January Net Worth Update (-$663.89)

January was a tough start to 2010. Our net worth in January decreased $663.89 from last month, to a total of $67,773.74 (click on spreadsheet below).

What Worked
My 401(k) contribution increase from 7% to 15% kicked in this month. My wife and I are both now contributing 15% to our 401(k)’s. We also increased our payments from $60/month to $100/month on the student loan. This is our last remaining debt, so we want to get it paid off.

What Didn’t Work
We contributed a total of $1,716.15 to our retirement accounts (401k’s and Roth IRA’s) this month, but saw our retirement accounts decrease a total of $616.45. We also weren’t able to put any money away into savings, and that is one of our main goals this year.

Next Month
February should be a strong month. My wife receives her quarterly bonus check, and believes it may be ~$3,000 gross (~$1,500 net). This will help us bloster our savings account balance. I will be traveling for work part of the month, so our expenses may be a bit less too.

Free Money Each Month

My wife and I try to charge as many of our expenses as possible to our cash back reward credit cards. Not only do we get cash back, but charging expenses to our credit cards helps with our cash flow situation. Of course, we make sure we pay the credit cards off each month so that we don’t incur interest charges.

We each have our own cash back credit card that we use for business expenses as well as a joint cash back credit card that we use for household expenses. We earned a total of $646.36 in cash back rewards from these credit cards in 2009. That works out to an average of $53.86/month. This is truly free money since we pay off the credit cards each month. I love it!

Net Worth Milestone - $70,000

Thanks to our retirement account contributions and market gains, we passed the net worth milestone of $70,000!

We hit our last net worth milestone of $60,000 in November and are on track to hit a net worth of $80,000 in April.

2009 Net Worth Recap

As I’ve already indicated, 2009 was an up and down year, but ultimately, a good one for us. Below is a table of our net worth data for each month in 2009 (click on table to enlarge). Some highlights from 2009 include:

• We increased our net worth from $42,083.69 to $68,437.63. We missed our net worth goal of $75,600 by $7,162.37, but still did pretty well, all things considered.
• We contributed $10,000 total to our Roth IRAs.
• We contributed $9,437.41 total to our 401(k) plans.
• Our total retirement account balance grew from $23,506.87 to $54,620.37.
• We reduced our debt from $347,279.48 to $4,148.46. Short selling our condo was the bulk of this reduction, but paying off our auto loan eliminated $15,943.59 in debt that we started 2009 with.

With 2010 underway, we’re working hard create new highlights to review in 12 months.

2010 Goals

Below are our primary financial goals for 2010.

1) Increase net worth to $105,700
We finished 2009 with a net worth of $68,437.63, $7,162.37 short of our net worth goal. We’ve missed our net worth goal that past two years, so hopefully we can hit our 2010 goal of $105,700. We’re starting off a little behind the 8 ball because we didn’t hit our target this year, but based on my rudimentary forecast, this is a reasonable goal, and we should reach it if we stay focused.

2) Increase savings account balance to $20,000
We weren’t able to hit our savings goal in 2009 because we paid off our 6.5% auto loan instead. While we are starting 2010 with just a $2,492.73 balance in our savings account, I think we can reach $20,000 in savings if we make this a priority.

3) Contributing at least 15% of income to company 401(k)
This one is a gimme. My wife is already contributing 15% to her 401(k) and I’ve completed the paperwork to increase my 401(k) contribution from 8% to 15% in January. Now we just need to make sure we keep this up throughout the year.

4) Decrease debt by $1,000
After paying off our auto loan in 2009, the only debt we have left is $4,148.46 in student loans. We plan to pay $40/month extra to the student loan ($100/month total) so that we can reduce our debt by $1,000 in the next 12 months.

5) Increase tithe $25/month
We have been very blessed, especially since we began to be more faithful with our tithing, so we want in bump up our monthly tithe a bit. We consistently tithed $800/month in 2009 and plan to tithe $825/month in 2010.

