I’ve been tracking my personal finances for about ten years now, and I’ve been making the information public but anonymous on Consumerism Commentary since 2003. This, in addition to learning about money, was my primary purpose for creating this website and it still is a major part of what I do.
I don’t pay as much attention to each cent as I did in 2003, however. My financial situation was different at that time. In 2002, I found myself a corporate job after making no money after taxes and expenses at a non-profit organization. I considered it a short-term fix, but stayed there until this past month. After a while, I had gained control of my finances and didn’t need to monitor my finances as closely. I gained and maintained better spending, saving, and investment habits and found ways to earn more money.
This year, I may post my financial updates on a quarterly basis rather than monthly. I will continue to monitor my finances as I do. Even while everything is going well, reviewing statements on a monthly basis is still necessary for intercepting any problems. The public updates and the desire to allow the community to keep me accountable may not be as necessary right now.
Here’s a chart of my year-over-year progress.
I ended 2010 with $538,000 in my accounts, a healthy increase since last year. My income and expenses both increased as well. Not including taxes, my expenses increased about 32% in 2010 compared with 2009, due completely to business expenses and money spent on hobbies like photography (which may be business-related, as well, if I earn money from photography). My income increased 56% — a better raise than I would likely ever get in a corporate environment.
Like last year and the year before, I added history to my net worth report to show my progress since 2001. That year was a low point for me; in December 2001 I left a non-profit company with no money, no place to live, and student loans hanging over my head.
Continue reading to see the chart.
I generate this chart by using Quicken’s Net Worth Report, exporting the information to Excel, popping the numbers into a template I designed to subtotal the account balances by type, and converting the report to a graphic file that can be displayed on a website.
Here’s an explanation of everything you see on the report.
I have two lines included here. The first, cash in banks, represents all of the savings and checking accounts I have, including both personal and business accounts. I have accounts at all of the banks I’ve reviewed on Consumerism Commentary, and this coming year I will be looking to reduce the number and close some of the superfluous accounts.
I also include accounts receivable under current assets. This is for the most part a business account, where I track clients and providers who owe money to me personally or to Consumerism Commentary. On average, receivables are cleared in 45 days from the invoice date, and that means any month-end balance in accounts receivable might include income from two different months, as I apply all income earned during the month to the last date of the month.
Long-term assets are accounts that I don’t plan to touch for a long time. I include my investment accounts in here even though they are almost as liquid as savings accounts. Most of my investments are held at Vanguard to take advantage of their free accounts and low-cost investment options, but I also have accounts at Sharebuilder and Scottrade.
This also includes stock in my former company, which as an employee I was able to buy up to 10% of my salary at a 15% discount (or more). I expect to sell most of this investment later this year.
My retirement accounts are included as long-term assets, as well. I plan to call Vanguard today to set up an Individual 401(k) and possibly a SIMPLE IRA to replace my former company’s 401(k) going forward. I will also need to decide whether to convert my existing 401(k) over to a Rollover IRA. Some of my former company’s 401(k) investment options are expensive, so Vanguard’s less expensive choices will be beneficial over the long term.
I also include my car as a long-term asset. My 2004 Honda Civic has about 128,000 miles on it and it runs perfectly. I’m interested to see how long it will last. At this time, I have no need to replace it. I began deducting $100 from the car’s value in Quicken on a monthly basis to represent depreciation. This roughly tracks Edmunds.com’s third-party trade-in value for the car, and I tend to err on the conservative side.
My only current liabilities are credit cards, all of which are paid in full every month. The balance is particularly high this month, as it was in December in 2009 as well, because it includes a good portion of my charitable contributions for the year. My current card of choice for personal use is the Chase Continental Airlines OnePass Plus Card..
I have no long-term liabilities left, for now. I’ve eliminated student loans and car loans, and I am completely out of debt. If I buy a house requiring a mortgage, that will change. But for now, I’m just enjoying being debt free.
Thanks again to everyone, particularly regular Consumerism Commentary readers, for a great year! In a few days, I’ll post a review of my investment performance for the year.
Updated May 15, 2012 and originally published January 3, 2011.