August 2015 Net Worth: $639,000 (+8.0%) and Goal Tracker

This month was massive for me.  I crossed the $1 million mark in terms of assets and my net worth crossed the $600,000 mark for the first time.

One of the interesting things about updating my net worth every month is that I totally ignore the larger numbers...I'm far more interested in how I'm performing month to month...but occasionally when I cross a bit milestone like $1 million in assets...that's pretty exciting!

So how did I do it and what changed?  Well read on below for details.

Net Worth: $639,000 (+8.0%)

	Value	% Change
Assets	$1,052,000	+6.3%
Liabilities	$412,000	+3.8%
Net worth	$639,000	+8.0%

This month was absolutely crazy for me.  I took a massive hit in my share portfolio as global share markets sank to their lowest levels in 4 years.  However offsetting that was a large increase in the value of my property.  I will go through this and more in my detailed explanations below.

June 2015 Net Worth: $561,000 (-0.9%)

After an incredibly strong performance last month, this month saw my net worth slip by almost 1% driven almost entirely by an incredibly weak Australian share market.  In this post I'm going to highlight what happened to my net worth this month, what drove most of the chances and where I am heading in the future.

In the coming week I will also upload my annual performance review which tends to give far more detail about how my portfolio is structured.  My apologies for the late posting of this month's net worth.  I was on leave from work (and my computer) for a few weeks as I was getting married and moving home...I will also post more about what is happening on the personal front soon.

Before I take a deep dive into my performance this month let's have a look at the headline numbers.

March 2015 Net Worth: $549,000 (+2.2%) and Goal Tracker

I love updating my month end net worth post.  I actually don't spend that much time during the month focusing on it because unless I'm actively changing something in portfolio it does me no good to keep track of where I am day to day.

This post includes a category of liabilities I included recently called "future liabilities" which is where I account for the fact that I have committed to spend a certain amount on different activities and that some of the cash on the 'assets' column of my balance sheet are actually already accounted for.  At March 2015 my future liabilities balance sits at $52,000 - a significant drop compared to last month.

March 2015 Net Worth: $549,000 (+2.2%)

	Value	% Change
Assets	$964,000	-0.1%
Liabilities	$415,000	-3.0%
Net worth	$549,000	+2.2%

My performance this month was actually much better than the $540,000 I was originally aiming for.  It was really driven by a reduction in my future liabilities balance (which I discussed above) with some other small positives along the way.

Below I have outlined some of the positive and negative factors which affected my performance

Positive factors

• A significant reduction in my future liabilities balance
• My future liabilities balance decreased by ~$13,000 this month.  Although some of this reduction was offset by cash (or an increase in credit card debt) to pay for the expenses, a lot of the expenses were also borne by my fiance
• We are planning a wedding together and a large part of the liability relates to the wedding and honeymoon expenses
• For the sake of simplicity I include the whole liability on my balance sheet however she has been saving and paying for significant parts of the wedding and honeymoon as well
• A large reduction in my credit card bill
• My credit card balance was abnormally high last month and I have managed to bring this down slightly this month (although not nearly as much as I should have)
• Continued savings towards my employee share plan and emergency fund
• My employee share plan is the only guaranteed return I will ever get in my life and I continue to contribute the maximum amount that I can 
• I will discuss this below but I also continued to save towards my emergency fund
• A particularly good outcome on a recent share purchase plan
• I have historically had pretty bad luck when it comes to my share purchase plans however one finally went well for me.  I will write about this in more detail soon.

Negative factors

Unfortunately this month had a slew of negative factors which affected my result including

• A significant step up in my capital gains tax liability
• As mentioned before I am starting to feel uncomfortable with the levels the stock market is currently reaching and I am taking the opportunity to sell some of my more overvalued stocks
• However this has the downside of crystallizing capital gains tax

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%)

	Value	% Change
Assets	$942,000	+1.1%
Liabilities	$433,000	+18.9%
Net worth	$509,000	-10.3%

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

2014 Expenditure Tracker...A year in review

Last year I attempted to track and budget for every dollar that came in my pay check and it was a great exercise to go through.  It was an incredibly valuable process with some interesting outcomes.  Below is a summary of how I did as well as a detailed look at where I outperformed and where I under-performed my budget.

Item	Actual 2014	Target 2014	Perf. vs Target
Accommodation / Living expenses	$27,617	$26,950	+$667
Car expenses	$6,926	$8,300	-$1,374
Health / Well being expenses	$6,162	$6,790	-$628
Entertainment / Personal expenses	$15,738	$14,764	+$974
Travel expenses	$10,299	$8,100	+$2,199
Other 'big' expenses	$40,695	$42,100	-$1,405
Savings / Investments	$11,393	$12,613	-$1,220

So what happened?

