If I were to describe my finances in three words, those words would be “slow, steady progress.” I’m not getting rich by any stretch of the imagination, but if I am able to manage consistent growth at the same rate while making sound financial decisions, I should be able to live without worries. However, anything can happen, and good luck can always turn sour. I’m doing what I can now to ensure I’ll have a comfortable future while enjoying my life now.

Every month I review my personal finances by publishing my balance sheet and income report online. The balance sheet is included in this post. It shows a 5.3% increase in “modified net worth” since last month. That increase consists of a 13.7% decrease in cash equivalents and a 24.2% increase in investments. I’ll explain that after the report. Click on the thumbnail to zoom in.

Answers to Frequently Asked Questions

• The report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.
• The credit card balance is paid off every month and earns cash back.
• My student loan interest rate is 4.25% and my savings account interest rates are mostly above 3.0%.
• I determine the value of my car using the private party value from edmunds.com, but only several times a year.

Explanations and Details

Considering the large tax payments I made in April, I’m happy to come out ahead. While filing my taxes, I was able to determine the maximum amount I could invest in my 2007 SEP IRA. This month, I transfered about $13,000 from savings into two funds at Vanguard. I purchased $4,350 in the Total Stock Market Index (VTSMX) and $8,480 in the Prime Money Market Fund (VMMXX). I plan on using the money market fund to invest periodically in VTSMX, but I have not set up the automatic transfer yet. This should give the the best of both worlds—lump sum investing and dollar-cost averaging. I have to admit, though, that $4,350 is not much of a lump sum, and a lump sum once a year is basically the same as dollar-cost averaging over a longer time frame.

I invested $1,115 in my 401(k) in April, including contributions for my employer. The remaining $1,975 increase in that account was due to investment returns. My Roth IRA’s increase was due to performance only. This is the first year I won’t be investing in a Roth IRA throughout the year. There’s a possibility I may not qualify due to a higher income. If I determine that I won’t reach that income level, I’ll invest in one lump sum when I file my taxes next April.

As a result of the higher investment into retirement accounts this month, my retirement accounts now represent 50% of my total assets.

My student loan debt is still hanging around. I’ve been paying the loan off slowly because the interest rate is not bad for a loan and for a while my savings accounts were earning more interest than I was paying. I’ve mentioned before that I intend to increase my payments towards this debt as savings interest rates are decreasing and there’s little advantage to keeping the debt around. I was nervous this month and didn’t want to jeopardize my cash position considering my tax bill, so I increased my payment to only $500 from $125. If May shapes up to be a good month, I’ll look to double my payment towards debt to $1,000.

Look for my April income and expense report shortly.

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Tags: balance sheet, Flexo, net worth, Personal Finance, quicken
By Flexo on Friday, May 2nd, 2008 at 8:00 am