I was surprised at my numbers in March. The volatility of the stock market made me fear I would have a losing month overall since a good portion of my net worth is determined by the mutual funds in which I have my retirement invested. In the end, my net worth increased 1.16%. This is not a dramatic increase and certainly not as good as February, but a few factors helped me stay positive in March.
Cashed out term life insurance
I have term life insurance through work for three times my salary so I thought having a separate policy was unnecessary. Other than my cats, I have no dependents so the need for this insurance is reduced. The future may show this was a poor choice, but I think investing in my Roth IRA was important. As a result, the cash value allowed me to fully fund my Roth IRA for 2007 and still had money to contribute in 2008. My purchases in the index fund that comprises my Roth IRA were also made when the market had some of its worst days in March. I did not time the market at all, but knew that I would get good value over the long term with the mostly downward volatility the stock market has been experiencing.
Gained some value in the stock market by the end of the month
My 401(k) has not been performing very well and while March was not an exception, I did come out higher than I started the month. A gain of $800 does not seem much, but since it is more than my contribution for that month, I will take it. This is where I hope the dollar-cost averaging will show its strength in a few years when I imagine the market will have gained value relative to my purchase price.
Added a few extra dollars toward my mortgage principle
My escrow fell from the year before so more of the money I allocated for paying my mortgage goes to principle. I doubt I will contribute a whole extra payment over the year, but I am happy another $7 that will decrease my principle. Again, I am starting my third year of a 30-year mortgage so interest is quite a bit of my payment, but every dollar counts, working to decrease my debt. I will take an extra 0.01% more of my mortgage paid!
Received interest income
Despite the lower rates even on the high-yield savings accounts, I still have interest compounding on top of interest and the additional contributions. This interest is money I did not have before and I will take it! It is a small bit of passive income and at today's inflation and interest rates, not keeping me above inflation, but is slowing my money's erosion.
April will be an interesting month. I have a large car repair bill and the purchase of replacement windows that will draw down my cash reserves. While the windows will add value to my home, it is no longer liquid and involves a long-term investment that I may not fully realize. Since the no-spending vow is a bit iffy right now, I do not know if the extra saved money will be exist or not. Stay tuned for next month's analysis!