Net Worth Newbie

formerlyskint.com - net worth newbie

I’ve been following various bloggers tracking their net worth for a couple of years or so. Over the past few months, there seems to have been a little flurry of posts from some of my favourites focusing on net worth.

After reading some of these, I realised that I track literally every other aspect of my financial life, but this was one thing I didn’t have a full grip on. I mean, I had a rough idea, but tracking my net worth on a page in black and white? I am a newbie!

 

I built a super simple net worth tracker spreadsheet and started on December 8th. I’ll be updating this on the 8th of each month going forward.

All well and good, but the one thing I have struggled with is how exactly to calculate the magic number. There are so many variations on what people think should be included and I can see it from all sides!

 

The Sticking Points:

Property: OK, so I own a house worth approximately £120k. The mortgage owed is £87k. Technically my home equity is £33k. But this isn’t exactly a liquid asset, is it? When I retire, I’ll still need somewhere to live.

Perhaps if I was living in a bigger family home, I would include that as an asset as I would likely sell up and downsize after retiring.

 

In this post, Joe over at Retire by 40, focuses on the percentage of your net worth that is tied into your primary residence.

This is an interesting way to look at it. It’s not something I would be putting a lot of effort into tracking at this stage of my life, as there are too many potential variables standing between me and retirement.

I do, however, think this would be more relevant to the overall picture closer to retirement.

 

On the other hand, Luke, at Consumerism Commentary, is extremely persuasive with his stance, insisting that a financial liability is not a physical object. Therefore your house is is an asset.

 

This is the one real biggie that has me torn. I have decided to track it both ways, one figure simply excludes the value of my home.

 

Student Loan: My current student loan balance stands at £24,000. Like most UK graduates, I repay the minimum (working out to around £50) from my paycheck each month. If I was in the situation where I needed to liquidate my assets, I assume I would not have an income in this scenario.

If this was the case, I would no longer be liable to make repayments until my income reached the threshold again.

 

Being on a Plan 1 loan means my balance is written off 25 years after graduating. This is actually calculated from the end of the tax year in which you graduate. So my 25 years began in April 2012. This will make me 50 years old when the loan is forgiven.

Whichever way you look at it, it is not a loan which, like any other, I will carry into later life or that will still be relevant should I fall on hardship.

For this reason, I have chosen not to include it in my liabilities.

 

The Current Picture

So on January 8th, this is where I stood

formerlyskint.com - net worth january 2019

 

This is pretty much exactly where I would expect to be at my stage in life. I bought my first home just over 3 years ago with a mortgage, so this obviously makes up a huge chunk of both my assets and liabilities.

Until 5 years ago, I mostly worked freelance or bounced between short term contract jobs meaning I had no workplace pension. And I only started saving when I wanted to buy a house, then most of my money went towards the deposit and furnishing. All of this makes for pretty dismal reading!

 

I know I am almost setting myself up for disappointment by committing to track this monthly. It’s not likely to be taking any huge leaps upwards any time soon, if anything, it’ll go down significantly once I’ve finally bought my new car.

 

I am really hoping to push myself to both save more and pay more off my mortgage this year, so hopefully it will spur me on a bit.

I’m going into 2019 debt free, whereas last year, I had £1200 of credit card debt to clear. Logically, this is another £1200 which I can divert straight into savings.

 

I’m putting off setting my annual targets in stone yet, as I’m expecting a pay rise in the next couple of months.

At the minute, I’m basing my budget on my current salary so the real plan is to throw any extra income at my savings/mortgage.

 

Rather than boring you all to death with regular posts on my barely-moving net worth, I’ll be updating it monthly here.

2018 Money Diaries XXL: Recap

After taking a bit of a break over the holidays, I’m back with a roundup on my Year of Money Diaries.

I went in to 2018 feeling like I was in a bit of a rut financially. In the past, I have been relatively good with saving..but only when I had an end goal, something tangible I was saving for.

Since buying my first home and moving in, everything seemed so expensive, I was basically hemorrhaging money and it was basically impossible to save anything more than the bare minimum.

 

Even after I had furnished, decorated and fixed ip a few bits (very slowly!) I had fallen into my old habits of wasting money on “stuff.”

In an effort to put a stop to this, I decided I needed to figure out what this “stuff” was by tracking my spending. Every penny. That’s where this blog came in. I needed to give myself some level of accountability or I would quickly lose motivation!

