5%

There is absolutely nothing new to report for our liabilities as they again dropped the typical monthly rate of 0.5%. I still do not have any concrete plans to do anything interesting to try to rid myself of the mortgage early.

Our net worth increased more than 4%

For the past two months, our net worth has increased more than 6%;, though it increased again this month, the increase was less.  There are no major changes to the plan on the horizon.  Saving and investing in 401(k)s, some company stock, and some low cost index funds will continue for the foreseeable future.  I am now again within sight of our all-time net worth high point of last summer…we’ll see if this upward trend continues.

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Just like last month, our net worth has increased again (that makes three months in a row!) And just like last month, the majority of the increase has been driven by the stock market.

Our assets increased more than 2.0%

For the first time since November of 2008, the estimated value of our house (according to Zillow.com) has increased. Now, it only increased a tiny bit, but that’s better than nothing. Not many houses in our neighborhood have been selling lately, so I’m not sure why Zillow thinks the values are ticking back up. In fact, our neighbor recently got a contract on their house but had to drop their listing price quite a bit to make that happen. What does it all mean? Who knows….I never had much faith in Zillow providing an extremely accurate estimate, but I don’t have any better options either!

Except for our liquid assets, all of our other accounts increased in value this month. Our accounts with stock market exposure increased the most, but the increase in the those accounts is trending downard (in other words, this month’s increase was less than last month’s which was less than the month before that).

Our liabilities decreased 0.5%

Our liabilities dropped the typical monthly rate of 0.5%. I am still adhering to the status quo with our liabilities (well, the mortgage). I have not done anything to accelerate it nor do I have any imminent plans to do so. Actually, a few months back I was investigating the idea of implementing something like one of those Money Merge Accounts where you use a home equity line of credit to speed your mortgage payoff. I didn’t get very far into that though since I can’t get a HELOC with the amount of equity I currently have in my house (approximately $0).

Our net worth increased another 6.5%

The percentage increase of our net worth was identical to last month’s increase. I am not making any drastic changes to our plan going forward. I am continuing to save and invest according to the current plan. I know, that’s boring…but boring has been working pretty well the past few months as our net worth has increased almost 33% since the low point in March (though I have not yet gotten back to the high point I hit last summer).

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Woohoo, for two months in a row our net worth has gone up!  Just like last month, the increase this month is due mostly to the stock market.  As a result, since I don’t think the economy has recovered yet, I’m not expecting the market to keep going up from here on out.  I’m expecting more volatility in the future and with that will come more net worth volatility for us.  I certainly can not predict the future though, so we’ll just have to stay diversified, keep saving and investing regularly, and hold on and see what happens.

Our assets increased 1.8%

Our liquid assets and home values decreased, but everything else (since the rest had stock market exposure) increased last month.  Our stocks and mutual funds increased 15% last month (I must somewhat sheepishly admit that this is driven mostly by my stock purchases of a few months ago – my portfolio of particularly battered stocks has more than tripled since I bought it).  Our 529 plans are up almost 20%, my stock options value increased 15%, and even our retirement accounts are up almost 7% (in fact, my 401k has bounced up 42% in the past two months though it is still not as high as the middle of last year).

Our liabilities decreased 0.5%

Another month and another decrease of 0.5% for our liabilities.  I have still not moved on accelerating our mortgage prepayment.  We’re in a bad spot now because we owe more money on our mortgage that what our house is apparently worth now…so that makes me a bit nervous.  There is not really much to do about it right now though, other than keep saving up in case we need a bunch of money to refinance or sell the house (man, would that stink to have to pay money just to sell the house!)

Our net worth increased almost 6%

The net of all this is that our net worth increased again this month by 6%.  That is nowhere near the crazy 15% increase of last month, but I will certainly take it!  These days, anything in the positive direction is fine by me.

The plan continues as is…I will keep saving each month and continue to buy company stock, low cost index funds, fund our 529 plans, and put money into our diversified 401ks.  We’re still relatively young, so the majority of our investing is done in stocks with just a bit of bond exposure.  The only potential change going forward is to put more money into Vanguard index funds.  We are finished paying my daughter and son’s school tuitions for the year, so I will probably look to start investing most of that while the market is still quite low compared to years past.

