Net Worth Review: February 2010

Blah is about all you can say after a month like this.  Nothing really exciting happened, and because of the down market, the four month winning streak is over (and erasing the last two month’s gains on top of it)

Assets:

  •  Property – Zillow and CyberHomes is what I use to track this, with a modification based on ‘gut feel’.  For the first time since I started tracking our value this way, the two sites finally came to a pretty close number.  Overall it went up slightly for the month, which is about the only thing that went in the right direction, go figure!
  • Autos – Kelly Blue Book went down quite a bit for the second month on both of our vehicles.   The first one is a Pontiac, and I’m wondering if because they’re discontinuing the brand, it’s causing a more rapid decline in value than normal.  The second car, I have no idea. 
  • Investment Accounts – We saw a modest 6.75% loss for the month, which shows maybe the bears are back on Wall Street after taking a break.  BOOOOO!!!!!
  • Cash – Cash was pretty much the same as before.  In actuality, we went up by a little bit higher than expected, but I wrote off some cash in preparation for the planned purchase in the next couple of months of installing a second water meter to lower our water bill.
  • Retirement – Our retirement account went down 6%….ugh.   

Debt:

  • Property – We made our standard mortgage payment.
  • Student loans – Minimum payments here for the month as has been the usual lately.  We will be paying a little bit extra on these coming up.
  • Credit cards – We carry no credit card balances!
  • Auto – We’ve paid off both cars outright so we have no auto loans!

We actually had lower monthly outflows than normal by staying frugal and being a little tighter with our spending than normal.  Unfortunately, that gets lost when you have so much invested in the stock market and the market has an ugly month.  This was definitely a month I’d rather forget!

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Getting Our Tax Information Ready

I think this is the earliest I’ve gotten everything together.  We have an accountant that does our stuff, so it’s all packaged and ready to get dropped off.

This is the earliest I think I have it all ready.  I know this because every year when I finish things off, I create a little Word document that has miscellaneous information that doesn’t have documentation, and the ‘Save’ date was five days earlier than I’ve had in years past!

It was pretty easy to get everything together.  Here’s the process we used:

  • Get a file folder for tax stuff – As soon as the first piece of information came in the mail, I grabbed a file folder and started putting everything into that
  • Create a checklist of old stuff – There are certain things that happen every year that I know we need before we have all the information.  W-2’s, interest statements, investment statements, student loan statements, etc.  It’s pretty easy to gather a list of everything you had in years past especially if you peruse last year’s returns.
  • Create a checklist of new stuff – If you opened any new accounts or had anything life-changing, make sure this is accounted for.  We had to add Baby Beagle’s information to our recordkeeping, as well as information about our 529 plan that we opened for him, since we’ll get to write those contributions off against our state taxes.  I also reviewed our car transactions (selling a car, purchasing a new one) to make sure that there wouldn’t be any possible tax implications. 
  • Use online resources – More and more access is available online, including year-end tax statements.  In year’s past, some stuff would get sent out on January 31st, but I found that the statements were available online well in advance of that, so I was able to print out the couple of items that hadn’t yet arrived.
  • Estimate – I plugged in our numbers on a couple of the websites that let you estimate your return, so I have a general idea of what to expect for our refund this year.  It’s always helpful to know that.  Although I could probably do it myself, I find that I’m just more comfortable having a professional do it, just to make sure that everything is squared away.

Happy taxes!

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Annual Comparison of Some Recurring Expenses

There are a grouping of expenses that occur on a regular basis.  I have attempted to group these together and ‘level’ the cost of these expenses, similar to how many utility companies will try to get you on a single payment for the year.  In my case though, I do this for about a dozen or so different things, and then make a single contribution towards this ‘leveled fund’ that covers the expenses.

Since I’ve been trying to level the expenses, it means that I’ve been tracking them.  So, I thought that I would compare these on an annual basis.  Some will have three years data, some will have two.  That’s because I add and subtract different categories as they come up.  When I look back at this next year, chances are you’ll see some additional categories here.

