Net Worth Update – February 2009

The numbers came in for the last month and unfortunately, we weren’t able to keep up the momentum that we had built last month, where we gained almost 10%. Oh, well. I guess in this market, we’re going to expect some ups and downs. Probably a lot more downs than ups until things get better in the economy.
Anyways, our numbers look like this:

  • Assets fell 1.0% in value. The biggest reason for this was that our home value reported further falls, and a down stock market. It actually could have been worse (see below)
  • Debt fell 0.49% for the month. We did pretty good here, and I’m proud to say that we’ve knocked off over $20,000 in debt from February 2008.
  • Overall, our net worth slipped by about 2.3%.

It doesn’t look that bad, but it really should have been worse. We got a significant boost by the fact that I became vested in my company 401(k) matches.
I was officially hired in by my company in May 2007. They are quite generous with their 401(k) match, as they match 100% up to the first 6% of salary. However, the vesting schedule was as follows:

  • You are 40% vested after two years of service
  • You add 20% more after year three, four and five, at which point you’re 100% vested.

By that math, I shouldn’t have been at all vested until this May, and not fully vested until 2012. So, did I somehow invent time travel? No. Did I find a way to interrupt the space-time continuum? No.
Unfortunately, it was nothing so glamerous.
In addition the schedule above, there was a stipulation that if the division I worked for was sold, that full vesting takes place. Well, last year my company ownership transferred, so we became fully vested at once.
So, I had previously held off reporting the non-vested portion of my 401(k) plan, but now I added it in. This is a nice one-time boost, and it will also help moving forward, as all future contributions (up to 6%) will be matched and vested.

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Busy As A Beagle

I apologize that I’ve gotten off my posting pattern a bit. I like to get five or six posts a week, but I realize I’ve been coming up just a bit short on that. We’ve got a major project at work that I’ve been on for two and a half years, and the final pieces are coming together, and it’s been consuming lots and lots of time. I should see some time free up in two or three weeks, but until then, the postings may be a little less.
Hang in there because I’ve got lots of ideas in my head for some great posts!
I will also say that this has been a busy month in the financial sense. We’ve got a few major things going on this February:

  • Property taxes are due for the winter months
  • The last of the tax stuff arrived yesterday, so it’s time to get everything together and get it over to our tax prep specialist.
  • Paying off our furniture – We used a good portion of the monetary gifts from our September 2007 to purchase furniture for various rooms in the house. We made the purchases quite a ways back, but the store was offering (at the time) same as cash for a year or more. We qualified so we were free of making any payments for the entire time. We’ve had the money stashed away earning interest, but now it’s time to pay it off. I’ve had this day circled on the calendar for awhile, because if we didn’t pay it by the end of the promotion, it would add about 40% to the bill. That’s probably how they get a lot of people, but not this Money Beagle!
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Proud To Say I Insipried Somebody To Be Frugal

I was walking down the hall with a co-worker today, and he made a comment that floored me. It was simple. He said, “You inspired me to start bringing my lunch in everyday.”
I had no idea that I was able to inspire someone in that regard. I do bring my lunch everyday, but I don’t make a big deal about it. I simply bring my lunch bag every day and our re-usable container, and that’s that. Most of the time I bring sandwiches, but for variety, I’ll sometimes have leftovers or a pre-packaged meal.
Still, I had no idea that people were noticing.
I asked him about it and he said that it was more convenient to eat in the building versus going out or waiting in line at the cafeteria, and of course it was a big money saver. Only after he stopped spending the money on going out every day did he realize how much it was costing him.
I wonder how many expenses all of us have that we don’t even think about. For my co-worker it was lunch. For others, maybe it’s a daily coffee or a weekly trip to the mall.
We get so used to stuff that we don’t even think about another way.
I’m glad I insipired someone to see another way, and one that’s saving him money.
Now I can only wonder….
What else are people watching me do that I’m not aware of? :)

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Answering A Reader: Our Own Child Care

In a comment to my last post, reader Dog Ate My Finances (love the name, by the way), asked why my wife doesn’t start her own child care to make up for the difference in pay that we’ll be taking once she leaves her job to have our baby.
There are some financial reasons and some non-financial reasons for not doing so. I’ll start with the financial reasons:

  • The local economy in Michigan is not that good. Many parents are pulling their kids out of day care as they are losing their jobs, so the market is very tight. As such, there would be no guarantee that it would even take off.
  • The costs involved are not something we’re interested in. To open a home day care would require significant costs for certification, licensing, as well as changes I’m sure that we’d have to make around the house. Not to mention insurance that would have to be taken out. While I wouldn’t mind someday taking the venture into a start-up, this isn’t a risk that we really want to take.

This leads me to the non-financial reasons of why this idea wouldn’t fly around here. The biggest is that my wife simply has no desire to continue in that role in a long term fashion. Right now, her and I are both excited for her to have the opportunity to focus on our baby.
Her background in college was in Child Development. She had hoped to do something to the level where she could work within a health system or some other parallel position, and work with children who needed special assistance or had developmental needs. She didn’t have her teaching certificate, although this is something that she briefly considered, so classroom instruction was out of the question.
But to get the type of jobs that I described, at least here in Michigan, she would have needed a Masters Degree. She didn’t want to simply accumulate loans, so before she made that jump, she wanted to work for awhile, and see if she even was interested in pursuing that. Which would give her time to pay down some of the student loan debt she accumulated in her undergraduate studies. The job that was most available was working in child care facilities. These decisions were made solely by her as her and i were just dating at the time.
While she enjoys the interactions with children and is great at what she does, the bottom line is that she doesn’t have the passion to commit to it for a career. Now, before anybody says that taking care of our children is parallel, let me just say that there’s a huge difference in taking care of our children versus taking care of somebody else’s. She has a passion and a fire for one and not the other. I’ll let you guess which one!
And, honestly, once we started talking about when we wanted to start our family, we came to the conclusion that the timing wouldn’t make it so that going back for her Master’s was a good idea, at least not yet. Why? Because either way, we wanted my wife to take some time to focus on our family. This was something we discussed before we were even engaged, so we’ve been on the same page with this for a long time. Going back to school now would simply have added debt that we knew we wouldn’t have time to pay off before we started our family.
So, while there are financial reasons involved, the non-financial aspects hopefully fill in the rest of the picture.

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