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Personal Balance Sheet, December 2007 ($122,596, +1.5%)

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It’s time to close the books on 2007, a successful year for me in terms of financial growth. As I do every month, I’m taking some time to publish financial reports in order to track my progress publicly. I’ve been posting these reports online since July 2003 in order to keep myself accountable for the decisions I make. I don’t pretend that anyone else would be interested in this much detail about the life of a stranger, but I will continue to do so unless it endangers my well-being.

While I came out ahead from November to December, I was held back from showing a significant increase in modified net worth due to holiday gifts, poor stock market performance, and a chunk of charitable giving. I call the bottom line in these reports “modified net worth” because it doesn’t include the true cost of liquidating all my assets. A full net worth might include tax liabilities as well as penalties for withdrawing funds from retirement accounts early. I want a number that’s more practical, so I don’t include that much detail. In this report I’ll use the term “net worth” to refer to this modified calculation.

My net worth increased 1.5% in December and 78% over the entire year. Continue reading to see the numbers, starting with an expanded report to show year-end balances for the past six years. The image in the post is just a thumbnail; click on it and a larger table will pop up.

Net Worth Balance Sheet, December 2007

Answers to Frequently Asked Questions

* The report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template.
* 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 range from 4.1% to 4.75%.
* I determine the value of my car using the private party value from edmunds.com, but only several times a year.

Explanations and Details

The numbers speak for themselves, for the most part. Thanks to more income this year, which will be described more in my income and expenses report, I was able to increase my bank account balances while increasing my expenses. Why not just increase savings without increasing expenses? That’s a good question, especially considering I am a fan of reasonable frugality. The answer is quite simple; I had always been uncomfortable with my living situation. Rather than choosing the cheapest one-bedroom apartment in the area as had been my living condition for a while, I had an opportunity to live more comfortably this year. I have to admit the change has done much for my well being.

This month, I contributed $860 to my 401(k). $138 was matched by my employer, brining the total added to the account to about $1,000. Despite this contribution, the balance increased only $400 thanks to poor performance of the investments and the stock market in general. I contributed $333 to max out my Roth IRA for 2007 but the account value increased only $300 from the end of November. The increase in the company stock plan account is due only to contributions; the funds are only invested once a quarter, and that stock purchase will take place today.

Under liabilities, the only long-term debt I have is a student loan. It’s a combination of money borrowed for my undergraduate degree and MBA. Although 90% of the tuition for the master’s degree was paid for by my employer, I didn’t always apply the reimbursements to the loan. You can see this fluctuation through the years on that line. As I mentioned in my financial goals and resolutions for 2008, I plan to pay off the student loan debt soon. With savings account interest rates dropping, it doesn’t make sense to hoard cash that could go to paying down this debt (other than to prepare for a down payment on a house or other large purchase).

It’s nice to look at six years at a glance. I’m happy with the progress I’ve made so far. It’s unfortunate I didn’t start paying attention to my finances sooner. At the beginning of 2002, I was already 25 years old.

Stay tuned for my income and expenses report which will provide an intimate look at my spending habits.

Published or updated January 1, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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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 .

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