Home > How I increased my net worth by 12K when I make only 21K

How I increased my net worth by 12K when I make only 21K

November 17th, 2007 at 04:15 pm

November 11 was my 1-year anniversary of writing a blog at Savings Advice. The date snuck up on me, so I decided to take a peak back in Quicken to see how my financial state had changed since joining this community.

Wait, is that for real?

Youíd think that because I keep track of things in Quicken I would be watching my progress over the past year- but I wasnít. I diligently added in everything spent and everything earned, but I wasnít watching the change in net worth. In part this was due to opening a Roth and high yield CDs causing the money to be spread across a number of accounts. Plus, my old (2004) version of Quicken no longer supports automatic downloads so I it had been some time since my ROTH and 401(k) were updated.

Drumroll, please: From 11/11/06 to 11/11/07 I increased my net worth by $12,346.85.

My take home pay from the University during this period was $20,760.19 (this includes by stipend plus the additional pay I received for teaching courses in the summer). Like most people, I pay rent, utilities, and a small car payment. When I started on this adventure, I never would have guessed I could increase my net worth by so much in a year. My objective was truly just to try to spend less and save some money.

So, how did I do it? Hereís my retrospective analysis:

1.) I looked for additional income streams (+ $3675.77)

For those of you that have been following my Challenge, youíll notice that Iíve earned just shy of $2700 in the challenge. My Challenge includes only new income streams since 1/1/07, but I have other income streams that were not new in the New Year that you'll see represented here. The bulk of the non-Challenge income came from my personal chef gig where I delivered homemade meals to a professional couple. That job ended in Spring when they had a baby and the woman stayed at home.

Personal Chef: $950.00
Ride Share: $90.00
Babysitting: $1731.00
eBay sales: $507.91
Half .com sales: $294.91
Garage Sale / Classified sales: $262.00
MINUS -160.05 for eBay fees and shipping for eBay and

Looking back at this makes me realize how lucrative the personal chef gig was. On the flip side, I feel like I baby sit all the time and the amount is still relatively small. Cooking was exhausting, babysitting is generally pretty relaxing and fun. I plan to keep on doing it. I was also able to earn a respectable amount by selling stuff I didn't use and didn't value through eBay, and a garage sale. When I move in 6 months, I'm sure I will appreciate the head start on de-cluttering.

2.) I re-balanced my 401(k) (+ $1,148.00)

I had a 401(K) from a job I worked at between 2000-2002. Shortly after leaving that employer, the employer switched wealth management companies. They moved all my investments into a money market account and told me I needed to re-balance. I did nothing for three years. This is something I kick myself for now. Anyway, around December of this year I re-balanced have seen $1,148 in growth. This was probably the single easiest thing I did that helped increase my net worth over the past year.

3.) I opened high yield savings accounts and CDs. ($495.82)

One of the first pieces of advice I acted on from the Savings Advice community was to open high yield savings account. In late November of last year, I opened accounts at both ING and Emigrant Direct. Although ING doesnít have the highest interest rate out there, its rates are competitive and the $25 new account bonus plus $10 referral bonus for new accounts more than made up the differential for me. In the past year, Iíve earned $360.82 in interest in all my accounts, $110 in referral bonuses at ING Direct, and $25 for a new account bonus. In other words, I earned $500 just for letting the right banks hold my money.

When I think back to my financial life prior to November 2006, I feel frustrated with myself for letting my money sitting in a checking account earning squat in interest. If youíre reading this and donít have a high interest checking, get one today! If you leave me your email, Iíll email you an ING referral and weíll both benefit: youíll get $25 if you open an account with $250 and Iíll get another $10 referral bonus.

After I opened my high yield checking accounts, I diligently transferred any odd job money I earned immediately from my checking account to my high yield account so I could earn as much interest as possible. As my savings accounts grew, I started moving the money into CDs. Currently, I have savings account at ING and Emigrant Direct (at 4.2% and 4.75% APR, respectively) and CDs at Emigrant Direct at 5.2% and 5.1% APR)

4.) I started a ROTH IRA (+$306.87)
In January 2007, I moved money from my high yield savings account to open and max out a Roth contribution for tax year 2006. I also started regularly contributing to a Roth for 2007. By July 2007, I had the 2007 Roth maxed out. I achieved this by contributing $150 monthly plus the income I earned over the University for teaching summer school. My Roth is currently in the Vanguard 2045 Target Retirement fund. Itís a topsy turvey market lately, but as of 11/11/07, I had earned 306.07 on my $8000 contribution.

5.) I embraced frugality and tracked my spending.
How many times have you been at the grocery store and looked at receipt afterward and thought, ĎHow did all those $1-$2 items add up to so much?Ē

I canít quantify how much I saved through watching the small purchases, but the little things do add up. Furthermore, if your income isnít very high to begin with, (like mine), the total percent of those little things can easily become overwhelming. By using Quicken, I was able to watch my monthly expenses and make sure a few dollars here and there wasnít usurping by paycheck. In addition, as I become more involved with my money, I found myself far less tempted by impulse purchases. I did a lot of

Text is homecooking and Link is
Text is couponing and Link is
couponing, and
Text is shopping for bargains and Link is
shopping for bargains while trying to resist the urge for a bargain if it wasnít really needed..

In sum, I feel happier and more empowered. Prior to joining Savings Advice I felt nervous anytime I saw an article in the newspaper about money and personal finance. Now, I know where I stand. I have more work to do before I can achieve some of my financial dreams like buying a house, but I do know I can have a rich life without a lot of money. This gives me freedom and confidence

23 Responses to “How I increased my net worth by 12K when I make only 21K”

  1. Octavious Says:

    Great post, I plan to follow up on the high yield checking on Monday (after some research this weekend.) I'm trying to save for my wedding and I don't need to tell you how tough it is today. This stuff is great advice and I appreciate your having posted it.

