Net Worth Review: November 2010

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It’s the beginning of the month, which means it’s time to examine last month’s finances. I’m happy to see us slowly move up with our net worth; hopefully we'll finish the year up on a positive note.

Our Spending Habits in November

Compared to last month, we drastically reduced our spending. Here are some highlights from last month:

• Anniversary Trip: We went ahead and got our anniversary trip paid for. Our goal is to have debt free vacations. It's meant that we've had to scale back on some trips, but we've never regretted it.
• Bus Tickets: We've had family visit us this month and the most affordable way to get them over here is picking up a bus ticket.

We're cutting back because we spent more than normal last month (video games, etc) and next month we expect to buy a bit more due to the anniversary trip. Our plan is start next year by continuing to grow our net worth.

Checking & Savings

We're so happy that our checking and savings accounts are doing well even with the vacation purchases. Savings took a slight hit this month though, so we'll be a bit more vigilant this month. We’re just going to continue watching our monthly budget and adjust it accordingly. We're trying to balance long term savings with having some fun in the present.

If you're interested in how we organize our savings, I recently wrote our family's savings system. Our emergency fund looks good and we're hoping to focus our attentions to other financial goals.

If you haven't found a bank or credit union that suits your needs, try Bankrate to compare checking and savings accounts. Find an FDIC bank or CUNA credit union in your neighborhood that offer high interest rates for savings and watch your money grow faster.

Our Cars

The cars are doing well overall. No repairs this past month, but I'm noticing that the little VW is acting up. I'm planning on getting that checked out later this week or maybe next to be safe. The car replacement fund is doing well. We make car payments to ourselves to be free of a car loan for our next car.  I'm hoping to slowly increase the deposits in 2011, but I'm looking at some of our other financial goals to see if that's the best move.

In case you’re wondering how I got the vehicles’ values, I used Kelly Blue Book. We no longer have car loans, so they are just assets on our family's little spreadsheet. Every quarter I’ll update the values to account for depreciation.

Retirement Accounts

My husband’s 401(k) is doing well this past month. My husband automatically has his 401(k)contributions deposited to get his company’s match. He has invested in a variety of index funds.

If you don’t qualify for a 401(k) at work, though, you can still open an IRA.  Opening an IRA isn't hard at all and it can be a huge benefit for you. In fact, you can start investing with less than $1,000.

If you're not sure how much you can contribute to your retirment accounts, here are the current annual limits:

• 401K – $16,500
• Roth IRA – $5,000
• Traditional IRA – $5,000

The main difference between the two IRAs has to do with when you’ll be taxed:

• Roth IRA – contributions are made with after-tax assets, all transactions within the IRA have no tax impact, and withdrawals are usually tax-free.
• Traditional IRA – contributions are often tax-deductible (often simplified as “money is deposited before tax” or “contributions are made with pre-tax assets”), all transactions and earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income.

Sources: IRS Publication 590 and Wikipedia

Right now I have a Roth IRA that I’m contributing regularly on my end. It's been doing well and I'll probably review the asset allocation next month to make sure it's still on target.

Student Loans

Nothing exciting or new, we’re just chugging along with the student loan payments. Payments have been automated so it’s been relatively easy to keep up with them; we just confirm payments have been made each month. I'm really happy that I consolidating my student loans earlier this year to take advantage of the lower rates.

If you’re interested in consolidating your federal student loans, there are 3 ways to do it:

• Online: You quickly and easily file and submit your application online with Direct Loan Servicing.
• Phone: You can also call Direct Loan Servicing and have someone walk you through the process at 1-800-557-7392.
• Paper: The slowest to complete if you’re a procrastinator like me.

It's easy to do and you get can help on completing the application.

Monthly Summary

After tallying up all the accounts, I’m happy to report we’re growing our net worth.It’s a nice little jump and I hope we finish out the year with a net worth of $50,000. We’ll see.

Net Worth (as of November 30, 2010): $43,295.79 (+$1,020.64)

Your Net Worth Update

The year is almost over; I'd love to hear about your progress. How are you doing in 2010 so far? How are you doing with your finances? Have you met your goals for the year?