Here are the expenses (I’ve rounded to the nearest dollar):

Netflix (Video Rentals)
2007: $183
2008: $113
2009: $85

We’ve dropped our plan a couple of times over the years to match the decline in our time dedicated to watching movies.  I think that this will end up about the same in 2010 and trend up slightly, as we are anticipating bumping the plan back up a bit when they begin streaming movies to the Wii.

Cable TV and Internet
2007: $1,255
2008: $1,166
2009: $1,031

We canceled HBO in mid-2008.  That accounted for the slight drop in 2008, and also for the bigger drop in 2009 as the full year of savings was realized.  I believe that this cost will rise slightly as cable costs are expected to rise like they usually do.

Groceries
2008: $3,990
2009: $3,700

I’m so proud to report that my wife is great with finding deals and clipping coupons.  We actually were able to reduce our amount spent at the grocery store for food

Costco (Household and Food)
2007: $864
2008: $1,248
2009: $1,453

We buy most of our cleaning supplies, and some food staples through Costco.  I expect this number will continue to climb as we buy more and more baby stuff through there, as they have pretty good deals on select items.  Also, as our family grows, it will probably make sense to buy things in bulk that we wouldn’t buy there now, so I would foresee this continuing to grow.

Auto Insurance
2007: $2,823
2008: $2,710
2009: $2,287

We saw a pretty big savings this past year as we made the decision to raise our deductible from $500 to $1,000 in the event of an accident.  This would essentially mean that we’d have to go accident free for just under two years to save the difference.  We also dropped rental car insurance.  Previously, when we were both working, we wanted to make sure that we had this coverage.  Now that my wife is staying at home, we feel that we could get by with one car in the event of an accident.  I believe that this cost will drop a little in 2010 as we realize the full year savings, and then level off or rise with inflation.

Secretary of State + Roadside Assistance
2008: $277
2009: $279

This covers license registrations as well as our dues for AAA Roadside Assistance.  Hopefully our costs stay about the same, as they did this past year.

Gasoline
2008: $2,335
2009: $1,399

This was a big drop for us, and it was for two reasons.  First, we drove a lot less.  My office, where I spend about 80% of my working days, is only about six miles round trip.  My wife stopped working, so although we miss her income, our fill-ups went down a lot when her daily commute went away.  I expect this number to increase in 2010 as gas costs are already higher, but hopefully we won’t approach our 2008 spending in this category for a long, long time!

Electric (Lighting, A/C, Power)
2008: $857
2009: $1,101

These costs have gone up quite a bit but they were expected and tied in with A/C costs.  First, my wife was home for the full day whereas previously we were able to drop the A/C during the day when both of us worked.  Second, we ran the A/C more often in the summer months to keep the temperature regulated with the new baby.

Natural Gas (Dryer, Water Heater, Furnace, Appliance Service Plan)
2008: $1,393
2009: $1,469

These costs were relatively stable.  I am projecting a slight uptick due to normal rate increases.  I am hoping to offset some of this by continuing to look for ways to insulate and seal our home from the outside air.  We also purchase our appliance service plan through the gas company, and I think the cost went up $2 per month mid-way through the year.

Water
2008: $849
2009: $900

Our consumption actually went down, but rates generally go up double digits per year where we live.  This year will be no exception as they’ve already announced that rates will go up at least 11.5%, probably more.  I am actually hoping, however, to lower this cost in 2010 by investing in a second water meter.  This would cost us about $500 – $600 to install, but will then provide us with a lower cost for the water that we use to water the grass.  The reason for this is that it would back out the sewage costs for water that goes outside.  Based on current rates and how much we use to water the grass in a year, I think that this would pay for itself in 24-36 months, so I’m in the process of getting quotes and preparing for the work in the spring.

Garbage & Recycling Collection

2008: $315
2009: $211

The city we live in went to a single hauler to pick up garbage and recycling.  With this, they were able to negotiate a significantly lower rate for residents than any resident had been able to do individually.  The costs are guaranteed for the next 18 months or thereabouts, so I believe the costs will be about the same this year (maybe a little bit lower since the new rates didn’t kick in until March 1st).

