May 31, 2008

May Snapshot

Retirement Savings Rollover IRA: $1,415
Roth IRA: $3,603
401(a): $4,120
403(b): $16,973
Total: $26,111
Emergency Savings Catastrophe: 15,004
Problem Cushion: $1,382
Short Term Goal Savings Car Maintenance: $1,316
Car Insurance: $1,375
Travel/Con: $700
Total: $3,391
Long Term Goal Savings House Downpayment: $33
Investment Loans Prosper-ish: $12,630
Personal Loan: $5,000
Savings Bond: $357 (current accrued value)
Total: $17,987
Total Assets Non-Liquid: $26,111
Semi-Liquid: $17,987
Liquid: $16,386
Expense Acct: $256
Goals Savings: $3,424
Total: $64,164
Debt and Liabilities Truck: $5,450
Citi: $56
Chase: $371
Insurance: $775
Rent: $1,360
Total: $8,012
Net Worth $56,152

 

While I liked Moom’s suggestion of breaking out the short term and long term savings goals for a more accurate feel, I’m still hesitant to include it in my net worth specifically because it’s meant to be spent someday. For now, I’m leaving it in there, and still leaving the automobiles out of the accounting. Given the current economy and the amount of time it’s taking to sell the truck, I don’t have a lot of faith that I could easily sell the cars for a current valuation.

I’ve actually regressed a little since last month’s snapshot: $56,454. In part, a lot of hefty bills came to roost, like the insurance deductibles. Bill creep accounted for some small part of it, which is why I started on the crusade to bring down the cable and internet bills. The new additions to the expense/savings do balance each other out, though, like for the auto insurance item. Redistributing that “windfall” and having it go into spending categories reduced the overall amount. Primarily, though? I think I’m almost certain that gas prices have been eating up my budget. In the last month, I’ve spent $250 on gas, compared to $250 in the two months prior. I’ve literally doubled the amount spent on gas.

I’m still seeing some growth in the long term savings, and I just need to produce more growth in the non-spending areas.

I’d like to see better numbers, but I’m not terribly surprised that this month wasn’t so good. Assuming work doesn’t have any really unpleasant surprises, I hope to see some improvement in a few months. I won’t see it in the investment section, though, as I’ve severely reduced my contributions.

 

May 6, 2008

Should I continue measuring my net worth?

Each month, I round up all my expenses and work out the total of what I grandly call my net worth. A lot of bloggers do it, in one form or another. Actually, I call mine “snapshots” because they’re just a quick glimpse at my ever-fluctuating expense and income sheets. In a way, I like that the numbers continually change, especially since I get bored so easily. Activity isn’t always a good thing, though, as noted by the massive reductions in net worth during the BroDucky debacle. Let me emphasize how I never want to spend so much for so little again. 😛

Every month, I put together these snapshots, but I don’t actually have a net worth goal. And keeping track of numbers without an actual goal seems rather halfhearted. I do have annual savings goals, as you can see by my sidebars, but I don’t have an overall net worth goal. Part of this is because the savings goals are both saving and spending goals. A good half of my goals pertain to a future purchase or expenditure: car maintenance, home ownership, auto payoff. The other half are for retirement (completely untouchable), emergencies (almost always untouchable), and mistakes (only if it’s serious).

Between the two, it seems like I’m just saving to spend. Oh, that’s not really the case, I’ll still have the savings at the end of a long hard day, but the half and half structure of my goals implies that this isn’t all about holding on to my putative wealth. In that light, “net worth” doesn’t seem applicable unless I have something more concrete than the employer retirement funds and cash in a savings account. Some things more like CDs, and savings bonds, and property. An actual stock portfolio, at some point. You know, grown-up things. So again, what’s the point of tracking my net worth?

After all, it can be very subjective. You can choose to include or exclude any number of possessions or holdings that you deem worthy or not of being considered. I leave out my automobiles entirely because it’s a bit too complicated to include them. I don’t plan to sell my personal vehicle ever, and the family sedan, which is not my financial responsibility, is still being paid off. Still, if something happened to it, you betcha I’ll be the one who has to figure out a replacement. Same goes for personal loans. I only started including those because I’m getting forgetful, and didn’t want to lose track of them entirely. One of the reasons I’m leery of including any possessions is the idea that possessions only have value to me. If I lose or break something, I have to replace it at a cost to myself. It’s highly unlikely, in the general scheme of things, that my possessions will be worth anything to anyone else. Barring selling large ticket items, of course. But my point is, things are primarily a liability. More often, I’ll have to replace things, not make money from them.

So, why track a seemingly artificial net worth? In part, accountability. As long as I see steady progress, or lack thereof, in the form of numbers from one time period to the next, I have to stay on track. Some kind of track. And if I keep the variables constant, then the change in amounts is a valid indicator of circumstances. Just because I don’t include my possessions doesn’t mean my financial holdings aren’t real.

