Net Worth Update January 2008

Ala The Simple Dollar, I have started tracking our networth and began several months ago. I hope to post monthly updates as percentage increase/decrease as actual numbers are somewhat relative.

I calculate the numbers in a relatively (I think) straightforward manner. On the first of every month before out rent comes out of our account, I add up the values in our bank accounts and add the value of our car into the mix. To find the value, I researched the Blue Book listing for it. This is the only real uncertainty in my numbers, which is only mildly disconcerting. I plan to relook at the value of the vehicle every 4 months to see how much it has depreciated. However, since it is a 1999, I believe the rate of depreciation will be low.

I then add up all of our debts and subtract this number from the assets. The monthly progress is done through the formula (current month - last month)/last month. The simple spreadsheet that forms the basis for what I do can be found here.

Assets - Up 9.6%

I attribute asset growth this month to several factors:
1. Being somewhat frugal by not buying ridiculous amounts of boardgames even though I really wanted to.
2. The Island Student award granted to Prince Edward Island students at UPEI.
3. Refund from dental costs.

Goal for next month: I plan to make February a mostly frugal month so I would like to see an asset increase of 5%

Debts - Up 129%

Wow, what an incredibly large number! The main reason for this was of course second semester tuition payments which are funded through a student loan. Credit card balances on the first of every month are included here as well. These tend not to be high month-to-month as we pay it off weekly.

Goal for next month: I am unsure. The debt is accumulating, but I am wondering if paying small amounts on the student loans now is worth it or not. This will be the topic of a future post. Let's say 4% though.

Net worth - Down 4.7%

Despite the large debt increase, our overall networth did not change as much as I thought it would, which is great. This will hopefully be a positive number next month.

I should note as well that since we have a "low" net worth any increase/decrease will generate larger swings in the overall percentages than someone who is well established on the financial track. For example, if my networth is $1000 and I increase it by $100, that's a 10% upswing. Someone that has a net worth of $100,000 would have to increase their NW by $10,000 to generate the same 10%. Not an easy thing to on a monthly basis. Though I could be wrong!