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PostPosted: Tue Jan 20, 2009 11:49 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
I got thinking about this post again tonight, and it was due for a much needed update after thinking about some of my finances. Lots has changed in the last 7 months!

I moved into a condo of my own in September, I rent. I pay 950$ rent for my place.

Received another promotion at work in September as well which accounts to the difference in take home pay since the last post even with contributing more to my 401(k).

My expenses have gone up quite a bit since the house I lived in last year, but my car was on it's last legs, so I bought a new one. I purchased a new 2009 Volkswagen Rabbit with all of the options that I desired (16" alloys, cold weather package, iPod adapter, floor mats) for $16,050. I received $1500 for my 1993 Honda Civic which I thought was quite fair. A few year old rabbits have held their value well and I got a great deal for my car (about 900$ under invoice). For anybody thinking of purchasing a car in this economy, I would recommend reading on http://www.carbuyingtips.com. So much useful information on that site on how to negotiate dealerships to get the price you want. I put down $10,000 on the car and financed the remainder at a 36-month loan at 3.9%. Current payoff quote is just under $6,000.

I have my emergency fund sitting right at $10,000 which I am quite comfortable with and fully intend in paying off the remainder of my loan as soon as possible, especially because it is a higher rate than what my ING Account is currently earning. I should get about $600 back after filing my taxes which will go directly to the car loan.

Here are my current monthly Budget (January, 2009):
Rent: $950
Utilities: Water/Electric included in rent, 30$ for internet (I choose not to pay for cable TV).
Cellphone: Corporate plan, deducted from paycheck, not included income.
Food: $400. Still dining out more than I would like, and I often pick up checks for dates.
Gas: $100. Prices have gone down a lot since last update, but new car doesn't get as good of milage, and I find myself driving more...
Insurance: $148.33. (Car and Renter's insurance)
Car payment: $183.18. Might as well keep the automatic payments on.
Misc (Clothing, shoes, entertainment, personal and house care): $400 max (plan on cutting back until car is paid off).

This totals: $2211.51 on the high end including the regular car payment intervals.

My current take home pay is $3796.20/month which allows me about $1500 leftover to pay for the car. I hope have it taken care of in less than 6 months at this rate, opting long in case something comes up. Given how I have about $1,000 extra in checking right now and the tax return coming back, this should be no problem. I would love to have it paid off in 3 to 4 months. I hate thinking I have even a little bit of debt, even thought I could pay it off with savings! I don't know how people live with debt.

Other figures:
Currently contributing 5% to my 401(k), get 3% match from my employer. Planning on raising this after paying off the car.
I plan to fully fund my Roth IRA once again this year, after paying off the car. Contributed 200 so far this year before re-thinking paying off the car first.
Recently requested to have my credit limit on my main credit card increased from $2,000 to $6,000. I don't plan on any large purchases anytime soon that would require this much, but I charge most of my everyday purchases and don't want 500 to 800 dollars monthly going over a certain percentage of my available credit, hurting my score. My credit should be in good shape in a few years when I go to buy a house.
No large purchases planned anytime soon.

Balances:
Checking: $2067.
Savings: $9800.
Roth IRA: $5,858.29. Less than 7 months ago and I had contributed thousands more. Ouch! Stock Market was awesome in the second half of '08.
401(k): $3,375.38.


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PostPosted: Wed Jan 21, 2009 2:08 am 

Joined: Wed May 02, 2007 6:52 am
Posts: 168
Location: Seattle
That looks like great work, I'm finishing uni and moving to Seattle soon, so it's interesting to see how your expenses look! Hopefully I can keep mine about the same level :)


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PostPosted: Sat Feb 07, 2009 2:00 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
I've really made it a point to cut back on spending (which i don't feel was outrageous anyway -- it's a comfortable place to be long term), and I've made a ridiculous dent into my auto loan.

I got a $689 tax refund this week and applied that to the car.

All in all, I've already paid over $4,000 off of my ~$6,000 car loan. I took out the loan about 3 months ago.

I would love to have that paid off in my next few paychecks, which should be do-able if I keep my spending where it is at right now. After that, I will start plugging away on my Roth IRA, doing the math what would take me to the limit in even increments over the year and bump up my 401(k) a few notches.

