Review of 2009 Financial Goals / New Goals for 2010

I track our net worth, and the components that comprise our overall net worth, on an Excel spreadsheet.  At the end of each year, I put in ‘goals’ for each category for how I would like the upcoming year to play out.

Since December is the last month, and I’ve already done our net worth analysis for the month, I can look back at the last twelve months and see how we did.

Away we go!

ASSETS

HOUSE
2009 Goal:   -5.1%

2009 Actual:   -11.6%

2010 Goal:   0.0%

Comments:   Based on the performance of the housing market, I had estimated that the value of our home would continue to fall.  I had hoped it would ‘only’ fall around 5%, but unfortunately, it fell quite a bit more than that.  The encouraging thing is that the rate of decline has slowed over the past few months, so I’m hoping that things level off.  Therefore, I will be happy if the value of our home stays the same over the next twelve months, and have set that as my target for 2010.

CARS
2009 Goal:   +25.4%
2009 Actual:   +43.4%

2010 Goal:   -8.2%

Comments:   I had planned on purchasing a car, which we knew would be necessary once we had Baby Beagle.  Therefore, I was counting on the value of our cars to go up for the year since we would be replacing our least valuable car with a more expensive car.  This took place.  I don’t anticipate any change in what we own in 2010, so I simply anticipate regular depreciation.

INVESTMENTS
2009 Goal:   +14.6%
2009 Actual:   +33.9%
2010 Goal:   +4.7%
Comments:   I had hoped for somewhat of a rebound in the stock market, and this was answered….and then some.  While the overall value of our investments are disappointing compared to what we paid for them, we saw a recovery of a good portion of our 2008 losses.  I think that the upward trend of the stock market will slow down or even reverse slightly in 2010, so I’m setting a conservative goal for this category.

CASH

2009 Goal:   +17.8%
2009 Actual:   -3.3%

2010 Goal:   +11.6%
Comments:   I didn’t have any real reason for forecasting an increase here except for possibly being too optimistic.  I knew that we’d be purchasing a car which would reduce our cash holdings.  This happened, and explains a slight decrease for the year.  We are not currently planning any major expenditures for 2010, so I’m hoping to boost our cash savings by a modest 11%.

RETIREMENT
2009 Goal:   +53.0%
2009 Actual:   +77.1%

2010 Goal:   +18.8%
Comments:   I was more aggressive in forecasting our retirement savings (compared to the Investments category), but there were several reasons.  First, is that I am making regular contributions.  Second, I had anticipated that my employer would continue matching those contributions.  Third, because retirement is so far away, the investment classifications are overall more aggressive.  All of these played into a substantial gain for the year.  This would have been more, but my employer cut their matching contributions in early summer.  I’m forecasting an 18% gain, which would basically happen if there was a modest gain in the market and we continue our rate of contributions.  Should our employer start kicking in again, this could be higher.

DEBT

MORTGAGE
2009 Goal:   -1.5%
2009 Actual:   -1.4%
2010 Goal:   -1.7%
Comments:   This is probably the most boring category, as we simply make the minimum payments on our 30-year fixed rate mortgage.  Eventually, within a couple of years, I’d like to start paying this down more aggressively, but for now, the numbers are pretty self-explanatory.

CAR LOANS

2009 Goal:   $0
2009 Actual:   $0
2010 Goal:   $0

Comments:   I didn’t do percentages here because you can’t divide by zero.  We didn’t have any car loan debt coming into the year, and it was my goal to not add any new debt in this category.  Mission accomplished, as we paid cash for our upgraded car.  Since we’re not planning on making any changes to our car ownership this year, our goal for 2010 is simply to keep the $0 balance here.

CREDIT CARDS

2009 Goal:   $0

2009 Actual:   $0

2010 Goal:   $0

Comments:   Actually, the same goes here as in the car loan category.  While we do use our credit cards, we pay off our balances every month, and this is reflected here.  Our goal for 2010 (and forever) is to keep this at $0.

