marți, 1 februarie 2011

Net Worth Snapshot

Here is the net worth snapshot for Mr. and Mrs. FSA.

Assets Value Comments
Home $220,000 appraisal
Car 1 - 2001 $9,000 trade-in value
Car 2 - 1995 $1,950 trade-in value
Checking $3,900 best estimate
Savings $1,138 best estimate
Emergency Fund $1,500 emigrant direct
401 (k) $0
Roth IRA $0
Misc $477 kids 529 plan
Total $237,965
Liabilities Value Comments
Mortgage $190,000 5/1 ARM
Car 1 Loan $14,000 60 Month loan
Credit Card Debt $5,893
Student Loans $24,000 Husband and wife
Misc $0
Total $233,893
Total Net Worth $4,072

Not too bad so far. The good news is that it's positive. The bad news is that financialbabysteps is catching up to us quickly. That is one financially savvy baby! A little friendly competition never hurt anyone :). Here's the rundown on our assets and liabilities:

We refinanced our home recently so the appraisal value is only a few months old. Funny story about our mortgages. I was just graduating from college and couldn't qualify for a conventional mortgage yet. We wanted to move in and get settled before I started working so we did an IO ARM which allowed us to buy the home when we wanted. After making one payment, I started working and we refinanced to our current mortgage which is a 5/1 ARM with a really low rate of less than 5%. The total P&I payment for the ARM is less than the IO payment of the first mortgage we had which is great. It was fortuitous timing for us since it was right around the time that interest rates bottomed out. We will certainly be moving in under 5 years, so I'm not worried about the ARM reseting at a higher rate. The only negative I have about the mortgage is that we're currently paying PMI. That sucks. I tried using
homegain to see what some comps would be for our area, but they didn't have data for our little town. I'm planning on waiting another six months before trying to get rid of the PMI.

We own two used cars. We bought one with cash and the other we financed through our credit union with a 5 year loan. Ordinarily I would say that taking out a 5 year loan is a bad idea for a car, but considering the fact that the interest rate was exactly the same whether I got a 3, 4, or 5 year loan it made sense to me. The rate is below 5% on the car loan as well, and I can earn almost the same amount of interest from an online savings account so I'm not really in a hurry to prepay the loan.

The emergency fund really needs to be more, but we're going to be concentrating on the Credit Card debt first.

You might notice that we have started saving in our kids 529 plan, but hasn't funded my 401(k) or a Roth IRA. More than half of the kids 529 comes from family memebers for Christmas and Birthdays. We did the inial seeding to open the account, but we haven't added anything since we opened it last month.

In terms of the retirement accounts, my company doesn't match until I've worked for a full year. I'll also be getting my first raise at the same time that I qualify for the match, so that's when we'll start contributing.

A large portion of the credit card debt (> 75%) is currently in the form of a 0% balance transfer for 12 months. We're going to be aggresively paying that off in the coming year. The rest of it is from our home improvement project that we did at the beginning of the month and will be paid in full from savings. So far we have yet to pay any credit card interest and plan to keep it that way.

For our student loans I've signed up for the electronic payment option so I qualify for a lower interest rate. My wife is finishing school so we don't have a pay her loans for at least a year. I consolidated my loans and I'm currently paying less than 5% on the balance. My mortgage rate is actually lower than the rate on my student loans :).

So there you have it. Our financial picture for the current year. In another post I'll go over the goals that we have and how we plan to achieve them. Any comments or thoughts on our net worth picture would be greatly appreciated. Thanks.