Accommodation / Living expenses: +$667

Almost every single expense line in this category came in exactly where I forecast.  Rent, utilities and insurance came in almost exactly where I forecast.  The big variances came from groceries ($600 less than I forecast), clothing ($450 more than I forecast) and apartment set up costs ($600 more than I forecast).  

If I hadn't bought my new television right at the end of the year I would have been well below my overall target.  I can't believe how close my estimates were.  It really does show how effective budgeting and tracking can be.

Car expenses: -$1,374

I was honestly a little surprised how well I performed in this particular category.  I spent a little bit more on registration and maintenance than I had forecast however my fuel costs, parking and toll costs and car washing costs were way below my forecasts. 

Once again, actually tracking my expenses made me focus on saving money wherever possible.  I used my car less, bought my own equipment to wash my car (instead of paying for it) and paid far fewer tolls in previous years because I could see it affecting my budget every time I spent on one of these items.

Health / Well Being expenses: -$628

I confess I was surprised

2015 Financial Goals

I love this time of the year.  Setting goals for the coming year is exciting.  Everything is a blank canvas and the year always has so much potential ahead.

Last year I tracked every single dollar I spent and allocated all of that cash to achieving goals which I set out at the start of the year.  My ability to do this going forward is limited by the fact that I now share finances with my fiancee (although we are not fully integrated yet).  Given how tedious tracking every dollar is I'm not going to ask her to do this and so I'm going to have to settle for a way of tracking my goals which is less hands on than last year.

 But before we get to the 'how'...I'm going to outline my savings and spending goals for the coming year.

My financial goals for 2015

I set my financial goals this year with my fiancee.  This was the first year that I had to do it with someone else and I had to reign in what I wanted to achieve in order for us to accommodate both of our goals.

The goals listed below are joint goals.  I tried separating these out but it really was far too complicated and I couldn't work out how to track them separately either.

Goal #1: Get Married.  Required savings: $5,000

My fiancee and I decided to have a shorter engagement rather than a longer one.  Neither of us really wanted a long and drawn out engagement.  This was for a variety of personal factors including life plans and age and also neither of us want to drag out the wedding planning phase for too long.

I have outlined my wedding savings plan before.  We have budgeted $40,000 for the wedding itself.  Some serious saving done through 2014 means we only have $5,000 left to save for the wedding.

Goal #2: Go on a grand tour of Europe for our honeymoon.  Required savings: $20,000

The best part about planning a wedding is definitely the honeymoon.  I love travelling and I really wanted to travel through Europe before I had to settle down with children.  When I budgeted for my wedding in 2014 I was also budgeting for my honeymoon so although it looks like I haven't saved anything it's because it has all been allocated to the wedding (which comes first)

Goal #3: Save for a home deposit.  Required savings: $40,000

Ok - for all those who were worried that I had suddenly changed into a person who had totally given up saving and investing don't worry - I haven't.  Saving for a home deposit is something that I've been doing for years.  I haven't explicitly said that is what I was doing but every time I put money in my investment property's home loan offset account it was to form a deposit for my own home when it came time to buy it.

December 2014 Net Worth: $568,000 (+1.2%) and Expenditure Tracker

This is my last net worth and expenditure tracker for 2014.  The detail and effort I put into maintaining my budget tracker this years sometimes had me wanting to give up but I'm glad I pushed through with it.  I'm probably not going to include the same level of detail next year for several reasons but it was instructive to go through the process this year.

The expenditure targets in these series of posts come from my 2014 Financial Goals post where I set out a lot of what I wanted to achieve for the year.  This was a 'no saving' year for me - I tried to pack in as many goals that I had been meaning to do for a while (and a few new ones) without dipping into my savings at all.

December 2014 Net Worth: $568,000 (+1.2%)

	Value	% Change
Assets	$932,000	+1.2%
Liabilities	$364,000	+1.2%
Net worth	$568,000	+1.2%

What drove my net worth performance this month?

