Net Worth: March 2010

I’ve got a crush on the last 30 days, because my NW soared. I want to fly like an eagle, I want to run through the halls of my high school, I want to shake my money maker (those are all song lyrics in case you didn’t catch on). My net worth is on the up and up, and daddy likes what he sees. I have a strong tutoring and blogging month to thank for the increase. Let’s take a look at the grizzaph…

Checking Accounts: $1,983, +$106. Made some transfers from checking to the good old INGdirect savings account. I love ING. They don’t pay me to say that, but I wouldn’t mind if they wanted to…you hear that ING… Give me your monies!!!!

Savings Account: $22,765, +$1,700. I’m WHOREding (haha get it!) cash for the time being, until I get a better grasp on what lies ahead. I’ll be using about $4K of this shortly to pay for my upcoming honeymoon. Check back tomorrow to see why I’m willing to give up 4 grand for a vacay.

Roth IRA: $13,539 +$171. I have fully contributed to my Roth since my senior year of college. Right now my account balance is about $700 less than my total contributions. Hopefully soon, I will have actually made money from investing!!!!

TSP (401K): $12,313, +$554. The standard 5% contribution heads this direction each month. I also get that 5% fully matched. Can’t pass up free money now could I?

Student Loan: -$15,612, +$391. Yeah I know, some of you hate me for hanging on to my student loan debt, when I could pay it off. I’ve paid it down $13K in the last two years, that’s got to count for something though…right?

That put’s me at a net worth of….drumroll please….. $33,525!!! I’m up $3,291 from last month, which makes my heart smile. My next paycheck should have my increased salary in it, so I’m hoping for bigger and better things in the coming months!!!

**If you have wondered why the blue bar (debt) in the graph sometimes increases, it’s because my credit card balance gets taken in to account each month. Even though I pay the balance in full it still appears as a “liability” in Quicken. I just deduct this from my checking account balance to give myself an accurate net worth reading. This is why my actual NW increase, may not always necessarily match with the totals of each category, but I promise the overall total is REAL. I chose not to include possessions (including my car) in my NW calculations, which would probably increase my worth by about $8K.**

Do I have to change the name of my blog?

What situation would you rather be in…

Situation Uno: You could have $20,000 in savings, but also have $15,000 in mid-interest debt (7%).

Situation Dos: You could have $5,000 in savings, but zero debt.

I’m currently sticking with situation uno. I have $22K in the bank and a little over $15K in debt. I could pay off my student loan tomorrow, be truly debt free, and still have a small emergency fund. I chose not to. Dave Ramsey would be pissed! My blog’s title is Punch Debt In The Face, but by choosing to remain in debt, perhaps I should change the name to Punch Debt In The Face When You Feel Like It. It doesn’t quite have the same ring, does it?

I would be all about transitioning to situation dos if not for one small detail. I’m getting married. There are a lot of unknowns at this point in my life. I know I will be paying for a honeymoon (probably around $4K) and will face other wedding related costs over the next few months. Not having to pay for the actual wedding day has been a huge blessing, but I will still have some financial obligations.

I have no clue what to expect for monthly expenses as Girl Ninja and I move in together. I’ve never lived with a girl before, but word on the street has it those things can be expensive. It’s also unclear what Girl Ninja’s income will be. She is a substitute teacher in California, and we all know the California government can’t manage money.

Maintaining a rather large savings account keeps me from stressing out about the “unknowns” of marriage. Personally, if I paid off my student loan, and only had a few grand in the bank, I would be super anxious about our stability. So for the time being, I plan to continue operating in situation uno until, at least, the end of the year. After a few moths of the married life, and once I have a better handle on our future, I will strongly consider paying off my loan.

So what would you do? Does the security of having a large amount of cash in the bank keep you from stressing about your debt? Or does debt overwhelm you, and you would get rid of it in an instant. I have a feeling there will be a pretty even split.

I can’t wait to take on more debt….sike!!!!

So I received a free 9 month credit monitoring package from TransUnion as part of some class action lawsuit I was unknowingly involved in. I have to say, having the ability to access my credit report whenever the heck I want is pretty dang convenient. I still don’t think I’d pay the $12/month the credit monitoring regularly costs, but I could see why some people might.

As I was poking around and exploring all my credit details, I stumbled upon my credit score. Here’s what I saw…

Cool. My credit score isn’t crazy high by any means, but it’s probably not too shabby compared to most other 24 year old males. I got a good chuckle out of the next section titled “Ways to improve your credit score.” Here was their suggestions…

Okay bucko, I’m on to your clever tricks. You want me to get in more debt. Well I got two words for you… Suck it!!!

I love that the first piece of advice suggests that I do not have enough revolving debt. Apparently my $16,000 student loan debt isn’t sufficient.Their solution? Go take out a bank loan, an auto loan, a business loan, and maybe finance some plastic surgery. Surely then, my credit score will increase! Think about it, I can go rack up a good $30K in debt to raise my, already good, credit score a few points higher. Where do I sign up!?

