The Net Worth Spiral

We’re more than halfway through January, and I have to admit, I’m a little concerned. I’ve confessed before that I have a slight obsession with calculating my net worth multiple times a week. Usually I get the rush of watching the numbers creep up slowly throughout the month. This month? Not so much. Each time I calculate my net worth the numbers seem to get lower and lower. I’m already thousands of dollars down from December’s net worth! What?!?

Okay, it sounds really bad. But it isn’t like I went on some serious spending spree. What happened? Well, I updated the value of my Ford Escape*. New cars lose a lot in value over the first 3-5 years, so this wasn’t unexpected. That took about $1,500 off my net worth. Yikes! On top of that, I bought a new garage door for the house ($670), and lent Bryan $500 to help cover expenses. Couple all that with the dropping stock market, and January isn’t looking so pretty.

But none of this was really unexpected. After all, I have money set aside in savings specifically for making improvements to the house to get it ready to sell. And I increased the emergency fund because I knew I’d need to help Bryan out some until he started working again. And, like I said, new cars lose a lot in value over the first few years. I knew all of this was coming, but it still hurts to see it.

On the plus side, things should be looking better from here on out. The garage door was the last big-ticket item on the house, and we should be able to list it soon. Bryan is back to work. I’ll be updating the value of the car again in about six months, but hopefully the decrease will be a little less with each update. And I have a nice chuck of change set aside in savings to be put towards the student loan!

The point is, the numbers may look really bad, but they don’t tell the whole story. I’m actually making a lot of progress! I just have to remember that not everything is immediate. Life isn’t ever going to be a straight line going up. I’m going to have little bumps all along the way. What’s really important is the big picture, and whether or not the steps I’m taking are leading me in the right direction.

So, be prepared: My January Net Worth Update is going to look really bad. But I’m still headed in the right direction!

– Cindy W.

* Yes, I do include the value of my vehicle in my net worth. Some people don’t, as vehicles lose a lot of value in depreciation. However, since I have a loan on the car, I only feel it is right to balance the asset against the liability (I am an Accountant, after all). Also, next to the house, the Escape is one of my most valuable assets. In a pinch, I could sell it. So, I only think it’s fair to include it.


  1. Don’t feel too bad about January. Your habits have been good, it’s the stock market that’s kicked our rears. I just did our net worth for the year and it dropped by a few thousand too. It’s been a bad month!

    1. At least it’s happening at the beginning of the year, right? We have 11 months to correct it!

  2. funny, before I got to the end of the post, I was going to give you my “accountant’s” point of view. I guess people have different ways of looking at thing.

    Frankly, I think it is misleading (to you) to put it in as an asset. I would consider the car an expense unless you had plans to sell it in the future. It’s artificially propping up your net worth.

    If there’s a possibility you might sell, then go for it… seeing as I drive my cars till they can no longer be driven (and have practically no trade-in value) maybe that’s why I look at it differently.

    If you could get a new car in the next 5-8 years then i guess it might make sense.

    1. I understand where you’re coming from. It’s kind of a personal decision; Some people include it, some people don’t. I don’t think it’s “artificially propping up” my net worth though. Think of it this way: If I died tomorrow, the car would be a valuable asset in my estate. Or, more appropriately, an asset that balances out a debt. Which is how I’m using it in my net worth. There aren’t many things I own that could be sold for more than $500. But the car is something of value.

      Sure, the value of the car will go down. But so will the amount of the loan. At some point, once it isn’t worth much, I’ll drop it from my net worth. That’s pretty consistent with what many PF Bloggers do. I plan to drive it long term, but who knows? Accidents and things happen that are outside of our control.

      Again, it’s a personal decision. It makes sense to me, but may not make sense to someone else in their situation.

  3. Oh, commiseration! Between the stock market and that plane ticket I bought, my net worth is lower now than it was in December and I HATE that. I should still have an increase by the end of the month, with another paycheck coming in, but I really like seeing things go up, not down 🙂

    1. I think it will be February before I’m able to regain what I’ve lost. Maybe longer. Not where I want to be, but I know it will get better! Other things are moving in the right direction, so I’m trying not to get too stressed out about the overall number.

  4. […] posted a few weeks ago that January was going to be a pretty rough month for my net worth. And, of course, it didn’t […]

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