In order to reach my net worth goal of $210,000 by December 31, 2008, I will need to add $50,000 to my balance sheet. Considering my progress so far this year, it is likely that I’ll fall short. Even if I do, as long as I continue on my path, I’ll still be satisfied with the outcome.
At the end of May 2008, the sum of my assets reduced by my liabilities was $158,793. That’s up 7.8% from last month‘s adjusted number. My reports aren’t perfect. Even when I post these financial reports after the month ends, I often remember additional expenses missing from Quicken. I’ll therefore make some adjustments that show up in the next report. That explains why last month I reported by April 2008 ending balance to be $151,079, but today I’m reporting April’s balance as $147,314. The different isn’t usually quite so large, however.
Keep reading for details about this month’s numbers.
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
I mentioned yesterday that I have fourteen checking and savings accounts, and those accounts are structured across two brick-and-mortar banks and three online banks. While I’d like to simplify, and I could probably do so by combining a few of my ING Direct sub-accounts, I’d like to add one more brick-and-mortar bank for accessibility and one more high-yield savings account to earn more interest.
The recorded value of my Honda Civic has not changed recently because I haven’t updated its value in Quicken. As I mentioned above, I check edmunds.com infrequently but it might be in my best interest to take the time to find an estimate for my car’s current value and then create some entries reducing its value by a portion of the difference over the last few months. This will have a negative impact on my net worth, but it would create a more accurate picture.
Between my 401(k) and company stock purchase plan, I invested $1,500 for retirement this month. That accounts for about half of May’s change in the value of my investments. The other increase of $1,535 was due to the performance of my investments. Recently, CPA1298 asked why my net income (which I’ll report later today for May) doesn’t equal the difference between my balance sheet from one month to the next. The biggest reasons are unrealized gains and losses, which I don’t include as income or expenses.
On the liability side, I’ve begun accelerating the elimination of my remaining student loan. Now that interest rates on savings account are low, there is no advantage for me to keep the loan hanging around when I can afford to pay it off except for liquidity. In each of April and May, I sent $500 towards the student loan. I’ll increase this amount in June.
(Reading last month’s report, I predicted I would have paid more towards my student loan in May, but when it came time to do so, I was concerned about the future of my business income. I still am concerned.) My stated goal is to eliminate the debt in full by the end of the year. I have the ability to do this right now, but I’d be sacrificing liquidity when I may need cash on hand.
My income and expense report will be posted shortly.
Published or updated June 1, 2008.