I'll have an update upon paying that off with more details, but I'm really happy with how things are going.


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PostPosted: Sun Feb 22, 2009 11:09 am 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
I dropped my car payoff envelope in the mail yesterday. It feels good to have a car paid off when it still has less than 3500 miles on it.

I cheated a bit to do it, (took $1K out of my emergency fund to do so), but I didn't want to have to wait any longer. This will be replaced next month.

All in all, I estimate I saved about 500$ on interest by paying it off early. That money certainly wouldn't of made that much sitting in my 1.85% APY ING Account, so I'm glad I did it.

Upon replenishing my emergency fund back to an even $10K, I will begin to fund my Roth IRA for the year. Also, I have raised my 401(k) contributions by a percentage point. I will bump that higher if I get a pay increase later on in the year (at this point, I'm happy just having a job given the economic conditions).

It's time to start building my housing down payment fund. I believe I can realistically put a $1K a month toward this goal, which I will keep in a separate ING account as demonstrated by JD's How to Prioritize Savings Goals (http://www.getrichslowly.org/blog/2009/02/20/ask-the-readers-how-to-prioritize-savings-goals/) post the other day. I don't want to rent forever and would like to buy my own place in the next 3-4 years -- depending on how the housing sector and my earning is looking at that time.

I would like to re-sign my lease in my current apartment as it fits my lifestyle for the moment, am comfortable with my financial goals at this cost of rent, and would like to avoid paying moving costs this year. I will have this conversation with my landlord soon -- I'm still about 6 months away.

Random tips of the month:
- Never go grocery shopping without the weekly ad which shows up in the mail each Wednesday.
- Go grocery shopping every Sunday to have food at home, helps avoid eating out. Also, I buy things that are good deals, even if I don't "need" them at the moment to save them in the cupboards for future use.
- Self-imposed 1 drink limit when I go out to a bar or pub with friends. Generally have a few drinks at home before or after.
- Avoided internet purchases, no matter how small. At times, I would buy things that were "good deals", even though I didn't really "need" them!
- Track all spending in Yodlee (including splitting and categorizing cash purchases -- allows for accuracy and "no cheating").
- Spent a lot of time studying for my Microsoft certifications lately. These exams are paid for by my work, can grow my career and earning, and are a good use of my time.


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PostPosted: Mon Mar 09, 2009 8:05 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
No numbers for this post -- only one paycheck has come since my last update. Although, I am happy to report it is awesome, simply awesome, to get a pay period where my only debt is 153$ accumulated on my credit card since the last check.

I've been focusing even more on where my money goes. One thing I never thought too much about was grocery shopping before now, but now that I am cooking more and eating at home on a nightly basis (wasn't the fact of the matter for the past summer -- I worked such long hours we usually ended up ordering in and staying late through the night), I am really going back to my roots on sales shopping and coupon usage. I was essentially raised this way. My mom always had stocked pantries and could be often found clipping coupons out of newspapers and magazines. I urge you all to take 30 minutes out of your week, plan your meals around the supermarket ad and do a quick Google search of the items you plan to buy, often you can turn up a manufacturers coupon that you can apply on top of the store coupon. I'm getting much more value for my money -- my cupboards are full for the first time ever. It's okay to buy something that you will use eventually. Did I need to buy 8 lbs of chicken breasts this week? No, not really, but at the rate I got them at, they are just fine in my freezer.

Other big change is that I opened another checking account. Why do you ask? This isn't something that I NEED, but it doesn't hurt at all having it. I was referred by a friend to a local credit union (Boeing Employees Credit Union -- http://www.becu.org) and each of us made 25$ just by signing up. I'm growing tired of Bank of America and may end up moving away from them. BECU offers a whopping 6.00% on the first 500$ in each savings and checking, which is about what I keep in my BoA checking right now. I'll likely not use it much, but I'll get it stuffed to 500 per account quite soon to get the maximum reward. Also, having money in an ING Emergency Account is kind of odd in the fact that it takes several days to get your money out. Money in this account is both liquid and makes a great rate, I'll consider it my short term emergency account.

