Every month I write a post that I call accountability.
It’s probably not the most useful post for any of you brokeGIRLrich readers out there, but for me, it’s a major reason I keep blogging.
Keeping myself accountable financially was the very first step in getting my finances under control.
Doing it publicly, through this blog, helps me make sure I do it regularly (every month) and motivates me sometimes to keep trying to make better decisions throughout the month.
Keeping this monthly collection of entries about my finances has proved useful to me for so many reasons.
I have roughly 4 years of data to work with now and I’ve lived in a variety of circumstances and incomes since I first started tracking my net worth and expenditures each month.
I’ve spent about 2 years working a steady job with a steady paycheck (the circus – 2013/2014 and City Center 2014). The rest of the time has been freelance and contract work.
Because of tracking my net worth for a few years I know that my high point for the year is often in May, since I regularly get slammed with annual bills in June. So now when I do my net worth calculations for June and July, I don’t fret over the drop. I know it’s normal.
I’ve also had a fair number of months with setbacks where I either couldn’t hit my savings goals or I got hammered with expenses or the stock market dropped a lot. However, with so much data to work from, I can also see that by sticking to my general personal finance habits, the numbers are still going up overall.
There were a few years, especially at the beginning when I was still paying off debt and trying to build a decent emergency fund, that felt particularly cash strapped, but in the grand scheme of things, they didn’t really last that long and I’m very financially stable now because of the sacrifices I made then.
Most interesting to me, is that fact that on a fairly small salary, my overall net worth has still gone up $10,000 to $15,000 a year since I’ve started tracking it. Before I was tracking it, I’m pretty sure most of my money was just disappearing. There’s a real satisfaction in seeing it go up each month when I calculate it that just feels a lot better than any shopping trip.
For real though, let’s check out the stats (since we can, cause I track them):
- January 2014 Net Worth: $35,482.52
- December 2014 Net Worth: $46,597.51
- Net Worth Gain: $11,114.99
- Total Income Before Taxes: $50,589
But we were just getting started (and paying kind of high rent that year).
- January 2015 Net Worth: $47,894.34
- December 2015 Net Worth: $58,341.39
- Net Worth Gain: $10,447.05
- Total Income Before Taxes: $25,429
A grand less that year but I made half as much money (this is the power of touring and company provided housing).
- January 2016 Net Worth: $57,434.35
- December 2016 Net Worth: $76,802.66
- Net Worth Gain: $19,368.31
- Total Income Before Taxes: $36,052
Ta-da. 3 years guys. 3 years is all it took for compound interest to start making a big difference. And let’s not forget the stock market has been doing pretty awesome too – but still. That’s less time than it takes to get a bachelor’s degree. I only actually contributed about half of that net worth gain for 2016. The rest is compound interest and stock growth.
Gosh, imagine what I could do with an actual decent salary.
There are sooooooo many times over the last few years that if I didn’t have an accountability system, who knows what might have happened? I might have just thrown in the towel and started winging it and I can tell you right now – those numbers wouldn’t be those numbers if I was just winging it.
You don’t have to start a blog or shout out your net worth to the world (unless you wanna, then hey, go for it!), but keeping a personal journal and finding an accountability buddy can be great tools for your personal finance journey.
An accountability buddy (or buddies) are people with the same priorities as you that you’re comfortable enough to be open with. Even if you don’t want them to know your exact numbers, start with a friend who you know is good at saving money and tell them you’re trying to save up $5,000 for an emergency savings account. You can check in regularly with them about your setbacks and successes and cheer one another on.