It will be fun to look back in a year to see if we were successful in achieving these goals.

2009 Goals Review

2009 gave us a wild ride and we feel very blessed to have had as great of a year as we did. Below is a table compiling our net worth data for 2009 (click on table to enlarge). We set some goals for ourselves this year and overall, did pretty well. Below are each of our goals and the progress we made.

1) Increase net worth to $75,600
This goal looked doable, but we had a couple of challenges that kept us from hitting this goal. First, we missed our 2008 net worth goal by $5,716.31, so we started 2009 a bit behind. Second, we did not take into account short selling our house. The costs of the short sale and getting a rental unit were set us back a couple of steps. In the end, we got within $7,162.37 of our 2009 net worth goal, with a total net worth of $68,437.63. God willing, we should hit a net worth of $75,600 by February.

2) Wife to get a new job
My wife absolutely nailed this goal. After being laid off, she quickly got a job in the same industry as her last job, and with an even better pay structure and benefits. She received a company car, laptop, monthly phone and internet reimbursements, stock options and 401(k). Go wife!

3) Increase savings account balance to $20,000
Our short sale and moving into a rental unit hurt our chances of hitting this goal, but it still would have be possible, but we decided to pay off our auto loan instead. Our savings account balance at the end of 2009 is $2,492.73, $17,507.27 off our target. Now that the auto loan is paid off, we have $450 extra each month we can put into savings or invest.

4) Max out Roth IRAs ($5,000 each)
I’m surprised we were able to achieve this goal. We made up a lot of ground the last couple of months and were able to get $10,000 total ($5K each) into our Roth IRAs. This is a great feeling.

5) Contributing at least 5% of income to company 401(k)
We blew way past this goal. My wife began contributing 5% in April and increased it to 15% in August. I started 2009 contributing 5% and increased it to 8% in July. Our total retirement contributions (401k & Roth IRA) was $19,437.41, or 15.87% of our gross income. This sets a new benchmark for us.

6) Decrease debt by $8,000
Overkill. If you remove our $326,675.82 mortgage loan (since we short sold), our debt in December 2008 was $20,603.66. Our debt in December 2009 is only $4,148.46, a $16,455.20 reduction. Paying off our auto loan (loan balance in January 2009 was $15,586.49) was the key to smashing this goal.

7) Draft wills
Not done. We’ve decided to hold off on this goal until we have kids.

I will be posting our 2010 goals very soon.

December 2009 Income Statement

December was another strong income month and low spending month too (click on spreadsheet below).

In addition to our regular paychecks, I received a 3rd “extra” check and my wife received $330 in reimbursements from her company (3 months worth).

Our expenses totaled $5,174.03, a bit over our budget of $4,724.98/month, but not bad.

Not much else to report. The new year has begun and January looks like it may be an expensive month for us. We took a trip our of state from 12/30-1/2, we have payments due for our 6 months of life insurance, and I have a large 12 month gym membership bill due. We’re also going to see a bit of a drop because my 401(k) contribution increase from 7% to 15% begins in January.

December Net Worth Update (+$4,787.45)

December was a strong end to 2009. Our net worth in December increased $4,787.45 from last month, to a total of $68,437.63 (click on spreadsheet below). We missed our 2009 net worth goal of $75,600 by $7,162.37, but I'll be reviewing that in another post.

What Worked

With the end of the year here, we were happy to be able to finish maxing out our Roth IRA contributions this month. With a final contribution of $800 to each of our Roth IRA’s, we hit the $5,000 per person maximum for the year. We contributed a total of $2,911.66 to our retirement accounts (401k & Roth IRAs) this month and saw our retirement accounts increase to a total of $4,854.55!

What Didn’t Work

Everything went perfect.

Next Month

January starts a new year and new goals. I’ll be reviewing how we did with our 2009 goals and outlining our new 2010 goals within the next week. Happy New Year!