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Well, for the first time in many months our net worth has actually increased!  Not only that, it increased quite a bit.  What is driving this increase?  The same thing that drove the decreases in previous months….the stock market.  The market ticked upward a bit last month and as a result, I saw a gain in overall net worth.  I do not think this means the market has stabilized and will now go upward for a while, however.  I think there will be a lot more volatility ahead…but who knows (that’s why I don’t try to day trade and time the market).

Our assets increased more than 4.6%

All of our holdings increased this past month with the exception of the house value which continues its downward descent.  Our cash accounts increased more than 14% due mainly to our tax refunds.  Our stock market exposure really led the way though – our taxable accounts were up more than 26%, our retirement plans gained 15%, our college savings plan increased almost 35%, and my stock options saw almost a 60% gain.

Our liabilities decreased 0.5%

Our liabilities dropped the typical monthly rate of 0.5%.. I have not done anything tangible related to accelerating our mortgage payment yet.  For now, I am putting money into Vanguard mutual funds….maybe someday I can use that and the stock options to pay down the mortgage, but that remains a long way off.

Our net worth bounced back more than 15%

After last month’s 13% drop, a gain of 15% is a nice turnaround.  Basically, we are back to where we were at the beginning of the year (though that is still 20% lower than our net worth peak during the middle of last year).  I’m hopeful that we have been building up some financial potential energy during the past few low stock market months.  By continuing to buy stocks and mutual funds at reduced prices, when the market recovers that will translate into big gains to our net worth (that’s the plan anyway – as I’ve said before, I can’t predict the future so I’ll keep you posted on how it turns out).

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Wow, did I really miss doing this for two months?  I guess I just didn’t want to see the carnage that has become my net worth.  Anyway, now’s the time to get back on track and keep plugging away. I didn’t actually get around to logging all my account values at the beginning of February, so all the percent change values show the change over the past two months instead of a single month like normal.

Our assets dropped more than 5.3%

Leading the charge downward were our cash accounts, retirement accounts, and house value.  After many months of increase, our cash value dropped 8.5%.  Two components of this were some increased spending lately (new laptop from side business proceeds – on which I am typing right now – and some home repairs) and a transfer over to an ETRADE account for a little stock speculating (interestingly, my stock account balances actually increased due to the transfer and an uptick in my employer stock).  Like most people, our retirement accounts got hammered these past two months dropping more than 10%.  House values in our area started finally dropping too, I assume, judging from the 4.5% drop in home value according to zillow.

There were some bright spots as the aforementioned stock accounts increased, my stock options value increased a bit, and our college savings balances increased as well.  Overall, though, that was not enough to overcome the downward momentum in the stock market and home values.

Our liabilities decreased 1.0%

Our liabilities dropped the typical monthly rate of 0.5% times two.  I am still considering accelerating our mortgage payoff but haven’t moved on it yet.  I also did some preliminary research into refinancing our mortgage but unfortunately it appears that our lack of equity will prevent us from doing that at this point without a large cash outlay.

Our net worth decreased a whopping 13%

Wow, that number is not a nice friendly number (I’m not sure I feel like finishing up this post now).  I’m trying to remember that this drop has taken place over two months instead of one…but that’s little consolation at this point.

I still feel like we are doing the right tings to position us for the long haul.  We are still investing in mutual funds through Vanguard and our 401ks and buying a little company stock each month.  This is certainly not looking pretty currently but I am convinced that this is what is best for our long-term financial health.  Remember that there are decades before we need our retirement money and the price of index funds are drastically lower than they were last year.  Every dollar that goes into those accounts buys twice as many shares as they did last year (or more in some unfortunate cases).  Obviously, I can’t predict the future, but the US has been in dire econonomic straits before and has always recovered.   So we are continuing our plan and hoping that it will pay off at retirement time.

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Scares!  Shrieks!  Is it Halloween, you ask?  No, it’s time to check all our account balances and update our net worth for the month.  Check out this page if you want to see the spreadsheet I use to track it and a video tutorial on how to create and update it . If you don’t like spreadsheets (who doesn’t like spreadsheets?!), I also have a post on some online tools for tracking your net worth .

