A Post Full of Pictures: Ups and Downs

A quick update before I get started...

In the August net worth update, I wasn't sure if I had had a recent contribution. I didn't. As promised, I double checked, and my most recent contributions were on 08/05 and 07/20. I wrote the August update on 08/02 and the July net worth update was posted on 07/20 ;)

Now on to today's post...(in pictures screenshots)

The past few days have looked like this....

Am I stressed? Nope. Why? Mostly because I don't intend to access the money in my investment accounts for another handful of decades. Additionally, in that time, I plan to allocate my assets (and diversify within asset classes) to reduce my exposure to equities (I'm thinking pet rocks might be a good bet in my older age, but that business sounds vaguely familiar...). It also doesn't hurt that my investments (outside of my 403b) outperformed the S&P 500 and DJIA =)

My Response to J. Money's 5 Favorite Things

J. Money of "Budgets Are Sexy" posted a fun "5 for Friday" on May 13th. I'm a little late, but what the heck, here goes:

1) What’s your favorite credit card? My Capital One. They recently raised my limit (hooray for my credit score). However, I'm still in the market for a rewards card.

2) What’s your favorite financial book? I Will Teach You to be Rich, by Ramit Sethi, because he "keeps it real" and it's targeted to my age group. I'm so annoyed that many personal finance books are directed to middle age folks<<<same reason why I had to cancel my subscription to Money magazine (good thing my sister subscribes to it...she's older anyways :>). I also like Suze Orman's The Road to Wealth because it covers so many topics!

3) What’s your all-time favorite financial company? ING Direct and their new acquisition, Sharebuilder (which I used before the A&M). They make saving and investing, respectively, easy to do. And their websites aren't fussy :)

4) What’s your favorite financial tool? (could be software, investment vehicles, or anything you consider a “tool” really) Google Docs (specifically, the spreadsheets). I use it to track my expenses every day, keep a bird's eye view of my savings and investment account balances, and to track my debt elimination progress. What's best is, even when I'm out of town (and I have internet access) I can keep these things updated.

5) And lastly, what’s your favorite coin? ;) Quarters. I park in a city that only accepts quarters in meters.

February Net Worth Update

Here's this month's summary explanation:

Assets

403(b): (+2356.90) I recently updated my 403(b) contributions from $100/pay period to $125/pay period. You'll notice that the $4300+ listed next to this account is more than double what I posted last month. Well, I finally got around to accessing my account. When I first started my current job, I received an email (which I didn't print; nor did I receive any mailed copies) of my customer ID. This ID number allowed me to access my account to view my balance, change asset allocation, and a bunch of other stuff related to employer sponsored retirement accounts. Unfortunately, since receiving that email, my work computer crashed and my laptop was later stolen. And I hadn't backed up a single thing. 

At any rate, I finally got around to calling my plan's sponsor to retrieve my customer ID. Now, I have access to my account and can see all the money I (and my employer :>) have been contributing. By the way, my job contributes up to 4% of my salary to my account, and I'm making sure to get every last penny of it!

Emergency Savings: (+111.57) I'm still not contributing funds to this account on a regular basis. However, I moved $111.17 into this account from my Bank of America savings account because I earn a higher interest in this account...and I didn't have any plans for the excess. I earned $0.40 in interest this past month (versus the typical $0.01 from BofA).

Regular Brokerage Account and Roth IRA: (+117.07) The increases in these accounts are attributed to market increases (i.e. the value of my investments increased). Starting February 4th, every two weeks I will deposit $25 to the Roth IRA. It's not much, but I figured I could cut out some frivolous spending for something of more value. I can't wait to supercharge these deposits!

Savings Account: (-24.87...and other deposits through January) I deposit $25 plus any money left in my checking account at the end of a pay period into this [BofA] savings account each month (I like to match my pay checks with "expense periods," a sort of personal billing cycle). I previously mentioned that I moved some "excess funds" from this account into my emergency fund.

Liabilities

Car Loan: (+300.96) I'm chugging along with eliminating this debt. I'm halfway through paying off this account in 18 months. Had I stuck with the assigned payment amount, I would be halfway through my debt in 31 months.