I was really surprised at how good my net worth performance was this month given that there were several negative factors to come through.  Most of the factors relating to performance this month were actually expenditure related however there were one or two quirky factors which I have outlined below:

• Positive factors
• A quirk in my bonus calculation made up more than half my gain this month
• My bonus is paid in November and the large step up can be seen in that month.  However in November I had not yet been allocated my deferred compensation so I included a tax adjusted estimate for this compensation in my net worth calculation
• In December I was actually allocated the number of shares.  These shares are not taxable until they vest in a few years time and I don't include the tax impact on these shares until they actually do vest
• As a result I got a 'write back' of the tax that I had included in my November net worth post
• A rebounding share market helped...a lot
• The last few months have been quite painful on the share market however the December rally definitely helped my performance
• Negative factors
• I started paying for my wedding
• I have been saving for my wedding for the entire year and although most of the expenses will be in 2015 when I actually get married I started having to put down deposits for things like the venue and engagement party etc. 
• Although I have budgeted for all of these they still impact my net worth as I spend the cash
• I bought and paid for (part) of my sports car
• I have been talking about buying my sports car for years and this month I finally did it
• Again this was fully budgeted and saved for however the cash has actually started to flow out.  As I'm buying it from Japan I haven't paid all the costs yet.  I've paid the Auction House for the value of the car and also the compliance center here a deposit to start the process of bringing it in. 
• I loosened the purse strings a little around Christmas / Boxing Day
• I actually spent a lot of money this Christmas on going out and presents but I also spent a lot more than usual at the Boxing Day sales this year.  I bought a new TV and gaming console which set me back $1,500
• This isn't like me at all but I have been trying to live in the moment more and I gave into a bit of consumerism.

What is my outlook for next month?

Next month I will see a large drop in my net worth.  This is a combination of factors including more expenses on my car and wedding however the biggest factor will be the inclusion of the total cost of my wedding and honeymoon as a liability (whereas currently it only impacts my net worth as I spend the cash).  I know it is going to happen and I'm saving for it so the savings should offset the expenses and leave me neutral.

The calculation of my net worth is also going to become more complicated as I co-mingle my finances more with my fiance. I am targeting a net worth of $500,000 for January 2015 (which will hopefully reflect all the large future expenses that I have coming up).

December 2014 Expenditure Tracker

Item	Apr 2014	Monthly Target	Perf. vs Target
Accommodation / Living expenses	$3,179	$2,246	+$934
Car expenses	$291	$692	-$401
Health / Well being expenses	$472	$566	-$94
Entertainment / Personal expenses	$1,381	$1,230	+$151
Travel expenses	$622	$675	-$53
Other 'big' expenses	$12,001	$3,508	+$8,492
Savings / Investments	-$6,442	$1,051	-$7,493

November 2014 Net Worth: $561,000 (+8.8%) and Expenditure Tracker

I should state upfront that although this headline number looks like a massive jump, I have set aside ~$15,000 of this to fund my new car.  If you want to know a more accurate 'look' through net worth you need to subtract the assets by $15,000

November 2014 Net Worth: $562,000 (+8.8%)

	Value	% Change
Assets	$921,000	+4.9%
Liabilities	$359,000	-0.8%
Net worth	$561,000	+8.8%

What drove my net worth performance this month?

Holy Moly!  That performance was far better than I expected this month (although as I indicated above this number is flattered because I haven't yet bought my sports car...I'm in the process of buying one from Japan).  This is also the first month where my assets exceeded $900,000...$1 million seems so close.  So let's jump straight into the factors which affected my performance this month:

• Positive factors
• My bonus was paid this month
• My bonus is paid in November every year and as a result it tends to be the 'wow' month for me
• My bonus this year was far better than I expected which I confess is not something that happens very often.  However tax being what it is the amount that actually made it into my account was far less that the original headline number I was so excited about
• I paid off all amounts owing to myself and saved a heap
• By sticking to a pretty rigid budget I found that I was having to borrow money from my savings every month to make up for over-expenditures
• When the bonus was paid into my account the first thing I did was to pay all of this back (my savings account is now 'whole') 
• After that I put away some money for my wedding and for my car (for more details see the expenditure tracker below)
• My credit card balance is the lowest it has been since July 2012
• My credit card balance at the end of the month was ~$1,500.  I haven't had a balance this low in nearly 2.5 years!
• This was driven entirely by the fact that I had saved for and cash funded my holiday expenditure.  The budget I set at the start of the year is really starting to pay off!
• Negative factors
• I generated a little bit of capital gains tax through share trading
• I keep track of how much I owe in CGT so that I'm not surprised when it comes around to tax time
• I sold some shares which I bought years ago because they had increased in price fourfold and I no longer really understood why I owned them

What is my outlook for next month?

Last month I knew my bonus was coming however I didn't realise how good it would be.  I targeted $550,000 and was happy to more than exceed this number.  In the coming month I don't have any 'big positives' coming and I'll probably be spending a bit on Christmas presents and the festive season.

I am also hoping to have purchased my sports car (which is going to cause a definite hit to my savings balance).  I am therefore going to keep my target for December 2014 to be a net worth of $550,000.  If I complete the year having achieved this I think I'm going to be pretty pleased with the outcome!