Over at One Caveman’s Financial Journey, recently there was a post on why your net worth isn’t the best gauge of financial health .  It’s an interesting post with some valid points.   I agree that the usefulness of your net worth as an indicator of financial health is clouded by external forces such as the stock market.  That is actually the main reason I created my net worth spreadsheet in such a way as to provide a information on different account categories.  For instance, it might not be very illuminating to simply see that our net worth decreased 4.5% this month (OUCH!) but being able to see how our liquid savings did separately from our accounts with stock market exposure is still useful, I believe.

Our assets dropped 2%

Just like last month, I expected our assets to drop more than they did.  Every account with stock market exposure dropped significantly.  For instance,  our taxable investments dropped 12%, our retirement accounts dropped 7.5%, our 529 plan dropped 5.7%, and my stock options dropped a whopping 49.5% in value!  My options have been hammered lately, dropping 48%, 33%, and 49% over the last three months.  That means compared to their value in August, my stock options are down more than 82%! (Luckily, I guess, they weren’t worth that much money to begin with)

All of this was buffeted by the fact that our liquid assets increased 9.9% this month.  So, for the past two months while all of our accounts exposed to the market have been tanking, our liquid assets have balanced this out somewhat as they have grown 25%. So, I feel that looking at our increase or decrease in liquid savings is probably the best measure to see how we’re doing financially in this current environment.

Our liabilities decreased by 0.49%

Another very important financial metric to me is our level of liabilities (seeing that level go down to be specific).  Our mortgage drops a similar amount each month and our lone remaining debt (my wife’s contractual obligation if she stops working) drops a set amount.  As long as this keeps decreasing, I’m happy.  I do not have any plans to accelerate our mortgage repayment in the near future, but it is an idea with which I am toying.

Our net worth decreased approximately 4.5%.

All of this adds up (subtracts up?) to a 4.5% loss in net worth this month.  At least the downward decline is decelerating compared to our 8% drop last month. Again, the most important measures to me are the direction of our liquid savings and our liabilities.  As long as our liquid savings are going up and our debts are going down, then I feel like we’ve been successful for another month.

I am still not overly concerned about the stock market

I am not super excited about the drop in our stock market accounts…well, in a strange way, I am actually somewhat happy about it (in a very selfish way, I admit).  I am in a position that I do not need to draw on my retirement savings for decades and hopefully our emergency fund will prevent us from having to cash out any mutual funds or stock options in the near future.  In that respect, the lower prices for stocks are actually helpful as we continue to purchase more every month.  In fact, I recently increased my 401k contribution 4%.

I know it’s not pretty looking at the current numbers; instead I try to focus on how many more shares I am purchasing each month compared to the number I was buying last year at this time.  If I stay focused and calm and continue to dollar cost average each month, it has the potential to pay off in the long term when the market recovers.  (that assumes, of course, that the new president-elect and democrat controlled congress will attempt to stabilize the economy instead of causing it crash and burn so they can switch us over to socialism)

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Well, it is that time of the month again…time to check our current net worth. Unfortunately, it is not the greatest week to update all those account balances. To track how we are doing financially, I monitor our net worth and update it on a monthly basis. Check out this page if you want to see the spreadsheet I use to track it and a video tutorial on how to create and update it . If you prefer, I also have a post on some online tools for tracking your net worth .

Our assets dropped only 3.3%

I am not sure how our assets only dropped 3.3% when each individual component seemed to be down – some by very large numbers.  Our non-retirement investments were down 13.5%, our retirement accounts were down more than 10%, my daughter’s 529b balance was down  more than 10%, and my stock options decreased in value by a whopping 33.4%.  I’ve already checked the overall number once, let me do it again quick….yeah, it appears to be correct.  Our liquid savings did increase more than 13% due to a gift we were given…but I didn’t realize it would be enough to balance it all out.

Our liabilities decreased by 0.35%

After paying off the last of our student loans last month , our decrease in liabilities will now be much more level (and much smaller) each month.  Basically, we have our mortgage and a decreasing contractual obligation that we track as debt.

Our net worth decreased approximately 8% in August.

