For the new readers, let me say that all of my credit card debt is in the form of a 0% balance transfer. Please see all three of my posts (1,2,3) on this and the (updated) best 0% offers that I have found. I’m earning 3.75% interest on my cash now, while these offers are still around.
Late update. As expected, our savings rate has slowed dramatically. Our net worth only rose $865 this month, compared to $3000+ in previous months. It wasn’t all that bad though, as our 6-month car insurance premiums were due for our (now) two cars, which we paid all at once to earn cash back on our credit cards instead of going on the payment plan. Lots of weddings (and the accompanying presents) this month too! I haven’t run the numbers in MS Money about our spending in budget areas for last month, I need to get on that next.
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At least it slightly increased.
However, one of the assets (cash) was converted into a rapidly depreciating asset (car). This move, although necessary, should be compensated by placing money into revenue generating assetts.
It is good you have been tracking your spending. You are well ahead of the average person (even the average person at your level of income). I admire you.
— Jose
Hey, at least you are up. That’s better than the US stock market. I didn’t understand the car thing though. So your car value was $7900 last month and you are up another $7900 this month. Does that mean your car appreciated 200% in one month? (I think mine depreciated 200%) Or does the first column indicate your year-start benchmark instead of last month’s numbers?
mmb- Well I purchased my case last/this month, so I added $7900 of value to this month’s chart, an increase (from zero) of $7900, auto-generated in Excel. Sounds stupid, but it helps offset the Total Assets column to something that made sense from last month. I removed the % column value, ’cause it was infinity.
You’re right Jose – got any creative ideas for “revenue generating assets”? 🙂
I see now. The first column is the running total.
When I buy a car, I do not add its value into my networth. It is hard to see my networth drop by many thousands in one swoop, but it forces me to prolong and thoroughly evaluate the decision.
re: trip
Considering that you can always sell your car and convert it to cash, it’s only fair to include its hypothetical selling price in your net worth.
I agree with DS Dan. Otherwise, buying a house will really put a dent in your net worth, and it wouldn’t be fair. However, one thing I do is reduce the net worth of the asset by the amount of the potential sale expenses. For example, with a car, I would use the KBB valuation if I was forced to sell it on the spot to the dealer (worst case scenario).
I’m with ‘trip’ on this one. I prefer not to factor my car nor my house into my net worth. Yes, it really is a part of my net worth, but we’re not willing to part with either one of them, so I ignore them for the sake of tracking how we’re doing. So what I really keep an eye on is our pseudo-net worth. WRT the house, I don’t figure in the mortgage at all — the value of the house and the mortgage cancel each other out, and we don’t get any credit for the equity. If I were to add in the value of our cars and house (and subtract our mortgage) we’re doing even better than it seems. But my goal is to be able to take shelter, transportation, et al. totally for granted and to be financially secure on top of those things. So keeping them out of my mental net worth calculations is just added motivation.