A Sloppy Start

January is my third consecutive atypical month, and financially things are looking messy. I’m writing this post to come up with a way to better meet my savings goals and get myself back on track. Just a quick month-by-month overview of how I got in this situation:

  • November – purchased a condo which resulted in expenses associated with buying a place, moving and settling in.
  • December – still had expenses associated with settling in and purchased holiday gifts.
  • January – went on vacation and I’m still getting settled.

I’ve basically spent too much and my credit card balances are higher than I’d like. My anticipated income for the remainder of the month is $500 (this is a crude estimate). I’ll be roughly $500 short of paying off all my credit cards…oops.

Updates/Check-in Frequency

I need to start doing weekly updates/check-ins to make sure I am on track. I may not do this formally on my blog, but I do need to assess my financial standing more frequently than once a month.

Saving and Checking Accounts

I have the following savings/checking accounts to meet my various savings goals. My next net worth update will reflect these accounts:

  1. Regular Checking Account – $500/month towards monthly expenses
  2. Amazon Gift Card Balance – $100/month for Amazon purchases
  3. Emergency Fund – $50-$100/month for emergency
  4. Irregular Bills (sink fund) – $55/month towards non-monthly bills
  5. Short-Term Savings – $75/month
    • Fund #1: local transportation sink fund (ex. ubers, taxis)
    • Fund #2: Eating out sink fund
    • Fund #3:  Home Maintenance sink fund (bulbs, batteries, minor improvements)
    • Fund #4: Travel fund ($500 est.)
  6. Long-Term Savings – $50/month
    • Goal #1: laptop ($1,000 est.)
    • Goal #2: Hardwood Floors ($2,000 est)
  7. Mortgage Holding- $X,XXX/month towards mortgage payment

One new accounting strategy is to keep track of my Amazon Gift Card Balance. I need to start treating this as another asset due to the frequency in which I use Amazon and my desire to earn credit card reward points. If I treat my Amazon Gift Card Balance like all other accounts, I should be less inclined to blow through the balance as I usually do.

Note that I still am not disclosing how much my mortgage payments are. But I do set aside my mortgage payments in a separate account. It helps me mentally avoid considering the use of a sizable sum of money designated for my mortgage when making financial decisions.

Credit Card Repayment Plan

My current credit card balances and my repayment plan is detailed below:

  • Credit Cards #1-4: $400
    • Will pay off with next paycheck
  • Credit Card 5: $600
    • Lowest priority: 0% APR with incoming $200 reward
    • January Payment: $150 ($100 from income, $50 from “Irregular Bills” Sink Fund )
    • February – November Payments $40/month (tentative)
      • February Additional Payment: $40 (for prepaid internet)
      • March Additional Payment: $40 (for prepaid internet)

Credit Card Rewards

  1. My 0% APR credit card (Credit Card #5) has a $200 reward incoming for spending $1,000 in the first 3 months. I opened this card to insure my new phone at no (explicit) cost.
  2. I am starting off the year with 30,703 Chase Sapphire Reward Points.
    • I need to earn ~8,333 points (or $125 travel credit equivalent) to break even. Though in actuality, additional card perks, such as airport lounge access, lower the break even point.
  3. Chase Freedom – 5% categories include phone/internet, gas stations, & Android pay. I should purchase and possibly prepay for:
    • Groceries
    • Gift cards (Amazon, Grocery stores etc)
    • Internet (prepay in March)
  4. I need to do better when using my Chase Cards in order to increase the points I earn. For example, I should:
    • Use Chase Freedom only on 5% categories
    • Use Chase Sapphire on dining and travel expenses
    • Use Chase Freedom Unlimited on all other purchases



A Year in Review | 2017 (& 2018 Goals)

Yes, this post is finally up and happening. Here’s my end-of-year review for 2017! It was a whirlwind of a year for sure. In the financial sense everything went smoothly. My net worth increased by over 75% in 12 months. I bought a condo. And I met all my financial goals.

Here’s an overview of my holdings at the beginning and end of the year:

Liquid Assets Jan-17 Dec-17 $ Change
Cash & Savings $1,200 $450 ($750)
Emergency Fund  $2501 $3,405  +$904
Short Term Savings $75 $525  +$450
Long Term Savings $43 $0  ($43)
Illiquid Assets Jan-17 Feb-17 $ Change
Brokerage  – $697  +$697
Savings Bonds $500 $2,135  +$1,635
Home Equity $11,850  +$11,850
Retirement Accounts $25,950 $46,459  +$20,509
Liabilities Jan-17 Feb-17 $ Change
Medical ($100) ($0) +$100
Furniture Loan ($1,792) ($1,792)
401K Loan ($10,748) ($10,748)
Net Worth $30,169 $52,981 +$22,812
% Change +75.6%

Buying a condo had a huge impact on my finances. I now have a mortgage and two loans. I have decided not to disclose my mortgage amount. Instead I’ll be sharing my home equity each month as I track my net worth. My liquid assets were somewhat depleted due to the condo acquisition, but the financial impacts would have been worse had I bought the condo before the end of the year.