STUDENT LOANS

2009 Goal:   -29.3%
2009 Actual:   -25.4%

2010 Goal:   -26.0%
Comments:   Any extra payment we have towards debt goes towards two student loans that we have.  We are paying the higher interest one off first, and were able to lop off 43% of that balance.  The minimum payments on the second, lower interest loan, allowed us to pay off 8% of that balance.  Overall, we came pretty close to meeting the target.  While we won’t be able to put as much towards them in the upcoming year (since we’re a single income family now), the percentage paid off is actually targeted to be about the same as last year.  This is because the beginning balance is lower. 

OVERALL

NET WORTH

2009 Goal:   +39.4%
2009 Actual:   +40.6%
2010 Goal:   +20.7%
Comments:   Even though the value of our house was a major drag, the stock market recovery offset this so that we were still able to meet our goal.  I’ve been tracking net worth since 2001, so this is the eighth full year I have to compare, and the 40% increase is the biggest percentage increase I’ve noted since I started tracking.  While this is nice, it’s still dampened by the fact that the 40% increase follows a 42% decrease that took place in 2008, showing that our personal recovery is still a long, long ways off.

However, the fact that we recovered so much was a bright spot.  The other bright spot is that, although the overall number is way down from all-time highs, the main reason for that is the value of our property.  I actually keep track of our net worth excluding real estate, and that number is at an all-time high!  This shows that our strategy of investing in retirement while paying down debt is working for us, and that while the real estate market is slowing us down, we’re still headed in the right direction.

Since we slightly beat our overall target goal for 2009, I’m extremely pleased.  Of course, now the focus is meeting (and beating) our goals for 2010, so as I said earlier….

Away we go!!!

My Brush With Identity Theft

I’ve never had my idenity stolen. I’ve read many of the horror stories that come along with it, but have never had to go through that.
But, that doesn’t mean that I didn’t come close. Or at least feel like I came a little close. Because there was one time where someone came pretty close, or at least a little too close for comfort.
A few years ago, I went through my mail, and there was what appeared to be a bill from UPS. I don’t make any shipments, and when I do, I typically pay for them at the counter. The bill was for a few dollars.
So, I thought nothing of it and threw it away.
A few weeks later, I got a second bill, again, not for very much money, but for a larger amount, but still under $50. Again, I discarded it thinking it weird that I was getting bills for something I didn’t use.
They got my attention a few weeks later when they sent another letter indicating that if I didn’t pay my balance, I would be turned over to collections. So, I immediately got on the phone.
My conversation went a little like this:
Me: “I’m calling about a bill that I got for a bunch of packages.”
UPS: “Yes, we need you to pay that.”
Me: “I’m confused, I didn’t send any packages using UPS.”
UPS: “But it has your name and address here.”
Me: “While that’s true, I didn’t ship any packages. In fact, the ’ship from’ location for all of these is in California.”
UPS: “Yeah, and?”
Me: “I live in Michigan. How would I have shipped these packages from California?”
UPS: *long silence*
Me: “How would someone have opened an account with my name and address?”
UPS: “Well, that’s all you need to open an account.”
Me: “You don’t need a credit card? A social security number? A drivers license?”
UPS: “No.”
Me: “So, anybody could just find someone elses name and address and open an account and start shipping packages, and UPS is OK with that?”
UPS: “Yeah, seems a little strange, doesn’t it?”
Me: “So, you’re going to take those charges off my account, the one that I never opened, and close the account, too, while you’re at it?”
UPS: “You’re sure you never opened that account or shipped those packages?”
Me: “Positive.”
UPS: “OK, then, we’ll take care of that.”
Pretty amazing stuff, isn’t it? Now, this was a few years ago so I’m really hoping that UPS does not simply allow accounts to be created in such fashion. It seemed that before, you could just create an account and start shipping with it. Granted, the number of shipments was small, so I’m guessing (hoping) that for bulk shippers, they would have required a line of credit.
But, really, who knows?
At the time, I didn’t really think much about it, but it was about as close I could have gotten to having my identity stolen without it actually happening.
It taught me a few lessons though:

  • Pay attention to your bills – I simply threw the bills out because I knew that they weren’t mine, but if I hadn’t, who knows if UPS would have somehow been able to find me and put a blemish on my credit report. It doesn’t seem likely since they didn’t have my SSN, but then again, I would have thought it pretty unlikely that they would open an account without somehow verifying the person opening the account.
  • Be careful of your personal information – Keep your personal information, especially things like account numbers, drivers license numbers, and other key information, safe.
  • Check your credit report – I check my credit report (and my wife’s) every four months, using our three free reports from AnnualCreditReport.com. After this, I have always kept an eye on it to make sure that every single creditor is someone I know. So far, I’ve had no surprises.
  • Check your balances often – Did you know that the longer you wait before notifying a bank or credit card company of fraudulent activity, the more you’re responsible for? I try to check my balances every day or two days on my bank accounts and credit cards.

Any other tips on preventing or dealing with identity theft? Any close calls?

Seven Things I’ve Learned Since Becoming A Dad

It’s been just under two weeks since God blessed us with Baby Beagle, and there have been a lot of changes. Here are just a few of the things that I’ve learned since the arrival of our son.

  • How to change a diaper – I actually never had changed a diaper before. Let me just say that you catch on pretty quickly.
  • You need more diapers than you could have ever planned for – Baby pees and poops more than I think we had ever thought possible. I actually went out on my first ‘diaper run’ late last week as we were running low on his size.
  • Hours seem to simply disappear out of the day – I think that once a baby comes, the laws of time change and there are only 21-22 hours per day for parents. It’s the only way that I can explain how every single day since the arrival has seemed to end much more quickly than they did in the past.
  • Don’t plan on getting things done with any sort of efficiency – My wife will love this one. See, before the baby came I had this list of things that I wanted to get done in the week following coming home from the hospital. A lot of different projects for the house, the cars, and my blog were on the list. I figured that the baby needs attention but since it sleeps 20+ hours per day, there will still be plenty of time to get things done, right? Wrong. Somehow there is always something to do, whether it be laundry, dishes, changing towels, planning for bath time, whatever. I got a few things done from my list, but probably 25% of what I had hoped. Still, the week off was amazing and time that I’ll cherish for the rest of my life.
  • Sleep schedules change – Gone are the days of sleeping through the night, at least for a while. Feedings and diaper changes are the new order of business. Our son is actually doing very well at sleeping in his crib without fussing, and about going back to sleep once the business is taken care of. Still, I was unprepared for what a drastic change would occur in sleep patterns.
  • Everything changes in an instant – Oh, I knew well in advance that things were going to change once the baby arrived, but nothing could prepare me for how much it does and just like that. Your entire heart opens up, your priorities are completely shifted, and your joy and awe reach heights that you could never have thought possible, all in a heartbeat.
  • Mrs. Beagle is amazing – It’s true that men could never go through the pain of childbirth. My wife is a truly amazing woman for carrying our son, delivering our son, and how she now takes care and loves him in a way that only a mother can.

What a blessing!

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.

Catching Up After A Long Weekend

Back in the swing of things after a nice relaxing holiday weekend. My wife and I spent most of the time decorating and relaxing. I will get back to my posting schedule starting….now! Thanks for being patient.
Odds and ends from the holiday weekend:

