Hello and welcome to our first Net Worth Update for 2018! I have a big goal this year, but I don’t know if it’s a stretch goal or a delusional one. I think by the end of this year, we might become worthless! I say this because our net worth increases thousands of dollars a month usually. It’s a tall order but we will see what happens.
This month we have a smaller than usual increase in net worth due to the holidays. We cash flowed all our gifts for the first time ever. I actually didn’t expect us to have any money left over but we had an extra $325 at the end of the month that we were able to put on our personal loan!
Please keep reading for a detailed breakdown of the changes in our net worth for January 2018.
The home value decreased a bit this month but that is due to normal fluctuations in the housing market.
I wanted to talk more about the decrease in our Savings – Emergency Fund. You will remember last month that I was putting my income tax savings from Shipt in our Emergency Fund because I didn’t have a designated place for it yet.
We went ahead and opened up 2 new savings accounts, one for my husband’s bonuses and one for Savings – Taxes. I will not be reporting the bonus account as an asset on our net worth updates because my husband needs the freedom to purchase big ticket items from that savings so I don’t want to have my eyes on it. Also, this keeps him from taking money from the end of the month to make those purchases as well! We both win!
We transferred the excess money from Savings – Emergency in to the new account Savings – Taxes and added to it as the month went on and I collected more Shipt paychecks.
Not one increase this month! I do believe that’s the first time ever! Not only that, but I just love to see this side of the chart shrinking. I took off the Equinox since it’s paid in full.
Though I will be adding an account for the next car I get, I can enjoy seeing only 8 debt accounts for a while.
Navient decreased $203; I will have more info about that in an upcoming post next week. I’m waiting for the next bill to post before I detail all the extra payments I made during that bill cycle.
The personal loan decreased $387 thanks to the excess of $325 at the end of December and our regular minimum payment.
Planned Debt Payoff
At the end of January I think we will have nearly $1,000 extra to send to debt. Last month I shared our smallest 3 debts and explained my reasoning from straying from the debt snowball method that we all know and love. I am doing a hybrid plan of:
- How much our monthly obligations will decrease by paying the balance in full.
- What the interest rate is on all debts that are within “firing range”.
Here are our 3 smallest debts as of January 4, 2018. These are listed in order of the typical debt snowball method, taking in to account balances only:
- Navient #9 – $590.38 (6.5%)
- Home Depot – $2,275 (0%)
- Personal Loan – $2,364 (9.5)
Since I’m already devoting all of the money I make from Shipt on knocking out Navient #9, the excess money at the end of the month I am sending to our personal loan. It has the highest interest rate and nearly the same balance as our 0% debt at Home Depot. Even the payments we send are similar: Home Depot is $175 a month and the personal loan is $150 a month. Therefore we don’t gain much from focusing on Home Depot just because it’s a slightly lower balance. The personal loan eats money!
I think the personal loan will be paid in full by the end of March, but I have high hopes we might be able to get rid of it by the end of February!
Here is my updated list of attack items on my personalized debt payment plan:
- Personal Loan – $2,364 (9.5%)
- CP Visa – $3,796 (9.5%)
- PMI – $5,375 (see below)
In order to get rid of PMI we need to bring our mortgage balance down to 78% of the original value of the home found on our appraisal at the time of our purchase. That amount was $72,000, so we need our balance to fall below $56,160 to get rid of PMI.
Our PMI payment is $54.54 per month, but we would of course keep sending the same mortgage payment that we have been sending all along so that $54.54 would become an additional principal payment.
When I crunch the numbers on Rocket Mortgage’s amortization calculator I can choose only a one-time extra payment, and a repeated extra monthly payment. Given that information I can see that a one-time extra payment of $5,375 made tomorrow would save us $11,760.69 in interest and reduce the term of our loan 54 months (4.5 years).
If I were to send an additional $54.54 a month on top of the $24.52 extra I usually send for the rest of the time we have the loan, we will save $16,137.62 in interest and reduce the term of our loan 106 payments (nearly 9 years).
I can’t find a way to calculate doing both of these things, but I do plan to do both of them! And the good news is, I think we should be able to accomplish all three of the goals outlined above before the end of 2018. Maybe even more!
After paying all of the bills and sending the extra payment to our personal loan, we paid off a total of $1,306 in debt and raised our net worth $701 for a total net worth of $(42,438).
I know my numbers aren’t very impressive this month, but I am proud nonetheless. We moved forward even though we gave at Christmastime with the same generosity as we have in recent years, but with much less stress. We didn’t go in to debt.