I Can't Pass Up a Good Sale

I lost $337 in my 401k last month.  That really isn’t a lot of money.  Especially since I only have a pitiful $4,000 in my 401k account.  Some unwise people are taking their money out of the stocks and putting them into bonds and cash.  I don’t know much about the stock market so I have to believe the majority of pf bloggers and my 401k administrator  when they say as long as  I have a diversified asset allocation then I should stay where I am.  I followed the 401k administrator’s pie chart on asset allocation for my age and I’m holding with one exception.  Since the price of stock has fallen, technically they’re on sale.  I can’t pass up a good sale so I’ve increased my contribution by $10.   That’s kinda pitiful.   I think I’ll add another $15 to that and see if I notice the difference in my paycheck.  It’s not a lot but it’ll do until I get a good efund going on.

I'm Back on the Saddle

Did I ever tell you that I was a thesis away from finishing my master’s degree?  I don’t think I have.  Well, I am.  I finished all the required courses to get a masters in creative writing in 2006 and stopped short of the thesis.  Well, God is watching out for me because studying for this Engineering Exam has really let me see how much I’d whether be doing something else for a living.  So, I’ve been working diligently on my novel/thesis while studying for the exam. 

I went up to the school today, reapplied for admission, and talked to the graduate advisor.  She was really helpful and encouraging, which helped because I was so nervous.  Writing a novel is so different from calculating a math problem.  I can do it.  I already know it.  Now I just gotta figure out what I want to do after this.  Go for a MFA at the same school or a PHD at OU.  Either way, I gotta get something published before I have enough weight to get accepted to either program. 

Tentative Plan:

Complete Master’s in Spring or Fall of 2009

Take a year off (2010) from school and work diligently on novel #2 and short story submissions

Fall 2011 apply for either PHD at OU or MFA at UCO.  Work on Novel #3

What suck about this is the money I gotta fork over for these dang classes!  6 credit hours is almost $1,200.

2008 Financial Goals-Midyear Review

Below is the list I made in October 2007.  I started early.

2008 Financial Goals

1.  credit card debt free by July 2008.  Achieved February

2.  $2,500 Cash Emergency Fund by March 2008.  Achieved, loaned the money out and now I’m at $1,400.

3.  Start 529 plan for my kids. Done! Valued at $214

4.  $2,500 into Roth IRA by December 2008.  Currently at $800

5.  Debt to Income Ratio of 3.1 by  December 2008. Currently at 3.25.  I may need to adjust this

6. Increase net worth by 16,000.  Almost there.  It’s increased by $15,000 so far

 

Plan

Can’t have goals without a plan on how to achieve them, right?  So here is the plan.

1.  credit card debt

It is all gone!

2.  Cash Emergency Fund

I adjusted this goal to be $3,600 by December 31, 2008.  I was almost there and then I started loaning people money.  TSK, Tsk.  Now I’m only at $1,400.  I have $2,200 to go.  I have to contribute $440 per month to achieve my goal. I can do it, hopefully I should get most of the money I loaned out before the end of the year.

3.  College Savings

Done!

4. $2,500 into Roth IRA for 2008 ($209/month)

I’ve only been contributing about $100 when I do contribute, which is fine.  Currently the ROTH is at $860. 

5. Debt to Income Ratio of 1.7 (my goal would be from 3.5 to 3.1) by the end of 2008

I recently read an article which said the debt to income ratio for a thirty year old should only be 1.7 times her income.  My debt to income ratio is 3.5.  Thus, I owe 3 and half times my yearly salary.  I’ve reworked my debt payoff plan since then and I’ll be lucky if I hit 3.20.  Right now I’m at 2.25 and I seem to loose 0.01 every month.

6. Increase net worth by $16,000 by the end of December

My current networth is -32,000, largely due to a student loan debt of $56,000.  In order to achieve this goal I will pay off $3,000 of my HELOC since it has a higher interest than my mortgage and student loans.  Right now my net worth is around -$17,000.  That is an increase of $15,000, mostly do to my home’s value stabilizing, paying off my cc debt, purchasing a rental home, and contributing to a savings acct.  I’m $1,000 away from my net worth goal.  WooHoo!

Conclusion

I plugged these numbers into my budget and it looks doable.  In fact, it looks easy.  If I stick to this plan I can actually have a positive networth in two years (Happy dance!!!)

I always get happy and lose sight of the long term goals when ever I gain short term success. But this time there will be no back sliding, no money lending to family members, and no crazy Christmas and Birthday gifts/parties. I will be well on my way to having a positive neworth by the end of next year!   

Hmm, I have loaned money to family members, tsk, tsk. I have definitely learned my lesson.  

I haven’t done any crazy Christmas or birthday parties.  Good!

I still think I’m on track to have a positive net worth by the end of 2009    

I am in danger of not meeting my EFund goal.  I need to work harder on this.

July Networth

Credit Score	708	708
Assets	June	July		Difference	% change
Checking+Savings	$4,000.00	$2,900.00		-$1,100.00	-16.67%
Home	$125,000.00	$125,000.00		$0.00	0.00%
Rental	$72,348.00	$72,348.00		$0.00	0.00%
401k	$4,312.20	$3,974.51		-$337.69	-8.68%
529	$200.00	$210.00		$10.00	5.92%
Roth	$846.00	$856.00		$10.00	1.99%
Misc (Car, etc)	$7,000.00	$7,000.00		$0.00	0.00%
Total Assets	$213,706.20	$212,288.51		-$1,417.69	-0.66%
Liabilities	June	July		Difference	% change
CC	$5.41	$5.41		$0.00	0.00%
Home	$98,100.00	$98,016.00		-$200.00	-0.20%
Rental	$66,700.00	$66,649.75		-$52.00	-0.08%
HELOC	$9,200.00	$9,150.00		-$70.00	-0.75%
Student Loans	$54,478.53	$54,450.13		$0.00	0.00%
Total Liabilities	$228,483.94	$228,271.29		-$416.59	-0.18%
Net Worth	-$14,777.74	-$15,982.78		-$1,001.10	-7.47%

My net worth is almost -16,000.  This is the second straight month that my net worth has decreased.  Here are the reasons:

1)       I’ve loaned my sisters about $2,000 over the past two months.  Where did I get that money from?  My emergency fund.  Tsk, tsk.  Netiher one has paid me back.  So, I’ll never do that again.  EVER!  I’m such a softie. 

2)       I haven’t been contributing to my emergency fund.  In April my savings rate was 10.26%.  My July savings rate is 1.26%.  Pretty pififul, huh?

a.       Reasons for pitiful savings July: I went to South Padre Island, Texas.  It was so worth it.

b.       Reasons for pitiful savings June: worked on building a patio.  I didn’t know what I was doing.  Spent way more money than was budgeted and I’m still gonna have to bring someone out to fix it.  Money down the drain.  What did I learn?  Get an estimate, save, and have a professional do it.  ::Sigh::

3)       Checking/Savings: I would usually have a higher amount in my checking if I didn’t wait so long to post my net worth.  I am going to be more honest in reporting my checking acct. balance to encourage me to post my net worth earlier in the month.

Upcoming: I need to do an update of my goals and I’ve been thinking of some long term goals.