  • Giving Thanks – We had a lot to be thankful for this year and it was wonderful to get to spend time with our families. Even though we have a troubling financial year, it’s nice to remember the things we have to be thankful for. In our case, we have wonderful families, my wife and I both have jobs, we have Baby Beagle on the way, great friends, and so many other things. It’s nice to reflect on that and hopefully we all take the time to do it more often.
  • Black Friday – We didn’t do too much shopping. We weren’t planning on going out at all, but we both woke up around 6am, which is our normal time for getting up for work, and decided to go look around. I got some LED Christmas lights at 50% off for one of our indoor trees, and my wife got some odds and ends at Michael’s at door buster prices. So, we didn’t actually buy any gifts but we did get some good deals and do our part to add to the mad rush. Surprisingly, none of the stores were that busy, but I guess it seems that most of the attention is reserved for electronics for the early rush.
  • Health Insurance – I am not happy with our insurance provider, Empire Blue. They sent an explanation of benefits that about sent me through the roof, for my wife’s first doctor’s visit. Apparently they are claiming that some of the services fall under a ‘routine checkup’ which are limited to one per calendar year. I have to call them this week to verify that is the case, and see what needs to be done to re-classify the visit.
  • Fantasy Football – It was a depressing week for me in my fantasy football league. I’ve been atop the standings for most of the season, and the regular season winner gets $40. I lost my last two games to knock me down into third place, which means I got nothing. The playoffs start next week so I’ll have a chance for some additional money, but even the small money would have been nice. I know, such a small thing to be concerned about, but it’s fun to share!
  • Recession – So the markets tumbled 8 or 9 percent today on news that we really are in a recession. Wow, that’s news? I had thought the markets were supposed to factor in future events. And the fact that we’re in a recession is the oldest news out there, so I’m surprised that the market dropped in such dramatic fashion on that news.
  • Snowfall – We had our first snowfall which required shoveling. It was actually very beautiful and looked a lot like this picture (which is just a random picture). I was very pleased with the new shovel that I bought, much more so than the plastic coated one that I used last year and was good for only one season.
  • Disappointed in JoAnn Fabrics – We bought a new Christmas tree on November 13th, as it was on sale and we wanted to make sure we got it before they ran out. It listed for $180, and we got it for $100. They had a sale following Thanksgiving where it was $90, plus they had a ‘door buster’ coupon for an additional 20% any sale priced item. They didn’t have any more in stock, and they refused to do a price adjustment, as they said that they normally only do those for 7 days after the purchase. I am used to retailers price matching for 30 days or so. This will probably prevent me from considering JoAnn for any future purchases of higher priced items.
  • Baby Update – Mrs. Beagle reported that she felt the baby move for the first time this past week. She described it as feeling like a muscle spasm, which matches what others say the first noticeable movements feel like. Exciting times!

I hope that everybody had a great weekend!

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My Hopes Following The Election

Now that the election is done, hopefully all the lawn signs will disappear, politicians will get back to work, and the business of getting the economy back on track will be the number one thing on our politician’s minds. Oh, and I think you’ll all agree that we’ll gladly welcome seeing early commercials Christmas versus the endless mudslinging ads that have taken over the TV, radio, and even Internet outlets.
Anyways, here are some hopes that I have for the various political powers that be. I’ll try to keep it related to personal finance since this a blog focused on that! :)
President-Elect Obama
First, congratulations to the newly elected President. In all the elections I’ve witnessed in my 34 years, I’ve never seen a candidate capture the attention and admiration of so many people. Whether you supported him or not, you have to admit that his energy was polarizing. Here are some hopes for our soon to be new President:

