Calculating my Net Worth
I decided today that I was going to calculate my net worth because I had never done so. I was surprisingly astonished when I received a net worth of $37,337! This took into consideration myself and my husband’s information, but I was really expecting to be in the red!
To explain our financial situation a little deeper, I am still in my early 20s and my husband is in his early 30s. We both make a decent income for the area of the country we live in. In fact, we earn almost twice more than the median average household income for our state. We own our own house, have a first and second mortgage, both have Roth IRAs, I have a 401K, and we’ve got a nice chunk of savings kept in a high yield savings account at ING. We both work full time as managers in our respective fields, I work in finance, and he works in the food industry.
I was pretty shocked to see the number come up that was displayed. We’ve had a little bit of a financial crisis lately, with a tree falling on our house, tearing a hole in our roof, and totaling one of our vehicles. We’re going to have that extra expense of the deductible on our home owner’s insurance and we’re going to have to buy a new vehicle in a year or so. Luckily a family member sold us her car for something we could afford so we don’t have a car payment right now.
Throughout my life I have lived frugally. It all stemmed from the lessons my mother has taught me. I remember working my first job training horses, where my Grandpa would give me $50 or so when he sold the horse because I helped out. I always saved that money, and was glad I did. We don’t buy fancy cars or spend money on expensive clothes or electronics. We live well below our means, and to tell you the truth, I love it. I love being as close to debt free as I can. Hopefully in 10 years or so we will be completely debt free. I think one of the keys to long term wealth is not generating more debt than you can handle. For instance, don’t go out and buy a new plasma TV if yours works fine. You don’t have to have the nicest things to “keep up with the Joneses”.
I am going to try to “bank on myself”, where next time I need a loan, say for a car, I’ve got that money saved up so I don’t have to get a loan. I’m going to set up a pre authorized transfer of at least $350 a month (same as a car payment) so that I can pay cash for the vehicle of my choice when the time comes, or at least have a good amount to put down on a vehicle so my loan amount isn’t outrageous.
This was a really interesting exercise and I strongly encourage you to do it as well. You may be as surprised as me to find out your real net worth!