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!

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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).

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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!

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

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.

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A New Car Is Little More Than A Drag On Your Net Worth

I got a call from our credit union the other day.  I used to do all my banking at this credit union until we got married, when we decided to combine our finances, and this led us to consolidate checking and saving services into a nearby bank, meaning that the credit union accounts largely became dormant.

Still, I kept the account active with a little bit of money because for several reasons:

Read moreA New Car Is Little More Than A Drag On Your Net Worth

Reviewing Our 2012 Financial Goals

I wanted to take a look back at the financial goals that we had set for 2012 and review how each of the areas that I had targeted actually performed.  The way I handle our financial spreadsheet, the net worth review that we do toward the beginning of the month is how the year is closed out, so even though there’s still some time left in the year, we can give an accurate look at our goals based on how things shaped up with the most recent review.

Here is a summary of each goal as well as how things actually turned out:

  1. Home value increases by 1% – The housing market had begun to show signs of stability at the beginning of the year, but it now looks like an actual recovery is taking place.  The formula which I use to calculate the value of our house takes into account a number of considerations, including Zillow’s reported value, comparable houses sold in our neighborhood and surrounding subdivisions, and a couple of other factors.  I’m happy to report that, based on these calculations, the value of our home went up by 5.7%.  There’s still quite a ways to go before we even reach the point of having it worth what we paid for it, but it’s still a great step in the right direction.  Achieved!
  2. Auto value decrease of 13% – Auto values had been holding relatively steady over the recent years, mostly as a result of an increased demand for cheaper, reliable used cars.  Now that the auto industry is steadily increasing sales and the age of the average car increases, the value of used cars has begun a more rapid decline.  Ours actually went down only by about 8% simply because the decline I forecasted didn’t really start until about mid-year (at least according to Kelley Blue Book, which is my estimating tool for our two cars).  Better than expected!
  3. A 25-30% growth in our investment account – I have a few stocks which I believed were ripe for big gains.  Unfortunately, they didn’t do as well as expected and we only realized about a 6% gain here.  It’s still better than nothing but not what I had hoped for.  Fail!
  4. A 15% increase in our cash holdings – We did OK here, seeing an increase of about 12%.  (Our cash holdings allowed us to pay for items and costs that came up, but if cash is not readily available there are options for quick loans that can get you through in a jam)  I had hoped our side income would be a little higher with various things that we do to earn money on the side, but while it was good, it was slightly less than expected.  Fail! 
  5. A fifteen to twenty percent increase in our retirement balance – This one was right on target and I’m happy to say it was toward the high end, as our retirement account balance increased by 19%.  Achieved!
  6. A five to six percent decrease in our mortgage balance – We did not apply any extra to our mortgage payments this year, but the 15-year 3.375% re-finance we got ourselves into last year helped us pay off 5.3% of the balance.  Achieved!
  7. An eleven to twelve percent decrease in our student loan balance – Again, we made minimum payments (thanks for nothing, employer who still hasn’t given out any raises) but this allowed us to pay off 11.3% of the outstanding balance we have for student loans.  Achieved!
  8. An overall net worth increase of 22% – If I were to have hit on all of the targets above, the end number would have resulted in a 22% net worth increase.  As it was, we hit on five and missed on two.  That’s the bad news.  The good news is that the ones we hit on had a bigger impact than the ones we missed on, namely hitting the high end of our retirement saving goal, and the value of our home going up by a few more percent than I had estimated.  With this we saw a net worth increase of 25%.  Achieved!

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