  • I want to see him channels the energy built during the campaign into a more united Washington and a more united America. We’ve been divided for too long. Between rich and poor. Democrats and Republicans. Even America versus well, everyone else. I hope that Obama can carry the promise to bring people together and make us once again the true United States of America.
  • While things like health care and tax reform were big campaign promises, those are not things that will fix the current economic problems, and should be addressed only when the economy is stabilized. Those things might make for popular TV ads, but we need jobs and I hope that Obama focuses his first 100 days (and more) to bring jobs to Americans.
  • As my series on ‘The Drive Home’ has shown so far, a good deal of our success as a nation over the last 100 years has been because of the automobile industry. That industry is suffering in a big way right now. Unfortunately, many people have given up on the industry and written it off. Even more unfortunate is that one of those people is President Bush, who basically said multiple times that the automotive industry was on it’s own. Regardless of how we got here, there are millions of people that depend on the automotive industry, whether they be workers of the auto companies or suppliers, or the retirees and families. I hope that Obama looks forward and works to make a healthy auto industry a key part of a healthy America once again.
  • This one’s more lighthearted. I live in Michigan and am very critical of our Jennifer Granholm, our current governor. I simply don’t think she has done her part to fight for Michigan jobs during one of the toughest economic times our state has seen There’s rumors that she could be considered as Obama’s Attorney General, a position she held at the state level before becoming governor. I hope that Obama pegs her for this job, so we can get a governor more focused on bringing jobs to Michigan.

The Democratic Party
The Democratic party was a mess for a good portion of the last 10-15 years. After losing both houses of Congress in 1994, they also lost the Presidency in 2000, and only in the past couple of elections have started to regain their footing. Now, the Democrats have come back in full force, taking over both houses of Congress with very decisive numbers, and of course having the Presidential office as well.

  • I hope that the Democrats do not use this time to push a partisan agenda.
  • Instead, I hope that they do what is right for America and help us out of the current economic crisis.
  • I hope that they listen. That they listen to one another, to Republicans, to independents, and most importantly to the voters. Having all the power is great, but it’s gotten parties into trouble before (see below), so I hope that they remember what is the important thing: the people.

The Republican Party
The Republicans quite recently once where the Democrats are now. The party that came back from having no control to having everything. It started in 1994 when they basically swept the elections for Congress and House by running races around the country focusing on the ‘Contract With America’. This was a pledge by Republicans to cut the size of government, streamline the government, promote lower taxes, and reduce government spending. This resonated with Americans, and the Republicans charged to victory. Six years later, they took over the Presidency as well and controlled it all (sound familiar?).
Unfortunately, several things have led to the quick fall of the Republican party:

  • The Contract With America was great in theory, but it didn’t really stick. The government has gotten bigger, not smaller, since The Contract.
  • Those that pushed for The Contract With America forgot to plan for what to do afterwards. I think America was so fired up to see what could happen after the party seemed to unite, but after everybody got elected, the Republicans really never came up with a true agenda.
  • The President that was elected lost the trust of most of America. Over eight years, the face of the Republican party lost more and more people to where perception became that he only cared about the rich, those on Wall Street, and those involved in oil. That doesn’t represent most of America, and as such, most got to feeling left out in the cold. He personally lost me after he turned his back on the auto companies.

After all this, the Republicans are now in the back seat. But, we need a strong second party. Many argue we need a third party, which I agree with, but we first need a strong Republican party if for no other reason than checks and balances. Our country was built on the checks and balances system, which was designed so that power is spread out and not controlled by one area (or party).

  • I hope that the Republicans return to their roots. They once stood for fiscal responsibility and not ballooning deficits. They’ve broken the promises of ‘The Contract With America’ and have lost their identity. I hope that they get it back.
  • I hope that the Republican party finds leadership and direction and can also find someone to inspire. We need as many people as possible to inspire and lead us, and I don’t care what party they come from!

The People
Americans are going to play a big part in what happens next.

  • I hope that offer our support to the President and the politicians that need to hear our voices and right now say they want to listen
  • I hope that we agree or disagree with positions or plans based on the merits of the plans, and not the party of the politician that supports it.
  • I hope that continue to participate. This was one of the highest voting turnouts in history, and i hope that we realize that our participation doesn’t end after you leave the polls, and also that it doesn’t end regardless of whether the people you voted for were elected or not. We need to let our politicians know what we want and what we expect. We need to make sure that our politicians are working for us and serving our needs. Don’t just sit back and watch. Take part!