Welcome to my monthly net worth post for December, 2016. Each month, I post a complete breakdown of my net worth, along with a chart showing the progression of my net worth since the start of this blog. Posting my net worth helps keep me accountable for what I do with my money, and motivates me to make better choices and push to reach new goals. You can see previous net worth updates here.
2016 has officially come to a close. So, where did I end up on this year’s journey to grow my (net) worth?
December, 2016 Net Worth:
I obviously lost some ground during the month of December. I was hoping to surpass my goal of $20,000 in growth during 2016. Instead, December saw my net worth tumble by $2,145. Not exactly the direction I’d like to be heading in!
At the same time, I’m not exactly upset about where I ended up. I still grew my net worth by $17,148 in 2016. That’s definitely something to be proud of, especially given how many years it took until I started seeing any significant growth at all. In 2016 I became debt-free for the first time since I was 17. I grew my retirement savings by $11,877 between my 401(k) and Roth IRA. I have a $5,000 emergency fund! I’m really proud of all of those things!
Part of the reason I had such a big loss in December is because the value of my Ford Escape fell. Originally, I’d planned to reevaluate my vehicle’s value every January and June. I use Kelley Blue Book (kbb.com) to estimate what my vehicle might be worth. But this year seemed to be an excellent year for my car: I checked almost monthly, but it seemed to be retaining it’s value. Some months it was even up a little, although I never showed that in my net worth. Then in December, things fell. I thought about leaving the value the same until January, since that was the month I was “supposed” to adjust in. But, knowing the value had gone down, it seemed a little dishonest to ignore it for a month.
I don’t really like how much impact the value of my vehicle can have on my net worth. I originally added the value to my net worth to balance the liability I had with the loan. Once the loan was paid, I justified that the vehicle was worth something, should I need to sell it for some reason. And, while that’s still true, I don’t like the idea of putting so much value on a depreciating asset. So, for 2017, I think I’m going to increase the rate of depreciation to $500/month. That way my net worth won’t take sudden hits. And, after 2 years, I can remove my vehicle completely from my net worth calculations.
Like so many things, I may change my mind about how I value my vehicle on my net worth chart. But for now, I’m comfortable with that plan.
Net Worth Progress Chart:
Overall, 2016 was a really great financial year for me. What about 2017? Honestly, I’m struggling a little bit with financial goals for this year. Bryan and I still don’t have a really clear picture of where our future is headed. We know the basics: Some day we’ll get married. We want to travel the United States. We eventually want to retire. It’s the details that are a little blurry: Where do we want to live? Buy a place, or continue renting? When should we retire? Where and how do we want to work? The great part is, we have tons of options!
My main focus in 2017 will be helping Bryan to get on better financial footing. He still has debt, and needs to figure out a better savings strategy for the winter months when he’s laid off. Every person is different, and I know what worked for me won’t work for Bryan. It’s going to be a process of trial and error, and really learning to communicate and compromise.
That doesn’t mean that I’ll be ignoring my own financial progress. I’d still like to continue seeing my net worth grow. I’m keeping my standard goal of $10,000 in growth, while having a stretch goal of $20,000. Maybe 2017 will be the year I actually make it? I’m also changing up the way I view my savings. I currently put 25% of my gross pay per week into my company’s 401(k) plan. After expenses and spending money (and payroll deductions such as taxes and healthcare), that leaves me with $150 per week for “savings”. I did have a list of items I was saving for, like a new cell phone (which I bought in December), or vacations. But I found myself dissatisfied all year with this system: It felt less like savings, and more like slightly deferred spending. Just having that money sitting in savings earmarked for spending seemed like an excuse to spend it.
So, for 2017 I think I’m going to divide that money into two more vague categories: “2017 – Savings” and “2018(+) – Savings”. Basically, short-term savings, and medium-term savings. That way I still have money for things this year, such as vacations, or maybe some larger expenses. But I’m also putting away some money towards more medium-term goals. It gives me the flexibility of not having to have specific plans, while still setting savings goals. Maybe we’ll want to buy a house in a few years, and need a down payment? Or start a business? My goal is to put $5,000 into “2018(+) – Savings”, with a similar amount going towards “2017 – Savings”. I’ll still have my Emergency Fund of $5,000 as well.
Hopefully I’ll have my spending posted in the next few days. Trust me, it isn’t pretty!
- Cindy W.