Doh! I knew this would happen!
Say what! After this whole big speech about “I’m going to concentrate on paying down my debts”, I’ve been fooling around again?
I’ll reassure you right away, this is not the case. My finances are under control, but…
Because there is always a “but”….
We had our 3rd child at the beginning of the month! This is great news for my wife and I but not for our budget ;-). In fact, a kid means:
– 2 days of dining out expense for breakfast, lunch and supper (‘cause the hospital food is completely disgusting)
– A drop in my income since I’m on paternity leave for the whole month (more time but less money!)
– Tons of last minute expenses for the baby (diapers, clothes, etc)
– A bunch of medical receipts that I need to file claims for to get reimbursement from my insurance
In addition to that, I got my first bill for municipal taxes ($429) along with a $500 cash deposit for my pool this summer. But don’t worry; the pool is being paid in cash. But I’ll get the cash with my tax return… which I will only receive in May or June. Therefore, the $500 deposit has to be taken from my own money in the meantime.
So overall, my liabilities have temporarily increased by almost 2K but I’m not too worried. Starting on March 12th, I’ll be going back to work with a salary increase and I’ll be able to catch up pretty fast considering the fact that I won’t have to spend $800 in transportation anymore. Yup! I’ll be working 5 minutes away from my house!
On the other hand, when I look at my assets, I’ve noticed that I’m fairly conservative. For example, the neighbor in front of my house sold his for 340K last fall. My house has about 20K more in features (heated floors everywhere + central AC) & materials and is 400square feet bigger. Last year, I added a small increase that equals the cost of my central AC. This year, I’ll do the same thing with the pool. I’m aware that I can’t use the full price of these 2 things and add it to my price as it’s not “worth what I paid for” when it comes to selling my house. However, I don’t consider inflation in the price either. This is why it’s about the same thing.
Then we have our cars. I even out the value of my Tribute with its loan and I drop my RX-8 by $400/month since I bought it. By the end of the year, the car will be virtually worth nothing (less than 2K). However, I’ve done a quick search and the cheapest car I found for this year was selling at 7K.
Finally, I have my company shares. This could be quite arguable as they don’t have a “real liquid value”. However, following our valuation model (we consider 36 times our monthly income minus debts), our company is already worth more than the $196,000 (98K each) that we established. The next update will happen in May after our annual meeting. I can’t wait to have a new evaluation ;-D
I guess the most important point when you do your net worth statement is to be highly conservative with your assets and track down every single expense. You don’t want to boost your net worth artificially. This is called “living on a cloud of dreams” and prevents you from seeing dramatic situations. This is when I realized I was spending too much in 2011 and made corrections for this year.
I’m expecting a good month for March. This is really where we will see if I made a real statement when I said that I was taking care of my finances in 2012.
Here are the details:
CHECKING ACCOUNT $1,000 $1,000 0.0%
$3,083 $3,139 1.8%
RRSP ACCOUNT $29,804 $29,545 -0.9%
PENSION PLAN $20,218 $20,218 0.0%
HOME $345,640 $345,640 0.0%
COMPANY SHARES $98,000 $98,000 0.0%
MAZDA TRIBUTE $17,794 $17,360 -2.4%
MAZDA RX-8 $5,600 $5,200 -7.1%
TOTAL $521,139 $520,102 -0.2%
CREDIT CARD $6,358 $8,287 30.3%
LINE OF CREDIT $19,804 $19,213 -3.0%
HELOC $263,400 $263,400 0.0%
CAR LOAN $17,794 $17,360 -2.4%
Personal Loan $10,624 $10,416 -2.0%
TOTAL $317,980 $318,676 0.2%
Net Worth: $201,426
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