Starting to plug away at the Roth IRA. Won't max it out right away, simply because I am starting to become leary of my job and would like to keep my money liquid if possible. My company let some people go a few weeks ago and there are rumblings of more separations. When you work for a consulting firm and a growing number of people aren't staffed on projects and billing time to customers... well, the bottom line doesn't look as good. I'm staffed for the next several months, so I'm considered pretty safe for the time being, but 3 months from now, who really knows. Important to me to stack as much cash as I can, so I'm watching every penny, as usual. Could just be paranoia, but that's just the times. All I can do is continue to work hard, deliver value to my customer and watch where my money goes.


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PostPosted: Mon Mar 09, 2009 10:08 pm 

Joined: Wed May 02, 2007 6:52 am
Posts: 168
Location: Seattle
Sterling Bank is offering $101 for people who open a new account and organise a direct deposit, debit card and electronic banking through it (paid three months after the account opens). I would open one myself if I ever got around to going to a bank during opening hours.


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PostPosted: Mon Mar 09, 2009 11:05 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
Agh, yeah, I had this BECU thing for about a month before I finally went on on a Saturday morning, so I know how that is.


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PostPosted: Tue Mar 24, 2009 12:31 am 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
News to me was part of the passing of the stimulus package which lowered taxes from my paycheck. I had raised my 401(k) contributions another 1% before this last paycheck and it just about evened out.

I love it when stuff like that happens.


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PostPosted: Mon Mar 30, 2009 1:30 pm 

Joined: Tue Mar 24, 2009 6:12 pm
Posts: 27
Location: Seattle, WA
Egaas, I've been reading your Journal and I've got to say I'm very impressed. Not only are you living below your means, but it seems like you've got a really nice life that you enjoy and also, your career is really progressing well.

So in the immortal words of Han Solo: "Great, kid! Don't get cocky!" ;) http://www.youtube.com/watch?v=N0nyOyrprIs

Seriously though, well done. The more you save / invest now, the less you'll have to worry about it later.

I know you're a smart guy and you know this already, but just as an example, if you were to invest $5k a year from 22 to 32 years of age, with a rate of return of 8% and then you didn't invest another cent until you were 62 years old, you'd end up with $787,175.89 assuming that 8% rate of return continued - while if you waited until you were 32 and invested $5k every year for the next thirty years, again assuming a rate of return of 8% a year you'd only have $611,729.34.

So obviously, front load those accounts all you can. Get that 401k and Roth built up now, when your debts / responsibilities are low (and BTW, thank your parents / grandpa for giving you such a great head's start!) so that when you find a partner, or build/buy a house or maybe get some kids, your habits will not only be ingrained but you won't feel quite so pressured to deny the wants and needs of those you love or yourself.

Anyway, keep up the great work Egaas!


Last edited by hendrake on Mon Mar 30, 2009 10:09 pm, edited 1 time in total.

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PostPosted: Mon Mar 30, 2009 4:06 pm 

Joined: Wed Nov 12, 2008 9:47 am
Posts: 172
Location: FL
This is a fun thread to read because I'll be entering the job market in September in almost the exact same situation as you (i think my take home is gonna be the exact same), about the only difference is i have a heaping mound of student loans, but I will be working hard on those right away, without neglecting retirement and my EF, keep posting updates its fun to follow!


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PostPosted: Tue Mar 31, 2009 9:10 am 

Joined: Tue Aug 05, 2008 3:22 pm
Posts: 548
Location: Northern CA
Egaas wrote:
News to me was part of the passing of the stimulus package which lowered taxes from my paycheck. I had raised my 401(k) contributions another 1% before this last paycheck and it just about evened out.

I love it when stuff like that happens.


Alert! Keep in mind that I think this stimulus package just changed the WITHHOLDING from your paycheck. You'll still owe the same amount of taxes at the end of the year.

I already adjusted my W-4, to keep the same amount being deducted. I don't want a repeat of 2003, when we had a $9K tax bill!

Sandi


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PostPosted: Tue Mar 31, 2009 8:59 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
Quote:
Alert! Keep in mind that I think this stimulus package just changed the WITHHOLDING from your paycheck. You'll still owe the same amount of taxes at the end of the year.

I already adjusted my W-4, to keep the same amount being deducted. I don't want a repeat of 2003, when we had a $9K tax bill!

Sandi


Thanks for the heads up, but I still received a 700 refund this year on my taxes, so I think I will keep it where it is at. I don't foresee much else changing within the next year for me tax wise.