The second recommendation kind of shocked me. I knew multiple credit accounts helped boost your credit score (see point one), but I never really thought I would be told I needed MORE credit cards! Like I said, I’m 24. I already have three CCs (all with zero balances). Do I really need to go sign up for another two or three just to give my credit score an artificial bump? Hell to the No I don’t.

There really isn’t much I can do about the third recommendation. I’ve only been legally allowed to have a credit card for six years, but apparently that isn’t good enough for the credit score gods. Perhaps I should have considered illegally applying for a credit card when I was 8 years old so I had a “longer” credit history. Stupid, stupid, stupid.

I have no plans in the immediate future to accumulate any more debt or open any new credit accounts. I guess this means I will never break the 800’s as far as my credit score is concerned. Sure having a good credit score is important, but there is no way in H-E-double-hockey-sticks I am willing to take on stupid debt just to do it. I’d rather have $50K in the bank and a 760 credit score than$50K in debt with an 820.

Have you ever had experience with a credit monitoring program? Do you know your credit score? Do people actually follow this crappy advice? Has anyone out there ever actually accumulated debt simply for the sake of improving their credit?

Vote for me or I’ll punch a baby

So I found out the other day that I had been nominated by my fellow bloggers for a 2009 Plutus Award in the category of “Most Humuours Personal Finance Blog”. That’s right suckers, at least a few of you think I am funny. You probably have a few questions like…

What are the Plutus Awards?

They are basically like the People’s Choice Awards for Personal Finance blogs. If I don’t win, that means you didn’t vote for me. And if you don’t vote for me, that means you are a dumb face.

Why Should I vote for you Ninja? There are way funnier PF blogs out there.

True, there are funnier blogs out there, but I’m keeping my fingers crossed that when you go to vote for Budgets Are Sexy, you accidentally vote fore me 🙂

Who is responsible for the Plutus Awards?

My man Flexo over at Consumerism Commentary is the the mastermind. He put it all together, so if you think it’s stupid, blame him, not me.

How do I vote?

Head on over here… find the category  “Most Humorous PF Blog”… vote for me… DON’T VOTE FOR THE OTHER GUYS… give yourself a pat on the back for being not-stupid!

I voted for you Ninja, now what should I do?

You should laugh because this picture is funny…

THANKS FOR VOTING FOR ME!!!!!

Oh and I guess I have to provide some type of financial advice real quick….

Don’t have kids…ever…those things are expensive.

Okay bye. See you tomorrow 🙂

p.s. GO VOTE!

I save like a G

I love today’s title because it holds double meaning. I originally meant I save like a G (as in Gangsta). If you didn’t know, I’m the ghettoest (is that a word?) personal finance blogger this side of the Mississippi Milky Way.  I love rapping, hip hop music, making beats, and learning about compound interest. If that’s not straight hood, I don’t know what is. Not only does “I save like a G” mean I’m a gangsta, but it also can be taken literally. I really do save about a G (as in a grand) each month. In fact, last month I had $1,800 in discretionary income.

Today’s blog post was inspired by a loyal reader who commented on yesterday’s post. MattyIce wrote…

What is your Percentage of Savings? Is it 15% and then that 15% is divided among your IRA, Savings, and Student Loan Payment?

Well MattyIce, here is my super-dee-duper-uber-complicated formula for my savings…

Basically what I’m trying to say is I have no savings plan. Here is how I actually decide what I do with all that discretionary income.

First, I take my baseline net income (I know each month the minimum amount of $$$ I will bring home is $2,700). Generally, I supplement that with a couple hundred dollars in side income. I also know that my expenses each month generally hover between $1,500 to $2,000 (depending on the month). Thus, I usually have about $1,000+ each month in “do whatever the heck I want” money.

Most people, pay themselves first. Meaning they treat their savings as an “expense.” Before they pay any bills, they throw X% of money in to their savings account. While I totally understand why people do it, I don’t really need to. I don’t have a problem saving. I’m frugal by nature, and frugality leaves me with discretionary income.

So what do I do with my discretionary income? It’s pretty simple, I take all of my left over moolah and throw it in my savings account. Sometimes, when I’m really feeling anti-debt, I’ll take a thousand dollars out of my savings and throw it towards my student loan. Other times, I pay minimum on the loans, and keep the discretionary income in my savings account.

As far as saving for retirement, I have 5% of my gross income thrown in to my 401K. I don’t actually use a dedicated savings account for Roth IRA purposes. Since I am able to hoard so much cash, I don’t have to set aside my retirement savings separate from my main account. Periodically throughout the year, I will make contributions to my Roth IRA, from my one savings account. There is no method to my madness, but it’s what works for me.

Essentially to answer your question MattyIce. I have ABSOLUTELY NO SAVINGS PLAN. Instead of subscribing to a super complicated method, or trying to manage 8 different dedicated savings account, I throw all of my discretionary income in one account and take from it when necessary (i.e pay down student loan, contribute to Roth IRA, buy an engagement ring).

Let’s look at a few past months to see what my savings rates were…

January 2010: 48% (of net income) saved

September 2009: 11%  saved.

