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FI Weekly – January 2, 2024: Net Worth Calc, Emergency Binder, 12 Financial Challenges plus Community Wins

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.

Net Worth Calculation for 2023

I think it’s important to track your net worth on at least a yearly basis (I track mine quarterly) and there’s no better time to start than right now at the start of the new year (Happy New Year!).

Really simply:

You can use a free app like Empower (formerly Personal Capital), but I like a spreadsheet where I list out all my assets (every account separately plus major assets like my home and investment properties) and liabilities (mortgages, student loans, credit cards, other debt, etc.) individually.

Add up all the assets and subtract out the liabilities to get your 2023 net worth.

This takes all of 10 minutes and it’s really valuable to see the state of your finances at a glance like this.

FI Essential: Emergency Binder

On the topic of taking action at the beginning of the new year:

Here’s a friendly reminder that you will die someday.

And if you don’t have your essential documents, financial accounts, etc. listed out for your family, they are going to struggle during an already stressful time.

Chelsea Brennan came on the podcast in Episode 125 to talk about her Family Emergency Binder, which makes this process of documentation simple.

I know this is something we don’t like to think about, but it’s so important to have in place!

Chelsea kindly offered our community a 20% discount on the Family Emergency Binder when you use the discount code ‘CHOOSEFI’ (this is entered after you click “check out” in your cart and it takes you to the checkout page).

At the current price, that means the discount takes you down to only $31.20 for something that is truly an essential piece of life planning.

12 Financial Challenges You Could Try in 2024

To finish off the trifecta of ‘taking action,’ I came across this great article from Becoming Minimalists on ‘12 Financial Challenges You Could Try in 2024’.

Many of these seem simplistic on the surface, but I believe they can lead to significant habit change if you’re looking to kickstart good financial habits.

These 3 jumped out to me:

  • The Weekly Investor Challenge: Choose a dollar amount—maybe $5 or $10—and invest it into the stock market every week of 2024.
  • The “Community Hero” Challenge: Every month in 2024, donate $100 to a different local charity. Just make a decision to do so now and get started right away in January.       
  • The No-Buy Year Challenge: A whole year dedicated to cutting out extraneous purchases in order to reset your spending habits

ChooseFI Community Taking Action This Week

  • Jess said, “My 1% better was finally setting up a transfer of 401k funds from a previous employer. I had like 5k sitting in this weird holding account that wasn’t even investable (!?). Of course Vanguard made it easy. The procrastination was way more painful. Also I just passed $100k in my investment accounts for the first time! I didn’t realize I was so close until I set up a Personal Capital dashboard. Before this milestone it didn’t really feel like all my saving was doing anything. But it was! I feel like something clicked in my brain and I’m excited to keep going!

  • Eddy said, “My 1% better: I have been looking for a new job because my current one is 45 miles from home. I spent around an hour and a half each way, and I would not see my 1-year-old baby sometimes because I would leave before she woke up or arrive when she was sleeping. I decided to find a job closer to home, even if that meant getting a pay cut. Well, a great job 20 minutes from home opened up. I worked my butt off to get it. When the offer came in, it was already $10k higher than my current job. Since I am catching up on old episodes I have just listened to the Negotiate Your Salary episode with Tori Dunlap. Even though the base salary was higher than my current one, I would lose a 7% match from my current employer. So, I used Tori’s gratitude approach to let them know how grateful and excited I am for the new position but that I wished to have a higher salary based on my current job accomplishments and because I would be losing on the match. I asked for $10k more. Today, I received a call from my new employer and they offered me the requested salary! I’m happy to say that not only will I be making $20k more than my current salary, but now my commute is only 20 minutes from home, which means I’ll be able to spend more time with my baby since I’ll see her when she wakes up in the mornings and play with her in the afternoon!

  • Brandie said, “My 1% this week was reviewing our expected tax deductions for 2023 (mortgage interest, giving, property taxes) to see how close my husband and I would be to breaking the standard deduction barrier. For 2022 we were right on the cusp but I didn’t know until we filed taxes in February of 2023. We were just as close this year, so I made a large donation to our Donor Advised Fund (Daffy, which I learned about thanks to Choose FI) from our savings. This is effectively “pre funding” our giving for 2024 and the money we would use for charitable contributions each month in 2024 will now go back to savings. By setting aside the funds this tax year we will probably save 15% on the taxes. Next year, 2024, will definitely be a standard deduction year though!

  • Houston said, “My 1% better was opening a 529 Savings Account for my 2 month old daughter. I did it online and the website gave me a link I can give out to relatives. This way if somebody doesn’t want to add to her mountain of toys and clothes, they can help her by investing in her future. Without your show, I wouldn’t have fully understood how important it is to start this early and stay consistent with it.

  • Alex said, “My 1% better this week was 1% less stress. Yesterday morning I woke up to our water heater not working. I researched a few videos online to see what the issue could be and if there was anything I could do to fix it myself. After trying a few things, it was time to call a plumber. Our plumber came that day and replaced our water heater. Since we have an emergency fund saved up, we are going to be able to take money from there to pay for the water heater. We saved that money for situations like this, and now we won’t lose any sleep on how we are going to pay for it. This morning I was able to wake up to a hot shower!  
  • Paula said, “My 1% better was negotiating a $23,000 raise, a 50% higher bonus, and as part of the compensation adjustment, we created a path for a promotion in 12-24 months. The promotion will change my title, which in turn will increase the bonus eligibility, my base compensation, and make me more marketable in the industry. I’ve never cared about my title, but from this process I’ve learned HR often has compensation limits for specific roles. Changing titles opens you up to new levels of money that other roles simply cannot access due to company structures. Using the pointers in Ep 211 and the other Financial Mechanic episodes, I was able to confidently negotiate this raise and come to a creative solution that benefited myself and the company.

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.
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