  2. Ima saver Says:

    You are really doing great!!

  3. Broken Arrow Says:

    Wow, that's wonderful! Relative to income, that's quite a sizeable increase!

  4. madhaus90 Says:

    I love to see that all these little things DO add up and while I use coupons all the time and tend to buy only resale I should probably be tracking my savings!

  5. PauletteGoddard Says:

    This post should indeed be a top contender for the November prize. Thanks for the tips!

  6. baselle Says:

    Fantastic. You really embody the saying:
    Its not what you make, its what you keep.

  7. none Says:

    Excellent blog post. Congratulations to you. ING will save you LOTS of money. Ive made almost $1k in interest alone over the year from my savings account with them. If you are savings money every month after bills have been paid then you can setup an automatic savings with ING to pull from your normal checking account on a monthly basis. It's hard to remember to put money aside, let ING do it for you Smile
    Also i love what you said about the 'odd jobs', that income can add up. Craigslist + garage sales can certainly bring in 1k a year extra

  8. monkeymama Says:

    Agreed with Paulette.

    I had a similar transformation this year. We have always been big savers, but we weren't investing it well. I have been proud that our net worth has fared so well this year, but you blow us out of the water - percentage-wise - for sure). Way to go!!!!

  9. katwoman Says:

    You are my hero.

    It would not surprise me in the least to see this as the makings of a book on personal finance some time in the future.

  10. daybyday Says:

    Good job and great post!

  11. lucas Says:

    Very nice JOb! Regards

  12. luxliving Says:


  13. KEW Says:

    That's great! I've just recently been re-born into the saving/frugal/wake up and smell the coffee world and would love any and all advice.

    I've been looking at high yield savings, where did you read to make your decision? Any idea about Washington Mutual?
    Can you track your saving/spending with Peach Tree or Quick Books?

    Thankyou, I look forward to any and all responses =)

  14. sulingsi Says:

    hello, to those curious about high yield savings, I get my recommendations from this site:

    it's awesome.

  15. threebeansalad Says:

    KEW- I looked for rates on
    Text is SA Forum and Link is
    SA Forum.
    As I stated in my post, ING doesn't have the highest rates, but the $10 referral bonuses plus the $25 new account bonus more than made up the difference for me. ING has a great interface, too. If you decide to go with ING, I'd love to give you one of my referrals :-)

  16. KEW Says:


    I'm going to look at both sites =)

    Have a happy holiday all~

  17. Mikey Says:

    Great job! Feel free to send me one of you ing referrals at!

  18. minimum wage Says:

    I'm not sure I'm all that impressed. I take home $12K and I have student loan debt plus debt from an uninsured extended illness.

    I just lived on mac-and-cheese, rice, beans, and pasta for several weeks. I think I'm hard to beat on frugality.

  19. dan Says:

    @ minimum wage

    The big difference is that she has taken steps to increase her net worth where you are still living paycheck to paycheck. She did things beyond her normal job to earn more so she could put some away. Something that you seem unwanting to do. Being frugal is useless unless you take the steps to make that frugalness help you.

  20. minimum wage Says:

    If my math is correct, with her additional income streams, she took home twice what I did last year. Given that huge income gap, a net worth gap should hardly be surprising.

    Personal chef? I have no skills there, but I'd like to take some cooking classes (but lack the money) in order to teach others to cook. (I believe cooking skills are essential for anyone young and broke, not to mention anyone old and broke.) Also, I know someone with a commercial kitchen (one of the vendors where I work) and am interested in professional food preparation.

    Ride share? I don't even have a car (or license) myself.

    Babysitting? Virtually none of my local friends have kids, and I think there's a general distrust of middle-aged men you don't know as babysitters.

    Online sales? I've started making a small amt of money, but I'd need a digital camera or source of cheap books to make anything more than trivial money. Hard to sell online successfully without the ability to provide pictures of what you're selling.

    So I do have some ideas but not all the resources.

  21. threebeansalad Says:

    @Minimum Wage-- see what Cooperative Extension offers in your county. In particular, look for classes taught through the Expanded Food and Nutrition Education Program (EFNEP). This is a state and Federally funded program to increase the nutrition education and food prep skills of low income audiences.

    I would also suggest you "put on your happy face" when you are out and about in public and try to hid the gloom and doom you circulate on blogs. People pay me very well to babysit and house/pet sit--to be honest, I think sometimes I'm overpaid for relatively simple jobs. In part, people want me to continue to be available to them, but also I think they like the image of the cheerful, happy student. I don't always feel so happy and chipper, but you better believe I smile and keep whatever is going on in my personal life OUT of my working life. I've got issues, too (including a spouse who lives over 200 miles away and my own health issues), but I show up pleasant and eager.

  22. minimum wage Says:

    OMG, thanks, I had entirely forgotten about that! I used to live in an area with an agricultural school and a substantial Extension presence, now I'm in a larger area where they are hardly noticed at all.

    There are an awful lot of "foodies" in this area, including a cooking school and all sorts of cooking classes (some of which are pretty pricey) if you have the money.

    I don't think I ever really wanted to make a living as a lowly employee. I've had various ideas for a business, but never the money to really do anything about them.

  23. Benjamin Williams Says:

    Awesome advice! I would love to look into ING if you can send me an email. Thanks

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