Monday, 2 February 2015

January 2015 Net Worth: $509,000 (-10.3%) and Goal Tracker

As highlighted in my 2015 financial goals, I am changing my net worth and expenditure trackers quite significantly.  The biggest impact on this is the massive decrease in my net worth this month as I start to include future liabilities in my net worth tracker ( I will outline why I am doing this below) however I am also changing my expenditure tracker to a 2015 goal tracker (to account for the fact that I am sharing finances with my partner and can no longer actually track every dollar I spend)

I'd love your feedback on the new format (as well as your views about including future liabilities as part of your net worth)

January 2015 Net Worth: $509,000 (-10.3%)

% Change
Net worth

Holy Moly!  Did my net worth really drop by $60,000 in one month?  No...thankfully not, however what I have started to do is to include budgeted future liabilities in my net worth.   
  • What are budgeted future liabilities?
    • Like most people I save up for big expenses before they come. This year I am saving for a wedding and a honeymoon.  I have already saved for a car but have yet to spend the cash.
    • These future liabilities are amounts which I am committed to spending in the future which I believe should be reflected in my net worth today
  • Why am I including them in my net worth calculation?
    • The problem with saving for particularly large expenses is that my net worth today looks artificially high and continues to do so until I spend the cash I have saved towards it
    • Honestly it is going to be inaccurate whatever way I do it but I would rather have a conservative net worth figure which improves as I save for the liabilities than an overstated net worth which looks like it is under-performing when I'm actually doing well
  • It requires a one off 'reset' as I include all of these in my net worth
    • I have been mentally including these liabilities in my net worth for a while now but had not actually included it in my excel spreadsheet until this month
    • Part of this was not wanting to take the pain and hit to my stated net worth (which is silly but hey...I'm proud of my performance) but I finally bit the bullet and did it this month
    • The actual impact of this was $70,000 for the month however a great performance over the month made it look like a lot less
Now that we have dealt with that...what else happened over the month?
  • I continued to save towards my 2015 goals
    • I will provide more detail below but my cash balances continued to increase as I save towards my various 2015 goals
  • My share portfolio performed particularly well
    • It was actually a great month for my share portfolio which recorded a 1.9% gain for the month.  My portfolio is skewed towards cyclical stocks which did very well this month.  In addition the falling A$ also helped my foreign investments...although this currency play could be coming to an end
  • My credit card bill remains frustratingly high
    • My credit card bill did not fall at all this month which was frustrating given that it was already at a significantly elevated level.  I have really noticed the difference in my saving focus as I no longer keep track of every dollar
Saving and investing has
, unfortunately taken a bit of a back seat in my life as I plan for this wedding.  Weddings are the biggest cash suck I have ever seen but thankfully it is only for 6 months more.   In the coming month I am hoping for a reasonable rebound in my net worth as my employee shares vest and as I continue to save for these upcoming future liabilities.  For February 2015 I am aiming for a net worth of $520,000.

January 2015 Goal Tracker

Since combining finances with my partner, I have found that it is impractical to continue to track every dollar that I spend.  Instead I have decided to track my saving and investment goals  I had 5 goals for 2015.  In the table below I have outlined what the goal is, how I did during the month, where I am on a cumulative basis, how much I have to go and whether or not I have achieved the goal.

GoalJan 152015 Total2015 TargetRemainingAchieved?
#1: Get Married+$3,500$3,500$5,000$1,500No
#2: Honeymoon+$0$0$20,000$20,000No
#3: Home Deposit+$0$0$40,000$40,000No
#4: Emergency Fund+$833$833$10,000$9,167No
#5: Share Portfolio+$5,326$245,921$276,000$30,079No

As you can see from my goal tracker I have a fair way to go on most of these goals however I am have almost fully funded my wedding (most of the savings for this was done last year) and my share returns over the month mean that I am well on my way to achieving my 15% return on my share portfolio.  I have also started to build my $10,000 emergency fund which I am incredibly happy about.

In the coming month I am hoping to knock over my wedding budget and to start to fund my honeymoon (the part I'm most excited about).

You May Also Be Interested In
2015 Financial Goals
How to combine finances with your partner...a transitioned approach
My updated wedding savings plan
Net Worth: All Posts


  1. Did you consider using the "smoothing" technique instead of absorbing a 60K loss all in one month? I am a little sad as I liked having a benchmark to compare against of similar value each month.

    1. Hi Rob! I'm sorry about the change - I was a little sad at having to reset it like that as well. I did it once back in 2012 when I started including my superannuation balance and once in 2013 when I started including my tax liabilities but generally I try not to.

      I did try to think of a way of smoothing the expenses coming up but it honestly added a little bit too much complexity. If my savings matched up with the time remaining closely it would have worked well however the big "problem" I had was that I had saved so much so far in advance that I was sitting with these assets within my net worth that I knew really shouldn't be sitting there.

      If you exclude the reset amount my net worth actually increased by 10k this month driven by better performance in the share market and some serious cash savings.

  2. Hey 90M,

    Good update and change from my perspective, saving for goals always makes me feel a bit more motivated to get there and achieve them!

    On including the future liabilities I'd say that is a good change as well as doing this means that you have a reasonably accurate representation of where you are sitting..

    Good luck with continuing to smash out those goals! :)

    1. Hi Jef - thanks for the comments. I agree that it is great to see the progress towards goals. The biggest problem I noticed is that by no longer tracking my expenses I no longer feel guilty for 'splurging'...I'm not suggesting continuous guilt is a good thing but it certainly helps you save a lot :P

  3. Hey 90million,
    Got to admit I freaked out a little when I saw your portfolio drop 10% before reading on !
    But I do like the idea about accounting for future liabilities, I might try it for my upcoming holidays :)
    And hopefully you can knock off that wedding budget so you can focus on saving for your honeymoon ! Best of luck!

    1. Hi Financial Rookie - honestly if it was only a few thousand dollars I wouldn't bother (because you have to keep track of how much of your budget you are spending along the way). The only reason I went down this path is that I realised I had more than $30k saved which was counting towards my net worth which wasn't 'real'.

      Thanks for the comments though. Wedding should be knocked off this month. My fiancee is also saving towards the honeymoon so hopefully we can get that down quickly too!

  4. Hi 90 million - it's always a difficult one, when to account for large expenses - well done on finding one that works for you.

    1. Thanks goodfinancialchoices! Do you have one that you use? I'm seriously open to any new ideas

  5. Tell you what, agree with you on the guilt there ;).. I've started tracking my expenses now, even the 1$ roll purchases and it makes you a lot more aware of what you're buying.. It helps that I'm not drinking alcohol this month as well haha