Overall, 2012 was a great year financially! There are some things I wish I did differently, but then when I look at the big picture, it really makes me question my love for details.
- Improved my down payment fund to over $70,000 and total savings to over $100,000 before buying a condo.
- Closed on a condo in the mid 300’s with a 20% down payment.
- Made almost $30,000 in mortgage pre-payments in the last five months of the year, paying down almost 10% of the original mortgage balance, and giving me over 25% in equity.
- Refinanced my mortgage, lowering the rate half a percentage point from 3% to 2.5%.
- Maxed out my 401(k) for the second year in a row!
- Increased my net worth by over 50%.
- Bought my first (and hopefully not my last) Admiral Shares fund.
- Increased my net worth by almost $20k in one month.
- Hit the $200,000 net worth marker. (NTF was right – the first $100,000 was definitely the hardest.)
- My net income hit the six figure range for the first time! (Last year, my gross surpassed six figures.)
- Doubled the amount I have invested to over $70,000.
Now for some visual proof of the good stuff!
My net worth took off by leaps and bounds in 2012, exceeding my original predictions by $30,000! I finished the year off at $211,300.
My investments doubling off really helped with this. They saw a rate of return of about 11.2%! Maxing out my 401(k) was a huge help as well, of course.
Paying down my mortgage wasn’t a bad chunk either, though it still seems incredibly huge. It’s really difficult for me to fathom exactly what having over $200,000 in debt means. Even with my somewhat-aggressive payoff schedule, it still feels like a huge mortgage. No matter how many times I forecast how much I can reduce my balance by the end of 2013, it still seems huge. I’m not sure what I can do to make me feel like it’s less huge other than paying it off. There is definitely a part of me that wonders if it would feel more manageable if it was under $200,000 or some other number. I think it definitely would under $80,000 since that’s the amount my net worth increased by in 2012. I think it probably would under $100,000 too. I’ve just…never had debt before in my life and I’m not a huge fan of it. I don’t want to admit how many times I log into the online servicing website for my new loan wondering if maybe it’s gone down a bit. At least I finally figured out how to make extra principal payments outside of the regular payments.
Now for the bad…my expenses were really high in 2012. As in, I spent about $50,000. As far as I’m concerned, that’s an obscene amount for a single person, no matter what the cost-of-living is in my city or what my income is or how much I saved. I think that some of the spending wasn’t done very consciously due to the stress of moving, so that’s definitely something I’m going to try to work on in 2013. Before making every purchase, I’m going to try to remember to ask myself a few questions:
- Do I need an item of this type?
- Do I already have an item of this type at home?
- Is the cost of this item worth it to me?
- Does this item fit well?
- Am I sure this item fits well?
I’m also going to record every purchase manually. I want to kick off some of the fat in my spending from last year. It’s really hard though to think about a $15 purchase when it represents such a small portion of my overall income or when I look at the net worth and savings graphs above, but that’s exactly what I need to keep doing to close the gap on my mortgage debt and my assets. I need to try to think my income is smaller than it is. I’ve adjusted my direct deposit so that my monthly budget, without my mortgage payment, goes into my regular checking account and the rest of my paycheck is siphoned off into a savings account to put into savings, pay down the mortgage, or invest. I think that should help to not just adjust the budget every month to account for overages, but I guess we will see how the year plays out.
2) Clothing (yeaaaaaaah… I really need to ask the above questions.)
3) Financials: I can do my own income tax return.
4) Internet bill – I can ask for new promotions every few months when mine expires, but I’m really bad at remembering. (This was a good reminder to go do that, but live chat is soooo slow!)
5) Electricity: I can switch my lights to the CFL ones that use less electricity as they wear out and actually program my programmable thermostats.
Readers, what did your 2012 look like?