July 2009: 53% saved

As you can see, my savings rate is all over the place. My “non-plan plan” is much different than a lot of methods, but it’s what works for me. How do you all decide what you are saving? Do you pay yourself first? Do you save an exact percentage? Or are you like me, and just throw all your leftovers in a savings account? Do you have multiple savings accounts for different things (i.e. new car account, retirement account, kids college, etc)?

Monthly Expenses: January 2010

If the rest of 2010 is as good as January was, I’ll be a happy camper. Tutoring really gave my discretionary income a sexy little boost and I also brought home some blogging income. These side hustles are turning out to be a wonderful thing. Here’s where my money went last month…

My Income:

Blog: I don’t plan to become an advertising whore, my primary focus for blogging is on not sucking, but I’m not gonna lie and say a little income doesn’t hurt.

Salary: This income is after tax. I’m only a few paychecks away from my $12,000 pay raise! I bring home just under $1,400 every two weeks, but it should be closer to $1,650 once that raise comes.

Tutoring: January is finals week for all my high school kids, so they are desperate for some tutoring. Being knowledgeable in Algebra and Geometry is pretty much awesome. Tutoring is the easiest money I’ve ever made.

My Expenses:

Auto: How much do you spend on gas each month? I bet it’s not under $41, like I was able to get away with. Having a work vehicle is simply amazing.

Dining/Groceries: Eating is freakin’ expensive. I have a goal to spend no more than $250 and am proud to say I managed to stay under budget. I’ve always wondered how much I would spend each month if I was girl?

Interest expense: I have been making only minimum payments on this pesky loan for the last couple months. With a wedding and honeymoon pending I’m hoarding cash and holding off on the student loan accelerated payment schedule. I do plan to pay this beast off soon, but that time has not yet come.

Travel/Reimbursement: I have an airlines credit card that I get double rewards points on when I buy airfare. Last month I bought quite a bit of airfare for my family members and so that is what the reimbursements are. I wish I was planning on going somewhere, but I’m not, I just buy tickets for other people 🙂

The other categories were too unimportant or self explanatory so that is why I didn’t cover them. The overall total at the bottom is the cash I had leftover after all my expenses. I walked away with +$1,814 in January, and that kinda turns me on. I hope I can stay in the green once I get married.

* Are you wondering why I post the previous month’s expenses a couple weeks late? I use quicken to track my spending and I have to wait until the end of the billing cycle before I can download these transactions. I know I could manually add each expense as it comes, but I am entirely too lazy for that. Thanks for checking in and if you got any comments, tips, or advice I’d be more than happy to hear it. *

No difference between optimism and stupidity?

I love that people use optimism to excuse stupidity. I try to avoid being labeled a pessimist or an optimist. I much rather prefer to associate with the realists. I do consider myself a positive realist, which in my opinion, is significantly different than an optimist.

Wikipedia defines an optimist as one who generally believes that people and events are inherently good. While I would love to be able to assume most people and events are “inherently good”, I’m gonna have to keep it real and disagree. I’m pretty sure there is nothing good about terrorism, Hitler, country music, Detroit, and this guys shorts…

Did you just throw up in your mouth a little after sneaking a peek at that picture? My apologies, but I couldn’t resist.

I get really frustrated when people make stupid decisions because they have “faith” everything will work out in the end. I bet we know plenty of people that live paycheck to paycheck by choice. They spend every dollar they earn on frivolous things like $300 bar tabs, flat screen TV’s, video games, etc because they know their next paycheck can get them through the upcoming month. They use their optimism (believing that their next paycheck is an absolute) as an excuse to do financially stupid things (not establish an emergency fund). Guess what buddy, if that paycheck doesn’t come, YOU ARE SCREWED!

I’ve got news for the overly optimistic: Rainy days lie ahead, bad things are going to happen to you, and…gasp… sometimes life isn’t all rainbows and unicorns.

Don’t get me wrong, I LOVE POSITIVE PSYCHOLOGY and I hate negative people, but I get sick of people that hope for the best, only to find themselves royally screwed when things didn’t work out the way they planned. I believe you should hope for the best, but prepare for the worst. Sure I plan on having a job next month, but if for some reason the crap hits the fan, I have a decent E-fund to help me survive unemployment.

While I like the idea of ending poverty, I’m forced to face the REALITY that I will never live to see the day that happens. No matter how much we attempt to level the playing field, there will ALWAYS be people that squander away everything they have, much like there will always be people that are diligent savers. I’m really not trying to open up a political can of worms with this point, but I get so frustrated when I hear someone say “We need to put an end to poverty and spread the wealth around”. It’s hard to tell someone they are stupid for wanting to end poverty, but when their solution is to further tax the rich, they are just that… stupid. Out of fear of receiving a verbal lynching, I shall end my rant here and open the floor for discussion.

Have you had to deal with some stupidly optimistic people? Do you just bite your tongue and watch them make bad decisions or do you attempt to intervene and share some realistic input? It’s tough to tell someone they are being too positive, but sometimes it’s too important not to!