Happy New Year! It’s hard to believe it’s 2011. One of my resolutions is to get more involved in blogging: blog more, get more involved in the personal finance blogging community, and maybe even transition to my own domain. So I guess I should start this year on the right foot with a new post!
After reading this post at Paying Myself, I felt compelled to review my financial standing. But, because I’m not completely anonymous (my “real life” friends read this blog), I decided to just post the change in each account, as opposed to what my actual assets and debts are. I know that money is still an uncomfortable topic in social settings, so that’s my reasoning behind hiding some of the information.
So, let’s review:
- Liquid assets (checking and savings accounts):
+$4319 (would have been higher but used a large amount…see Car Loan below)
- Retirement (401(k), Roth IRA, Rollover IRA):
+$19,053 (thanks to a slight rebound in stock prices and my increased 401(k) contribution)
- Car (edmunds.com private sale value):
-$1,090 (I know there’s a lot of debate over including cars in net worth calculations. I initially included it to make myself feel better about my auto loan, to balance out the ugly dip in my net worth)
- Student Loans:
Reduced payoff balance by $7,127
- Car Loan:
Reduced by $13,731. Current balance: $0! It felt so awesome paying off my car loan 3 years early.
Change in net worth since last year: +$43,140
WOW. I don’t think I ever stopped to realize how well things went this year. Shoot. I feel like I’m bragging now.
But looking at this, plus reviewing a lot of the comments on some of my older blog posts (like on I’m okay with being wrong sometimes, Personal Finance Stagnation, and Fighting Lifestyle Inflation), I realized I should be more aggressive with my student loan payoff. Granted, the interest I’m paying on my student loans isn’t that much higher than the interest I’m earning off my savings accounts, but I think I have enough saved for emergencies, which is always goal 1 when you’re reviewing your finances. My next main goal after paying off my debts is buying a house, so I do want to have money for a down payment. But as Big City Beer Budget pointed out here, banks will be looking at your total financial picture when considering you for a mortgage, so the less debt I have, the better I’ll look, and the lower interest I might have to pay.
As you probably could tell from a lot of my posts, I’m always second-guessing myself when it comes to my personal finance priorities. Reviewing my accounts, I also realized that while I save money at a consistent and steady pace (everything automated at reasonable amounts), I tend to pay debts in a more erratic rate. With all of my student loans (and before, with my car loan), I paid the monthly bill, i.e. the minimum. But every once in a while, I realize I should be paying off my loans faster, since paying only the minimum is never the path to getting out of debt. So I pay a few thousand dollars towards my student loans (or in the case of my car loan, completely pay it off). But then more months pass, and I’m back to just paying what the banks tell me to, since that’s the way the autopay is set up.
I have to make a plan to get rid of this debt. I think maybe I should figure out if I can set up an extra or higher autopay for my student loans. Plus I could also do another lump sum payment with that extra $4k that I built up in my cash accounts. We’ll see. I think I’ll try to keep my blog posts shorter in the future (another resolution?) but I tend to have so much to say once I start thinking about something! Maybe I can start turning these into multiple posts 😛
Happy New Year!!