GUYS! Today is an important day. Not only is it the first day of 2015, but it’s also the day we officially declare ourselves in the green on our net worth! As silly as it may sound to some, this is huge for us. Between being starving students and struggling to find a good job after graduation, we’ve been in the negative since we got married in 2010. Last December we were sitting at -$13,570.64 and over the last year we’ve clawed our way to where we are now at $350.97. Finally!
It’s taken a lot scrapping, self-denial and hustling:
- I started ramping up my effort in to grow my freelancing business.
- We’ve been frugal to the point of wanting to tear our hair out.
- We’ve taken advantage of credit card rewards to satisfy our wanderlust without piling on more debt.
- I worked my butt off at work to earn gift cards so we could enjoy a night out.
- My wife started a small hustle selling crafts.
- We’ve spent weekends hanging with our inexpensive friends, Netflix and Redbox, and doing game nights with our human friends.
- We avoided credit card debt entirely.
Oh, and we’ve powered through a few setbacks:
- Moving to a different state where rent, vehicle registration, etc. is all a lot more expensive.
- Losing my wife’s income for medical reasons.
- Having my wife start substitute teaching, only to be told by her doctor to try to avoid it for the rest of her pregnancy after being put on temporary bed rest.
- New medical bills from my wife’s pregnancy and an ER visit.
Overall, I’m ecstatic about where we are. Here’s a breakdown.
Cash. We haven’t grown our cash that much over the last year simply because we’ve been directing it to other important things (i.e. my tax account, emergency fund, paying down debt, etc.). We’ll continue to find ways to maximize our cash flow rather than just letting it sit idly.
Tax Account. As my freelancing income has grown, I’ve tried to put more into the tax account to cover our liability for the year. At this point, I have no idea what that number is. I’m just hoping it’s not too much so we can start making estimated payments moving forward. The only bad thing about this one is that it’s a few thousand that will all be gone in a few months.
IRA/401(k)/Teacher Retirement. My IRA hasn’t made a ton of progress without me making any contributions. That will hopefully change as I start making monthly contributions again starting this month. As for the 401(k), that’s been a nice perk with the job I started in February (free money!). We knew about my wife’s Arkansas teacher retirement last year, but the state does a horrible job administering the plan, so we didn’t actually know how much she had in her account until she quit in March. I really need to move it into a Vanguard IRA so it can start making us some money.
Vehicles? The last time I updated our net worth, a reader asked me why I don’t include our vehicles on there. I’m a little torn on it. On one hand, it’s hard to know exactly how much I’d get for either so I don’t want to overvalue them. But on the other hand, it’s a little unfair to have the auto loan liability against us without counting the value of the vehicles for us. I’m still not 100% sure, but I may go back to including our cars in our assets moving forward.
Student Loans/Auto Loan. We’ve been just getting by on these ones with the minimum payments (although I do put $100/month to my student loans instead of the required $93.55). I’m looking forward to being able to start putting a little more toward these this year.
In-Laws. This loan was for a medical treatment my wife needed right after graduation when we were both living with her parents and weren’t working. Even though this loan doesn’t have interest, it’s been our top priority since we incurred it two years ago. For a long time, we were paying the minimum of what we agreed to, but we’ve really turned it up lately and will have it completely paid off this month!
Computer Loan. This was a 0% loan through the bank I was working for, but when I quit they jacked up the rate to 10%. Rather than pay interest, we just paid it off.
Credit Cards. If you haven’t heard (read?) me say this before, we pay these suckers off throughout the month. We’ve never paid credit card interest and we don’t plan on doing it in the future. The balances here are the balances at the end of the month.
Hospital. Luckily this one’s a 0% interest loan, so we’re in no hurry to pay it off.
Looking forward to 2015
In the coming year, we plan on things continuing to be dicey. One of our cars is slowly dying the death, so we’re probably going to have to buy a new one. We’re not going to go crazy, but the last two we bought were both under $6,000 so we’re probably going to try for something that will hopefully last longer.
We’re also having a baby in February (well, my wife is), and since it’s our first, I’m preparing myself for whatever unknown costs that are going to be associated with that initially and going forward. All I know is that it will all be worth it 🙂 We’ve decided that we want my wife to stay home with the baby, so I’ll have to find a way to continue to increase my income.
If we can, we’ll keep trying to find ways to add to our debt payments, but we’ll make sure we’re not running faster than we can handle. Overall, I’m looking forward to the challenge 🙂
How did your 2014 go financially? Did you rock it or do you need to make adjustments in 2015?