April 2014 Expenditure Tracker

Item	Apr 2014	Monthly Target	Perf. vs Target
Accommodation / Living expenses	$1,703	$2,246	-$543
Car expenses	$436	$692	-$256
Health / Well being expenses	$427	$566	-$139
Entertainment / Personal expenses	$1844	$1,230	+$613
Travel expenses	$391	$675	-$284
Other 'big' expenses	$4,600	$3,508	+$1,092
Savings / Investments	$13,836	$1,051	+$12,785

If we look

October 2014 Net Worth: $516,000 (+1.4%) and Expenditure Tracker

I have been off for several weeks as I travelled around South America.  The trip was fantastic and was one of my financial goals outlined at the start of this year.  I returned home yesterday and am still recovering from the jet lag.  I will be returning to my regular posting schedule over the coming weeks.

October 2014 Net Worth: $516,000 (+1.4%)

	Value	% Change
Assets	$878,000	+0.1%
Liabilities	$362,000	-1.7%
Net worth	$516,000	+1.4%

What drove my net worth performance this month?

I should note upfront that this data includes my performance up to the 5th of November - it was too hard to try and remove the last 5 days (since my return home).  As in previous months the big swing factor this month was my share portfolio performance however there were a number of other factors which also impacted the result.  I had originally targeted $510,000 this month and was pleased to do better than I had expected

• Positive factors
• Share portfolio
• My share portfolio increased by 2% over the month which I was incredibly pleased with
• My Australian shares continued to be weak however my US exposures which make up a significant part of my exposures did well (especially with the softer US$)
• I paid down a significant amount of debt
• Although my assets didn't move significantly, this month saw a big decrease in my debt balance as I paid down my credit card.
• Last month saw my largest credit card bill to date (~$9,500) which was caused by the engagement ring that I had bought in prior months
• My holiday cost less than I had budgeted
• I will go through this in more detail below but I ended my holiday with more cash than I had forecast (~$1,500 more) which was an unexpected boost to my net worth
• Negative factors
• This month there were no large negative factors which affected my net worth.  Originally I had expected my cash contributions to my holiday to be a significant negative factor however as I came in under budget this didn't move the dial significantly

What is my outlook for next month?

There will be several swing factors in this coming month.  My bonus gets paid which is always a big positive however there will be A LOT of negative factors including 5 weddings (and bucks nights) which are likely to see me out of pocket ~$1000 in gifts and entertainment, I need to pay my tax bill (no refund for me this year) and other bills which all see to fall due at the same time.

I have not yet decided whether I will include the cash from my bonus in my net worth as I am using it to buy a car.  If I buy the car in November it will not make a huge difference as it will net out but if it takes me longer than that I am likely to see a big positive followed by a big negative.  Assuming I do include it I am targeting a net worth of $550,000 for the month.

October 2014 Expenditure Tracker

Item	Oct 2014	Monthly Target	Perf. vs Target
Accommodation / Living expenses	$1,594	$2,246	-$652
Car expenses	$28	$692	-$664
Health / Well being expenses	$450	$566	-$116
Entertainment / Personal expenses	$683	$1,230	-$548
Travel expenses	$1,562	$675	+$887
Other 'big' expenses	$2,000	$3,508	-$1,508
Savings / Investments	$1,138	$1,051	+$87

If we look at the major line items in my tracker above

• Accommodation and living expenses
• My fiancée moved in with me this month which resulted in us splitting a lot of the utilities and grocery bills which feel due.  This combined with the lack of large one off expenses resulted in a large under-expenditure this month
•  Car expenses
• I couldn't quite believe how low my car expenses were for this month however I was away for half the month and in the first of the month I didn't need to fill fuel which resulted in the lowest car bill I have seen all year
• Health / well being expenses
• A lot of expenses in this category (e.g. gym and health insurance and charities) are automated however being away did help lower other expenses such as the hobbies and sports I engage in on a casual basis
• Entertainment / personal expenses
• This is where being away really helped - Friday nights, coffees, meals and drinks were all non-existent expenditures for half the month.  This performance is definitely not going to be repeated again
• Travel expenses
• Although I 'underperformed' in this category this month it was by far less than I had originally expected
• I will do another post on why I spent less than I had budgeted but I came back from my holiday with $1,500 more in cash than I had originally thought I would.
• Other 'big' expenses
• I am no longer saving for the engagement ring which reduces the amount that I put towards 'big expenses' however in the next month or two I will be buying a car which is going to see this number completely blown out of the water
• Savings / investments
• I continued to save into my employee share plan and didn't need to dip into savings this month which helped keep me in positive territory

This coming month should be interesting, with my bonus payout, my car purchase as well as a lot of other expenses that I mentioned above.  I am starting to look forward to writing up my annual performance in a few months time.  I really hope I managed to stick to this budget.  Tracking every dollar has been a bit of a pain however it really has helped me focus my spending.

