At the end of every month, I review my personal finances, including bank account balances, investment performance, income and expenses, and I share some of those details here. This was the original purpose of Consumerism Commentary: to track my own finances publicly and hold myself accountable for my financial decisions. I wasn’t aware at that time that within a few years Consumerism Commentary itself would become a large part of my financial development.
I ended 2009 with a “modified net worth” of over $300,000, an increase of more than $100,000 since the end of 2008. A recovery in the stock market helped raise the value of my investments, greatly contributing to that increase. This modified net worth doesn’t include things like tax liability. the value of my possessions other than my car, or the value of my business if I were to sell it. It does however represent a metric that is meaningful for me to track over time.
Like last year, I add some history to my financial report to show long-term progress. The data in Quicken go back to 2001. At the end of that year I had just recently left a low-paying job at a non-profit organization and, like many people today, was unemployed for a few months. As you can see in the chart I had no savings and a few thousands dollars of debt.
Here is an explanation of the categories and numbers.
The cash in banks line includes the total balances of all my cash accounts, like savings and checking. I also include the balances of my business savings and checking accounts in this total, as well as money market fund portions of my investment account. I have checking accounts at Wachovia and ING Direct and savings at the same banks as well as FNBO Direct, HSBC Direct, Everbank, Ally Bank, and many others.
Accounts receivable includes the value of the invoices I have sent to companies for which I am still awaiting payment. For the most part, outstanding invoices clear with 45 days.
The investments line includes any non-cash investment I own outside of retirement accounts. I have a small amount invested in MSFT, AKAM, and IYZ through ShareBuilder. These investments were all made with “free money” through sign-up bonuses. I have an account at Scottrade holding an investment in AIVSX which was transferred to me ten years ago and has lost value overall throughout the course of that time.
My active investment account is held at Vanguard. I’ve been investing $1,000 a month since April in VTSMX, and I’m considering putting that automatic investment on hold now that the stock market has shot back up.
The investments category also includes my company stock purchase plan. I’ve been investing 10% of my salary in company stock since the plan was first offered. I haven’t sold any stock in about two years but I plan on beginning to sell again during the next open trading window.
The retirement category includes by 401(k), both before-tax and Roth portions, my Roth IRA, and my SEP IRA. Both IRAs include investments at TIAA-Cref and Vanguard, though I actively contribute only at Vanguard.
I also include the value of my car as a long-term asset, and I update the amount once or twice a year using a conservative estimate from Edmunds.com.
The accounts payable includes my credit card balances at the end of the month, which is automatically paid in full by the due date. The only cards I use actively for personal use are a Citi Dividend World MasterCard and a Bank of America Visa Signature. For business, I use an American Express Blue Cash for Business.
This category includes two sets of loans no longer existent. I paid off my car about three years after I purchased the car and I paid off the last of my student loans in December 2008. I expect at some point this category will include a mortgage.
Income and expenses
Although I no longer post income and expense reports on Consumerism Commentary, I still review them every month. In comparing 2009 to previous years, I earned much less interest even though my account balances have been higher thanks to the low interest rates on supposedly “high-yield” savings accounts. Income outside of my day job did not increase as much as I would have liked, even though I surpassed my goal for the year.
At my day job, my pay increased about 10%. I expect to receive a smaller raise and bonus this year, so growth would only come if I change jobs. My plan to leave this job behind and work on my projects full time is somewhat closer to being a reality, but for at least the next few months I will continue to hold down what seem to be at least two full-time jobs.
A steady increase in my dining out and convenience food categories worries me. I’m not necessarily worried about the spending itself; the amount I pay for food is well within what my income would allow. I’m worried because I should be taking the time to shop for better groceries and cook my own meals for the sake of my health. With the aforementioned multiple full-time job equivalents, this has not been a prioritized use of my time.
My entertainment expenses have decreased considerably. This is mostly due to not buying any new photography equipment in 2009. On the other hand, with the start of the Consumerism Commentary Podcast in April, my business expenses have skyrocketed. This required a new computer, audio equipment, and a podcast producer. I then needed another new computer to replace the original new computer which had ended up unreliable — and sometime soon I need to make sure I get the broken computer fixed or get my money back.
In 2009 I paid an enormous amount of federal and state taxes, for 2008 taxes due when I filed in 2009, estimated 2009 taxes, and payroll taxes deducted by my employer. Thanks to my accountant, I’ve managed to get some tax payments back for 2007’s filing but I am still waiting for refunds for 2008.
As I have been doing following the end of each quarter, I plan to post a summary of my investments within the next few days.
Updated September 2, 2011 and originally published January 4, 2010.