April 2013 marks one year since I started this diary. Before I post the regular monthly update, here's the big picture of our progress from the last twelve months.
Excluding vehicles and household goods, my wife and I have a current household net worth of $3,604.19. That may not sound like much, except that one year ago our net worth was minus $47,398.93. In other words, we improved our net worth by $51,003.12 in the last twelve months.
While our index funds are up slightly since last year, it's safe to say that 95% or more of the net worth improvement came directly from either paying down debt or adding to our savings. Together we made about $120,000 before taxes during the last twelve months, and because of built-up tax credits and deductions we were able to take home about $100,000 of that. That means we were able to "save" roughly 50% of our take-home pay over a twelve month period (counting debt reduction as savings).
On April 1st, 2012 our balance sheet looked like this:
Registered accounts: $34,019.12
Total assets = $90,968.79
Student debt: $105,130.85
Consumer debt: $33,236.87
Total debt = 138,367.72
NET WORTH = -$47,398.93
On April 1, 2013 our balance sheet will look like this:
Total Cash: $35,263.39
Total Reg'd Accounts: $62,591.11
Total assets = 97,854.50
Student debt: 94,180.91
Consumer Debt: 69.40
Total debt = $94,250.31
NET WORTH: $3,604.19
Last year at this time we had a car loan of more than $13,000 (at 7.29% interest), and $10,000 on a LOC (at 6.99%). We had a bunch more debt on credit cards with low promotional interest rates. In total, we had more than $33,000 in consumer debt. Shortly after April 2012 we paid off the LOC and vehicle loan, and we've been consumer debt-free ever since.
We have combined monthly payments of about $1,250 on our Canada student loans and my professional student LOC. About $800 of that goes to principal, and with a couple of extra payments we've knocked nearly $11,000 off our student debt in the last twelve months.
Add it all up, and we've eliminated $44,117.41 worth of debt in the last twelve months.
When I posted one year ago we had just sold our house, so we had nearly $57,000 in cash sitting around (plus just over $700.00 in TFSAs). A big chunk of that cash went right away to paying off the consumer debt, but we've been stuffing money into savings and TFSAs since then, to the point where we now have $62,350.71 in cash and TFSA savings.
Add in some modest gains in our retirement accounts, and we've managed to increase our assets by $6,885.81 since April, 2012.
Even with our incomes increasing, we won't be able to duplicate this year's success any time soon. We're currently living in a very low cost-of-living area, but we expect to move sometime this year. We'll also be looking to buy a house when we move, with all the immediate and long-term expenses that brings. Sooner or later there will be children and maternity leaves. While our progress will inevitably slow, we wanted to make sure we got a real head start in our first year with both of us working. I'm happy we were able to achieve that goal.