Net Worth: April 2014 Progress

In April, we had a solid month in terms of expenses, savings and paying off debt. However, our investments didn’t play along – So it’s yet another “go nowhere” month when looking at the top-line net worth figure. It’s a bit frustrating to see the top-line number stay pretty much the same this year so far, when we had such an amazing run-up last year. The past three months have given no actual growth, but the underlying numbers are much healthier now. Let’s take a look…

The Numbers

For background on the methodology and definitions, see Net Worth: September 2013 Progress. I’m including the past two months for comparisons now, but the “difference” values are computed for the past month’s changes.

Category Feb 2014 Mar 2014 April 2014 Difference
Net Worth $600,075.89 $599,957.23 $600,277.24 + $320.01 + 0.05 %
 Assets $991,861.99 $992,582.92 $986,768.27 – $5,814.65 – 0.6 %
— Real Estate $602,416.00 $601,406.00 $592,492.00 – $8,914.00 – 1.48 %
— Automobiles $25,000.00 $25,000.00 $25,000.00 0 0
— Investments $356,181.35 $355,650.46 $352,866.35 – $2,784.11 – 0.78 %
— Cash $8,264.64 $10,526.46 $16,409.92 + $5,883.46 + 55.9 %
 Liabilities $391,786.10 $392,625.69 $386,491.03 – $6,134.66 – 1.56 %
— Mortgages $364,726.50 $363,534.58 $357,838.35 – $5,696.23 – 1.57 %
— Auto Loan $25,311.63 $24,890.31 $24,470.54 – $419.77 – 1.69 %
— Credit Card $1,747.97 $4,200.80 $4,182.14 – $18.66 – 0.44 %

Analysis

The Month

Once again, as has been the case the last three months, the net worth figure has gone nowhere. Considering the losses we’re showing here in real estate valuations and my investments, that actually proved to be hard to achieve this month.

For the second straight month, my cash cushion is being built up. We got a much needed injection of cash from tax returns both Federal and state. Obviously the fact we got such a sizable return shows that I need to ratchet down my withholdings for 2014, I don’t want to be giving the government a chunk of money to hold onto when I can invest it or use it to prepay mortgages. I’ve already adjusted my federal withholding through my employer’s HR system. For now, I haven’t done the same for state, mainly because I need to actually fax paperwork to get it done, but also because a good chunk of my return was due to additional estimated tax payments I made quarterly last year, and am no longer making. That means the 2014 return should a good deal smaller. (The fact that I had to pay estimated taxes last year was because I owed over $1,000 in state taxes in my 2012 filing. Then this year I’m getting ~$2,400 back. It’s a pretty good indicator of how wildly our tax situation has been swinging for the past three years).

As promised, I took a good chunk of my tax returns and used it to prepay one of our mortgages that still has PMI on it (as can be seen by the bigger than normal difference in mortgage reduction above). With that prepayment and today’s normal mortgage payment, the loan to value ratio has gotten below 80% and we can petition our lender to remove the PMI. That means we’ll remove ~$40/mo in payments that went to PMI. I’ll likely fold that back into our monthly payment as additional principal payments. My largest goal beyond maxing out retirement savings for my wife (IRA) and I (401k) was to make serious progress on paying down this particular mortgage. It has a 6.75% interest rate and had PMI payments up until this point. That is my highest interest debt and the lowest balance mortgage, so it makes the most sense math-wise and should be the one we can get rid of quickest.

 

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