Credit Card: (+433.33) I paid off the previous balance using funds set aside for my super-duper car payment (just as I suspected). Hooray for no credit card interest charges. Boo for compromising the debt reduction plan for the car. I intend to pay off the current small balance with funds in my checking account and BofA savings.

Student Loan: (+98.26) Hooray for a principal reduction of ninety-eight bucks (sarcasm). I can't wait to unload this sucker, too!

Considering that my liabilities are close to 3.5 times more than my assets is a bit discouraging. At the same time, it's a reminder that I need to work harder to improve my financial situation.  

What do you think is an appropriate balance between assets and liabilities?

Early Graduation from Graduated Payments?

In Tuesday's post, I shared my negative net worth statement with you. It forced me to log on to the Direct Loan Servicing website to see the exact amount I owed (up until then, I referred to it as "$30,000+"). Well, it's $30,504.41 (down from the original $32,300). And that's not the only thing I noticed. For the past two years, I've been paying $229.21 a month for my student loans as part of the graduated repayment plan. This amount fit into my $35,000 yearly gross income at the time I began repayment (exactly 6 months after completing grad school...wow, I just had a moment....$35K income AFTER graduate school....:<).

Anywho, the graduated repayment plan allows debtors to pay off their loans in the same amount of time as standard repayment debtors (130 months). Rather than paying the same amount month after month (like the standard repayment plan), the graduated repayment plan allows you to pay a smaller amount for two years, then the amount increases for the next two years, then it increases again for two years, and so on. In fact, here's what my graduated repayment plan looks like:

You'll notice that I'm scheduled to pay an additional $36.76/month beginning February 2011 ($265.97-$229.21 = $36.76).  I've anticipated increasing my student loan payments....once my car note has been paid. Fortunately, the February '11 increase is feasible (by the way, the few bucks extra in my paycheck because of the tax holiday covers the $36.76 and then some). What I've started to think about, however, is if I should hurry into the standard repayment plan (that is, once my car note is paid off). By the way, here's the standard repayment schedule:

I'm thinking that I will "free up" more money to save and invest with the graduated repayment versus the standard repayment. The graduated plan costs $1163.54 more in interest; a "drop in the bucket," relatively speaking, but who wants to throw away money? Then again, my money wouldn't be tied up in a 5.3% loan and I could do more (i.e. earn more) by contributing to my Roth IRA, $10,000 goal and brokerage account.

What would YOU do?

A New Tradition?

Two of my favorite bloggers, Debt Ninja and J. Money, share monthly net worth updates with their readers. Since I'm down for being a copycat (disclaimer: so long as it's the right cat to copy ;>), I've decided to do the same at the beginning of the month. Here goes:

Here's a summary explanation:

Assets

403(b): $100 every pay check.

Emergency Savings: Currently, I'm not contributing to this account. However, I've tapped it a few times in 2010 to pay for major car repairs.

Regular Brokerage Account and Roth IRA: I'm not contributing to these accounts, at the moment. However, I made a random deposit (from my "emergency savings") to beef up the Roth a bit. In hindsight, it was totally a psychological band-aid for the realization that I haven't been maxing it out.

Savings Account: $25 month. I opened this account for overdraft protection, but I haven't had to use it for such in the past year. Yet, I sometimes transfer a few bucks to cover an unanticipated, small expense (like the crap I got around Thanksgiving 2010).

Liabilities

Car Loan: If you've read through my previous posts, you know that I'm a bit obsessed with paying off my car note sooner than later. I opened this account in July/August of 2009 with a $13,500 balance. If I paid what my credit union wants me to pay on a regular basis, I would retire this debt in 2014. However, I have other plans. I set aside $1,055/month to pay off this sucker. With my estimations of a nice tax refund and "extra" paycheck in April, I plan to completely eliminate this debt by May 2011.

