Mapgirl’s Fiscal Challenge

I’m holding onto a lot of cash at the end of April. My net worth is going to look screwy I think.

For the most part, it’s totally artificial because I took out a $5K balance transfer on one my credit cards to cover the bathroom remodel. I wonder if I should hold back some of the cash reported because it’s in reserve for the construction.

At any rate, I’m still gathering numbers for net worth valuation for April. I always have to guess my mortgage numbers since one of the statements doesn’t come until after the month closes. (But usually the guess I make is pretty good, +/- $200)

Here’s to you Ben Bernanke for yet another Fed rate cut. I don’t think it’s really going to do anything for me at the moment. It’s likely working against me since I won’t be able to find a better paying interest rate on my emergency fund CD’s this summer. pooh.

Contemplating things further, I think I can finance a bathroom remodel. Especially since the estimate I received is under $6K. Add on 10% for overruns, as most places advise, and it’s still slightly under the $6K mark.

Resources available:
1. The insurance company will pay me for the repairs ~$950.
2. My tax refund is ~$1400.
3. My stimulus payment is $600.
4. Liquidating my savings accounts ~$1300.
5. Cash I can raise from my next two paychecks, $1200.
6. Balance transfer at 1% APR till January 2009, $5000.

So that’s $10,450 in resources, not bad. Of course, I have debts to pay. And to get my apartment ready as a rental, I need to do a few more things to the plaster and the kitchen. The plaster work is only about $1000-1200. However kitchens are expensive and that’s what gives me pause. I’m not sure I should go as far as fixing the kitchen up really nice. Should I stick to something cut rate? Should I only update the kitchen appliances? At the moment, I am leaning towards replacing only the dishwasher.

Right now, in the aftermath of tax season, I think the only way I can take on all this cost is to sink it into my apartment as investment or improvement costs on a rental unit. Make it all a Schedule C line item.

Renting out my condo at market value will end up having negative cash flow for me each month unless I find a really sick cheap room for rent, which is possible in my neighborhood. I looked at a sublet for $575 a month last week. I could net about $300 in my pocket from positive monthly cash flow and put it towards debt repayment. Then I’d also be able to reduce my tax liability from a Schedule C net loss. But all of this makes me exceedingly uncomfortable. I am just not confident I can make it work out in my favor though.

I would have the hassle of finding a stable roommate situation and signing a lease. I’d have to move all my stuff out of my house and find storage for it. Having moved 7 times in 2 years during a transient period of my life, and recently reliving those times while filling out a security clearance form, I really hate the situation I’m in.

Of course, I could stay in the place. But then I’d want to remodel the kitchen, tear out the carpet and really spruce up the place.

At least I’ve freed up some resources and have a plan now.

I’m up quite a bit because I was able to get my Medical FSA reimbursement earlier this month. It’s up 14.2% month over month and up about 15% from March of last year.

The main thing I noticed is that my main retirement account holdings is down 8.88% since the year began. That’s a lot and it’s kind of disturbing since that’s an old 401k plan to which I cannot add new funds to dollar cost average out that low dip. I’m now safely past the 60-day holding period for selling off my funds without penalty so I can roll it over and out of the plan holder’s firm. But I think I’ll wait another quarter anyway just to see if the S&P improves any before selling it off and moving the money. Someone told me I can have the fund shares transferred without being hit with penalties for moving money in and out of a fund to quickly, but honestly, nothing in that account really thrills me. I’d rather sell everything in it and reallocate it all.

I took a close look at my abnormally high cash holdings. Since I get paid on the last day of the month with my new job, I expect that I will continue to have artificially high cash holdings unless I start doing some planned liabilities to offset that amount. It disturbs me because usually I have a mortgage payment waiting to go out of that money right after the new month starts.

At any rate, I think I can almost double my usual credit card payments in April. I have been hoarding cash a little due to my friend possibly needing to borrow money and wanting to buy a replacement laptop. But I think I am going to buy neither right now. I am going to another wedding in Boston in April and I plan on using a credit card to pay for that trip. It’s mostly just a hotel, gift, and a possible car rental. I hope to use cash for all other expenses that weekend since I can look at it as a self-indulgent spending weekend at home in DC. Costs for meals should be comparable.

I wish I had more to say right now. There seems like there should be a lot but there isn’t.