And as previously mentioned, despite buying a condo, I was able to meet all of the following financial goals:

Fund/Goal Goal Progress Initial Goal Percent
401K $18,000 $18,000 100%
Roth IRA $5,550 $5,500 100%
Emergency Fund $5,500 $5,500 100%
Vacation $1,125 $1,000 112.5%

My spending wasn’t terrible either but I did tend to go over budget most months. If I exclude the costs towards homeownership, my 2017 spending breaks down to be:

  • 56% – Rent
  • 23% – Everything Else
  • 10% – Food
  • 7% – Medical
  • 4% – Fixed Expenses

If I Include home ownership expenditures:

  • 39% – Homeownership
  • 34% – Rent
  • 14% – Everything Else
  • 6% – Food
  • 4% – Medical
  • 3% – Fixed Expenses

Most likely in 2018, I should start tracking the “Everything Else” category in greater detail so I can attempt to trim the fat off of unnecessary expenses.

I know I don’t talk much about the non-financial aspects of my life, but one of the main reasons why I seek financial independence/stability is because I live with a chronic illness. The year 2017 wasn’t a great year for my health, and so far 2018 has not been much better. I do hope 2018 changes for the better and is the year I can find a viable treatment option. I’ll take a cure too. Without proper control of my illness, my life will eventually get very complicated and even more expensive.

Outside of my personal health, everyone in my immediate family had very serious health problems too. Thankfully, everyone seems to be fully recovered and I hope they stay in good health throughout 2018 and beyond!

Financial Goals for 2018:

  • Contribute 15% of income towards retirement (20% stretch goal)
  • Pay $2,500 towards 401K Loan ($3,000 stretch goal)
  • Pay $1,250 towards furniture loan ($1,900 stretch goal)
  • Contribute $1,000 to emergency fund ($1,500 stretch goal).
  • Increase net worth by $20k, barring a market downturn ($25k stretch).
  • Start saving towards home improvement projects (hard wood floors, new furniture etc).

******EDITED TO ADD******

I would like to note that I am starting off the year with 30,703 Chase Sapphire Reward Points. I need to earn ~10,000 points (or $150 travel credit equivalent) to break even on my travel credit card.  Though, I also do use perks such as airport lounge access which more than make up for the cost of the card.

Nov/Dec 2017 Spending

Okay so I’m trying to get caught up on some details that I left out in the November and December net worth updates. Neither month went as well as I would have liked due to the condo purchase and the expenses that come with a new place.

November Spend

Category Budgeted Actual Remaining
Rent $1,050 $1,045 $5 under
Fixed Expenses $125 $122 $3 under
Food $200 $337 $137 over
Moving Exp. $600 $600 $0 over
Everything Else $250 $924 $674 over
Total  $2,225  $3,228 $803 over

In November I was $803 over budget.  I ate out a little more than usual and I made quite a few purchases for my new place. I also used Uber frequently to run errands and purchased Christmas gifts.

December Spend

Category Budgeted Actual Remaining
Mortgage $- $- $0 over
Fixed Expenses $125 $315 $190 over
Food $200 $183 $17 under
Medical $- $52 $-
Everything Else $250 $702 $352 over
Total  $575 $1,134 $559 over

In December I was $559 over budget for many of the same reasons. Thankfully my first mortgage payment wasn’t due until January 1.

I spent a week with my parents which helped cut down on food costs.

I did purchase a new phone and also applied for a new credit card to insure said phone (some credit cards come with this free benefit). In order to get the $200 bonus reward from the new credit card, I need to spend $1,000 in 3 months, so I went ahead and prepaid my internet bill and Netflix. This resulted in high spending in the “Fixed Expense” category.

Under the medical category, I bought new glasses for $52.

I’m satisfied with the amount of additional expenses that came with moving and settling into a new place. I only made one major purchase which was a leather sofa.  I did take out a 0% loan for the purchase because of the interest rate. I’m hoping leather will allow me to sit on this sofa without breaking out in hives. The sofa will arrive in February.

For 2018 I’ll need to tweak my budget to account for additional fixed expenses (an electricity bill and the furniture loan). I also need to come up with financial goals.

