February 29, 2008

February 2008 Income Statement

Wow, we went over budget in almost ever category this month (click on spreadsheet below). Income taxes, vaccines for our dog, food/drinks for a party, gifts, carpet cleaning, replacing our entertainment stand, eating out for our birthdays and Valentine's Day. You name it we did it.

Thankfully, we had some extra income this month. My wife earned a $59.50 commission, I cashed out $1,239.53 of my company vacation, we earned a $25 HSBC credit card reward, and our neighbor paid us $96 for 6 months of internet.

Next month, in addition to our standard monthly income, my wife may earn an extra ~$1,000 commission from her company. This would help us fund our Roth IRAs. Expensewise, we have a large property tax bill due that will ding our savings pretty good.

February 27, 2008

February 2008 Net Worth Update (+$3,014.03)

February was a very good net worth increase month. Our net worth increased $3,014.03 from January to $27,693.81 (click on spreadsheet below). We are currently at 57.94% of our 2008 net worth goal of $47,800.

What worked this month?
Our retirement accounts (401k and Roth IRAs) went up by a total of $1,579.60! Thanks in part to our $400 contribution to our Roth IRA's. We also continued our 2nd mortgage accelerated payment plan by cashing out 6 days of my company vacation time for $1,239.53 and paying that directly to our 2nd mortgage principle.

What did not work this month?
We had to dip into our savings account to pay our Federal and State income taxes. We had planned for this so, in reality, I’m not sure it should fall into the category “what didn’t work”.

What's coming next month?
My wife has been doing great at her new job and may get a $1,000 commission next month. We hope to use this money to fund our Roth IRAs a bit more. We also have our property taxes due next month. Thankfully, our property taxes will be less than expected since we got our property value reassessed.

February 21, 2008

Why Pay Down The 2nd?

We recently had a friend ask us why we are paying down our condos 2nd mortgage at an accelerated rate. I think it makes sense for a few good reasons:

1. It is our highest interest rate debt at 8.55%.
2. Once we pay it off we can:

a. Stay in our condo & have an additional $411.33/month to put towards saving for a house.
b. Buy a house and pretty much break even on renting out our condo.
c. Sell our condo, if necessary, and hopefully not be upside down.
3. We don't have kids yet and can afford to pay extra to our mortgage.

February 19, 2008

Business Trip Miles

I just returned from a business trip to the East Coast, earning me another 9,941 Delta SkyMiles. Since I am Gold Medallion level, Delta doubles my miles each flight, making these longer trips a nice way to gain SkyMiles.

My total Delta SkyMiles balance is now 72,139 - just about time to start thinking about when we are going to use these for a vacation.

February 13, 2008

Cashing In On Vacation Time

To help us continue our accelerated 2nd mortgage payments progress, I cashed out 6 days of my company vacation time for $1,239.53.

Since I have been with my company seven years, I receive 19 paid days off a year. This is more time that I really need. Being able to cash out some of my vacation time is a nice perk.

My 4.5% raise last month brought my salary to $69,030/annually. By cashing in the 6 days of vacation I essentially gave myself an additional ~1.8% raise for the year, bringing my income to $70,269.53 this year.

February 10, 2008

2007 Income Taxes

We completed our 2007 taxes this weekend. This was our 2nd year using Turbo Tax and it was once again very helpful. My wife is really the one that completes most of the forms, I simply supply some numbers from our records and help with proofreading.

Thanks to multiple itemized deductions, include $22K in mortgage interest, my wife’s business expenses, and charitable donations, we only owed $387 to federal and $307 to state. That’s pretty close to hitting the mark of zero, neither owing a ton of money or giving the government an interest free loan until you get your refund.

It feels good to have our taxes done, even if we do owe a bit. We’ve scheduled the federal and state payments to be transferred from our checking account in a couple of weeks.

February 8, 2008

Chasing Savings Account Rates

When we first opened our Emigrant Direct savings account ~1 year ago, the APY was 5.15%. Since then, the APY has been reduced multiple times, and is currently at 3.60%. Emigrant Direct has worked well for us, but we've been disappointed with how much the APY has dropped over the year.

Today, my wife saw an E*TRADE ad on television mentioning their 4.40% APY savings account. After checking out their website, we decided to apply. Like Emigrant Direct, E*TRADE does not have minimums balances or account fees and is FDIC-insured up to $100,000.

The new E*TRADE account will be opened within a couple of days, at which time we will begin moving our $6,051.84 Emigrant Direct balance to the E*TRADE account. We understand the futility of switching banks everytime rates drop a bit, however, we feel it's worth it to go from 3.60% APY to 4.40% APY.

February 1, 2008

January 2008 Income Statement

We did a good job keeping our expenses below our income in January (click on spreadsheet below). If you subtract out our extra $691.00 payment we made to our 2nd mortgage principle, we were more or less within our monthly budget.

I received a 4.5% raise this month and 3 paychecks (1 more than usual). My wife received a $348.98 commission check, but her standard paycheck was slightly reduced because she transitioned from being a 1099 with no taxes taken out of her check, to an employee with taxes automatically deducted. This is good because it saves us the hassle of having to put money aside for income taxes. In other income news, we received a $64.38 Citi credit card cash back reward and $19.00 in interest income on our Emigrant Direct savings account.

Next month is going to be a somewhat typical income month, with my wife and I each receiving two paychecks. However, my wife is expecting a small commission check and I hope to cash out 6 days of vacation time for an extra $1,200 or so.