Despite debt that increased this year, our net worth still managed to progress up in the chart. In December 2008 our net worth was only $13,199 and it will most likely reach $30k before the new year starts.
Let me recount the things we have done, or haven't done, this year that got our net worth to where it is now.
1. Credit card use lessened
As you have noticed I didn't use the verb STOP to describe our usage of plastics. Before 2008 ended, we have stopped putting new transactions into the cards that were carrying a balance. We now use a credit card that we pay off, which is my way of punishing myself for deviating from the plan. So if in a pay period there's nothing left to save after paying off the card, that's what we get for not being conscious of our spending. It's like I have another person involved in our finances: a strict auditor!
2. Pay more than the minimum
I also ensure I pay fortnightly. Even if the extra payment is about $5 or $10, it is still paying debts off faster. It also gives me the feeling that we are consistent and getting to our goals quicker.
3. No lifestyle inflation
Our salaries have increased this year despite the recession. We could easily re-introduce eating out on a regular basis but we'd rather not. Sure I miss going out for drinks and trying new places for lunch or dinner, but if I did that I will not be helping my family attain financial freedom. Admittedly I have been thinking about buying a new pair of jeans. The most recent pair was bought 2 years ago and it has been heavily used becos I gained weight due to pregnancy and it was the most comfortable one I have. Now it's a bit frayed and looks worn. My other pairs are from 2001. No kidding. I've pretty much decided to buy a new pair and it's a matter of time before I just randomly make the decision.
4. Keep retirement contributions the same, if not higher
The government introduced a lower contribution of 2% early this year and many people reduced theirs from 4% or 8%. I get why they did that but I wish they didn't. If they were able to live off of their previous net pay with 4% or 8% deducted, then it was a big mistake to reduce contribution by half. Not unless of course their circumstances have greatly changed that would warrant a reduction in their retirement contribution.
5. Pay in cash
To be consistent about paying for things in cash can be so limiting at the beginning, but it only proves a point that we all can't buy anything whenever we feel like it--unless you have a neverending supply of cash. Once the habit is formed, it only makes things easier and simpler. It made me focus on improving our way of life and made me creative.
As these 5 things continuously prove to us that they work, there's no way that we'll choose to live without them in mind. I can't wait to get rid of our debt and experience that life again, this time with the financial knowledge that I have.