After December I generally find Januarys easy to handle, at least in the financial sense. This January was no exception. This is where my accounts stand:
| Liquid Assets | Dec-16 | Jan-17 | $ Change |
|---|---|---|---|
| Cash & Savings | $832 | $1,200 | +$368 |
| Emergency Fund | $1,500 | $2,501 | +$1,001 |
| Short Term Savings | $0 | $75 | +$75 |
| Long-Term Savings | $0 | $43 | +$43 |
| Other | $290 | $303 | +$13 |
| Illiquid Assets | Dec-16 | Jan-17 | $ Change |
| Savings Bonds | $0 | $500 | +$500 |
| Roth IRA | $11,756 | $12,824 | +$1,068 |
| Traditional 401K | $11,521- | $13,126 | +$1,605 |
| Liabilities | Dec-16 | Jan-16 | $ Change |
| Credit Cards | $0 | $0 | +$0 |
| Medical | ($175) | ($100) | +$75 |
| Net Worth | $25,724 | $30,472 | +$4,748 |
| % Change | +18.5% | ||
Liquid Assets:
According to my Goal post , if everything went as planned in January, my liquid assets should have increased by $1,950. Collectively, my Liquid Assets increased by exactly $1,500 – $450 below target. The main reason why I missed this target is due to transfers into illiquid savings. I contributed a bit extra to my Roth IRA and I decided to turn towards i-savings bonds. When these are taken into account I actually saved and invested $2,165.
One change to my financial plan is the fact that I opened accounts for my short and long term savings goals. I will make a post on what these goals are soon. My long term savings will eventually be transferred to a brokerage account.
Illiquid Assets:
The second change in my financial plan is the slow movement of my emergency fund over to i-savings bonds. I haven’t quite figured out my contribution schedule for this yet since I won’t be able to touch these funds for 12 months (this is why they are listed as illiquid right now). But the interest rates are better than banking. I’ll most likely purchase a $500 savings bond with my tax returns.
My retirement accounts increased nicely. As stated in an earlier post, the first two 401K contributions were small the third was $738. Subsequent contributions will continue to be $738 to reach $18,000 by the end of the year.
Liabilities:
I decided not to carry over any credit card debt this month and I would like to get into that habit. I still have medical bills to pay though.
Budget
As I said previously, January tends to be good on the budget. I did change my budget slightly from the beginning of the month. Namely, I increased my “Everything Else” expenses by $300 due to receiving $100 as a late Christmas present and a $200 banking reward.
| Category | Budgeted | Actual | Remaining |
|---|---|---|---|
| Rent | $1,650 | $1,650 | $0 left |
| Fixed Expenses | $100 | $89 | $11 left |
| Food | $200 | $192 | $8 left |
| Medical | – | $440 | ∞ |
| Travel | $77 | $77 | $0 left |
| Everything Else* | $373 | $423 | $50 over |
| Total | $2,400 | $2,431 | $31 over |
I ended up spending $100 on an Amazon prime membership, and $75 on a toothbrush. I’m hoping the toothbrush saves on some of my dental bills. I gave $25 to a friend and don’t expect it back. I spent the rest here and there on various things, such as booking a hostel for an upcoming trip .
I don’t budget for medical expenses because my health is too important to place an upper limit on my spending.I spent $440 on medical expenses this month but I don’t anticipate that this spending category will affect my net worth for a while due to a well padded FSA and a health based rewards card provided by my insurance company. If I remember correctly it was around April when I depleted my FSA and rewards card last year. My health is much better this year, so I’m hoping they’ll last the entire year
Taxes
I finished up my tax returns this month and it will be larger than anticipated. I should be receiving the federal portion on February 5. I am not sure how long it will take to receive the state portion.
Here is how I plan to allocate my return:
- $500 in Emergency Fund
- $500 in i-Savings Bonds
- $100 in healthcare expenses
- $70 Fun Money
The remainder will go towards my cash buffer in my primary checking account
Conclusions & Next Month
This was an incredible month. I stuck to my game plan and was able to save $215 more than I originally anticipated. Going back to my goal post, with taxes coming up next month, my goal was to increase my liquid assets by $1,125. I am going to roll over the extra savings from this month so I need to increase my liquid assets and savings bond category by $910 to stay on track.
Right now I have $4,622 in liquid assets and savings bonds. My goals now are:
- February Goal: $5500
- February Stretch: $5750
- March Goal: $5750
- March Stretch: $6000
A Tale of Finances 
Excellent. Way to go!
What tools or apps are you using to budget and track your net worth?
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I’m using Quicken 2017 for Mac. I like how the budgeting and net worth aspects are pretty much identical to Mint, but there are some advanced features, like being able to project the cash flow and better track investments.
I recently decided not to use any apps or tools that sync to my bank and/or investment accounts due to security concerns.
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The interest rates on I bonds is really crappy right now. In General I like them, but for now you could put your money to a lot better use. I recently cashed in 2 years worth of mine b/c they were not making anything.
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The composite interest rate for I bonds is 2.76% right now, so I wouldn’t say that’s low. But over the past 5 years it’s fallen below 1% on only two occasions and certainly averaged over 1%. When deciding whether or not to purchase ibonds I looked at the historical average and used the threshold of 1% since that’s the going interest rate for high yield savings accounts. Since the ibonds are my emergency fund, I figured it would be nice for my emergency fund to keep up with inflation and have no risk. Savings accounts yields have not historically exceeded the yields of ibonds, on average, in recent years. Hence my decision.
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