Continue reading “2018 Money Diaries XXL: Recap”

Money Diaries: December 10th – 16th

Formerlyskint.com - Money Diaries december 16th

Throughout 2018, I will be tracking every last penny I spend, and sharing it here weekly. I’m a (late) twenty-something lady, living in the North of England with my Other Half, commonly referred to as OH. I travel regularly for work, and often spend more time on the motorway than in my own home, which can often account for my fluctuating Car Expenses and entirely random Grocery costs!  By the end of the year, I’m hoping to have a better overview of where my money goes to each month, and have a realistic long term savings plan in place (as well as the many other savings plans I have in my head, but you can read more about that here). You can also read the full series of my money diaries here.

 

So what I have gone and cleverly done this week, is willingly pay someone £800 to butcher my mouth and essentially remove my ability to eat solid foods just a week before Christmas. Who does that?!

This gal!

Most of the week has been spent lying up popping painkillers like Smarties. I did manage to get my Christmas decorations up but it was very much forced fun, when I would have much rathered just continue lying down and munching painkillers.

 

Of course, as is my life, my dentist trip turned out to not just be a straightforward extraction. The tooth I was saying goodbye to actually had a root wrapped around the root of the tooth next to it. This made it a super painful, super long and super difficult experience!

In fact, it was so bad that I couldn’t carry on with the rest of the dental work planned for that day. I had to return the next morning to have a crown fitted. This was 4 days ago and had it been a standard extraction I should be now functioning like a normal human. However, I’m looking at probably another couple of weeks of agony before things start looking up.

 

OH tried his best to make me feel better, bless him, with festive hot chocolates and an array of the softest foods he could find in Tescos. (I don’t recommend this unless absolutely necessary. A Christmas buffet is not the same when it features the random mixture of soup, risotto, mashed potatoes, Philadelphia and chocolate mousse)

 

Weekly Spending Review – The Breakdown:

Continue reading “Money Diaries: December 10th – 16th”

Money Diaries: December 3rd – 9th

Formerlyskint.com - Money Diaries december 9th

Throughout 2018, I will be tracking every last penny I spend, and sharing it here weekly. I’m a (late) twenty-something lady, living in the North of England with my Other Half, commonly referred to as OH. I travel regularly for work, and often spend more time on the motorway than in my own home, which can often account for my fluctuating Car Expenses and entirely random Grocery costs!  By the end of the year, I’m hoping to have a better overview of where my money goes to each month, and have a realistic long term savings plan in place (as well as the many other savings plans I have in my head, but you can read more about that here). You can also read the full series of my money diaries here.

 

Has anyone elses life just become a Countdown to Christmas? My last day at work is 21st. Unfortunately, I have an event that night so it’ll be a late one, but then I’m off work until January 7th!

I get two whole weeks off work! I’ll be on call in case of dire emergencies, as our venues are still open with plenty of Christmas events going on, but I think this will be the longest stretch of down time I’ve had since leaving university 7 years ago.

 

Like most people, December is usually a crazy month in my social life. This year however, things are a little bit different. I think partly because I do have so much time off over the festive period, I don’t feel rushed to get all my Christmas drinks squeezed into this couple of weeks!

Also, anticipating shelling out close to £1k on dental treatment is hanging over me like a dark cloud.

On that note, where has it all gone this week?

 

Weekly Spending Review – The Breakdown:

Continue reading “Money Diaries: December 3rd – 9th”

Money Diaries: November 26th – December 2nd

Formerlyskint.com - Money Diaries december 2nd - Inspired by Refinery29 (photo credit CreativeConvex)

Throughout 2018, I will be tracking every last penny I spend, and sharing it here weekly. I’m a (late) twenty-something lady, living in the North of England with my Other Half, commonly referred to as OH. I travel regularly for work, and often spend more time on the motorway than in my own home, which can often account for my fluctuating Car Expenses and entirely random Grocery costs!  By the end of the year, I’m hoping to have a better overview of where my money goes to each month, and have a realistic long term savings plan in place (as well as the many other savings plans I have in my head, but you can read more about that here). You can also read the full series of my money diaries here.

 

Last week, I promised you two Money Diaries posts as I’d missed one while I was ill. As I looked over my spending tracker for the week, I realised that there was a really good chance it was going to be the single dullest piece of writing I would ever produce.

I summed it up in a tweet instead:

Money Diaries: November 19th - 25th. formerlyskint.com

I’m back in action this week and am probably feeling around 90% myself again, so that’s good enough for me! I was luckily able to work from home again for a few days this week so getting the extra rest and not trekking to the office in the cold is definitely helping.

I had another generally quiet week, work is crazy busy at the minute with lots of things to close off before Christmas, so I’ve been enjoying not doing much in the evenings and just relaxing!

Despite this, it has managed to be my most expensive week of the year so far.

I watched my first Christmas film and had a peppermint hot chocolate. Then I promptly spend about £500 online on Christmas presents.

 

Weekly Spending Review – The Breakdown:

Continue reading “Money Diaries: November 26th – December 2nd”