February 2009 Net Worth Update (-$2,630.57)

February saw a decline in our net worth. It was reduced $2,630.57 from last month to $39,383.12 (click on spreadsheet below).

What worked:
Our prayers were answered and my wife found a new job that pays her more than her old job and has better benefits.

What did not work:
My employer implemented a company wide salary reduction resulting in a 10% salary cut for me on 2/25. Initially, I was expecting a 20-25% reduction in pay, so the 10% reduction is much more bearable. We also contributed $657.47 total to our retirement accounts (401k and Roth IRAs), but still saw our total balance decrease by $2,709.87.

Next month:
Next month should be a mixed bag. My wife will have her first full month of employment at her new job that includes a great salary and benefits and a final bonus check from old company. On the other hand, it will also be my first full month of my reduced salary. We will also have ~$2,000 in Federal and State taxes to pay and ~$800 in medical bills that may come due.

New Furniture. . .In This Economy?

Yep. We've wanted a new couch for quite a while, but couldn't commit to spending the money in this economy. My wife's father just shut down one of his stores and is giving us a nice leather couch and love seat. He will be dropping them off with us today, so we sold our old sectional couch on craigslist yesterday for $150. We plan to give my father-in-law the $150 as a thank you for the delivery.

Miles and Miles

I just returned from a business trip to the East Coast and earned another 9,944 Delta SkyMiles. My Gold Medallion status provides me doubles the miles for each trip, so they add up quickly. I now have a whopping total of 127,083 SkyMiles. My wife and I plan to use the frequent flyer miles for a trip to Hawaii, but my wife needs to get settled into her new job first (see starts on Monday).

Safe & Sound

We've wanted a safe for some time, but couldn't justify spending $300-$500 for a new one. So, I checked craigslist and found a number of home safes in the $150-$250 range. After some research, we decided on a Sentry Fire Safe that was listed for $200 (it costs $312 new). I was able to talk the guy down to $175.

We put our cash, passports, social security cards, marriage license, insurance paperwork, and our external hard drive (important digital files and photos). When we have kids in the house, we can also lock up our handgun in the safe.

Here are some of the features of the model (KSW3632) that we bought:

* LCD electronic lock with backlit keypad
* 4 live-locking bolts
* 2-hour fire protection
* Water-resistant
* Multi-Position drawer
* Multi-position tray
* Key rack and compartment for small items
* Door pocket
* May be bolted to floor

My Wife Just Called. . .

I rarely post twice in one day, but today is an exception.

My wife called to let me know that she just received and accepted a new job. Since being laid off a month ago, she has been working hard to get back into the same industry. All of that work really paid off today.

The package is even better than her last job:

* Annual salary is $55,500
* Annual bonuses of approximately $16,500
* 2,500 shares of company stock
* 401(k) plan
* 2 weeks vacation a year, 10 sick days a year, numerous holidays off (including Christmas to New Years week)
* Company car
* Laptop computer
* Cell phone reimbursement

That is a huge blessing and something I know my wife will enjoy and excel at. She already gets along really well with the managers that she has met at the new company and is excited to get started. Her first day is the 23rd.

My Company Laid Off 4 More People

My company laid off four more employees this week, including my boss. That drops us down to 28 total employees. Thankfully, my old boss has come back over from our sister company to act as our new General Manager. I really enjoy working with him and am convinced that if anyone can help see our company through these challenging economic times, he can. Plus, I’ve stayed in touch with him since we last worked together and have been playing cards with him and some other friends every Wednesday night for the last few months.

These additional layoffs helped minimize the salary reductions that the rest of us have to take. I found out today that my salary will be reduced 10% (from $70,460 to $63,423), beginning with my 2/25 paycheck. I expected a salary reduction of up to 25%, so needless to say, hearing it will only be 10% was a blessing.

January 2009 Income statement

January was a surprisingly good income month (click on spreadsheet below) considering it was the first month of my wife’s laid off. We also had an equally good month for keeping our expenses low.

In addition to my two paychecks, my wife received a final $2,150.26 paycheck for 13 days of work and 3 days of vacation, a $60 reimbursement, $190 for babysitting, and her first unemployment check for $405 (with taxes deducted). We also received a $51.30 Citi credit card reward, $25 from selling a few items on craigslist.org, and earned interest income on our savings account of $16.71.

For the first time in a long time, our expenses came in well below budget; we only spent $5,379.39 in January. It’s great to see our belt tightening paid off. Every month we keep from touching our savings buys us more time.

Next month we have another new challenge. My company will be implementing a 20-25% reduction in pay beginning the 2nd half of the month. We also have ~$800 in medical bills for my wife that may come due. It will be more important than every for us to conserve cash.