1. I’ve been sick as a dog and working from home. Sleep is good. It’s put my wedding trip into jeopardy though. I’m afraid I won’t be able to drive to Jersey tonight. That would be traumatic as I have been waiting for this wedding for 11 years.

2. I decided that I really want to be able to go home to my apartment. I had a discussion with my boyfriend and neither one of us is ready to move in with the other permanently. I gave my friend a deadline of May 1st, not to be mean, but to motivate her in finding her own place. I suppose part of the reason was because of #1 above. I was really sick this week and I really wanted to be at my own home. Dorothy was right. There is no place like home.

3. In preparation for the drive to Jersey, I took the car in for an oil change and a brake job. I noticed something funny when I was stepping on the brake, but paid it no mind. Boyfriend likes to tinker around with his car and pointed out same funny sound to me, making me step on the brake in various ways to test it out. I am still waiting to pick up the car from the dealer and find out what the damage is going to cost. There is also a CV joint that is slowly leaking as well. I was told about it before, but held off on it till the calendar year changed. I vow to drive this car till it dies, but will it nickel and dime me to death in repairs first?

In measuring and deciding what to do about all these things, I am holding on still to a lot of cash for now. Cash hoarding seems like the best thing for the next 3 months as I have to attend 3 weddings.

EDITED: To include a link about the Lenten piggy bank.

Oink! Oink!

I still have my Lenten piggy bank, and for most of the year, it’s empty. For some reason, this year, I decided to throw small bills in there and much to my surprise, sometimes I have a nice stash of about $40. It always sort of surprises me how much is in there when I bother to count it up.

When I am running out the door to go somewhere and I don’t have enough time to hit the ATM, I will reach into my piggy bank and grab some money out. Saves me time and usually saves me money because I don’t use a non-network ATM or charge dinner. $40 is more than plenty for dinner and movie.

The other night, I decided to count it up and found out I had $30 in it. I pulled out half because I was running low on cash for the week and consolidated the rest into larger bills. ($1’s for $5’s, not so large, eh?) I ‘topped off’ my wallet, which is good because I needed $10 to park at a downtown parking garage while I went to the theater. I would have been caught short if I hadn’t done that.

This blog has really transformed me. I don’t think I would be using cash as often as I do without realizing through blogging that cash is king. My experiments during Lent to save some petty cash around the house has turned into a small habit of tossing money into the piggy bank all year. It’s helping me avoid using credit for buying food, which cannot be returned or resold. Heck, even just withdrawing wads of cash in $100’s instead of $20’s has left me with small bills to toss into the bank. That’s a major change for me because I never used to pull out that much money at once. It was always twenty here and twenty there.

What about you? Have you changed your small habits with blogging? Can you point concretely to something that’s different about you since you started your involvement reading or writing a PF Blog? Has it stuck with you?

Yesterday I wrote about losing my ATM card. Today I will write about my plans for managing without it.

Due to my friend’s visit, I took Friday off work. I got my 2006 property tax refund check last week, which I was going to deposit by ATM. That’s how I realized the card was gone. Knowing that I could get cash back from the deposit, I decided to do a counter deposit and get about half of it back in cash. $300 for the next 2.5 weeks. (That’s 10 business days, 2 weekends, and the holiday weekend.) I hope it’s enough.

I had a bit of cash on me before this happened and I was thinking about doing this sort of thing anyway as a paycheck challenge experiment. I could put everything on my credit card till then, but we all need to carry some sort of cash around. It’s really hard not to have a little bit for little things like the parking meter, tips, and whatnot. I would love to never carry cash, but I find that even though I don’t want to carry it, there’s too many situations where I need it. Plus I don’t want to get carried away with credit either.

I got all of the money in $20 bills. I got two envelopes from the bank. I put $100 in the first one and the remaining $200 in the second. I plan to use only $100 per week for pocket money. I hope this works. I will allow myself to buy gas and groceries on my credit card, but I will also try to use only the allotted cash for dining and entertainment. Since I don’t have a lot of social events planned for the next two weeks, I think I might be able to do this.

Because I was already thinking of doing this, I am not sure that $100 is enough. I was initially going to give myself $140 per week, so $20 a day. Since I did make a grocery run, I think I should be able to eat at home more often and spend less I normally would on dining.

When the card arrives, I let you know.

Right now, I’ve got $60 left in my wallet after the weekend. I even paid $40 for some shoe repairs.