You May Also Be Interested In
September 2014 Net Worth: $509,000 (+0.1%) and Expenditure Tracker
2014 Financial Goals
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How to buy a diamond ring (Part 1)

September 2014 Net Worth: $509,000 (+0.1%) and Expenditure Tracker

I managed to get back into positive growth with my net worth this month but it was a close run thing. There were a range of factors which influenced this outcome which I will go through below.  This post also includes my expenditure tracker which helps me track my financial goals for the month.

September 2014 Net Worth: $509,000 (+0.1%)

	Value	% Change
Assets	$877,000	+0.1%
Liabilities	$369,000	+0.1%
Net worth	$509,000	+0.1%

What drove my net worth performance this month?

There were a range of factors which influenced my net worth this month.  The share market was a significant negative (and although I felt that a correction was coming I didn't alter my portfolio in time) however a range of small factors all combined to ensure that I was still slightly ahead for the month (although I did miss my target of $510,000 for the month).

• Positive factors
• My restricted bonus vested
• Part of my bonus every year is restricted and vests in portions over a multi year period.  I count this restricted amount in my net worth so this did not move the dial significantly however it did help pay off some of my large, engagement ring driven credit card bill
• Continued contribution to superannuation and my employee share plan
• The power of automatic savings cannot be underestimated and my continued contributions to my superannuation and employee share plan helped incrementally improve my net worth performance this month
• Negative factors
• A weak share market performance
• The sell off in the share market towards the tail end of the month caused a ~$5,000 decrease in my share portfolio and consequently my net worth
• This would have been much worse if the exchange rate hadn't fallen as well.  A significant part of my portfolio is in US$ denominated investments and these benefited from the falling A$
• High personal expenditures for the month
• I will discuss this more in my expenditure tracker below but as I have written about before this year is a year for large one off expenditures on things or experiences that you only do once in a lifetime
• A lot of these expenses (such as my large overseas holiday, my sports car and proposing to my girlfriend) were tail ended in the year - i.e. I have been building up cash for these expenses and now I am making them
• The expenditure of this cash on both credit and from savings has started to hit my net worth and will continue for the foreseeable future

What is my outlook for next month?

October is likely to be another flat to negative month for me.  I have several large swing factors hitting in this month including

We all need to withdraw money from savings...but make sure you put it back!

If you have ever set yourself a budget you will know that things don't always go to plan.  Sometimes there are unexpected expenses and sometimes you just spend more than you wanted to on a night out.

If you have budgeted for almost all of your income this means that one of two things will happen in those months where things don't go to plan:

1. You will not save as much as you intended to in the month; or
2. If things really get out of hand you will need to dip into savings

Don't write off the bad month...

One thing I realised since I started tracking my expenses fairly religiously was that if you 'write off' a month as bad you will never really catch up again.  You need that bad month to be made up by a good month later down the track.

Writing off the month mentally makes you reset to zero and you go back to trying to make your budget in following months.  I think this is a bad way of approaching it.  Bad months need to be compensated for.  You need to replace that amount you have taken out of your savings account or actually contribute that amount you didn't contribute in a previous month.

So how do you do this?

What you need is a way of tracking your unexpected withdrawals from savings...

If you have a way of tracking your unexpected withdrawals from savings then you can keep track of how much you 'owe your savings account' on a real time basis.  Not only does this motivate you to save more or be more wary of your expenses, it also reminds you that when you are having a good month that you may need to contribute a little bit extra to your savings account.

If you want a way of tracking the deviations from your budget I recommend the following method.  I have been using it for a few months and have found it quite effective.

1. Have an excel file which tracks what you do with your money when you get paid.  I call mine my 'wage day' file

This is a super simple spreadsheet which every month tracks what you do with your cash.  It is not a budget of any sort but it interacts with your budget.  For example I get paid monthly so my Wage Day file is updated monthly 

Below is an example of a month where your income doesn't quite cover all the expenses and savings plans that you had for the month

Let's work through this tracker:

• Income
• In this (fictitious) example

August 2014 Net Worth: $508,000 and Expenditure Tracker

This post covers my net worth and budget tracker for the month.  This month I suffered only my third monthly loss since I started tracking my net worth more than 3 years ago.  For an overview of what drove my performance keep reading below.

August 2014 Net Worth: $508,000 (-0.4%)

	Value	% Change
Assets	$876,000	+0.6%
Liabilities	$368,000	+2.0%
Net worth	$508,000	-0.4%

What drove my net worth performance this month?

