Our 2014 Financial Goals

mb-201312billscoinsLast week I wrote about our household’s financial performance.  Having beat our goal of a 17% net worth gain by a few percentage points, I set our sights on what our goals are for 2014.  I love this time of year as others post their goals, not just to see the goals themselves, but to see the priorities and also the reasoning behind their goals.

As such, here are our goals!

  1. As seamless a transition as possible between my ‘old’ and ‘new’ employer – I will be working at the same job doing the same thing, even sitting at the same desk.  But, our work is being in-sourced as the organization has decided to bring most IT services in house.  My salary is staying the same, but there will be adjustments across the board.  Benefit deductions will change.  We will go from receiving 24 paychecks a year to 26.  The offerings for some things, like life insurance, may need to be supplemented.  Added together, this will present enough changes so that I’ll have to make some changes to how I track things on a detailed level.  I’m hoping I can get through this relatively stress free.
  2. A modest gain in our home value – According to my estimates, our home went up 5.6% in 2013 after a 6% gain in 2012.  I’m thinking that things will start to level off, so I’m hoping for a modest 2% gain in 2014.
  3. A 20% decline in the value of our cars and camper – I think this one speaks for itself.
  4. A 10% gain in our trading account / personal investments – I don’t think that the stock market will continue its rally anywhere near the extent that it has the past several years.  I don’t think we’ll be headed toward a recession, I just think the market will take a breather.
  5. A 5% increase in cash savings – If nothing goes wrong, then we should be able to beat this pretty easily, but as I learned when I got stuck with $2,000 in costs between a new dishwasher and car repair bills last month, it’s best to plan conservatively and anticipate the worst.
  6. A 12.5% gain in the value of our retirement funds – Again, I don’t think the market will give too many gains here (though I hope I’m wrong), so I think this would come primarily from contributions.  My transition in employment will actually result in getting an employer match, something I haven’t had in a few years, something which will definitely help toward this goal.
  7. A 6.6% reduction in debt – If we make the regular payments on our mortgage and student loan payment, this is what I estimate the reduction will be from our current balance.
  8. This would result in a 13.6% net worth gain – If all of these things come out exactly as estimated, our net worth would go up by 13.6%.  This would be a big cut from the 27% and 25% gains we’ve seen the past two years, but I think it’s time to start setting our expectations a little more conservatively.

That’s it.  I’d love to say that we’re going to do something big like ELIMINATE ALL DEBT or MAKE $500,000 IN THE MARKET but things are a little less exciting than that.  In the end, we’re still working hard to increase our assets and reduce our debts as we work slowly toward building stability, financial independence, and wealth.

I’d love to hear your goals.  Share them in the comments below or point me to your site, if you’ve also written a blog post outlining your goals.  I wish success for us all!

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2013 Financial Year In Review

When I first started tracking my budget and net worth, I did monthly updates around the 7th of each month.  This still holds, and what it means is that December 7th is the ‘last’ net worth update for the year.  In order to do year to year comparisons, I’ve always kept the December update as the ‘final’ update.

What this means is that I wrapped up our net worth tracking for the year a couple of weeks ago.  I finally had a chance to look at it compared to our estimates, and determine that it was a pretty good year.

I don’t go into actual dollar amounts, but rather like to keep things in percentages.  I will still try to keep things interesting and in perspective.   I also continue to use accounting principles upon which my budgeting skills were formed, so I will list things according to the simple accounting formula that Assets minus Liabilities equals Equity (or in this case, Net Worth).

ASSETS

Our House

Projected:  +4.1%Actual:  +5.6%

What This Means:  I use a combination of inputs to estimate the value of our house.  Zillow is one component, our property tax records another, comparable sales in our subdivision and surrounding area, and just an overall feel of what’s going on. Even though the ‘actual’ is still an estimate, I am fairly conservative in my estimations, so I can safely say that the value went up more than I had thought.

Our Cars and Camper

Projected:  -13.7%
Actual:  -27.5%

What This Means:  At first glance, this appears to be pretty terrible, but in all honestly, the big gap was by my own choice, and is tied to me being somewhat pessimistic.  I use Kelley Blue Book as the starting point for valuing our cars.  I always lower the estimates about 5%, but knowing that our cars are now each around seven years old and the camper is nearly ten, I purposefully started lowering the value even further.  I figure as the cars get old, there’s an ever increasing chance that a blown engine or transmission could render a vehicle pretty much worthless, so I now write down about 20% of the value, and continue to ‘up’ this as the age goes up.

For a point of comparison here, had I stuck with the 5% point, the actual decline would have been around 15.0%, so I would have been pretty spot on.

Our Investments (Trading Account)

Projected:  +19.2%
Actual:  +28.8%

What This Means:  A darn good stock market for the year helped us along here.  Not much else to say, really, except that I wish I’d started off the year with more to invest!

