It’s time for that monthly financial review again, where I make sure I’m keeping up with my short-term financial goals. I generally break things down by evaluating my assets, my debts, and then my net worth, and then using these numbers, I attempt to set goals for the coming month. This is a useful exercise for everyone to do, simply so they can keep tabs on their overall assets and debts and make sure that they are consistently heading in the right direction. Let’s break it down.
Assets My focus this month was in building liquid assets to make moving easier, and it certainly worked out well, with a 6.2% increase in assets. My wife was thrilled with this, as it was incredibly clear evidence that the ongoing success of The Simple Dollar and our frugal May are really paying off.
Debts A very slight increase in debts, mostly due to carrying a small credit card balance (gas and groceries, actually).
Net Worth The big jump in assets without much change in debt saw a very nice jump in net worth this month. Because of this, we feel very ready for the big move into a home in early July.
Last Month’s Goals (see last month’s review)
An asset increase of 5% We did this and more! Our happiness with the 6.2% increase in assets in a month cannot possibly be overstated.
A debt reduction of 0.5% We didn’t get this one done, but we’re fine with that, because the “overage” on the asset increase would have taken care of it and more and we were on time with all of our payments.
June is going to have a similar focus as May: maximizing liquid assets so that when we move, we don’t have to put necessary purchases on credit – we can pay cash for everything.
This Month’s Goal
An asset increase of 6% This is our only goal for June. We would like for that asset increase to be mostly liquid so that our move is easier.
How am I going to handle the big changes July will bring? July is going to look like a devastating month in my net worth roundup because (a) we’re going to spend at least some of that liquid buildup on a point on the mortgage, closing costs, our first mortgage payment, and lots of stuff for the home, and (b) the house will become a part of the equation, with the assessed value being a positive and the mortgage debt being a negative. The end result is that our net worth will see a precipitous drop as our debt skyrockets. I will probably not set a numerical goal for July because of this major change.