In my last net worth post (July 2014) I mentioned that I expected this month to be challenging driven  by the fact that I was buying a diamond ring to propose to my girlfriend.  I had hoped to stay even with last month's performance (at $510,000) but in hindsight I was lucky to only be set back one month.

I have provided a break out of the key positives and negatives which affected my net worth performance below

• Positive factors
• Almost all the positives this month were driven by the share market
• My portfolio increased nearly 2% over the month almost entirely driven by my investment in FKP (which I have written about extensively before).  I am currently looking to sell down this investment as it has performed well beyond what I expected.
• My employee share plan vested and I received the inbuilt profit associated with these shares. 
• I recently started accounting for the tax owing on these transactions as part of my net worth performance so the gains aren't quite what they used to be!
• I continued to invest in my employee share plan in this month
• Negative factors
• My credit card bill was higher than it has ever been
• I have a $12,000 limit on my credit card and I was butting up against this limit all month as I paid for the engagement ring on credit
• Note that I had the cash to back this (I wasn't using debt to buy the ring!) 
• I was also paying for various trips and holidays associated with the proposals (I had to pay for a flight to visit my girlfriends parents to let them know about the proposal...something I hadn't factored into my calculations!)
• This month I experienced a significant cash drain 
• In addition to the big expense above several large expenses fell due this month including my car registration
• It was actually an interesting experience trying to manage all these expenses without dipping into savings (in the end I had to withdraw $2,300 from savings to cover some expenses)

What is my outlook for next month?

I am going

July 2014 Net Worth: $510,000 (+1.4%) and Expenditure Tracker

This post covers both my net worth performance for the month.  It also includes my expenditure tracker, a series of posts I use to track how good I am at actually sticking to my budget.  I combined the two topics as they are inherently interlinked.

July 2014 Net Worth: $510,000 (+1.4%)

	Value	% Change
Assets	$871,000	+1.2%
Liabilities	$361,000	+1.0%
Net worth	$510,000	+1.4%

What drove my net worth performance this month?

When I wrote my June 2014 net worth I genuinely thought it would be a month where not a lot happened.  As it turns out I couldn't have been more wrong.  I had some really big expenditures come through however the strong performance in the share market completely offset the impact of these expenses.  I was targeting a net worth of $508,000 for the month and was happy to beat this.

Outlined below are some of the competing factors which affected my net worth performance this month:

• Positive factors
• The share market performed incredibly strongly
• Both my personal portfolio and my superannuation portfolio performed very strongly over the month (each recording gains in excess of 2% for the month)
• The strength of the share market over the past 6 months is starting to make me think that I should start to sell at least a part of my portfolio.  I have some particularly high beta stocks which I wouldn't mind selling out of (and they have performed incredibly well form me)
• I managed to save quite a bit of cash over the month
• It was quite a

June 2014 Net Worth: $503,000 (+2.1%) and Expenditure Tracker

A few months ago I combined my net worth and expenditure tracker posts as the posts were interlinked and it seemed to make sense to display them together.  This post represents the 'regular' net worth update however in coming days I will also post up an annual review of my net worth performance which will give far greater insight into the construction of my portfolio as well as my liabilities.

June 2014 Net Worth: $503,000 (+2.1%)

	Value	% Change
Assets	$860,000	+0.9%
Liabilities	$357,000	-0.8%
Net worth	$503,000	+2.1%

What drove my net worth performance this month?

I was incredibly happy to reach my net worth goal for this month as it was also my revised goal for the year. I can't believe I've crossed the half million mark - although it has been a slow and steady process it still feels strange to sit here at this level.

The month on month improvement was one of my best for the year and represented incremental improvement in all of my accounts instead of one big hit which improved everything.  Outlined below are some of the biggest factors that affected this result:

• Positive factors
• I finally submitted my tax returns for the year and this had several positive implications for my net worth
• I received a modest tax refund which was mainly driven by my investment property which was negatively geared over the year
• This eliminated many of the tax liabilities that I was carrying in the liabilities section of my net worth tracker (especially CGT liabilities from share sales)
• My share portfolio was up for the month - it wasn't a significant improvement (less than 1%) however this has been a drag over the last few months so it is good to see it back in positive territory

May 2014 Net Worth: 492,000 (+0.8%) and Expenditure Tracker

This monthly post of my net worth may look a little different to my regular readers.  I'm trialling having my net worth post and expenditure tracker post in one article.  If you like this (or dislike it and prefer to the two separate articles) let me know.

May 2014 Net Worth: $492,000 (+0.8%)

	Value	% Change
Assets	$853,000	+0.7%
Liabilities	$361,000	+0.6%
Net worth	$492,000	+0.8%

What drove my net worth performance this month?

