Mapgirl’s Fiscal Challenge

Well things have resolved for my friend. She’s going to move back in with her old boyfriend and live as roommates in a little while so she is going to give me back my keys in a few days. Honestly, this is a relief to me since I need to get to my desktop PC and my Quicken! It’s time to do my taxes and my March Net Worth!

She won’t need to borrow any money from me since she forgot that she has a security deposit her ex-boyfriend will buy out her share of their current deposit. That’s good because I had another car repair this month for about $550.00 and miscellaneous wedding expenses, namely advance deposits for a beach rental for the wedding in May. Unfortunately, that means I’ll be putting off a laptop purchase for a few more weeks.

Oh and my girlfriend offered me a few hundred dollars for the last few weeks, but I told her to knit me a nice scarf or something instead. Considering how long it takes to make an item and she has a lot of knitting talent, it’s a pretty fair barter. Hm. But of course, if I took ‘rent’ from her I could take it as a tax deduction…Now there’s a thought!

My Medical FSA check came and I am trying to turn the money around in my checking accounts. Once it goes through, I will have bumped my net worth back up by almost $5K,

I am also holding on to a lot of cash at the moment and probably through April too. For various and sundry reasons, I may have to loan a friend some money. I know many people don’t believe in making loans to their friends. I’m not one of them. I just pick and choose to whom I loan it, just like a bank does.

My friend, the possible recipient, recently landed a new job and it’s been going very well for her. But she needs to borrow the money since before the landing the job, she was unemployed and burned through her savings during that time. (Hey, isn’t that what it’s for?) Having worked with her and idly chit-chatted about many topics, I know she’s very careful with her money and quite good at saving. Borrowing money from me is a question of short-term need vs having the time to save. There are reasons and situations in our lives where the former is necessary, and I’ll be damned if I watch her get an auto title loan or some other crap like that. And please don’t speculate about her situation. I am the one who offered to loan her money. She didn’t ask me for it.

At this time, she hasn’t decided yet what her best course of action is, and neither have I. She’s living in my apartment till the end of the month and then she’ll figure it out from there. Time is all she really needs now. Day after day, week after week, another pay check means more savings she can build back up and then she won’t have to borrow anything from me. I can offer her a rent-free place to live and that’s the best for now. (Otherwise she’d be paying double rent, which is not tenable, possible yes, but crippling.)

Ultimately, this means that I’m holding off on replacing my laptop for about another month till I know what kind of cash I have to spare. Every month my company sends a list of refurbished laptops for sale. There is usually a decent model available for $350-$400. Since I’m holding on to at least twice that amount for my friend to borrow, hoarding the cash for a month or two will not hurt me too much. If she doesn’t need it, then I can go buy a replacement computer right away!

I’m no saint here. My apartment is a god-awful mess. She knows it too. I did a little clean up so she could have a drawer and some closet space to herself. Moved my stuff off the bathroom counter and let her use the internet connection. She’s sacrificing a TV since I don’t have one and the company of her cats, since I’m allergic.

Basically there are times in your life when you have to ask yourself what is the right thing? For me, being able to give her a place to go is the right thing to do. And if I want to reclaim my space, I can loan her the money so she can go find another apartment. I’m not in a hurry at the moment, but she’s aware that my sense of urgency may change over time. But I think it’s best for her to stay focused on herself so she can think clearly to make a good decision.

P.S. If you are wondering, patient boyfriend is letting me stay at his house for now. Since I’m going away for a few days this weekend, I won’t be there 24/7 to get on his nerves.

It’s up just a tiny bit. Liabilities down, assets up. But the credit card number remains fairly static.

I know part of it is that I bought my mother some swimsuits from Lands’ End. The modest cuts are good for old ladies. They even have little skirts, so my mom was happy with her present.

I also know part of the reason my credit cards are up are due to some early purchases for weddings this year. I had to put flights onto my credit card.

My credit card balance being up by only $73 means that the $1000 I usually throw in that direction was negated by about $1000 in charges. Sounds about right, but still a bummer.

U-G-L-Y, at least I have an alibi! It’s UGLY! It’s UGLY!

It’s been so ugly, and I’ve been busy, that I’ve been ignoring the update till now. I have lost a lot of money in the market in all my investment accounts.

I have added almost $5k in medical debt, but it I have a pending account receivable associated with it. I will not accounted for the reimbursement yet on my net worth calculations until I submit my papers.

My credit card debt is stagnating at the moment. But since 2008 is focused on debt payment, I’m most worried about this one and reining in my spending.

My real estate assessment has lost some value, good because it reduces my tax bll, but bad because it also hits my small net worth pretty hard.

I think I’m going to be lucky if I reach the peak of my 2007 net worth.

The reason is two-fold.

