March 2006 Net Worth Update

I knew the numbers were going to look nice, but even I'm a bit shocked.

As of March 31, 2006:

• I have $9489.11 in cash, checking and savings accounts. An increase of $2818.48.
  
• I have $12964.95 in my 401(k), Roth IRA, and other stock accounts. An increase of $3017.79.
  
• I now owe $5991.61 on two credit cards at 0% interest. An additional debt of $952.03.
  
• I have a home and a car woth approximately $130,900.
  
• I now owe $120,961 on my mortgage and home equity loan. I paid off an additional $603.
  

My total net worth is now $26,401.45. This is an increase of $5487.24 in one month.

Wow.

I'm going to take some time to break down exactly how this happened.

Looking forward to tomorrow

Tomorrow is Friday! I'm really looking forward to it. We're having a team meeting at work (which means free lunch.) It's the end of the work week. And it's the end of the month, which means... time to update my net worth spreadsheet.

I'm a bit embarassed that I'm so happy about it, but I've done really well this month. It's the end of the term for our Employee Stock Purchase Plan (ESPP) so that should boost things a bit. We get a 15% discount and our company stock has done fairly well. I'm nervous about relying too much on our company, since my whole paycheck comes from them to begin with, but I figure an extra 1% of my income wouldn't be too big of a risk. I'm lowering the percent of my 401k that is currently in our company stock from 4% to 3% to make up for it, and may lower it even further when I rebalance at the end of the year.

I also got a bonus this month, which I never even saw. 30% went to my 401k, 27% to taxes, and the rest went right to ING. Since my credit cards are all at 0% interest, I'm not paying them off right away and am earning interest on the money instead. Because of this, I'm not counting it towards my emergency fund, even though the balance keeps getting bigger.

Between the extra income and my normal savings rate, it should be a nice update, and I feel a bit giddy. Anyone else ever look forward to updating?

I love my car

I really love my car: a 1992 Toyota Corolla. It's the first car I ever had, and I own it outright which makes me even happier. (It was really more of a hand-me-down, but it suits me very well.) It may not be much to look at, at it may not be worth much, but it's been very reliable and it gets me where I'm going. Other than routine maintenance, I haven't had much work done on it. But given its advanced age, I've been getting worried that I may need to start looking for a replacement.

While visiting two dealerships for freebies tonight I checked out a few used cars, but was fairly unimpressed. I'll need to keep checking for privately owned cars, I guess. Is it really too much to ask to find a well maintained car with good gas mileage that's cheap and looks nice? I doubt I could find one I like if I also want to get it from a dealer with any sort of warranty.

Dealership Freebies!

A few weeks ago I saved a Jeep ad from our Sunday paper. Inside was a promotion where you could win a new Jeep or Chrysler car, and everyone who entered was guaranteed a 31-piece emergency roadside kit by mail. The promotion ends on March 31, 2006, so I decided to stop in tonight and find out if I would be taking home a new car (Yeah, right.) Since the dealership was actually on my normal route home, it didn't really take any extra gas, and only a little bit of time. My kit should be arriving in 6-8 weeks.

Needless to say, I didn't win a new car.

A couple blocks away there is a Lincoln dealership, and it just so happens that there is a promotion for free American Airlines AAdvantage miles going on right now. So I stopped in there as well. I got 2,500 bonus miles for stopping in, as well as 250 more for viewing a clip online. I could get 25,000 miles for buying a Zephyr, but I think that one I'm going to pass on. If you're an AAdvantage member, check out www.aa.com/lincoln.

Account List

I like to think I'm somewhat computer savvy. I've been using a computer in some form or another for around 20 years now. I play games on my computer, I use email to communicate with most of my friends, I work on a computer all day, and most of my financial information is stored on my computer. I'm pretty good about creating backups of the important files, but what if something happened to me?

Almost all of my banking is done online. I manage my 401k, Roth IRA, brokerage accounts, money market accounts, savings accounts, checking accounts, home loans and credit cards online. If something happened to me, it would be very difficult for someone to track down exactly where I keep all of my money.

And for this reason, I need to create a list of all my accounts, what the current value of each is, and how to access the account if something were to happen to me.

Taking Inventory

I'm a self proclaimed packrat. I've been this way as long as I can remember. When I was a little kid, I had a room full of "stuff." Now I'm an adult, and I have a condo full of "stuff." Some of this "stuff" doesn't really matter to me, some of it is expensive, and some of it is irreplaceable.

I just re-evaluated all of my insurance coverages, and was reminded that I need to take an inventory of everything that I would replaced in case of emergency. Since I have so many things, I'm trying to go through everything and donate or sell the things I no longer need. Once I'm done, I intend to take a full inventory of what I'm keeping.

My plan is to do the following:
Create a spreadsheet of any belonging worth more than $25.
Take digital pictures of all items in the spreadsheet.
Burn two CDs containing all the pictures and spreadsheet, storing one in my fire safe box in my home and keeping the second in a safety deposit box.

As part of this, I also need to look into getting a safety deposit box. I also need to make backups of any important documents and keep a copy in the safety deposit box as well.

Writing a will

As a young, unmarried woman with no dependants, I have not felt a major need to get my will written down. Now that I have more assets (401k, Roth IRA, condo, etc.) I think that I should probably outline who I would like everything to go to. I can specify beneficiaries for my insurance policies, 401k and Roth IRA, but as far as everything else goes, I think I could probably use some guidance.

My employer does provide legal assistance for creating a will, so I need to look into how I can take advantage of this. I figured this would be a good overall goal to complete this year.

2006 Goals

The next step for me was to figure out what my goals for this year are.

1: Have an emergency fund with at least 3 months of expenses. For me, this would be $4500.
2: Fully fund my Roth IRA ($4000) and 401k ($15,000) this year.
3: Net worth of $40,000 by the end of 2006.

I believe that all of these are very reasonable goals. My current emergency fund has $3,600 in it. I'm contributing enough to my 401k that I should have it fully funded before the end of the year. This year I haven't yet made any Roth contributions, but those will be starting in May, and I'll contribute $500 a month for 8 months. My current net worth is $20,914, and based on my calculations, I'll hit at least $39,868 by the end of the year. After taking into consideration all dividends, increase in stock prices and interest, I should be well above $40,000.

Other non-monetary goals are:
1. Have an up-to-date will.
2. Take an inventory.
3. Create a list of accounts in case of emergency.

I'll cover what I think each of these entail later.

Background

I've heard that one of the most important steps is to find out where you are and what you hope to accomplish. I'll start by giving some information about myself and where I'm at.

I am a single female living in the far western suburbs of Chicago, Illinois. I graduated with a Bachelor's Degree in Computer Science in May, 2005. I had a job lined up as a software engineer right after college. I graduated without any student debt, and enough saved up to make a down payment on a small condo.

Where I'm at currently (as of Feb 28, 2006):
I have $6,670.63 in cash, checking and savings accounts.
I have $9947.16 in my 401(k), Roth IRA, and other stock accounts.
I owe $5039.58 on two credit cards at 0% interest.
I have a home and a car woth approximately $130,900.
I owe $121,564 on my mortgage and home equity loan.

Overall, I have a net worth of $20,914.21.

Welcome

I've become and avid reader of finance blogs recently, and it has prompted me to start my own. My plan is to outline my current financial state, pick some goals, and track my progress towards them. Hopefully this can be somewhat informative to others, as well as allowing me to look back over how I've done.