Wednesday, September 28, 2011

Financial Update - September 2011

I haven't been so good about financial updates since we switched our focus from paying off debt to building up savings. I decided that once a month I want to update you on our current financial goals and also provide a snapshot of our net worth. I'm hoping that this additional analysis will help us figure out where our financial focus needs to be.

The Goal Tracker (the thing with all the colorful bars over on the side) keeps track of the goals we have accomplished and the goals we are currently working on. As you can see, the $60,000 in debt we paid off shows up as the maroon bars. Our remaining debt, fondly nicknamed Albatross, is the bright yellow bar, and the green bars depict our current savings goals which are:

Create $15,000 Emergency Fund. Since we just started saving about a month ago, it feels good to be
a third of the way to this goal. My annual bonus helped us out but we expect to be able to put about $3,000 a month in savings from this point forward and meet our goal by December 2011.

Max Retirement Savings. For tax year 2011, the elective deferral limit for 401(k) plans is $16,500. Although we won't come near reaching the limit in 2011 since we were focused on paying off debt for most of the year, I still wanted to track how much money we contributed to our 401(k)s in 2011. As you can see, we contributed about $12,000 to retirement this year. Pretty good but I wonder how much more debt we could have paid off if we didn't make those contributions!!

Mike and I both increased our 401(k) contributions this month. Based on the current limit and what we have started to contribute, we will be able to easily reach $16,500 (or a revised limit) in 2012 if we can maintain this contribution level.

Net Worth
Based on the snapshot you see above - as September 24, 2011, we have a positive net worth of approximately $70,000. I immediately noticed that most of our assets are not very liquid so it makes me feel better that we are working on creating an emergency fund. Also, the value of our retirement fund has been all over the place these past few months and will likely continue to be all over the place. Finally, I included both of our cars based on the Kelly Blue Book value. I was pleasantly surprised to see that both cars are worth more than I expected (private sale value) but also know that these values will continue to decrease.

I would love to get an investment account going but I've got a lot of learning to do before delving into that category. As for the liability side, we have one student loan left and it has a large balance. Luckily the interest rate is only 3.625%.

Stay tuned,

So that's our September update! What do you think?

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