1. I am taking a bath in the markets lately in my retirement accounts. Coupled with my low contribution rate in 2008, I think I’ll be lucky to be flat and not lose anything in the funds I hold. I have shifted some money around to re-allocate to a heavier international portion, but honestly, I think things aren’t look too good globally either.

2. I just got my 2008 real estate assessment and I’m taking a $4k hit on the value of my condo. No worries though, I’m still up 14% on my original purchase price from 3 years ago. Unlike other people who bought at the top of the market, I bought an undervalued property and am still enjoying a positive increase in valuation. With the way regional planning is being done, I actually am primed for a huge increase in value in my property in the next 5-10 years. (They’re putting a new trolley/lightrail system a few blocks away, which they want ready in less than 10 years.)

Add on all that some changes in cash flow with my job transition and I’m holding onto cash as much as I can right now, but it’s been tough since I know I have to upgrade my wardrobe and I cannot submit my eye surgery to my new Medical FSA account just yet.

SMART: Specific, Measurable, Achievable, Relevant, Time-Bound

Goal #1
Specific - Contribute to my 401k plan
Measurable - X% of my total salary
Achievable - With each paycheck
Relevant - Yes. Because it will help my retirement funds grow
Time-Bound - All of 2008

I will not get a corporate match for my first 12 months, but my new company will match 100% of the first Y% of my salary, so there are some extra benefits to doing this, but I won’t see them till 2009. That’s fine. Because of other goals, X=Y, i.e. I’m only putting in the minimum to get the match.

Goal #2
Specific - Reduce my credit card debt
Measurable - By 50% or $9,137 (rounded up to $10K)
Achievable - Monthly payments of $762
Relevant - Yes. Because it will help my net worth grow faster
Time-Bound - December 31, 2008

My NCN Network chart/Save-O-Meter number is $18,273 and I have not made much progress at all. In fact, I’m probably going over that when I finish tallying my December net worth numbers. What really burns me is that Tricia has paid off more debt that I have. I’m really proud of her, but dammit. I gotta get moving!

Goal #3
Specific - Reduce my credit card debt on my highest balance card ~$10K
Measurable - By 50%
Achievable - ~$450 a month
Relevant - Yes. Because it’s killing my credit score
Time-Bound - December 31, 2008

This leaves about $312 per month for my other credit cards. Though they have higher interest rates, the balance to available credit ratios are so low they aren’t detrimental to my credit score. I’m not buying anything any time soon, bu I would like to push my score higher for the heck of it. There is an implied goal here of breaking a FICO score of 720.

2008 is going to be very simple. Three goals and three goals only. I am focused on saving for retirement and reducing my credit card debt. That is all. Once I get going on these three things, I feel my larger goal of having nothing but my mortgage will come to me more easily in 2009.

I suspect this year my Month-Over-Month net worth growth will wind up being negative in December. There’s just too much going on for me right now with my medical expenses and overspending. I have had one too many splurges over the holidays.

I had a nice comment the other day asking me to update the NetWorth IQ graph, which I have done. I haven’t been home a lot, and that means I have been spending money out the wazoo. Because I waited so long to do it, November represents a very accurate picture of my finances. Usually I do not wait for my HELOC statement to come in before doing the update. I often just estimate it because it arrives so late.

I ended 2006 with a net worth of $34K, even. This year, I will end up around $48-49K, $50K if the market does better. Like most people, I took a serious hit this November as the S&P stagnated. However, I did use this as an opportunity to buy up a little Citigroup stock as a long-term hold generating dividends. It does not appear that they will cut their dividends any time soon, so I am relying on the depressed price to bring me good yields over the next decade. Yes, I hope to have it that long.

Examples of my holiday splurges:
1. Theater tickets
2. Super nice Christmas presents for my co-workers. Over $20 each.
3. Shopping with my friends and realizing, “Hey, I need that too.”
4. Baby shower gifts

(more…)

This is an advisory. It’s going to be ugly.

I added my dental bill to September’s net worth, which is why it’s down. However, this month, I had a major maintenance bill for my car, so even though I paid $800 down on the dental bill, I didn’t have enough in reserve to cover the car repairs. Onto the credit card it went.

*sigh*

I almost don’t want to look.

But I’ll let you know in a few days what the finally tally is after the month fully closes.

I went grocery shopping this week to cut down on the dining expense. Hopefully that will help. But I also know that I went to Target this weekend and stocked up a lot on stuff like laundry detergents because of a special coupon I got in the mail.

Trent at The Simple Dollar has an excellent deconstruction of comments on the Yahoo Finance article by Anya Kamenetz about living frugally in the Age of the iPhone. What I find vastly interesting is that some of my coolest friends in San Francisco were some of my poorest. They were really good about saving their money. I learned a lot from them about how to shop thrift, go clubbing on the cheap, and figure out the free and fun stuff around town. We rarely took cabs there. The bus and our feet were our best travel companions.