I was actually reasonably pleased with my net worth performance this month.  I achieved exactly what I set out to achieve this month (as discussed in my April 2014 Net Worth post).  I did not save as much as I wanted to as I booked several things on my credit card (which I will discuss below) which increased my liabilities significantly.  However offsetting this was a strong share market performance.  The major movements in my performance are described below:

• Positive factors
• A strong performance in my share portfolio. 
• This month one of my companies did an accelerated renounceable rights offering.  Unlike a non renounceable offering there is no opportunity to apply for an overallocation of rights which are not taken up.  However I could apply for my rights.  Theoretically this should make me value neutral however the value of these shares traded well above the Theoretical Ex-Rights Price and I made a good return from them
• Continued Savings into my Employee Share Plan.  
• I never really understood why 'pay yourself first' worked so well until I started investing in my employee

April 2014 Expenditure Tracker

As outlined in my April 2014 Net Worth post yesterday, this month (like March 2014) was not great for me in terms of keeping control of my budget and expenses.  I had several large expenses combined with having to pay off a large credit card bill from the previous month which left me very cash poor.  My detailed expenditure tracker is below.

April 2014 Expenditure Tracker

Item	Apr 2014	Monthly Target	Perf. vs Target
Accommodation / Living expenses	$2,071	$2,246	-$175
Car expenses	$1,782	$692	+$1,090
Health / Well being expenses	$804	$566	+$238
Entertainment / Personal expenses	$1,114	$1,230	-$117
Travel expenses	$0	$675	-$675
Other 'big' expenses	$2,500	$3,508	-$1,008
Savings / Investments	$-968	$1,051	-$2,019

If we look at the major line items in my tracker above

• Accommodation and living expenses
• Although it looked like I outperformed my target for this month it was actually quite an expensive month.  I have started entertaining more at my apartment so my groceries bill was quite high and I also spent a fair bit extra on clothes
• The only reason this category came in within budget was because I did not have to pay my apartment bond nor did I have any expenditure on things for my apartment
•  Car expenses
• This  was the category that absolutely blew everything out of the water this month
• I budgeted that I would have $1,500 in maintenance costs for the year however I ended up having to spend more than that on just one service
• Health / well being expenses
• This category was also worse than expected.  My increased health insurance premium really bit into my budget and I continued to spend more on some of my hobbies
• My charitable donations (which fall into this category) were also up above budget...though I'm not upset or concerned about this!
• Entertainment / personal expenses
• I actually spent far

March 2014 Expenditure Tracker

March is always a bit of a painful month for me - there are always numerous birthdays and anniversaries, it is normally the last gasp of summer so I'm trying to get out and do all the things I forgot to do over the summer and this year I have a lot of weddings and bucks nights which seemed to fall during this time as well.  Last year was similar.

That being said - it was not a complete disaster.  In February I managed to stick to my expenditure targets quite well so I had plenty of cash available for savings in March.

Last month I had mentioned that I got real value out of tracking my expenditure at a much more granular level - I could see what I was spending a lot of my money on and where I could save cash (and also where I was underspending compared to what I wanted to do).  I am still getting a lot of this value but I've got to say that keeping up with the allocation of every dollar spent in my spreadsheet is turning out to be a bit of a headache.  It is not really difficult but it is tedious and unless you're really committed to knowing what is going on with your finances I recommend finding an easier way to do this.  I'll probably stick with this methodology for the rest of the year but I'm definitely changing it next year.

Below you can see my detailed expenditure tracker for this month and the causes of the movements in individual accounts.

Item	Mar 2014	Monthly Target	Perf. vs Target
Accommodation / Living expenses	$1,970	$2,246	-$276
Car expenses	$244	$692	-$447
Health / Well being expenses	$627	$566	+$61
Entertainment / Personal expenses	$1,891	$1,230	+$661
Travel expenses	$782	$675	+$107
Other 'big' expenses	$2,300	$3,508	-$1,208
Savings / Investments	$872	$1,051	-$179

• Accommodation and living expenses
• I managed to spend less than my budgeted amount in this category even though I received my electricity and gas bills this month (although it should be noted that these were for partial periods)
• A lot of these expenditures were front ended when I moved into my new apartment so I don't expect this to ever go over budget again
• Transport expenses
• These were also lower than budgeted this month - my main expenses were on fuel and public transport and big

February 2014 Expenditure Tracker

This month was a much more 'normalised' month from an expenditure perspective. Although I didn't save as much as I wanted to because I was paying off credit card debt from last month's expenditures (related to setting up my house) I managed to keep every other account under control.

