Wow… this is nice! The stock market is down and I’m still able to show a 7K growth for my monthly net worth statement! Nope, I didn’t increase my house value or my company shares (this is being done annually). In fact, I received my pension plan update, yeah!
However, what I am the most proud is to see my debt level increase by only $500 while I hosted 2 birthday parties and booked my vacation (Virginia Beach, here we come!) since my last update. The parties along with the hotel in VB have probably cost more than $1,250. Therefore, the increase is less than the money I have spent over my monthly regular budget. I know that other expenses will make my task of lowering my debt difficult in the upcoming months as I have municipal and school taxes along with… my B-Day in September ;-).
Why looking at your net worth on a monthly basis is a good thing?
I used to think that looking at my net worth month after month was kind of a waste of time. Some people do it on a yearly basis and they are just fine with it. However, I have noticed that since I follow it on a monthly basis, I’m being a little bit more cautious about my spending.
I’m not going to cut down on my Starbucks, but I will be more patient for bigger spending. For example, I have been going crazy to buy a pool this year. However, buying a pool also implies buying all the equipment and building a deck around it. Since this year I have spent enough money on my house (I added a central A/C and did my landscaping), buying the pool would be totally irrational. Therefore, I’ll wait until next year when I can pay cash for it. I have recently mentioned that I am expecting a big bonus in January. This bonus will be used to pay off my debts, maximize my RRSP and pay for my pool ;-D. If my bonus is not big enough, the pool will simply have to wait another year.
If I wasn’t looking at my net worth on a monthly basis, I might have thought that I could borrow some more as all pool dealers offer generous financing options. However, I would have jumped at the time of my yearly net worth statement. Since the beginning of the year, I have seen my debt level grow from $328K to $333K this month. While my assets are evolving faster than my debts, it is still not a good sign to see them growing! This is exactly how the US Government got into debt troubles; they didn’t care about their debt enough…until it hit them in the face harder than a shovel swung by Alex Rodriguez!
Then again, my plan is to eventually use my employer stock to pay off my debts. While it is growing on a steady basis (besides this month obviously!), it is also paying a 4+% dividend (which is double the interest I pay on my debts). This is why I let my employer stocks grow at the same pace as my debts do ;-).
So here’s the statement for the month:
CHECKING ACCOUNT $1 000 $1 000 0.0%
$6 930 $6 867 -0.9%
RRSP ACCOUNT $21 453 $21 453 0.0%
PENSION PLAN $12 000 $20 218 68.5%
HOME $345 640 $345 640 0.0%
COMPANY SHARES $98 000 $98 000 0.0%
MAZDA TRIBUTE $20 398 $19 964 -2.1%
MAZDA RX-8 $8 000 $7 600 -5.0%
TOTAL $513 421 $520 742 1.4%
CREDIT CARD $16 625 $18 684 12.4%
LINE OF CREDIT $19 717 $19 677 -0.2%
HELOC $263 710 $262 836 -0.3%
CAR LOAN $20 398 $19 964 -2.1%
Personal Loan $12 083 $11 874 -1.7%
TOTAL $332 533 $333 035 0.2%
Total net worth: $187,707 (+3.7%!)
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