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It’s hard to believe it has been three months since I started tracking my net worth. In case you missed the previous reports, you can check them out here:
There was a big move between June and July, in large part because I started tracking my cars and updated the value of our home using some online services (Zillow.com, Trulia, and Homesnap).
This month saw a slight uptick in our overall net worth (+$7,142 or 3.68%), in part because we were able to pay down our overall consumer debt by about $1,000 (even though the balances on the credit cards actually went up). I also made a large payment ($2,400) on our Care Credit Account during the month.
A Word of Warning About Credit Cards
I think it is REALLY important to caution you here about credit cards and explain a bit about how we are using ours. If you knew nothing more about our situation, you would think that our credit card debt has actually increased and we are basically shooting ourselves in the foot with our debt pay down plan, which I initially laid out in my first financial snapshot.
Back then, I set forth our plan to use the Costco Card to save money on our overall grocery budget. Although we had some large trips to Costco at the beginning, those trips have now tapered off and we are spending less and less on each successive trip. In addition, the goal was never to incur any additional debt – I will be paying off the balance on this card each month so as not to incur any finance charges.
As for the other credit card we have, this has been used sporadically – mostly for unanticipated one-time charges. And like the Costco card, I intend to pay off the balance each month.
The last card we have is a Care Credit Card. If you aren’t familiar with this card, it allows you to pay for medical expenses interest-free for 12 months. After 12 months, if you haven’t paid off the balance, the deferred interest for the entire year gets added to the balance. This is a great tool if you intend to pay off the balance on time, but not if you don’t! Right now I’m paying the amount required each month to make sure we will never pay any interest on this card. Again – with three small kids and a variety of unexpected medical bills that pop up from time to time, it is a good way to even out our overall cash flow.
So even though you will see the balances on all three of these cards go up and down, my intent is to pay them off in full each month and use them to assist with cash flow only (and to allow us to shop at Costco, which we would otherwise be unable to do).
That being said, if you are unable to manage or control your spending when a credit card is involved, then I recommend that you steer clear of this strategy. Right now, the verdict is still out for us. I indicated my intent to pay off the balance of these cards in full each month, but if I falter, then we will have to go back to not using any credit cards at all.
My Debt Payoff Account
You will notice that I added a line item for my “debt payoff account”. This is actually an online savings account at Capital One (affiliate link – if you sign up for an account through this link you will receive a $25 bonus for your new account). I opened this account to keep track of all extra money I put towards our debt snowball plan. So this month I added $440 to this account.
This money was in part from my normal earnings, but I was also able to sell an old TV and printer for cash (a little over $200 total – I can’t remember the exact amounts). I deposited the cash to our checking account and immediately transferred it to this account.
It shows $440 because I got busy with work at the end of the month and forgot to make the extra payment on my student loan. But I have since processed a payment for $420 (I leave a little cash in there so they don’t close the account) that will be reflected on the next financial snapshot.
Other Notes from the Month of August
I was holding onto about $2,000 for my brother and sister from a tax refund due to my Mother’s Estate. I had written the checks awhile back, but my siblings got lazy and didn’t cash them. I gently reminded them to do so and this month my investment account lost approximately that amount of money as a result.
In addition, I opened up a Roth IRA with $2,500 that I took as a required minimum distribution from an IRA I inherited from my Mother. I didn’t need to take that much, but I needed at least $2,500 to invest in a stock market index fund at Fidelity.
The stock market as a whole has done well over the past several months, and my investments, in particular, have also done well. I own a considerable amount of Facebook (FB) and Apple (APPL), both of which are currently trading at all-time highs. I did sell off my shares of Snapchat (SNAP) at the end of July and generated a loss of over $3,000 that can be used to offset income on next years tax return.
I did not change the value of our vehicles – although they probably decreased marginally in the past month and will continue to do so. I’ll update those amounts every quarter or so.
My Acorns account (affiliate link), while small, continues to grow and save money for us automatically. I’m not looking to retire on this money anytime soon, but it is a good way to force savings.
How Are YOU Doing With Your Financial Plan?
Tracking your net worth is an eye opening experience. Writing about it in a blog post is even more enlightening, because you start to dig into the weeks about what really happened with your money during the month.
Do you track your net worth? Is your debt paydown plan on track? Please comment below and let me know – I would love to hear from you!