Yep, it’s that time again! Time for me to “bare my financial soul”, so to speak. I know, I know, I’m a little late again this month. Without further delay:
As you can see, my net worth took a bit of a dive in October. An almost $4,000 dive, to be more precise. What happened? Well, I bought a car. A shiny, new, 2014 Ford Escape. The hard part about putting a brand new car into your net worth is how to value it. Using the MSRP (in this case, $23,535) seems a little misleading. After all, a new vehicle starts losing value the instant it’s driven off the lot. But it’s not like Kelly Blue Book values 2014 models yet (I checked). So, how do you value it? In this case, I looked up the value of a used 2013 Ford Escape S, and ball-parked the value of the 2014 from that number. It’s not the best option. But, then again, valuing a used car is tricky business. In reality, it’s only worth what someone is willing to pay for it. Hopefully I won’t be confronted with that for another 10-14 years, at which time the number will be vastly different. For my purposes, a general estimate is good enough.
It’s not exactly ideal to watch as my net worth goes down. After all, I’m supposed to be growing my worth, right? But, I’ve kind of been preparing myself for the fact that 2013 was going to be a bit of a bumpy ride. I think it’s always that way in the beginning; When you’re working with very little, every bump in the road has a big impact. Hopefully 2014 will be pretty smooth sailing!
How did you fare this month? Do you agree with how I valued my new vehicle?
– Cindy W.