English Major Money asks, “Where do our money personalities come from?” Great question. You’ll have to read all over my blog to find that one, but try clicking the Personal Memory category on the right. I’m sure it’s buried all in there.

Hazzard at Everybody Loves Your Money has created a chart to tell you what you have should have saved by now. It’s got a number for every age between 21 and 65. Even though I’m in my early 30’s, I’ve got what a 29 year old has got. Fortunately, I am trying to save more than $2.5K a year and do way better than only 8%. However, 8% is a very achievable average rate of return that I use in most of my long term forecasting spreadsheets.

Ask Dong has some tips on TIPS.

Savvy Saver’s strategy for zero balance transfer arbitrage. I’ll be honest, this sounds too risky for me. I don’t know that I’m interested in trying out since I have lots of debt at the moment. On one hand, I don’t need new credit lines for anything whatsoever in my life right now. Maybe in 3 years I’ll need car, so this could be a good time to do it. But on the other hand, interest rates are falling so perhaps the time for the greatest interest rate spread has passed us by?

Pinyo of Moolanomy guest blogging for J.D. of Get Rich Slowly. Get it? Ok, the post is actually on Pinyo’s 12 Investing Mistakes. A really excellent list. Please learn from it. Even now, it still has lessons for me.

It’s down. But you knew that. I decided to put my dental bill on there as a liability since it’s going to take me several months to pay it off. I sent them $500.00 last week. It’s actually a small ding to the net worth that is offset by my 401k contribution and a recovering stock market. My entire portfolio is up by 9%. That’s pretty crazy if you consider that it’s up 4% because of my contribution. The remaining 5% it’s up is pure market rebound. Of course, I did also have a liquidity event, i.e. dividend reinvestment, on one of the funds.

What’s nice is that I did meet my goal of having $30K in retirement money by the end of 2008. Since I’ve met that goal already, I feel ok with stopping my 401k contributions for the moment.

There’s no way I’m going to meet my total goal of having $60K net worth by the end of the year. I am only focused now on two things:

1) Pay off the entire dental bill by January 1, 2008. This means ~$800.00 a month for the rest of the year. It sucks, but c’est la vie.

2) Reduce my credit card debt. I had a tough goal of $9K in credit card balances for 2007. I know I can’t meet that either, but I would like to nudge my NCN Network graph down again. So I will focus on getting this down under $16K. That might not seem like a lot, but with the Christmas holidays approaching, I have no idea how to pay for planned family vacations other than to dip into my savings. I have pretty much eliminated paying myself first right now. I hate it actually, but to meet goal #1, it had to be done. I’m only saving about $35 a month at the moment. (Considering that I was socking away over $1000 a month at one point, saving less than $50 seems like nothing.)

My family’s been talking about LA/Disneyland for Christmas with the nephews and my parents. My mom would like some new luggage, which is fine with me, but after looking at some of the monster bags out there. I am afraid that she won’t be able to get them into her car without needing some help. Luggage is also crazy expensive, so I’ve been shopping around for a good deal on quality stuff. I don’t want to get her something crappy. I’m being picky, but I think this is one of those areas where value and quality is just as important as price.

Please don’t bug out over the mention of Disneyland. I have a few friends who work for The Rodent and can get discounts for us if we plan properly. What’s also nice is having a frank discussion with my sibling over what to get the babies as presents. I can get them whatever I want and I can spend as little or a much as I want. (I was asking about clothes vs educational toys vs toys vs money.) That’s a relief. I like buying the boys cute things, but I really worry that they won’t have college money with the way things are in the America these days. 15 years is a long time for things to change, but a little extra money at Christmastime for their savings accounts could not hurt.

What’s also nice is that my mom sent a full sweater, shirt and pants outfit for the older nephew’s birthday, and he’s really fixated on the green sweater. He’s starting to exert preferences on his clothing so maybe he’ll like some cute, but frugal clothing I send as presents. I’m really big on Old Navy for kids’ clothing right now. Decent quality and inexpensive. I haven’t been in one in years so I was surprised this summer to find that I could spend about $120 and get two skirts and two dress shirts for work. (But I didn’t. I just *thought* about it.)

ps- I did have a No Spend Day on Saturday. Lunch was provided at my volunteer training gig. My laddie cooked me dinner. And the drink I got at the bar later that night was paid for by my old college friend who was squeezing in a visit with me. As he puts it, “I make enough for three people to live on.” I walked to the training session, rode my motorbike for fun in the parking lot, and drove only to my laddie’s house and to the bar in a series of trips. Not bad.