Cell Phone Service
2008: $871
2009: $931

We got some promotional breaks in 2008 when we renewed our plan for two years.  Hopefully, when our plan expires this year, we can get some good deals to keep our costs down or even lower them a bit.  I’d be happy with spending in the neighborhood of what we spend now.

Pets
2008: $995
2009: $1,045

This is for the food and vet visits for our two cats.  I’m projecting this number to increase as both of them get older and will most likely require more medical attention.  One of the cats is on a special diet to deal with a medical condition he’s had most of his life, so the food costs here are greater than they would be for most cats.

Others

There are a few other categories that I track spending for, but for various reasons, I will just list them.  In some cases, we haven’t included these as spending categories for long enough to do a comparison, and in other cases I don’t feel comfortable posting the details.  In any case, I’ll list the categories:

Christmas Gift Fund

Charitable Contributions
Clothing
Health Care Out-Of-Pocket
Landscaping / Planting Flowers
New Cell Phones

Though we track spending on a month-to-month basis, I am finding that looking at it from a bigger time frame allows you to really see spending habits over time, and pinpoint where opportunities for significant savings might come into play.

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We’ll Soon Be Bumping Up Our Netflix Plan

I’ve been a subscriber of Netflix for almost seven years.  I have gone through multiple plans and have rented over 600 movies in the seven years.  I actually am nerdy enough to where I keep track of my cost per rental, and as of August 2009 (last time I updated the numbers), I was running about $2.16 per movie.  I think that’s pretty good.

Back in my single days, especially when I was traveling, I was on a 3-discs-out-at-a-time plan.  I made great use of it.  As time has gone on, as we bought a bigger house, found new hobbies as a married couple, and began our family with the birth of Baby Beagle, I have lowered the plan a few times, to where I’m now on the most basic plan. We get one movie at a time for two rentals a month.  That works out to $2.50 per movie.  Right now, that’s been pretty good though there have been times that I would have liked more movies.

One of the things that Netflix started doing over the past year or two is streaming their movies to ‘Netflix ready’ devices.  The biggest of those was the Playstation 3 and the XBOX 360.  Various other devices, such as specific Blu-Ray players and devices designed only for Netflix streaming, exist as well.

I didn’t own any of those devices but thought it would be cool.

Now, I will have that chance.  We purchased a Nintendo Wii last year, and Netflix announced that they will begin support of streaming to the Wii beginning this spring.  All you need is a Wii that is connected to the Internet via wireless.  That’s the first thing I did with the Wii after plugging it in, so as soon as Netflix gets the partnership going, we’ll be good to go.  All they do is send you a disc that you pop into the Wii, and it will add a ‘Channel’ that will link up with your Netflix account, and we’ll be on our way!

That will make it a lot easier for us to watch and rent movies.  Though they only stream about 20% of their catalog, I know that there are plenty of movies that we could watch.  If we bump up to the minimum plan to support streaming videos, and watch two per month that way (in addition to two on DVDs), we’ll break even.  I don’t think we’ll have a problem with that because my wife and I have gotten into the habit of watching a movie on Saturday nights.  Right now, we watch two per month with Netflix, and we’ll spend the other two movies either watching a movie we own or trying to find one with our On Demand package or on Starz, both of which are included in our cable package.  Still, those two features only give us about 100 movies to choose from where the Netflix option will give us 17,000.

We’ve been talking about bumping the plan back up anyways.  Once they activate this option, this is a no-brainer.

I’m a big fan of Netflix and have always been.  Prior to that, I had used Blockbuster stores, which had high prices and horrible customer service.  Netflix has used technology over and over again to create new opportunities and ways for customers to experience movies.  They were the first to deliver DVDs to you via mailbox, and they were the first to then stream videos on a widespread basis.  They have said that over the next 10-20 years, they expect the DVD in the mail aspect to disappear altogether.  By then, who knows what else they’ll have come up with?

Chances are, I’ll be subscribing and will still be a satisfied customer!

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