One of the reasons I continue to track my personal expenditure is that I actually earn a very good income and the one problem that comes with this is that your standard of living and the amount of money you spend typically increases with how much you earn.  This year I have several aggressive financial goals and tracking my expenses and budgeting is an important part of my journey.

Below you can see my detailed expenditure tracker for this month.  As discussed in last month's post I have totally changed the way I track my expenses to give a great degree of clarity on where I am falling behind or am ahead.

Item	Feb 2014	Monthly Target	Perf. vs Target
Accommodation / Living expenses	$2,116	$2,246	-$130
Car expenses	$296	$692	-$396
Health / Well being expenses	$478	$566	-$88
Entertainment / Personal expenses	$1,352	$1,230	+$122
Travel expenses	$100	$675	-$575
Other 'big' expenses	$2,100	$3,508	-$1,408
Savings / Investments	$1,238	$1,051	+$187

• Accommodation and living expenses
• These were just below my target for the month and benefited from lower than normal utilities bills.  My utilities bills (gas and electricity) get charged on a quarterly basis so in months where these do not fall due I would expect to outperform this category
• Groceries were also marginally

January 2014 Expenditure Tracker

Changing the way you report and track things is always a rather big decision because you no longer have the benefit of going back and comparing what you did in previous years.  My expenditure tracker posts have been running for exactly 2 years now and they have largely been in the same format - i.e. how much am I saving towards my home loan, how much am I investing in shares and how much am I spending on personal expenses.

In my 2014 financial goals, however, I mentioned that this year will be a 'no savings' year where I am going to try and achieve all those things which I have been putting off for a very long time.  Given that I am typically an over-saver rather than an over-spender this is not a bad thing, however it does make my previous expenditure trackers quite pointless.

So why continue with the expenditure tracker at all?

Quite simply because I have a budget.  Actually it is a rather tight budget.  Even though I am not saving much this year (for the long term) I am trying to get a lot done.  Have a look at my 2014 financial goals and you'll see that to achieve some of them I actually need to sell some of my automatic share investments.  This means I am tracking what I am spending much more closely than in the past.

How am I tracking my expenses now?

Although I'm not going to provide the details (because it would bore everyone) I have set up a spreadsheet where I track every dollar I spend.  I update this daily (takes about 2 minutes) and there are 7 top level categories and 38 sub categories which I can fill the details into.

For the purpose of this post every month I will provide details on the top level categories.  Some expenses (such as home set up costs for my new apartment) are very lumpy.  The new expenditure tracker sheet that I have allows me to see when I'm actually behind (according to my goals) and when it is just a lumpy month.

January 2014 Expenditure Tracker - Updated Version

Item	Jan 2014	Monthly Target	Perf. vs Target
Accommodation / Living expenses	$4,297	$2,246	+$2,052
Car expenses	$1368.9	$692	+$677
Health / Well being expenses	$399	$566	-$167
Entertainment / Personal expenses	$1,452	$1,230	+$222
Travel expenses	$429	$675	-$246
Other 'big' expenses	$1,900	$3,508	-$1,608
Savings / Investments	-$2,840	$1,051	-$3,891

The sea of red may look terrible above but

2014 Financial Goals

I have been mulling over my financial goals for this year for quite a while.  When I first wrote my post about thinking about your financial goals for 2014 I thought I would have my goals set well in advance of the new year.

What ended up happening was that I really sat down with my pen and paper and started thinking about what I wanted from my life and from my finances.  I have written about how your financial goals and life goals are inherently intertwined.  I also wrote about how I keep putting off my personal gratification in order to achieve a better savings outcome.  I am lucky enough to have saved a lot over the last few years and this year I decided to take a different approach.

2014 will be unconventional for me...savings / investments will stay flat and I will do everything I wanted to do

I probably signalled in my post on not putting off your gratification for too long that I was thinking about doing things I had been meaning to do for a while.  At the same time I hate taking money out of savings.

I came to the decision, therefore, that in 2014 I would save very little but I would achieve everything that I had been putting off and that I wanted to do but which cost significant sums of money.  I will not dip into my savings to achieve this, but rather will spend what I earn and continue to invest the investable assets that I currently own (which are getting up around $300,000 so there is a fair amount I can do without saving more from my wage).

My expenditure tracker is changing to reflect these changed goals

Anyone reading this blog would have seen the format of my expenditure tracker - I track how much I save into shares, into my offset account and into personal expenditure.  Because this year so much of my expenditure will be in personal expenditure, I decided to split this into several different categories in order to better track and control my personal expenditures.

This was a useful exercise in itself because it forced me to think about how much I actually spend on different things.  Some of the spending categories really surprised me.

What are these 'big goals'?

Normally I don't put much about my