I sat down for my monthly financial review recently to see what sort of progress I’d made in the last month. 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. Let’s break it down.
Assets: My assets increased in value by 7.3%, mostly due to some consultation work that I invested the income from. This is more than the normal increase in monthly assets, because I am contributing a lot of assets each month into eliminating debt. The best news was that my personal savings increased by a substantial amount – again, thanks to my consulting work. I have now reached an amount in my emergency fund that I am comfortable with, so I plan on funneling as much as possible into debt reduction in the near term.
Debts: My debts as a whole decreased by only 1%. While this seems low, I am still climbing out of a large pile of debt. This decrease is mostly due to a large payment on my auto loan as I hit the home stretch on getting that loan paid off. I have virtually no credit card debt (a tiny balance from my primary use card is the only difference), which is a tremendous relief compared to the five figure credit card debt I had several months ago.
Net Worth: Last month, my net worth went into positive territory for the first time since high school. This month, my net worth increased 79%. That percentage is really high because, well, my net worth is really low and I had a healthy increase this month. Soon, this percentage will mean something, but right now I simply smile at it, knowing that I’m out of the hole.
Goals for November: My goals for the coming month are straightforward:
1. An asset increase of 1.5%. This is more in line with what I expect from a normal month, now that the credit card debt has been eliminated.
2. A debt reduction of 2% Now that I have a healthy emergency fund, my next goal is paying down debts. I really hope to surpass this goal and bring about a re-evaluation of a monthly goal for debt reduction at the end of November.
I don’t plan on setting any difficult goals due to the upcoming holiday season (I buy most of my gifts that I give during November). Though I am committed to improving my financial situation as a whole this month, I am not going to set the bar so high that I cannot cross it. I plan to set stronger goals for December.