Credit Card: Despite setting aside cold-hard-cash for holiday gifts, I still resorted to my credit card to make some purchases. Gas. Food. Clothes. Accessories. And they were all for me. Now I'm staring this junk in the face, wondering how I'm gonna pay it off (one of my goals this year is to avoid incurring interest charges) while staying on track to pay my car note off by May. I'll keep you posted (even though I suspect the funds will come from January's $1,055 car note money :/).

Student Loan: Six years of post secondary school for me = $30,000+ student loans. Currently, I am on a graduated repayment plan (which will adjust in February to a higher amount). I have no intentions of continuing to pay on this plan, as, ultimately, the total interest charges exceed those of the standard repayment amount (i.e. about eleven years of the same payment each month). As soon as financially possible (hopefully May of this year), I can begin paying the standard repayment amount ($360.10) and then some (you know, so I can knock this puppy outta the water!).

I'll also share my yearly net worth updates once per quarter. Heck, I might later change my mind and display the YTD net worth totals with the monthly ones. But seeing as this is my first stab at it for the year, I figured I could spare you the redundancy.

Do you check your net worth? How often do you calculate it? Monthly? Quarterly? Bi-Annually? Yearly? Never? What benefits do you glean from assessing the differences between your assets and liabilities?

One More Day of 2010

Image from: www.geeks.pirillo.com

Lately, I've been reflecting on this year and the past decade (technically, the past eleven years, but I digress). It never ceases to amaze me how quickly time "flies by." My sister warned me that "after 21, it's all a blur." Blur or no blur, I'd like to review some of my accomplishments and a few things I am looking forward to in the new year.

 

What I'm Proud of... 

• Procuring a higher-paying position with an organization I admire and a wonderful group of colleagues. 
• Making massive additional payments to eliminate my car loan debt.
• Reining in credit card spending and managing the account so that I have a small balance (i.e. less than 30% of my credit line) or zero balance.
• Sharing my financial experiences with the world [wide web].

What I'm Looking Forward to...

• Increasing my savings and investing amounts (including maxing out IRA and getting on track to save $10,000).
• Increasing my net income.
• Finally eliminating my car note...and increasing my principal payments to my student loan debt.
• Consistently paying my credit card balance in full.
• Expanding my knowledge about insurance, taxes and investing.

What was YOUR biggest financial accomplishment of 2010?

P.S. HAPPY NEW YEAR!!! Have fun and be safe!

Budgets, Holiday Stuff and Revisiting Financial Goals

...and I'm back! I sincerely apologize for being absent last week, but I'm back now =)

So, what's been going on? The usual, the not-so-usual and some more of the usual. Let's get started with the usual.

The Usual

I've been diligently tracking my expenses in my tracker housed on Google Docs. I've exceeded my allocated amount for food and car expenses: footing the bill for my sister's birthday dinner; being a bit impulsive (eating out, mostly); increasing gas prices (is anyone else paying around $3/gallon?); and regular car maintenance (the coupon for my oil change this time around wasn't $19.99 + tax :<).

The Unusual

Holiday stuff. You know, buying gifts and bringing in whatever you signed up for for the holiday party at work. Actually, the work stuff was easy. We had a cookie swap and I brought a non-cookie item to swap: brownies. Had I not been distracted by the massive amounts of sugar tempting my waistline, I would've repackaged the cookies and sold them for income =) The not so easy stuff is holiday shopping. To cover the expense of Christmas gifts without regretting it in January (i.e. financing all purchases with my credit card with no clear way of paying it off), I decided to decrease the amount of my car payment this month to $356.98 (I know, it's a weird amount). At any rate, doing so allowed me to spend $705 of "car payment" money on gifts for my parents, sisters, boyfriend, best friend and godson. Sadly, I've spent $690 and some change and I still have a few items to pick up. Fortunately, I have a few bucks in my "immediate access" savings account (this is NOT my emergency savings account) that I'm comfortable using to cover these items.

