In an effort to track my finances more accurately, I have decided to post the changes in my net worth each month. Since it has been a while since I performed the necessary calculations I will use January 2009 as my baseline. As such, here is how we stand as of January 31, 2009.

Assets:

• House – $249,000.00
• Car(s) – $13,296.00
• Retirement – $10,605.09
• Cash (checking and savings) – $2,234.43

Total Assets: $275,234.52

Liabilities:

• Mortgage – $190,710.75
• Student Loan – $9,927.45
• Medical – $741.00
• Credit Cards – $0.00

Total Liabilities: $201,379.20

Net Worth: $73,855.32

Monthly Recap

As you can see, we are 100% free of credit card debt. I cannot truly express how happy this makes me. Like so many people, we really struggled to rid ourselves of the burden of debt.  Once we re-establish our baby emergency fund, we are going to start attacking Sallie Mae.

I have mentioned previously, that I really hate her. In August 2008, I began researching various methods to reduce my student loan. Since then, I have discovered eHow, Today, Bukisa, and affiliate marketing. Utilizing these methods, and a few others to be discussed later, I think it is possible to produce $1,000 a month in passive income. If I could achieve this level of success, Sallie would be just a distant nightmare relatively soon.

Additionally, by reducing my soda addiction somewhat (I still drink way too much diet coke), we are able to send an additional $50 per month to our mortgage. In the long run, this will save us a ton of money. During the second half of February, I am going to sell a few things on eBay, continue to write articles for eHow and cut expenses where possible.

How did you do in January? Do you track you net worth monthly?

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We lasted reviewed our net worth in May. Financially, we were depressed and lost. Despite my financial background, we just did not have a plan that we could agree upon.

Enter Dave Ramsey.

Since we started attended Dave’s Financial Peace University, we have eliminated over $8,000 in credit card debt. I will tell you it has been extremely hard, and at times, almost impossible. We created a budget, tried to stick to it, re-worked the parts that blew up on us, and basically started acting like adults.

Even with our stock positions losing over $8,000 in the past 3 months, our net worth as climbed to $111,578. This is a direct result of eliminating our credit card debt (and not putting new charges on them) and staying within the budget on the rest of our spending.

Currently the only debt we have remaining is our house and my student loan ($10,277). The student loan really irritates me. I did get a degree with the money I received from Aunt Sallie Mae, but it is not the degree I am using now. Truly, besides the social aspects involved, my first degree was a waste of time, and therefore, the money spent to attain it was also a waste.

For now, we are at a crossroads. We basically have two choices, as I see it.
1. Continue to snowball the student loan. This would take approximately 18 months to pay off.
2. Pay the minimum payment towards Sallie and use the difference to fully fund our emergency fund. This would take approximately the same amount of time.

I know what Dave would tell us to do. Pay off the student loan first, then fully fund the emergency account. This is one of those times where we are going to deviate a tad from his plan.

I would feel more secure, as would my wife, if we saved up enough money to cover 3 to 6 months expenses before paying off the student loan. This would provide a small cushion against disasters. Additionally, since the student loan was consolidated a 4.25%, the interest will not kill us.

What do you think of this idea? I would love to hear from you!

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Each month I post an update of our net worth. The 7% increase this month is actually due to an error in last month’s liabilities. I entered around $18,000 in other debt, when in reality it should have been $10,000. Without this $8,000 mistake, our net worth would have decrease about $2,000. This is mainly due to a decrease in out home’s value. This does not really bother me since I plan on living here for the next 30 years.

As I posted here, we will be getting a HUGE refund from the government this year, so this will help the cash portion of our net worth somewhat. Additionally, I am selling a bunch of stuff on eBay and will use the proceeds to pay down some of our personal loan.

Good things are happening here.

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