The Power of Accountability | brokeGIRLrich
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.
I really like your statement.
“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.”
People only get this satisfaction if they track their stats closely.
Keep up the good work.
Mr. JumpStart recently posted…The Biggest Bill I Ever Got.
Thanks! It’s true – tracking things gets pretty satisfying eventually.
My accountability partners are my wife and Quicken. It was actually my wife who convinced me over a decade ago that we needed to track our income and expenses to the penny. She was already working with Quicken and had a history built up. Now I can compare what I spent on groceries so far this year to the same time period 3 years ago, or whatever other comparison I can dream up. I can check out my net worth history, how I’m doing compared to my budget, etc. Having all that data can help me plan the future with a surprising degree of accuracy.
I’m so glad your accountability system is working and has helped you grow your wealth. “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. ” That is some excellent progress and something everyone who is struggling needs to see!
Gary @ Super Saving Tips recently posted…Why Your Insurance Company Isn’t Always Your Friend
Thanks! I’m very lucky to have very small major bills like rent and utilities most of the time that let’s me put in as much as I do – but the power of compound interest is crazy and amazing too.
YES! You’re doing awesome! This is exactly how I feel about our debt payoff. Blogging has been one of the most important tools toward our success. And not because I’m making a ton of money blogging (I’m not). It’s because of the accountability. But I would also say that the perk of a blog that draws in like minded people helps, too. It’s good to know that you aren’t the only one out there concerned about doing right with your money.
Jamie @ Medium Sized Family recently posted…August Check In: SMART Goals and a BIG Debt Payoff Plan
That’s true! The community that we have in the personal finance sphere is so awesome. Everyone is so positive and supportive – and they also get it when you’re burnt out, angry and just need to vent.
That’s terrific progress, Mel! And it’s true, having accountability partners really helps, particularly if, like me, you do better at keeping promises to anyone but yourself. I’ve realized that I do much better when I’m accountable to someone else. It’s something I’m trying to keep in mind as I struggle with fitness goals in particular.
Emily @ JohnJaneDoe recently posted…Tales of a Gardening Wannabe: Flaming Tongues and a Roll of the Dice
I want to start tracking my networth but it kinda depresses me so I don’t. But I love to read your accountability posts. Way to go!
Joley Budgets recently posted…“The One Where Eddie Won’t Go…”
Mine depressed me at first too! I feel a lot better about it now and I’m kind of happy I have the old ones to look back on to see how far I’ve come!
Thanks for sharing your yearly stats. This is motivating for me because I, too, earn a pretty small salary. It’s nice to see that you *can* substantially increase your net worth even when you’re not making six figures. What you’ve done is impressive!
As for staying motivated, blogging about our finances helps. So does obsessively tracking our budget and expenses. I know that sounds weird and super Type A, but… it works for me.
Haha, I think the Super Type A folks usually make it work in life, so I say keep on keeping on!
I might have to get a buddy. I’ve only been saving for retirement for a few years and have some massive catching up to do. Crash made me Sid and scared and income left nothing after necessities for a while. I’m not comfortable sharing with the world, but the buddy idea just may work!
Side note: mad kudos for what you’ve accomplished so far! Even with accountability, a lot of people wouldn’t stick with it like this!
Femme Frugality recently posted…Pittsburgh Programs Helping Women Get Back to Work
Thanks! I can definitely say being trapped out on boats, circus trains and tour busses made extra spending more difficult than it does for most people – but I am happy about a lot of choices I’ve made to do without to get ahead.