Year-End Progress Review

I guess this should be titled, "My One and Only 2012 Progress Review."   Rather than a month-to-month comparison, this will be a year-to-year comparison.

I know it isn't year-end yet, but with family around on New Year's Eve and Day, I doubt I'll capture all of the relevant data as of 12/31/12.  This will be as close as it gets.



MY DEBT

	Starting Debt	Last Year This Month*	This Month	DIFFERENCE
Fed'l SL (06/08)	$55,852.68	$50,115.88	$48,542.02	$1,573.86
Mortgage (1/6/12)	$274,000.00	$274,000.00	$269,463.90	$4,536.10
Bank of Mom (1/6/12)	$68,500.00	$68,050.00	$60,421.00	$7,629.00
CC (3/31/12)	$34,188.50*	$34,188.50*	$26,047.00*	$8,141.50*
TOTAL	$476,414.00	$426,354.38	$404,473.92	$21,880.46

* This credit card debt was incurred for the renovation work on my condo.  The renovation work wasn't completed until Feb. 2012 and the total was unknown until March 2012.  Thus, the balance of $34,188.50 is not from Dec. 2011 but rather from March 2012.

I eliminated approximately 5.13% of my debt.  Thankfully, I have not incurred any more debt since 3/31/12.  I would like to snowball my student loans to pay it off sooner, but I feel compelled to pay back my mom ASAP since this money will be used for her care if my sister and I ever have to put her in an assisted living facility.  So right now, my payoff priority is equally split between my student loans and my "mom loan."  Hopefully, at this rate, I will be debt-free (except mortgage) in 8 years.  I hope to be completely debt-free in 18 years.

SAVINGS

LAST YEAR THIS MONTH	THIS MONTH	DIFFERENCE
$14,437.72	$15,527.40	+$1,089.68

I'm actually short $277 from where I should be.  I had to borrow $632 from my EF to cover a Supplemental Property Tax bill that I'd overlooked when budgeting last year.  Due to Prop 13 in California, the prior owner of my condo paid artificially low property taxes because she bought the property 15 years ago when property values were much lower.  When I closed on my condo, I paid 50% of the property tax in 2011 based upon the prior owner's tax rate.  I budgeted and saved enough to cover my 2012 property tax at the newly assessed value, but I'd forgotten to budget for the retroactively reassessed property value for 2011.  Hence, the $632 shortfall.  *Dagnabbit*  I've already reimbursed $350 back into my EF.  My EF should be fully reimbursed by the end of January.

The savings I report here is with respect to my emergency fund only and does not include my future spending earmarks. Currently, the total amount in my liquid savings account is $22,054.62, which is actually $1,375.92 less than last year.  Not a good trend. 

MY ROP (LIFE INS) FUND

LAST YEAR THIS MONTH	THIS MONTH	DIFFERENCE
$1,823.93	$2,854.63	+$1,030.70

Long story short, I'm pretending to pay myself $55/month for a "hypothetical" return of premium (ROP) term life insurance policy. (A ROP policy pays back your premium at the end of the term if you outlive the policy term.)  Investopedia looked into whether ROP premiums are worth it and it concluded that "for policy owners that can invest in tax-deferred or tax-free accounts and are comfortable investing in the markets, a basic term policy without the rider probably makes more sense." 

That is exactly what I am doing:  I bought a plain-vanilla term life insurance policy and putting the $55/month savings in my Roth.  I've calculated that I need an annual return of approximately 3.7% to make this experiment worthwhile.

I've paid $4,422 in premiums to date and my ROP balance is $2,584.63.  I've recouped 58.45% of my premiums and the annual return on my investments is currently 3.34%, which is a bit below my target.  I'm not concerned because I haven't invested any of my contributions from this past year.  I feel stocks are a bit too expensive right now so rather than dollar cost averaging while the market's up, I'm just parking the money in my Roth and waiting on the sidelines.  I hope down the line, this strategy will pay dividends.

MY NET WORTH

LAST YEAR THIS MONTH	THIS MONTH	DIFFERENCE
$187,878.14	$241,536.92	$53,658.78

I think I can take maybe 20% of the credit for the increase in my net worth through debt reduction and savings.  But I suspect that 80% of the increase is from the market rise.  In light of the fact that I'd ignored my finances this past year, I'm pleased with the results. 

The history of my net worth can be found here.