As I begin my new job, with a substantial pay cut, I find it’s time to examine our financial house of cards. One of the tools I’m using to do this is maintaining a solid picture of our family’s financial net worth. Using the provided financial net worth spreadsheet, I’ve pinpointed* our financial net worth.
As of this writing, our net worth is negative. When I began this project back in December (before being laid off), our net worth was $-16,000. As of this month, we’re at $-11,000. We’re on track to go into the black sometime in 2010 (exactly when depends on a lot of variable factors).
Unfortunately, my 401K lost a lot of value last year, as did our house. Our car has been driven into the ground (ha ha!) due to long commutes and visits to family – so paying off the loan was particularly nice as we owed more on the car than we could possibly recover if we were to sell it. We had a windfall this spring, and opted to spend about 1/2 of it on debt reduction (the other half helped make up living expenses while unemployed). As we head into this new job I have, we’re in position to begin tackling (very slowly) the remaining debt we have. This is hampered by the overall trend toward raising rates on credit – even when you’ve done everything right (as we have).
I expect I’ll revisit this issue every few months just to see what our progress looks like.
*Pinpointed is probably the wrong word: I’ve estimated the value of our car using Kelley Blue Book for value; I used Zillow to find a value for our home. All other values are based on balances as of this morning.