Welcome back everyone, and perhaps I will welcome myself back too after my lack of posts in the last month or so. It is a busy time of year for The Fake Cheap. I’m putting in overtime at work, playing a flurry of games as my basketball season comes to an end, trying to watch the craziness that is March Madness and squeezing in family time doesn’t leave much time for blogging.
Lets get on to the good stuff.
Net worth update
I know, or seriously doubt anyway, that you folks get as excited as I do for my net worth updates, so I think I’ll provide 2 a year, maybe a January and July timeline. So here are my results for Jan 2015. You can see the Oct 2014 net worth statement here. I’ve also included my net worth FAQ again below.
Bank Accounts – $1,000
RRSPs – $46,000
TFSAs – $4,500
Cars – $13,000
RESP – $1,900
House – $205,000
Total Assets: $271,400
Credit Cards* (incl car loan)- $10,000
Line of Credit – $4,500
Total Liabilities: $168,000
NET WORTH: $103,400
Non-goals for 2015
I really don’t create financial goals for myself. I guess rarely might be a more accurate description. I just keep on with the theme of saving money and keeping expenses to a minimum. Maybe it’s a good thing, maybe it’s a bad thing, either way it seems to be working ok for me so that is what I’m going to stick with. I find that is key to your financial success. Find something that works for you, and then stick with it. Maybe that is writing down every cent you spend every day, if that works, great, keep doing it. If something is not working for you, then go ahead an stop whatever that maybe, move on to something else, find something that works for you, keep trying different things until you find it.
Doesn’t your NW take you like an hour to calculate?
No, it takes about 25 minutes. I keep it simple. My online banking makes things pretty easy, log on add some numbers, that is about 75% of the work, then I hit a couple of my preferred credit card sites, get the balances, do some more math, that is it. I don’t count cents and round down to the nearest multiple of $10. For most people it will not matter if your worth is $25,432 or $25,340.
Why don’t you include other stuff like your TV and furniture?
These things aren’t really relevant to my financial position, and frankly aren’t worth a whole lot anyway. If you happen to have thousands of dollars in electronics, I suggest reevaluating your priorities.
How Often to do calculate this?
I’m on a bi monthly schedule. I know some who do this on a yearly basis and others do this on a monthly, weekly or even daily basis. If you are just starting out and getting your finances in order, I would say every 2 or 3 months would be ideal to help you see the progress you are (or are not) making.
Why should I calculate this?
If you haven’t even done this before, do it right now. Seriously. You need this figure to see the big picture, to make sure things are moving in the right direction, at the pace they need to move at.
I want to do this. How exactly do I calculate my net worth?
Add all your assets, bank accounts, RRSPs, TFSA, other investments such as stocks, and subtract your liabilities (debts) like your mortgage, student loans, car loans, lines of credit, credit cards. The difference in this is your net worth! It is that easy.
What about bills such as my power bill or other monthly bills? How do I account for that?
This statement is just a snapshot of your financial picture, today. Your power bill due in 2 weeks shouldn’t have an impact on your net worth (I hope!). It is true you could do this on the day you get paid to inflate your net worth for today, but you would just be lying to yourself. I generally calculate mine on just after major bills have come out and I don’t have large amounts of my pay sitting in my bank account (which doesn’t happen anyway).
Thanks for reading, and as always fire away with any questions you may have or shoot me a topic you would like me to discuss.
*A very large portion of my credit card debt is my car loan. My car loan was moved to a credit card because the interest rate is currently sitting at 1.9% for the next few months. The remainder of the balance on my credit cards will be paid off as of the due date to avoid interest charges.