It’s true. The best thing you can do in a crisis is reduce your liabilities.
While preparing the September numbers, I depreciated my car and my motorcycle since VA thinks my car is worth about $4475 dollars and NADA Guides thinks it’s worth $3400. (I prefer NADA over Kelly Blue Book since NADA is composed of dealers, they have to take the NADA trade-in price, whereas they will try to negotiate you down from the Kelly price.) I split the difference a bit and list my car as worth $4000 and the bike $1000.
Like most folks, I also took a hit on the market with my retirement accounts. It’s only up because of regular contributions. My assets are overall down by about $500. But since my liabilities were down by $1200, my net worth actually rose! I like how that works!
I plan on trying to save a little more money going forward and continuing to pay off debts as best I can.
Related posts:
- September 2009 Net Worth Update A good bounce in the market is all you need....
- November 2009 Net Worth Update Things are looking up. I bumped up my retirement contributions...
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You are lucky your retirement funds are up – my 401k balance is down for the year, even including the 10% contributions I make and 3% employer match. I’m just reminding myself that I have a higher number of shares than at the beginning of the year, and about 18 years to retirement. My company plan only offers one index fund – an S&P fund, all the rest are actively managed with large expense ratios.
I couldn’t be happier that I cleaned up my liabilities earlier this year. It makes the current financial uncertainties a little less scary.
I wish I could say the same about my retirement funds–even with sizable monthly contributions, I’m down 16%. Congrats on your success.