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PostPosted: Sun Apr 05, 2009 9:31 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
I turned 24 years old this week.

Few recent things to further streamline my expenses:
- Raised my car insurance deductible from 500 to 1000 which lowered my premium over 300$ a year. Insurance is kind of a funny thing, it's like I'm taking a gamble that I won't have to make a claim within the next year and a half. However, I did this because the most likely thing to happy to my car is a bashed in car window in which I wouldn't even make a claim. Obviously, if I'm going to make a claim, it's going to be something pretty serious. I think it's a good move all considering.
- Contacted the cell phone plan people at my company and lowered the text messaging plan from unlimited to something that fits more to the amount that I would use. Only saved like 10 bucks, but hey, it all adds up.

Not much else going on.


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PostPosted: Sun Jun 07, 2009 11:53 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
A bit overdue for an update, so here it is.

- Reached my goal of maxing my Roth IRA contributions for the year. I have about 11k cash sitting in that money market account that I will likely invest in an ETF soon. I am currently looking at symbol "VYM" which is a high dividend yield ETF. I'm treating this as an opportunity to learn even more about investing before I take the plunge. Previously, I had bought stocks in individual companies in my Roth IRA, because, stupidly, I thought I could beat the market. I saw the market decline, I dollar cost averaged, and I cashed out a good chunk of my NVDA right about even after the market fell and raised again. This money and my contributions from this year make up my current cash holdings in the Roth IRA, which I want to make much more diversified, buy in, and let it grow.
- Bumped up the 401(k) another notch. I am currently contributing 7%, and getting 3% more employer match. If I receive any raise this year (not looking likely, but you never know -- I am happy just having a job!), this will also go into increasing my 401(k) contributions.
- Net worth continues to grow month by month and I have opened up a separate "House Down payment" account on ING outside of my Emergency Fund (which I am comfortable with at an even 10k). The account value is small, but with this will be the main beneficiary of what gets "swept" out of my checking account twice a month.
- No major emergencies for quite a while now. Life is real good.


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 Post subject: Re: Trying to start out right
PostPosted: Mon Feb 22, 2010 9:15 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
I got to thinking about this post the other day and how long it's been since it's last updated, really interesting to look back over the time line and what I thought at the time vs. my feelings and thoughts now.

I've become jaded a bit with life lately, not because of not meeting financial goals -- I am meeting any that I've set for myself and then some, but the lack of balance that I've lived over the past few years. I continue to grow my net worth about 2,000 a month, something which I've been overly persistent on. I don't have any expensive hobbies simply because I don't have time for them, and I just don't see it as a good use of funds.

Part of me feels like I realize that life isn't a race but I'm in a dead sprint holding my middle finger up to those behind me, just because I can, but I don't feel good about it in the least. I work too much, sleep too little, have lost track of too many friends, and in general am just feeling burnt out as of late. I have a mass of vacation hours to burn but simply never feel that I can get away. I put too much stress on myself and won't let myself let up. When I do get free time, I have a difficult time really caring how I spend it. I find myself losing my health and energy, picking up quick and cheap meals, drinking too much coffee to get through the day and too much alcohol to drink off the stress. I got into a nice habit towards the end of last summer, running 3-4 times a week, until I hit another brick wall at work and the long hours continued. I need to get back into the habit but am just having a difficult time motivating myself to do so.

I don't want this to make it seem like I don't appreciate all that I do have -- I am very proud of what I have, and how hard I've worked for it, but I view the key to life in the coming months and years for me is to strike a balance and really just stop thinking about money for a while, and just do what comes naturally now.

It's not all bad though, I don't want to make it seem that way at all. I've been invited to a conference in Las Vegas next month which I will pair with some vacation days and I am meeting some friends in the area -- this is essentially a free vacation once the conference days are over, and hopefully a chance to recharge my batteries and get out of the grind for a few days.

I've been thinking more and more about what the next few years will bring. I've managed to save up about $24,000 in my house fund (which doesn't include my Emergency fund). It's really surreal to think that I could be a home owner in the next few years, but I'm not sure it would make me any happier than I am right now, and just add more stress to my life. I've started to do some research on the matter just so I am comfortable with the process and know what to expect.


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