Our Cash (Bank and Savings Accounts)

Projected:  -11.4%
Actual:  -15.5%

What This Means: I knew that we were going to get a new roof this year, so I was expecting a big hit.  The difference and why it went down was mostly to do with the fact that the roof was more expensive than I had budgeted.

I also didn’t make as much from my side hustles as I did in 2012, though some of this was offset with my wife kicking in through her side hustle.

Overall, not too many complaints.

Our Future (Retirement Accounts)

Projected:  +14.5%
Actual:  +24.1%

What This Means:  Again, a good stock market helped out quite a bit.  I’m actually thinking that a top is coming soon, so I strategically got more conservative going into the fourth quarter. This probably left a couple percentage points on the table, but overall I can’t complain.

LIABILITIES

Our Mortgage

Projected:  -5.7%
Actual:  -5.8%

What This Means:  We paid off what we expected to pay off.  Since we didn’t make any extra payments, this essentially landed us right where we thought we’d be.

Our Education (Student Loans)

Projected:  -12.8%
Actual:  -13.0%

What This Means:  Ditto for student loans.  We only have one remaining, and the payment is less than $100 per month and the interest rate is locked in at 2.25%.

mb-201312coinsNET WORTH

Total Assets

Projected:  +6.0%
Actual: +9.3%

What This Means:  Since liabilities are pretty well fixed, the difference maker in how we do compared to our goals is tied to how well we do with our assets.  Since the overall number came in higher than budgeted, this bodes well for our net worth performance.

Total Liabilities

Projected:  -6.0%
Actual: -6.0%

What This Means:  Since both of our loans came in right where we estimated, it stands to reason that the total liabilities came in right where we thought as well.  It’s nice to note that we did not take on any new liabilities.

Overall Net Worth

Projected:  +16.7%
Actual: +23.1%

What This Means:  2012 saw a ‘record’ year for us, with a 28.4% net worth gain.  I was hoping we’d keep the momentum, and we did, exceeding what I had hoped.  This was our fourth best year since I’ve started tracking (2003 and 2002 were second and third, respectively).  I’d like to see years like this every year, but I also am realistic and know that the amazing performance of the stock market won’t continue unabated. This means that we’ll have to continue to increase our savings, and also to increase the pool upon which the investments are based.

We also keep a long term focus.  We realize that our personal finances are with us for our entire lives, and the goal is to continue to make positive strides both for the near term and the long term.

Hopefully you had a great 2013.  Share your results if you know them, I always love to see how I stack up!

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Great Read Friday: I Jinxed Myself – September 6, 2013

I had a feeling when I posted last month that our net worth had made positive gains for fourteen months that I was probably jinxing myself.  Sure enough, the streak came to an end as our net worth fell for the first time since June 2012.  Largely driven by the stock market taking a breather, our net worth fell by 1.5%.

mb-pennyI guess that can only mean one thing: It’s time to start another streak!

Here are some great posts I’ve read over the past few weeks.  I hope you enjoy them as much as I did.

A buffer of cash in your checking account can help in many ways, as pointed out by How I Save Money.  My favorite positive reason is simple: peace of mind!

All Financial Matters points out one of my pet peeves, that Tropicana raised prices by way of charging you the same as you used to pay but giving you less.  Argh!

KrantCents has a very resourceful list, outlining 25 odd jobs that can make good money.  If you’re looking for some extra cash, and want to do something that’s well worth the time, check this list first.

Keeping with the jobs theme, I always love reading about people’s job histories, and Tight Fisted Miser had a whole slew of entertaining and foundational jobs that provided many good insights into the workforce.

I remember when I moved into my first condo in 1999, a neighbor told me that she had already paid off her condo.  I couldn’t fathom this.  Apparently, I wasn’t the only person who assumed that everybody has debt, as found here at Plunged In Debt.

If you’re transporting your pets by way of automobile, Funny About Money wants to remind you to please carry them properly and safely (for you and the pet)

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Fourteen Months And Counting

Hopefully I don’t jinx it, but I recently completed our monthly net worth review and we have had positive net worth gains for fourteen months running!  It truly has been a bull market!

Of course the bull market is a big contributing factor toward our gain.  Between our retirement accounts and investment accounts, we’ve definitely been taking advantage of the gains.  I only wish I had more to invest up front!

The housing market improvement has also helped, as I’ve estimated that our home has gone up about 9% in that time frame, which is based off of estimates from comparable homes that have sold in the neighborhood over the same time.

By The Numbers

Consecutive Months of Net Worth Gain: 14

Percentage Gain In Net Worth Over That Time: 38%

Rank in Net Worth Gains Since I Started Tracking Net Worth (January 2002): 2nd

Highest Number of Months of Net Worth Gain Since I Started Tracking: 17 (March 2004 through July 2005)

Just a few more months to break the record.  What do you think the chances are?

Have a great weekend!

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