The other part, motivation. Seeing the numbers makes the whole game of finances, bargain shopping, and frugality more real. It’s not just theory, it’s life in action. If I were to be completely objective, I’d be proud of myself for going from working to pay off my family’s debt (credit cards, car payments, personal loans), to actually building a cash cushion, putting a decent amount away for later, and generally making some progress. It’s harder to see that, though, on those bleak days when all I can think of is the $18,000 I foolishly lent and lost, the entire salary of my 4 college years going towards bills bill and more bills, and most of my post-college salary going towards not me. I can only see the other side of the coin if I actually keep track of it.

It’s all too easy to forget that the grind can actually produce results, and to keep going because we’re going to make it. I look at the accomplishments of fellow bloggers, and I’m A-M-A-Z-E-D. And you know what? Seeing my numbers keeps me honest. I can finally be happy for what I’ve done here these past two years, too. Combine that with the realizations that it’s ok to be free, that it’s ok to live, and I’m going to say, not too shabby, really!

So, let’s keep on with the net worth! It doesn’t define me, and it may not truly define my “wealth” but it’s a good way to keep me truckin’ from milestone to milestone.

April 30, 2008

April Snapshot

Retirement Savings

Rollover IRA: $1,357
Roth IRA: $3,669
401(a): $3,742
403(b): $16,129
Total: $24,897

Emergency Savings

15,004

Goal Oriented Savings

Car Maintenance: $21
Savings for taxes: $4,800
Total: $4,821

Investment Loans

Prosper-ish: $12,630
Personal Loan: $5,000
Total: $17,630

Total Assets

Non-Liquid: $24,897
Semi-Liquid: $17,630
Liquid: $19,825
Expense Acct: $3,691
Total: $66,043

Debt and Liabilities

Truck: $5,847
Citi: $2229
American Express: $153
Chase: $358
Rent: $1,360
Total: $9,589

Net Worth

$56,454

Most of my gains were due to retirement contributions during the two months between this and the last snapshot I put together. I’m surprised that I, at least, kept the amounts I contributed, considering the market’s performance. Still need to re-examine my allocations, using Moom‘s Madame X series as a guide.

I’ve paid my tax bill, which was offset by a state refund, so the cash situation is half settled. I haven’t received my rebate yet. At that point, I think I’ll decide what to do with the lump sum of tax savings money. It’s mainly going to be divvying it up between the other smaller savings/expense accounts that have been neglected until now: auto maintenance was drained, insurance is perpetually lonely, the intermediate emergency fund has been languishing, and a little has to be set aside for upcoming Con. If there’s anything left after those are taken care of, I’d love to open a vacation/fun fund. That’ll be a first!!
Oh, and I need a moving out fund. I vaguely envisioned funding that from paychecks and miscellaneous income through the rest of this year, since the other major savings goals may be set. Regardless of the source, I need to set an actual number for that.

April 4, 2008

Changing the Snapshots

I’ve decided to move the monthly snapshots to the end of the month rather than doing them early or mid-month. I think I started that way because that’s when it occurred to me to do them, but it doesn’t make sense to call the January Snapshot “January” if it doesn’t actually include that month’s changes.

Just a little housekeeping.

March 3, 2008

March Snapshot

Retirement Savings

Rollover IRA: $1,395
Roth IRA: $3,743
401(a): $2,834
403(b): $13,773
Total: $21,745

Emergency Savings

14,132

Goal Oriented Savings

Car Maintenance: $520
Savings for taxes: $5,225
Total: $5,745

Investment Loans

Prosper-ish: $12,630
Personal Loan: $5,000
Total: $17,630

Total Assets

Non-Liquid: $21,745
Semi-Liquid: $17,630
Liquid: $19,877
Total: $59,252

Debt and Liabilities

Truck: $6,224
Citi – $860
American Express – $356
Chase – $690
Rent – $1,360
Total: $9,490

Net Worth

49,762

I was strongly tempted to skip this month’s roundup because the upcoming expenses listed in Yodlee are so depressingly high that it almost makes the savings above seem inconsequential.

I’ve an upcoming charge for the $500 deductible for the sedan’s repairs due at the end of this week. Argh! This doesn’t even include the other $500 deductible for getting my car fixed before I sell the danged ole truck.

But that would be cheating. And I’m no cheater! I’m facing up to the fact that the bills are far greater than they should be for some reasons beyond my control, like gas prices and my parents driving so very much this past month ($300 on gas alone!!) and the next insurance installment came due, albeit in a much much lower amount, and the car registration on my car was paid.

This is a rough spot, and I’ll get past it. Just gotta keep the chin above water and ride it out. Meantime, I’m eagerly awaiting my supplemental income check to come through, and not so eagerly pondering the payment of taxes. I’m still undecided as to the best way to pay them.

