A Brief Period of Positive Net Worth

Five years ago I took out massive student loans to get a graduate degree, and my net worth has been negative ever since. Payback is a long, slow trudge—half of every month’s loan payment doesn’t even touch the principal. I’ve settled in for the long haul of being in the red.

But last Friday, a glorious confluence of financial conditions pushed my net worth into the black—for a weekend.

1. Semi-Combined Finances. My boyfriend proposed last summer, and in a baby step toward combined finances, we opened a joint checking account. My net worth basks in the glow of this shared account, but in this pre-matrimony period, it’s not yet subject to any of my fiance’s financial liabilities. Best of both worlds!

2. Tax Return. My fiance and I both enjoyed sizable refunds this year: his because of his student status, and mine because I accidentally allowed myself zero exemptions when filling out tax paperwork. We both filled out returns promptly this year and threw the money into the joint savings account—wedding fund.

3. Pay Day. I get my monthly paycheck on the last Friday of the month. In March, the automatic deposit dropped on the 29th.

And thus: When I checked my Mint.com account on Friday, habitually gloating in the post-payday/pre-rent bubble, I noticed an unprecedented number in the left hand column under net worth. An unwontedly positive number. I had a net worth of $735.

It dipped back into the red once the joint checking account took the monthly rent hit of $945. But for those three days after my paycheck cleared and before I wrote a rent check, I commanded more capital than I owed. It felt peachy.


Megan McGlynn is a librarian in Michigan.


14 Comments / Post A Comment

ThatJenn (#916)

Ohhhh, the net worth thing on Mint.com! I was just laughing at myself yesterday about my weird obsession with it. I am extremely fortunate in that my loans are both secured with items with cash value (that is, I have a car loan and a house loan and no student loans, so I can put in the current value of my car and use the Zillow estimate on my house to offset the loans on these two items), but even so my net worth is pretty embarrassingly low (though, again very fortunately, positive). I do have a goal though, and I occasionally sit down and obsessively use my spreadsheet of amortization tables to figure out how many months/years it will be before I hit it, assuming nothing loses value.

Sloane (#675)

@ThatJenn I used to be obsessive about checking my net worth on Mint too! But then my student loans were migrated from one servicer to another, and Mint got all confused in the process. I kind of went through a mourning process because my net worth tracking has never be the same. I’ve just moved on to my own spreadsheets!

ThatJenn (#916)

@Sloane I had to wrestle with Mint a bunch when my bank renamed some accounts, as everything was showing up in two different copies of each account. Also, my auto/home insurance is through a company that also pays dividends to members once a year, so there was something about the way my insurance bill showed up that made it look like an investment account, meaning Mint counted the $2000 I owed for insurance as a positive contributor to my net worth. I ultimately just ended up removing that account from Mint. Similar things happened for my mortgage (though not as dramatic), so now I just manually update my mortgage amount every month from my crazy amortization spreadsheet.

…I think I have a tracking problem. Or a spreadsheet problem. But it feels good.

BananaPeel (#1,555)

I feel this, given that I recently added my student loan account to Mint and saw the resulting net worth change. I mean, it’s not like I didn’t know about my student loans before, or do the math in my head, but yiiikes.
p.s. Excellent illustration with this post.

awk (#840)

Let me register how much I hate the Zillow Zestimate on my Mint.com profile. On any given day, my home changes value between 1 and 15 percent, and the range of potential values is huge — between 41k and 169k! How is this possible? I don’t really obsess over my net worth, but I do obsess over that Zestimate (also, what a terrible name).

ThatJenn (#916)

@awk Yes, Zestimates are the worst! They’ve gotten me into a lot of trouble before, as it swings massively based on sales of nearby homes. Mine doesn’t change rapidly, but I am certain it has no idea what’s right. Now I just wish I could believe my Trulia estimate for my house, which is $40k higher than my Zestimate (and almost exactly what I paid for the house in 2007, heh).

awk (#840)

@ThatJenn Choose your favorite number and go with it. Until you decide to sell, the value of your house is fictional.

ThatJenn (#916)

@awk Definitely true, but I find it’s useful to keep a little bit of track of plausible sales prices, since I’m very open to selling once I can get a reasonable amount for it. (Plus, you know, neighborhood sales history + tax records of size of house do not a good estimate make, but it beats nothing.)

jfruh (#161)

half of every month’s loan payment doesn’t even touch the principal

OK, I don’t want to be a hater, but … this is literally how any large loan amortized over many years works and is not, or at least should not be, shocking. For instance: we refinanced our mortgage a year and a half ago, and now it’s a $60K and change 15-year loan at 4%, which is in historical terms a very low interest rate (though you can get lower now). Our mortgage payment is 773.71 a month; last month, $288.44 went to the princple, $203.45 to interest, and $281.82 to escrow (to pay property tax and insurance). So, like 58% of the actual loan payment went to principle. And this is a good loan!

I swear I’m not trying to minimize the pain of loan payments — obviously if you’re not earning much any payment is going to pinch. I just think people should be aware that, with five- or six-figure loans paid back over decades, for the first years or even decades of the loan substantial portions of each payment will be going to interest. 4 percent of 60,000 dollars (again, in my case of my mortgage) is $2,400! Which is a lot of money!

wrybrarian (#3,654)

@jfruh Oh, for sure this is normal! I wish my financial literacy skills had been stronger when I signed the loan, though.

To the extent that I imagined repayment, I had the vague idea that for a loan with 6% interest, 94% of each repayment sum would go to the principle. I was in for a rude awakening.

Youths of today, read the Billfold and know thy student debt future!

nogreeneggs (#154)

I used to be so obsessed with the Net Worth tracker on Mint! While I was paying off my student loans it felt like my entire life was leading up to when that stupid number would be green. Now that my loans are paid and the number is green it seems kind of meaningless? I never made a new goal for my net worth so it’s just kind of eh. It does feel good to be in the green though whenever I do notice it.

When I finally hit $0 net worth I sent my mom a super happy email about it and she was not impressed for some reason.

wrybrarian (#3,654)

@nogreeneggs This gives me hope that the net worth number will someday not haunt my thoughts.

And a $0 net worth announcement should garner some heartfelt congratulations! The same congratulations you would give someone who, say, escaped a hole in the ground, fought off an animal attack, or similar.

rorow (#1,665)

yes! omg, this! i don’t have student loans and have a condo that i’d put a hefty deposit on, so it looks really favorable, but i do love it and always encourage it over the next milestone.

i really should start looking more to the ‘earned’ vs ‘spent’. :(

DarlingMagpie (#1,695)

Oh, net worth, you sexy beast. I’m hoping mine will be in the positive by the end of this year but I’m spending some hard-earned savings on a vacation (much needed) so we’ll seeee

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