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Friday, 1 August 2014

July 2014 Net Worth: $510,000 (+1.4%) and Expenditure Tracker

This post covers both my net worth performance for the month. It also includes my expenditure tracker, a series of posts I use to track how good I am at actually sticking to my budget. I combined the two topics as they are inherently interlinked.

July 2014 Net Worth: $510,000 (+1.4%)

Value

% Change

Assets

$871,000

+1.2%

Liabilities

$361,000

+1.0%

Net worth

$510,000

+1.4%

What drove my net worth performance this month?

When I wrote my June 2014 net worth I genuinely thought it would be a month where not a lot happened. As it turns out I couldn't have been more wrong. I had some really big expenditures come through however the strong performance in the share market completely offset the impact of these expenses. I was targeting a net worth of $508,000 for the month and was happy to beat this.

Outlined below are some of the competing factors which affected my net worth performance this month:

Positive factors

The share market performed incredibly strongly

Both my personal portfolio and my superannuation portfolio performed very strongly over the month (each recording gains in excess of 2% for the month)

The strength of the share market over the past 6 months is starting to make me think that I should start to sell at least a part of my portfolio. I have some particularly high beta stocks which I wouldn't mind selling out of (and they have performed incredibly well form me)

I managed to save quite a bit of cash over the month

It was quite a high expenses month for me (as you can see below) however I managed to save a bit of cash in line with my savings plans

The great thing about automatic savings is that they are never there for you to cover those unexpected expenses that crop up from time to time

I continued to save into this plan and will continue to do so for the foreseeable future

Negative factors

My credit card balance increased by 50% (off a high base)

My credit card balance went up significantly over the month and was almost entirely due to me purchasing a diamond engagement ring for my girlfriend (I have a whole series of posts coming out about this - see part 1 here)

However I can't entirely blame it on that - I also went out a lot during the month, had several utilities bills fall due and had some expenses for my girlfriends birthday

I realised some unforeseen tax liabilities

I received my group statement (employer tax statement) during the month and I realised that I actually owe tax on some stock that was given to me which I wasn't aware of. This was a one off and is not likely to continue

What is my outlook for next month?

Next month I will be incredibly happy if I stay at $510,000. Although I bought the diamond ring this month I have so far only paid the deposit and I still owe the balance which is larger than the incremental increase in my net worth every month. In order to stay flat a lot of things have to go right however my employee share plan will be vesting this month which should help me remain flat.

July 2014 Expenditure Tracker

Item

Apr 2014

Monthly Target

Perf. vs Target

Accommodation / Living expenses

$2,078

$2,246

-$167

Car expenses

$435

$692

-$257

Health / Well being expenses

$457

$566

-$109

Entertainment / Personal expenses

$1594

$1,230

+$364

Travel expenses

$82

$675

-$593

Other 'big' expenses

$2,700

$3,508

-$808

Savings / Investments

$2,196

$1,051

+$1,145

If we look at the major line items in my tracker above

Accommodation and living expenses

Slightly below expectations even accounting for the fact that I had several utilities bills fall due during the month. The difference is almost entirely due to the set up costs which I have spread over the entire year but which were paid in January (and therefore reflected very badly in that month's performance

Car expenses

Like accommodation, if anything this should be slightly lower as it does not include things like insurance and car servicing. I had to fill fuel more than usual this month and at $100 a pop it starts to add up pretty quickly

Health / well being expenses

Although this was a better performance than usual I donated less than I would have liked to charity which isn't something I'm particularly proud of

Entertainment / personal expenses

This was above my expectations for the month and was driven by a few things. I went out much more - I hadn't had a night on the town in quite a long time and then I had several nights out in a few weeks which really started to add up over the month.

I also spent far more than I expected to on gifts as birthdays and other events occurred

Travel expenses

I should have put more away for this during the month as my big trip overseas is coming up rather soon and that is going to have some serious expenses associated with it

Other 'big' expenses

When I set up my detailed budget at the start of the year it was basically so I could afford all the 'big' expenses that I had coming up during the year. I didn't want any of the expenses to be a shock or to blow up my budget and so I have been stocking away cash since the start of the year for all of these expenses

This month I didn't have to record a big expense to pay for the diamond ring because I had putting cash towards this for months and I had fully covered the cost in savings over the last 7 months

The system worked exactly how it was meant to and I couldn't be more happy with it.

Savings / investments

My regular savings into my employee share plan this month were bolstered by the fact that several people repaid me money that they had owed me. They were individually quite small amounts but they really added up and they all happened to come in the same month

In the coming month I no longer have to save for the diamond ring and will have an extra amount to put towards some of my other big expenses and perhaps into savings as well. I have added an additional layer of complexity onto my budgeting which I will talk about soon - I keep a register of how much money I 'owe myself'. I found this to be a system that works remarkably well.

I've been following while away and great to see you've hit over the 500K net wealth now 90M.. Congrats and looking forward to seeing you hit the 1 Mill mark and joining you sooner rather than later myself :)

It's all about the journey though not the destination yeah?

On that charity component I would be very interested in talking some more with you on this as it's an area I'm passionate about too :)

Thanks Jef, appreciate the comments. Completely agree that it is all about the journey. I've posted about it before but one thing I constantly need to do is step back and actually enjoy life from time to time...spend the money on the things I like. I find it much easier to spend money on others than myself.

Happy to talk about the charity point sometime. I confess my approach is rather haphazard and looking to have more of a plan for it.

A bit of a delay in my commenting, only now getting back (really) into the swing of things & my blog will re-start again next week with some fresh content.. That isn't necessarily a bad thing with spending money on others (hope the wedding preparations go well)..