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JW December 2012 Net Worth

This article was written by in Naked With Cash. 3 comments.

Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

JW is thirty-one years old and a father of one with another one on the way within a month. He works in retail and is underemployed, and his wife and son are on state medical plans, and their income is supplemented by SNAP (food stamps). Read his bio for more information about his family’s situation.

His goal is to be able to provide for his family while still tithing 10% of his income to his church. JW is on Team Neal, with Certified Financial Planner Neal Frankle.

Neal Frankle, CFP appears courtesy of Wealth Pilgrim and Wealth Resources Group.

JW has made significant progress over the last year in improving his family’s financial condition. His net worth is below zero, so I can see some work ahead.

JW’s comments and analysis

This past month was a real good month financially. Being paid every two weeks resulted in three paychecks coming in during the month of December. During November we paid off the remaining $3,500 due on our car loan. Our credit cards were paid in full at the end of October so we did not make any payment on them this during November. The extra paycheck went to make the full payment of both November and December spending that was used on credit cards. Including Christmas spending.

This next month should be real exciting. Our daughter is due just into February but will likely come toward the end of the month. I also have done all the prep work on filing taxes sometime in the next two weeks. I expect a refund of around $4,000. Without seeing an IRS refund chart, I don’t expect the refund to show up before February.

We do need to purchase new items for our daughter to prepare for her arrival. We need a dresser and a crib/co-sleeper, clothes and diapers. We have not gotten anything yet.

Feedback from Neal

First, congratulations on the upcoming birth of your daughter next month. As the father of three daughters I can tell you how wonderful it is!

Here’s what I understand from your numbers — and more importantly from your letter.

  • Last month was good because you received an extra pay check and you used the money really well –- to get out of debt. I like that. It demonstrates commitment.
  • You paid off your credit cards in November –- another brilliant move. What are you doing with the extra cash flow now that you don’t have those credit card payments? Are you building up a bigger cash emergency fund?
  • What are you going to do with that $4,000 tax refund? Will that go towards the loans?

What I see overall is a young growing family very committed to a positive financial future. Here’s how to make that happen:

Set up a budget system. I am a big fan of using two methods and I outlined those in my previous note to Anne and Matt. See what I’ve written about a great budgeting system that works and tracking your spending in five minutes a month.

These articles discuss how I keep track of my spending. I think it would be huge for your family if you set up budgets and tracked spending against those budgets. You have debt. How were those debts created? Many times, we fall into debt because we fail to plan ahead and life just happens.

I understand this of course. Having children isn’t cheap. But that is all the more reason to set up budgets and track spending.

Do you have a financial plan? I know that it’s very hard to do with a growing family but even a flawed plan is better than none.

Make sure you have adequate life insurance. I love term insurance because it’s inexpensive — just what a growing family needs.

My initial focus for you would be to set up budgets and spending tracking with the goal of getting completely out of debt and building up a good emergency fund. At the same time, I’d make sure you have adequate life insurance. Then, I’d want you to build your financial plan.

I am excited to be working with you and look forward to hearing back from you.

Feedback from Jacob

Hey JW, I’m with you man! My wife is at home as well, and it’s quite a strain financially, but we’d have it no other way. I commend you on this honorable undertaking. Congrats on paying off the credit card and car loan. Looks like you have on left, but you don’t have that car? Is that correct? At your income, level, I’d focus on what Dave Ramsey calls “the four walls.” Make sure you can pay for food, shelter, utilities and clothing. Anything outside of that is only if you have the money left to pay it (i.e. the loan). But you’ve done amazingly well so far, so I anticipate and upward trend in your net worth, as well as income. Excited to follow along!

Updated January 23, 2013 and originally published January 22, 2013.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 3 comments… read them below or add one }

avatar 1 Anonymous

Well done, JW! By the looks of things, you’re making the most of what you’ve been given. Would be curious to hear more about your monthly expenses, and also as Neal asked about your plans for your tax refund.

Any way you could adjust your withholdings so you can have a smaller refund next time?

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avatar 2 qixx

Almost all of the refund is due to credits. Changing withholdings to 10 will have less than a $200 change in our refund amount.

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avatar 3 qixx


All the remaining debt is student loan debt. Payments from debts that are now paid off have been conciously moved to other categories. These are mostly other debts or targeted savings (car repair/replacement fund, etc).

We track our budget using Mint. I’ll probably stick to that in relation to your YNAB post. I’ll look at adding the 5 Minute budgeting from the other post.

For the Tax return we are still deciding what to do with it. We had planned to use it to pay off the car but got that paid off already. It will likely be some baby spending, some debt payment, some to savings.

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