I’m still on vacation but hopefully I can churn out a couple more posts when I return home next week.

Net Worth Update – December 2017

I know I should have posted this earlier, but I’ve been busy with the holidays and now I’m on vacation. December was another irregular month for me mostly due to moving into my new place. The good thing is my first mortgage payment wasn’t due until January 1.  So I was able to save quite a bit anyway. I’m hoping next month goes by a little smoother.

Here is a breakdown of my assets and liabilities. I aggregated my retirement accounts as well as my brokerage accounts for simplicity.

Liquid Assets Start End Change
Cash & Checking $1,000 $450  ($550)
Brokerage Accts $660 $697  +$37
Emergency Fund $3,400 $3,405  +$5
Short Term Savings $50 $525  $475
Illiquid Assets Start End Change
Savings Bonds $2,130 $2,135  +$5
IRA & 401K $42,920 $46,459  +$3,668
Liabilities Start End Change
Furniture Loan  ($1,898) ($1,792) +$106
401K Loan ($10,799)  ($10,748)  +$51
Equity Start End Change
Home Equity 11,850 $11,850 +$0
Net Worth $49,313 $52,981 +$3,668
% Change +7.4%

I’ll have to post my December spending later. I know I’ve been slacking since November! Hopefully I can also do a year in review before February!

Net Worth Update – November 2017

I’m a home owner! And I LOVE my new place. There are a few minor (cosmetic) changes I am looking to make in the future, but overall the place doesn’t require any updating. I’m getting used to a new neighborhood and I like being close to so many great restaurants!

I’ve decided not to disclose my loan amount or monthly mortgage payments,  instead I’ll be listing my equity using Zillow as the basis for my home value estimate

One interesting thing I noticed about my condo is that the previous owner understated the square footage in the listing. That alone adds additional value to my home. Zillow isn’t taking the extra square footage into account.

The first and only previous owner lived in my unit for only a year before being relocated by his company. That means everything is only a year old.   I really think I got a good deal. When I bought this place there was a considerably smaller unit on the market in the same building. I was actually deciding between my current place and the smaller one before I placed my offer. The smaller unit sold last week for more than my current place. I think this place could have easily sold for $15k more than what I bought it for.

Liquid Assets Start End Change
Cash & Checking $1,000 $1,000  ($0)
Brokerage #1 $166 $168  +$2
Emergency Fund $3,395 $3,400  +$5
Short Term Savings $1,900 $50  ($1,850)
Illiquid Assets Start End Change
Brokerage $482  $490 +$10
Savings Bonds $2,125 $2,130  +$5
Retirement Start End Change
Roth IRA $18,952 $19,545  +$493
Traditional 401K $20,359  $23,375 +$3,016
Furniture Loan ($1,898) ($1,898)
Liabilities Start End Change
401K Loan ($10,860) ($10,799)  +$51
Equity Start End Change
Home Equity $11,850 +$11,850
Net Worth $37,519 $49,203 +$11,614
% Change +31%

I’ll post my November spending later.

Net Worth Update – October 2017

I’m buying a condo!! So my net worth is way down this month. I’m not going to write a long explanation defending my decision, but it’s definitely the right decision for me. I did have to borrow from my 401K though.

Ok! So where do I stand financially in all of this?

Liquid Assets Start End Change
Cash & Checking $1,000 $1,000  ($0)
Brokerage #1 $161 $166  +$5
Emergency Fund $3,390 $3,395  +$5
Short Term Savings $3,000 $1,900  ($1,100)
Illiquid Assets Start End Change
Brokerage $472  $482 +$10
Savings Bonds $2,120 $2,125  +$5
Retirement Start End Change
Roth IRA $18,249 $18,952  +$703
Traditional 401K $29,477  $20,359 ($9,118)
Brokerage $472  $482 +$10
Liabilities Start End Change
401K Loan $0 ($10,860)  ($10,860)
Net Worth $57,869 $37,519 ($20,350)
% Change – 35%

So there you have it, I’ve lost over a third in net worth! This is mostly because I’m not a condo owner yet.

I’ll have a little bit of equity by my next Net Worth post. Had I included the equity, my net worth would have decreased by $8,350, or 14.4%, instead. I am treating the 401K withdrawal as a loan. And.  for every $1 I repay, my net worth will increase by $2. I plan to pay it off faster than the payment plan.

The great thing about buying in November is that my first mortgage payment isn’t due until January. This will allow me to max out my 401K for the new year AND buy a condo! I won’t be trying to max out in 2018.