Also, I have to be careful because I’m more susceptible than ever to Sad Spending Syndrome. Even if I’m not going out and spending wads of cash on stuff, I’m still less careful about the little expenses like an odd lunch here or there, or just loosening the purse strings overall because I’m kind of stressed, lonely and/or grieving. I’m only good at controlling expenses when I control the urge to acquire, and that urge is best controlled by a strong sense of satisfaction. Obviously, when stressed, etc., satisfaction isn’t the strongest feeling, so I’ve really got to keep on top of this.

*edit: I prefer to include expenses as liabilities this time, since they will be paid from the assets above instead of just my usually invisible expense account. Also, I’m going to start explicitly stating what my total net worth is.*

February 4, 2008

February Snapshot

Retirement Savings

Rollover IRA: $1,480
Roth IRA: $3,749
401(a): $2,572

403(b): $13,331
Total: $21,132

Emergency Savings

$14,819

Goal Oriented Savings

Car Maintenance: $646
Savings for taxes: $5,016
Total: $5,662

Investment Loans

Prosper-ish: $12,630
Personal Loan: $5,000
Total: $17,630

Total Assets

Non-Liquid: $21,132
Semi-Liquid: $17,630
Liquid: $20,481
Total: $59,243

Debt and Liabilities

Truck: $7,002
Total: $7,002

At first glance, it suddenly looks like I’ve done remarkably well since the last snapshot at the end of 2007. As usual, there are quite a few things this doesn’t show.

First, I paid off the balance transfer, and that means I’ll be losing a source of passive income that was a steady $40ish/month. Of course, with the interest rate dropping like a rock, I wasn’t assured that same return through this year. I’ll consider doing another BT this year, because it doesn’t look like I’m going to be able to post the kind of savings I’d need to put towards the real estate investment my friend and I had discussed.

Second, my spending has been well over my income for a few weeks. A few hotspots:
A) I overpaid the insurance premium in January because I still hadn’t received my revised premium statement by the billing due date. That’s an extra $300 I’m basically prepaying. It was on my credit card so I have the short grace period, but that’ll still have to come out of the checking account.
B) I forgot to reduce my retirement contributions in time for January’s paychecks. I’ve changed it for February from $500/check to $300, but I should have reduced it even more because I need the extra cash flow. And the contribution was taken out of my extra January paycheck too! Gah. I didn’t think that it would be.
C) Thanks to Ma’s accident in the sedan, it’s been out of commission for over a month. Haven’t been able to sell the truck, so another [-$400/month].
D) Best friend’s wedding last month did a doozy on the budget because I was just too stressed to clamp down as strongly on spending as usual. Eating out? Uh, sure! Buying new sunglasses? Yep! More food? Ok! Cold at night? Heater’s on! More stress eating? Let’s get another bagel sandwich!

Meantime, I’m trying to parse out how rent and all the other bills work out without tapping into the emergency fund until my supplemental income check comes in, whenever that’ll be.

January 7, 2008

2008 Financial Plan, Part 1: Expenses

Monthly Expenses
(some are close estimates, as the cost may vary slightly)

Fixed
Rent: $1360
Trash/Water: $80
Cable: $26
Landline: $37
Cell phones, Padres: $75
Cell phone, mine: $50 currently, will go up. A lot. Est, $80
Gas, home: $30
Electric: $125
Internet: $18
Gas, auto: $300
Groceries: $200
Truck payment: $400
Auto insurance: $300

Total: $2631

Variable Categories (personal, unbudgeted)
Eating out
Clothing
Travel

For the last section of variable categories, I don’t have a budget other than “as little as possible” because the fixed expenses have crept up to more than I make. It’s usually no more than $200 per month for all of the above, though, which isn’t much because even a cheap flight is about $120.

My plan to bring down the expenses:

1. Truck payment

Goal: Sell that sucker!
Deadline: By the second week of February. [After the wedding!]
Action: I have a figure in mind that I want to sell it for. I’ll get a quote from CarMax to see if they can match that price first. If they can’t, then I’ll take photos, and post it on Craigslist and perhaps AutoTrader.
Associated benefit: the auto insurance should come down quite a bit as well.
Savings: $400 + insurance reduction

2. Cell Phones, Ma/Pa

Goal: Change plan
Deadline: By Feb 22nd, the end of their next billing period
Action: Reduce their family plan to the cheapest one available.
Savings: $10/month.

3. Cell Phone, mine

Goal: Maximize minutes, minimize costs
Deadline: Feb 1st
Action: When I activate the iPhone, I’ll ask for the plan with the MOST minutes (6000) for the first month, then reduce it to the cheapest plan available. Since AT&T/Cingular has rollover minutes, I plan to bank the remaining minutes for use through the rest of the year. I do need to verify that they don’t penalize for changing plans, nor do the minutes expire.
Cost (before tax):
$880/year for 10,950 minutes
vs.
$720/year for 5,400 minutes

The difference is an extra $160 for 5,550 minutes. This is a situation where I’ll have to spend to save more overall. There’s no way I can use only 450 minutes/month when no one other than my officemates are on AT&T, and I am not paying any 40 cents/minute overage!

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