This week will be a simple one.  Last week you had a big assignment to create your personal financial binder and this week we’ll be adding the Net Worth Statement to the binder. 

I will be sending out a copy of the excel spreadsheet I created to newsletter subscribers so watch your inbox.

Part 1

Part 2

There are a couple of guidelines to follow in creating your first Net Worth Statement:

1. Don’t go overboard and try to include all your possessions in the first version.  You should only include your house, cars, and at most 1-3  of your most valuable possessions.  Then, every time you update your statement you can add one or two more items.  Over time you’ll have quite a comprehensive record of your possessions.
2. The first statement should take you 20-30 minutes to create.
3. If you haven’t completed your List of Accounts and List of Debts for your financial binder, please do so first.  This will make creating your net worth statement much faster and easier.
4. In the screencast I mention three resources for determining the value of your assets:
• Zillow.com for real estate.
• Kelly Blue Book for vehicles.
• Ebay using the “completed listings” search for general possessions.

5. Here’s a list of items you may want to include in your net worth statement
• Assets
• Cash
• Checking accounts
• Savings accounts
• Money Market accounts
• Stocks, bonds, CDs
• Market value of your home
• Major household items
• Market value of other real estate
• Rental property
• Time shares
• Vacation homes
• Market value of cars
• Value of Cash-value life insurance
• 401K accounts
• IRA and Roth IRA accounts
• Liabilities
• Mortgage
• Lines of credit (HELOCs, etc)
• Auto loans
• Credit card balances
• Student loans
• Other loans
• Owed taxes

There are several advantages to creating and updating a net worth statement.

1. Your net worth is a single number that reflects whether you are making progress financially or not.
2. Recording a list of your possessions can act as a safety measure if you were to be robbed or have a fire and needed records to get reimbursed for insurance purposes.
3. Updating your net worth statement keeps you in tune with your various accounts and amounts in them.  It increases your overall financial awareness.
4. In recording possesions and their worth you may uncover some assets you can sell for a healthy profit and put those assets to use in a more valuable way.

As always, leave any comments or questions below and I’ll do my best to answer them.

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Here’s week 1 of 12 Weeks to Fiscal Fitness. This week I detail how to create your personal finance binder. You can listen to the podcast below and read the article I previously wrote entitled How to create a financial binder.

There are a couple of audio glitches in the podcast so don’t be alarmed or think it’s your mp3 player. It turns out I need to disable my screen saver while I’m recording. Also, I compressed this podcast more than last week to keep the file size down. Please let me know if there are any compatibility issues playing the podcast.

I’ll be providing some additional resources for newsletter subscribers later in the week including:

• List of accounts form
• List of Bills form
• Decision form
• Savings goals forms
• Net worth spreadsheet and screencast – UPDATE: I may delay this to a later week because it may take too much time with the other assignments.

Here’s a link to the Annual Credit Report site where you can get your free yearly reports.

Man I look like a smurf in the video below. I’ll have to work on my lighting.

Your assignments this week are as follows:

• Create your personal financial binder. Don’t worry about filling out all the information in the binder. Instead, just make sure you’ve created the binder and fill in as much information as you can.
• Start using cash exclusively in three budget categories: one that each spouse chooses and in the grocery budget category.
• Try to automate as many of your bills as possible. See if you can get on an even-payment program for your utility bills (specifically gas and electric).

As always, leave your comments, experiences, and questions in the comments below. Let me know how the assignments are going. Are they too hard and confusing? Are they too easy? Do they help?

HERE’S THE PODCAST:

 

 Week 1 [36:37m]: Play Now | Play in Popup | Download

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I’ve just made a Spouse Agreement Contract available in PDF format to the newsletter subscribers. I’ll be sending an email out to existing subscribers with a link. If you haven’t subscribed to the newsletter yet, you can get the document by doing so.

The short video below describes how the contract works and why it’s important. It may seem a little cheesy, but signing the document and having your spouse sign will really increase your commitment to the program.

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It’s finally here. It’s time to start the 12 Weeks to Fiscal Fitness with a Pre-launch podcast. In this podcast I’ll talk about:

• My family’s journey on the path to total financial control. How we went from barely being able to pay our bills to meeting all our financial goals.
• What you can expect to learn from this course.
• What this course won’t do for you.
• Your first assignment:
• Get your spouse on board. Agree to follow the course unless you BOTH disagree on a single point in which case you can choose not to follow that point.
• Agree to never work on or discuss finances more than 30 minutes at a time

CLICK BELOW TO DOWNLOAD OR LISTEN FROM YOUR BROWSER.

 

 12 Weeks to Fiscal Fitness - Prelaunch [28:50m]: Play Now | Play in Popup | Download

Please email me or leave comments below and let me know what your biggest financial challenges are.

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I have some apologizing to do. I have had the bad habit of over promising and under delivering on this blog. Back in September I was ready to launch the 12 Weeks to Fiscal Fitness program and, alas, nothing happened. My eyes were bigger than my stomach and I fell victim of my tendency to want everything perfect. In addition, right when I was preparing to launch our family was hugely blessed by the arrival of a newborn adopted baby boy. We literally had about 2 weeks notice before he was placed with us. Add to all this that I’ve been unemployed, under-employed, or self-employed at various times (and depending on how you look at it) for over a year.

I don’t mean to excuse my lack of follow through, but rather wanted to give a sense as to why taking on the 12 week program became too much for me to handle. But even more than not following through with the program, I apologize for not communicating to those who were waiting and expecting it.

So now I am taking a new stance on this site which is to under promise and over deliver. I’m also going to let go of my tendency to want perfection in each post. That’s not to say I’m going to let the quality slack, but it does mean that I may be splitting up larger posts into chunks to make it easier for me to write them. It means that I may not be on a perfectly consistent posting schedule (not that this will be any different for the readers, but it will help me give myself a break mentally).

I WILL be starting up the 12 Weeks to Fiscal Fitness soon (given the above, I won’t promise a time). The one difference will be that I can’t promise to have new content every week. That will be my aim, but if I miss it I don’t want to get down on myself and stop posting just because I fell behind. Instead of looking at it as “12 weeks,” you might want to look at it as “12 steps” for now. All of the activities and assignments will still work just as well given a slightly longer time frame and I still anticipate it will help you get your financial life under control. In other words, the content won’t be any different.

I have so much more to share on this topic and I never even scratched the surface as to the topics I wanted to discuss. I miss having the community and user feedback which has dwindled due to my lack of involvement. I hope to reinvigorate that. Personal finances are such a personal topic that we don’t often share our struggles and questions with others and I hope to make this site a place where people can share and get their questions answered.

Thank you to all you readers who have stuck around even during long periods of silence. Your readership and contribution is very valuable to me and I truly appreciate it.

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