More of the Usual

Revisiting goals and planning. I spent quite a bit of time today updating my savings plan [another Google spreadsheet I use to track the balances of my savings account linked to my checking account (see "immediate  access" savings account above), my ING Direct account (emergency savings), my Roth IRA, regular brokerage account and 403(b)] and reconciling it with my 2011 budget. It feels SO DARN GOOD to account for every single penny. Did you get that? EVERY. SINGLE. PENNY. I know where it came from or where it went and for what purpose. Moments like these help me feel in control of my finances, and not vice versa...something that I occasionally freak out about. Nevertheless, I am on track to enjoy my boyfriend's birthday (I've planned a surprise trip for him), my girlfriend's birthday (we're going to be "Bahama Mamas"), a winter weekend getaway in the Poconos with a gaggle of friends, my 2nd year anniversary with the beau, paying off my car note, and my friend's wedding. And all of these things are happening in the first half of the year! To be fair, I am making assumptions about my anticipated tax refund, the bulk of which will go towards principal reduction on the note. Everything else is accounted for (i.e. planned to come from my regular income).

As I prepare for 2011 (and the end of my car note, hooray!), I'm considering the opportunities to save more, invest more, and to be better equipped to pay for travel and entertainment expenses that inevitably have a habit of "popping up." My post later this week will focus on financial goals [and concomitant action plans] for 2011.

How have you been handling expenses related to the holiday season? Did you set up a budget? Are you "winging it?" Have you started to plan for 2011 financially? Have/will you do a "2010 Year in Review" for your finances?

Taking Stock in....um, Stocks

Last night, I had a moment. Another one of those, "oh crap, what am I doing?" moments. This is what spurred it...at the end of every month, I take a look at my balances for my savings account, Roth IRA, and regular brokerage account. I then update the amounts in a spreadsheet I've called "Savings Plan." In reviewing my balances, I looked at the asset allocation of my Roth and brokerage account, and much like it has been for the past umpteen months, a considerable amount has been sitting useless as cash. I call it a "considerable amount" because the amounts I had in cash were close to the amount I've indicated to be "automatically invested,"  at least for the Roth....the regular account had zero cash.

To help you better understand what the heck I am talking about, I should share that I invest using the discount brokerage Sharebuilder (for both the Roth and regular brokerage account). I currently use an automatic investing plan for both accounts, whereby when certain dollar amount is available in cash, Sharebuilder will invest that certain amount in the securities that I have indicated. 

Side note: these securities include a small cap exchange traded fund (ETF), IJT, and a handful of my favorite companies: Johnson & Jonhson, Walmart, McDonalds, Pepsico, Honda, and Microsoft. Each time I purchase these securities, I pay $4 for each trade (i.e. $4 per company). 

Anyways, the "certain amount" I planned to automatically invest was $229 for the regular brokerage account (which holds one security, the index fund) and $1374 for the Roth (which holds the aforementioned six stocks; you'll notice that $1374 = 6 times $229). Why $229? Like I said before, there's a $4 fee for each trade; with that accounted for, I invest $225 in the respective securities. I wanted to be mindful of keeping my investment fees low, so my $4 fee for every $225 invested means I pay 1.7% in fees to invest. Make sense?

Well, last night I moved some money. I transferred $230 to the regular account from my emergency savings account (the savings account balance is now around $950). And I changed the automatic investment amount from $1374 to $1080 (I have $1084 in cash, about $290 short of the pre-set amount; this breaks down to $176 per stock plus $4 each to trade). I decided not to transfer any additional funds from the savings account to reach the $1374 because: 1) I am planning to use some of those funds in the next three months and 2) I don't want to be up a creek without a paddle in the event I need to access some cold hard cash. And yes, I realize that by changing the actual investment amount from $225 to $176 that I will pay about 2.3% in fees. Don't get your panties in a bunch, I'll reset it to $225 after this trade goes through. Besides, I am a bit consoled by the fact that some people pay much more in fees to trade..like those folks who are into active trading (for my account, that would be $9.95 a pop. Yikes!)

Overall, why did I make these changes? Because my accounts have been performing well and I haven't been using the cash in them. It's kind of like the lottery (which I don't play) you gotta play to win and frankly, my money isn't working for me as cash.

Would you have done the same thing? 

Or would you do things differently? If so, how and why?