With our assets dropping more than 3% and our liabilities only decreasing a little bit, it all adds up to an 8% drop during the month of September.  It would have been worse without the gift we received (over 10% drop).   When I look at these numbers, actually, I have to admit it was not nearly as painful as I expected them to be.  I think this is a product of when I checked the numbers and is quite misleading.  I took all these balances on the evening of October 6th – which was Monday night.  Obviously, a lot happened during the rest of the week.  If I had checked the numbers Friday night, I bet they had been much, much worse (I am NOT going to check them again right now!)  What this does mean, however, is that even if the market stabilizes the rest of the month, my net worth will show a big drop next month.

So will the events of last week change anything?

So, am I freaking out?  No (at least I don’t think so).  I have not considered pulling any money out of the market (too lazy for that frankly – I don’t want to have to pay attention to everything all the time in the futile attempt to time the market).  In fact, I’m planning on buying more mutual funds (hey, it’s kinda like a 40% off sale).  I have quite a few years before retirement and judging from history, the market will recover.  It might not be soon, but then again it might be and I don’t want to miss the recovery.  In the middle of last week, I finally signed up to have Vanguard pull out a few hundred bucks and invest it in some index funds each month.  Tonight after I finish this post, I’m going to decide what to do with some money in a rollover IRA I still have in cash and probably put in a buy order for tomorrow.

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To track how we are doing financially, I monitor our net worth and update it on a monthly basis. I think it is a great way to keep track of how all your planning and hard work is paying off. Check out this page if you want to see the spreadsheet I use to track it and a video tutorial on how to create and update it . If you prefer, I also have a post on some online tools for tracking your net worth .

Yikes! A 13.4% drop in our assets!

The hard work does not seem to be paying off (at least not this month!) It was actually a crazy month for us finance-wise. For example, our total assets dropped 13.4% driven by a whopping 65.6% drop in our liquid assets. Of course, since you are all faithful readers, I’m sure you remember that we paid off our final student loan this month and that accounts for the vast majority of the drop.

On top of that, however, it seems to have been a poor month for my mutual funds and company stock. Actually, the value of my company stock holdings dropped more than 7% and the value of my stock options fell off a cliff, dropping almost 50%! My other stock market exposure (in 401ks and mutual funds) also accounted for some of the asset drop, but they were down less than 2% each.

Woohoo! Our liabilities decreased by 17.5%.

Again, the weirdness of the month created quite a large drop in total liabilities. Ahhh, it is so nice to not have to obsess about paying off the student loan anymore. I haven’t really started obsessing about anything in its place yet (like paying off the mortgage, for instance). I’m still waiting for our liquid assets to recover a bit over the next months due to not putting so much cash towards that loan each month. After a trip to IKEA , however, I’m not sure how fast those numbers will rebound.

Our net worth decreased approximately 6.1% in August.

Putting those two large numbers together yields a slightly smaller, but still pretty large, drop in our net worth. Obviously the stock market wasn’t too kind to us this month. Taking into account the fact that a large amount of our cash buffer was used to pay off the student loan, you can see that the stock market exposure will continue to have a large impact on our net worth in the months to come.

This month, however, was much more about getting rid of our last student loan that anything else. I am very happy with our decision to use some of our cash to eliminate it. We are now down to only having the mortgage (and the other contractual obligation to pay back if my wife stops working in the next 15 months). From a net worth point of view, it will probably be bumpy for the foreseeable future as it will depend in large part on stock market performance.

As we go forward, we won’t be looking to replenish our cash reserves to where they were previously. We will keep our emergency fund at its current level of 3 or so months of expenses. We have started some short term savings for vacation, gifts, large home purchases, and yearly expenses. Also, I finally decided on an asset allocation for my rollover IRA and our taxable mutual funds. We will start putting more money into those mutual funds soon and probably increase our kids’ college savings accounts as well.

So, I sum up the month thusly: 6.1% drop: bad . No more student loans: great!

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In the short life of BFN, I’ve already stated multiple times the importance of using net worth to track how healthy your finances are and what their current trend is. Today, therefore, I thought it would be helpful to list some other methods for tracking net worth. These methods are all online (so no Quicken or MS Money) and all free (thereby precluding Quicken online, for instance).

Simple calculators

Calculating your net worth is quite simple as long as you have all the data – it just requires some simple addition and subtraction. You can easily find myriad calculator choices using a simple web search. Type in something like "net worth calcuator" and results will be displayed such as CNN’s calculator and Kiplinger’s calculator.