I spent a lot in October. Due to the condo situation, I didn’t really follow a budget. I’m going to list my spending anyways against an ideal budget, for the record.

Category Budgeted Actual Remaining
Rent $1,650 $1,650 $0 over
Fixed Expenses $125 $119 $6 under
Condos $- $6,225  $-
Food $200 $274 $74 over
Travel $90 $90 $0 over
Everything Else $250 $566 $316 over
Total  $2,315  $2,699 $384 over

Rent – I paid the usual too much

Fixed Expenses – I had to increase this budgeted category due to my internet costs increasing. There is a monopoly in my internet provider market so I can’t negotiate.

Condo – These are expenses directly related to getting my condo.

Food – I went over but not as much as I was expecting.  I’ve been eating out more due to the move that’s upcoming.

Travel – this is for my upcoming vacation. It’s the Airbnb costs for 7 days in South America.

Everything else – I went over budget. This is mostly due to the move. I also purchased an expensive gadget. The gadget will make my life easier and I’d been thinking about it for a while.

My (very) tentative goals next year will be to:

  • Max Roth
  • Save 15% of income towards retirement
  • Keep monthly recurring variable expenses to $500/month (Electricity + Cellphone + Internet + Food + Everything Else).
  • Budget better for periodic expenses.


Net Worth Update – September 2017

I’m going to try to make this short and sweet since September didn’t bring any surprises. My final account balances at the end of the month:

Liquid Assets Aug-17 Sept-17 Change
Cash & Checking $1,158 $1,000  ($158)
Brokerage #1 $150 $161  +$11
Emergency Fund $3,385 $3,390  +$5
Short Term Savings $2,000 $3,000  +$1,000
Vanguard Fund  $500 $0 ($500)
Illiquid Assets Aug-17 Sept-17 Change
Brokerage $466  $472 +$6
Savings Bonds $2,085 $2,120  +$35
Retirement Aug-17 Sept-17 Change
Roth IRA $17,657 $18,249  +$592
Traditional 401K $27,423  $29,477 +$2,054
Net Worth $54,824 $57,869 +$3,045
% Change 5.6%

The biggest change is that I’ve merged some funds into my short term savings to prepare to buy a condo.

I’m not going to update my goal progression this month because I’m lazy and don’t feel like it.

September Budget

Category Budgeted Actual Remaining
Rent $1,650 $1,650 $0 over
Fixed Expenses $100 $90 $10 under
Medical $- $275
Food $200 $146 $54 under
Travel $250 $270 $20 over
Everything Else $250 $315 $65 over
Total  $2,450  $2,471 $21 over

My food budget is low because I was on business travel for half of the month. I don’t include my reimbursed business expenses.

I broke out my travel expenses for once as I prepare for my next vacation. My plane tickets were roughly $200. The other $70 can be explained by things like Uber.

Overall I was $21 over budget.

Why I Will Be Borrowing From My 401K to Pay For My First Home

It wasn’t easy deciding to go against popular advice of not borrowing from my 401K now that I’m condo hunting. When it came to saving for the down payment and closing costs I weighed three saving strategies:

  1. Saving aggressively in liquid savings accounts, only contributing the minimum to my 401K to receive my employer match.
  2. Continuing to max out my 401K and then borrow from it
  3. Saving the notoriously recommended 15% of my income in my 401K and the rest in liquid savings.

I did a comparison of the three strategies and quickly realized borrowing from my 401K is most advantageous.
Strategy 2

Strategy 1 Strategy 2
(1) Time to save 1.5 years 0 years
(2) Amount to Save* $27,500 $25,000
(3) Time to repay self 0 years 5-10 years**
(4) Foregone 401K contributions $21,000 $0
(5) Lost interest income× $140,000 $30,000××
* – Strategy 1 requires more savings due to anticipated increases in housing prices
 ** – 10 years is the worst case scenario. I actually anticipate less than 5 years due to salary increases
 ×- this is an extremely crude estimate that assumes a 7% market return and no market fluctuations over 30 years
 ××- For every additional $1,000 saved towards a condo outside of my (maxed out) 401k, I’ll save ~$2,200 in potential interest

The main risk associated with Strategy 2 would be the need to repay the 401K loan if I were to lose or change jobs else I’ll have considerable taxes and fines. I do not anticipate either but I have emergency funds in place otherwise.

Strategy 3 would obviously have pros and cons that fall somewhere between the first two strategies.

After being on the housing market for about a month I’ve learned it’s brutal out there! I may not find a place for a while since those with cash or sizable down payments scoop up places 1-2 days after listing. I’ve placed one offer on a condo and bid equally to an all cash offer so mine was not accepted.

