I’m happy to kick off 2018 with this financial statement as my first task. Though a mere tick of the clock changed our year from 2017 into 2018, it can be a very powerful psychological gate if you will. A time when many people create resolutions, only to fail at them in a short time. For 2018 I certainly have goals… but I plan to focus more on actions this year. I plan to make every day one of resolving to be better. For me, personal finances are one of the big areas I will be seeking improvement on in 2018 and I’m happy you’re here following along!
My Net Worth increased almost $8,000 this month almost entirely in 401k and Pension gains; but I made little progress in the rest of the areas.
December 2017 Financial Statement
| Account Name | Previous Balance | Balance | Change |
|---|---|---|---|
| Cash | $1200.00 | $100.00 | -$1,100.00 |
| Savings - Personal | $1000.94 | $1000.96 | $0.02 |
| Savings - Personal (CU) | $3,012.02 | $2,124.00 | -$878.02 |
| Checking - Personal | $3,737.59 | $3,615.00 | -$122.59 |
| Checking - Business | $2,365.65 | $4234.67 | $1869.02 |
| Retirement - 401k | $168,005.65 | $173,229.35 | $5,223.70 |
| Credit Cards | -$10,352.43 | -$10,728,07 | -$375.64 |
| Retirement - Pension | $22,711.65 | $24,263.26 | $1551.61 |
| Retirement - HSA (Investements) | $5,614.26 | $5,666.62 | $52.36 |
| Retirement - HSA (Cash) | $2,930.91 | $3,119.20 | $188.29 |
| Asset - Vehicle 1 | $15,219.00 | $14,923.00 | -$296.00 |
| Auto Loan 1 | -$16,816.42 | -$16,095.48 | -$720.94 |
| Asset - Vehicle 2 | $6,500.00 | $6,500.00 | $0.00 |
| Asset - Precious Metals | $400 | $400 | $0 |
| Asset - Home | $141,815 | $141,808 | -$7.00 |
| Mortgage - Home | -$141,560.03 | -$141,291.90 | $268.13 |
| Net Worth | $204,054.55 | $211968.61 | $7,914.06 |
A few things to note this month:
- The Cash was spent during a December visit to Ukraine to visit my fiance
- It appears the auto loan didn’t update correctly during my November statement, as I did not make $720 in payments this month, but it is now correct.
- My Savings – Personal (CU) went down and my Checking – Business went up, because I did a transfer to inject more cash into my business for upcoming plans.
- My side business did even less revenue for December, and had some cash outlays for a big website redesign I’m doing for 2018.
- I did November’s statement on December 2nd (oops), and it had accounted for December’s mortgage payment. It is now January 1st, and a holiday, so my mortgage wasn’t taken out yet for next month. Yeah, I know this is not “perfect” accounting, but it averages out over the months… so for me, it’s good enough.
Side Business Income
December was a terrible month for the business, we did just under $800 in sales, ending the year with about $11,700 in revenue. Part of the decline is seasonal, part is due to a small customer base, and part is due to poor sales and marketing on my part. I have HUGE plans to increase revenue in 2018, and I will be starting with a complete website redesign to make the site more appealing to potential customers.
Retirement
Wow! My retirement accounts increased significantly this month, just under $8,000 in a single month. $1500 of that was the next contribution to my pension plan from my company, and the rest came from 401k contributions and gains. It does, however, really show how compounding interest and gains over time can really start to add up. I know it’s tough when you’re starting out and you’re looking at having only $3,000 or $12,000 or even $40,000 in your 401k and thinking it’s never going to grow. But you must let time in the market work, you must keep contributing, keep letting those dollars go to work and compound over time! I didn’t start saving in my 401k until I was 31, and I’m 36 now. If you are in your 20s, enjoy work and thinking you will “save later” I implore you to start saving now!!! It is literally in my top 2 biggest financial regrets of my life.
With retirement accounts totaling $197,491.61 and using a 3.5% safe withdrawal rate (SWR), that would allow me to take $576.02 as income each month, an increase of almost $20 over my position just one month ago! If that trend were to continue, I could retire in…. 14 years, but that’s just a fun little napkin calculation. For now, it’s the little wins that get me excited!
Safe Withdrawal Rate (3.5%) monthly income: $576.02
With a project monthly need of $4,000 in retirement, it’s still not enough. I have even re-evaluated if I could truly live in Ukraine on that amount and while the answer is technically true, it would not be a comfortable life and thus I better keep working and hope for good health! (I wasn’t planning on retiring just yet anyway!).
Spendaholic Ways
Unfortunately, my credit cards went up this month even though I did make a significant payment. I did have Christmas presents to buy, but the bulk of the increase came from unexpected vet bills for one of my dogs. Ideally, I would have budgeted for that and had it in savings, or even a real emergency fund I could tap… but because of my past Spendaholic ways, I didn’t have it. It’s tough… it’s really tough to climb out of that hole and correct those bad habits, but 2018 is going to be laser focused on success in this area!
I still spent way too much money. I spent $2438.24 on travel (includes the cash), $540.81 on restaurants while only $115.86 on groceries, and Pets cost me $1377.51 this month due to the vet emergency (well that’s not so spendaholic, I guess), $314.93 on gifts, and $96.54 on entertainment. I still need to cut back on eating out, and now that it’s 2018 that will be a big priority for me.
Looking Ahead
Over the coming months, I will continue working on the personal finance aspects of my journey, but there are some key points I must consider going forward:
- Fiance and step-daughter will move to the USA in June 2018
- I will return to Ukraine to visit them in March/April time frame I must plan for… all in, those trips typically cost me $4000 everything included.
- I project my side business to grow rapidly in 2018, starting in March, allowing me to take an income from it by the end of the year
- I will continue paying down my mortgage faster than normal
- March 31st, I should receive a bonus from work (fingers crossed!)
- My primary car is slightly underwater, I will make a large extra payment on it with the previously mentioned bonus
- I’m still cosigned on $29,000 debt from an ex’s student loans that I will try to get her to refinance this year
- My employer is swapping the pension, for additional 401k deposits come 2019