Though these are straightforward and easy to use, I don’t feel that they are as useful as other tools. Simply calculating your net worth will not provide you with historical data and allow you to see how your finances are behaving over time. If you are going to calculate your net worth periodically and save the data somewhere, then you might as well use a spreadsheet .

Online Net Worth Tracking

The first site that comes to mind when I think of online tools to track net worth is NetworthIQ.com. NetworthIQ is a "social personal finance manager" that lets you "track, share, compare" your net worth with other users. You periodically enter your assets and liabilities to keep track of where you are financially and where you’ve come from.

The unique feature of this site is the ability to compare your net worth with other users. You can search for other users by age, income, occupation, education, etc. This allows you to see how your net worth compares to others earning your same salary, or in your same occupation, for instance. As an option, you can select to share your financial picture with other users of the site as well.

Online Net Worth and Transaction Tracking

While NetworthIQ focuses on your net worth, other online tools go beyond net worth to include a more complete financial picture. These tools allow you to aggregate all of your various account information (checking, savings, credit cards, loans, etc) into a single application. Of course, it calculates net worth but will also give you more detail on exactly how you are spending your money on a monthly basis. A very nice feature of these sites is that once you configure all of your account usernames and passwords, updating your net worth each month requires nothing more than visiting the site and clicking the refresh or update link. The site then automatically visits all of your account sites and collects your up-to-date account information.

The three most prominent sites that I have found are Yodlee , Geezeo , and Wesabe . They are somewhat similar in how they work and the data they collect and display. Each has the capability to calculate net worth, display categorized monthly expenses, and provide budgeting capability. As I see it, there are two main differences among the three sites.

First, Wesabe and Geezeo integrate a social component into the site. You can share information with other users, you can ask for tips and information, and you can see what others have done in similar situations. This can be very powerful in assisting you to create and stick to your financial plan.

This feature can actually be good or bad, frankly. Allow me to relate a story (or just skip to the next paragraph and I’ll never know the difference). When I first found out about Wesabe, I was so excited about it. I thought it was going to be a fantastic tool to really optimize my finances. I created an account and put in my first main goal as getting rid of my student loans. Wow, it was quite disillusioning when most of the comments pertaining to that goal were about how it was stupid to worry about paying off student loans. ("good" debt and low interest rate and all of that). Honestly, I haven’t been back to that account since then.

The second main difference is found in the way security is handled. Security is obviously of paramount importance when you’re talking about usernames and passwords to all your financial accounts. For Geezeo and Yodlee, you upload your account information to their servers. Wesabe is a bit different, though. As I understand it, you download some software to your computer. That application stores your account information and transfers your account data to your computer and then up to the Wesabe server. In this manner, your account information is never uploaded to the Wesabe servers and that presents one less security risk.

Seriously, the security of your personal financial information is of critical importance. Before you disclose any of it to any of these sites, it is very important you investigate exactly how they collect your data and how they protect it so that you feel comfortable providing the information.

Your bank may offer a similar feature

Another place to look for a net worth tracking feature is your bank if they provide online banking. I have my main checking account at a "brick and mortar" bank that also has a good online banking component. Integrated into the online banking site is an application similar to Yodlee (I think it actually is Yodlee). I can add the accounts not held at my bank and use this tool to calculate net worth and track monthly expenses just like in Yodlee. If you are looking for an online tool to calculate net worth, this is something to investigate. If you are using it, your online banking site already has some or most of your financial information. So, if you can get the desired functionality there, it doesn’t make sense to unnecessarily upload your financial information to another site.

I’ll stick to my spreadsheet

My advice to you is to track your net worth. If you’re still listening for more advice, my next piece is to use a spreadsheet. Of course, if you want to utilize some of the transaction tracking and categorization features or social networking aspects, then a spreadsheet won’t be of much help to you. On the other hand, there are no security issues with the spreadsheet as it is on your computer and does not contain your account information anyway. Furthermore, a spreadsheet can be configured in a very powerful manner to allow you to pull more information out of your net worth updates rather than just the bottom line net worth number.

I am considering using the Yodlee-like feature of my bank to automatically update my financial information each month. I will then transfer this information to my spreadsheet. Using the tool in this way may save me a little time each month and allow me to look at the current status throughout the month.

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