Net Worth Update – August 2017

I’m continuing my condo hunt but am also still aiming to max out my retirement accounts this year. I’ll only be placing an offer on the perfect place.  I do want to increase my cash on hand though. So, in August, I contributed less to my Roth and 401k than in previous months and plan to do the same in September. I’ll increase my contributions eventually and slowly tighten my monthly spend.

Here is where my accounts stand at the end of August:

Liquid Assets Jul-17 Aug-17 Change
Cash & Checking $1,000 $1,158  +$158
Brokerage #1 $0 $150  +$150
Emergency Fund $3,380 $3,385  +$5
Short Term Savings $1,125 $2,000  +$875
Vanguard Fund  $500 $500 +$0
Illiquid Assets Jul-17 Aug-17 Change
Brokerage $460  $466 +$6
Savings Bonds $2,060 $2,085  +$25
Retirement Jul-17 Aug-17 Change
Roth IRA $17,367 $17,657  +$290
Traditional 401K $26,171  $27,423 +$1,252
Net Worth $52,063 $54,824 +$2,761
% Change 5.3%

I’m surprised my net worth increased as much as it did. I usually aim for an increase of $2,500 which I exceeded even though a lot less of my money was placed in my pre-tax 401K account. I even opened a brokerage account with some extra income I received this month.

I’m now a little behind on my goals for 2017 since I’ve decided to adjust the timeline, but I’ll get there unless I buy a condo, I have fully funded my next vacation though:

Fund/Goal Contrib. Total  Goal Progress
401K $886 $11,552 $18,000 64.2%
Roth IRA $160 $4,160 $5,500 75.6%
Emergency Fund $30 $5,470 $5,500 99.5%
$0 $500 $3,000 16.7%
Vacation* $—- $1,125 $1,000 112.5%


August Budget

You saw the play by play of my August spending. I was pleased with my spending habits. I had an emergency towards the end which required me to buy last minute plane tickets in order to attend a funeral halfway across the country. Luckily I have a travel credit card with plenty of reward points so the ticket purchase wasn’t that expensive.  I didn’t have to dip into my emergency fund and it didn’t throw off my budget.

Category Budgeted Actual Remaining
Rent $1,650 $1,652 $2 over
Fixed Expenses $100 $91 $9 under
Medical $- $74
Food $200 $91 $109 under
Everything Else $250 $265 $15 over
Total  $2,200  $2,099 $101 under

Not included in the above is reimbursed (business) food spending. I had a business trip early in the month which explains the low food expenditure.

The daily budget approach seemed to be really helpful. I was $100 under budget, at the end of the month.  Things I would like to focus on in September include:

  1. Limiting online purchases to two days a week
    • I’m not sure I actively attempted to do this in August. I’m aiming for Mondays and Thursdays.
  2. Keeping track of daily expenses.
    • I’ll try to keep a manual diary from now on utilizing the daily $15/day budget. I’d like to decrease this to $10/day eventually.
  3. Limiting nonsocial eating.
    • I saw this suggestion elsewhere in the blogosphere. It essentially limits eating alone.  This means little to no starbucks, takeout, food deliveries, etc. I don’t do much of this anyways, but I would have saved $50 had I followed this rule in August.

August Spending – Week 4 & 5

Spending Overview:

I’m keeping track of my spending to hopefully break the habit of going over budget. This daily budget approach actually ended up going very well! It is definitely what I needed to get out of the monthly overspend habit. The weekly spend:

Shopping: $11
Food: $51
Travel: $33

I’ll post my monthly totals in my August net worth post, which will be coming shortly. My spending habits broken down by days:

Day 1-6

Beginning Balance: $90
Spending: $0
Ending Balance: $90

I did really well with no spending for 6 days in a row! My longest streak yet!

Day 7

Beginning Balance: $105
Spending: $33
Ending Balance: $72

I spent $33 oan very last minute plane tickets. Thank goodness for credit card reward points that allowed me to attend a funeral.

Day 8

Beginning Balance: $87
Spending: $24
Ending Balance: $63

I went out to eat ($13) and made a purchase on Target.com ($11)

Day 9

Beginning Balance: $78
Spending: $38
Ending Balance: $40

I stocked up on some snacks for my trip.

Day 10

Beginning Balance: $55
Spending: $0
Ending Balance: $55

The purchases I made on this day ended up showing up on my Credit cards as a September 1st purchase. My laptop that is in the repair shop has not been returned so the $75 was not paid out either. I was $55 under budget for the month of August!! The daily budget approach worked. I’ll try to keep this up but most likely not on my blog.