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Thanks and see you on the blog!
KC
In today's Wall Street Journal, there was an article about how the increase in personal savings rates may end up slowing the economic recovery.
Economists are expecting a combination of falling income and higher spending (due to increased costs of gas, etc) to drop savings in the current month, however the overall trend is an increase in personal savings rates.
The general drop in net worth, currently the lowest since 1992, is pushing up the savings rates. Currently, the net worth numbers align with savings rates somewhere between 6% and 10%.
Just how does this impact the economy?
Well a 6% savings rate equates to about $700 billion that doesn't go into the economy. 10% would exclude $1.2 trillion.
Funny how things change, huh? I remember a time, not too long ago, when the topic used to be how pathetic the savings rates were.
A nice little bump in overall net worth this month, again helped by a pretty nice increase in the assets column as well as a decent amount of debt payoff. Within the past few weeks, I was able to completely payoff the remainder of my Bank of America debt - which felt really good. And may a pretty large payment to another credit card account. Now that Bank of America payment will be rolled into the next card which will hopefully will speed up that pay down. I realize I still have a way to go, but I can start to see the finish line from here and it's adding much needed motivation.
The debate going on in my head right now is whether to close my zero'd out credit card accounts or just leave them open. My fear is that if I close them my debt ratio increases and my rates could go up even further. The plus side to closing them now is that any damage to my credit score that comes from closing an account would not really effect me much and I'd be able to wait it out while I pay down my debt. I'll have to do some more thinking and research about this since I definitely want to end up only having two cards once I'm debt free - the ones that have treated me the best during this entire time.
So, I haven't blogged in a while - sorry about that. It's been pretty busy at work and I've been traveling a bit - both for work and for personal reasons. But regardless, I haven't given up on the blog and have a few updates to give, which I'll space out into a few posts.
In the meantime, let's see where I currently stand. Keep in mind, I didn't update my net worth for June so this update shows two months worth of financial data.
In the assets column, everything is going fairly well. I needed to dip back into the savings to cover new brake pads and routers for my car, but other than that my retirement and stock accounts are moving along nicely.
I'm still purchasing a set amount of stock automatically, but only at about $30 a month, looking for long positions and undervalued opportunities within today's market. It's been going pretty well for me so far as I've gained about $400 in the past month in that area.
As for the liabilities, I'm still chipping away at the student loan debt - realizing that more will be piled on once I complete my MBA. The credit card debt is something that I need to re-evaluate and re-focus myself on in the next few days/weeks. With the new credit card regulations coming this February, I've noticed my credit limit go down pretty much across the board and some interest rates rise - both due to the falling limits and the ending of low rate promotions.
All together though, in the past two months I've been able to get a little closer to having a positive net worth and that is really the end goal - so until then - I'll just keep moving forward.
Well I got my first paycheck, but I entered the new job in the middle of their pay period, so my paycheck isn't a "full" paycheck. That's fine and I'll make due, but I was really looking forward to putting a little of the added money from my new pay towards my debt.
In other news, stocks have started going up and some of the “bargains” that I mentioned earlier have been doing very well for me. Again, I’ve only been investing very small amounts each month – so all and all it’s not much, but I’m glad I did it.
And so it my net worth, ‘cause it’s gotten a little bit better. Once the checks even out and I start aggressively paying down the debt again it should get back to zero even faster.
But I really just have to keep telling myself that it’s not a net worth race at this point. That’s just a good way to track progress. The goal is still the erasing of all my credit card debt – and I haven’t been doing as much as I would like to lately. Still, I’m encouraged by the overall progress. If you would have asked me before I ran the numbers, I wouldn’t have thought I had made any progress this past month.
Hey everyone. Sorry I haven't posted in a while. I'll try to regain some momentum with a new net worth update soon.
In the meantime, I can only say that a lot has happened. Another prediction/goal has been crossed off the list. I went and found myself a new job. I don't have to tell you guys how hard the job market is, so it was definitely a confidence booster. Anyway, it's still early, but so far it's a big change and all for the better. I'm going to be paid a little bit more and I feel a lot more comfortable and happier in the new environment.
As for my finances, I'm still pushing on. I'm encouraged by my last net worth update showing that I've broken past the 20K mark. However, I know that had a lot to do with a bump in assets and not a big decrease in debt. So I just have to keep pushing forward.
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