Steady Progress

Although I only post our net worth in this blog once a month, I check our progress almost daily. Well this morning, we broke $20,000 ($20,235.09 to be precise) in liquid assets (Pre-tax Retirement Accounts, Roth IRAs, Taxable Accounts, Cash & Savings Accounts). Unfortunately, our net worth is well below this amount because we have liabilities that pull it down (0% interest credit card debt, student loan balance, and a mortgage that is slightly higher than what our condo is worth).

The details of this increase in our liquid assets will be noted in our new worth update post at the end of the month.

Cashing In Some Vacation Days

My company provides 4 paid days off (PDO) each year. The vacation days are structured as follows:

• After your 1st year, you receive 1 week of vacation


• After your 2nd year, you receive 2 weeks of vacation


• After your 5th year, you receive 3 weeks of vacation

I have been with my company for just over 6 years, and currently have 92.29 hours of Vacation/PDO saved up. My goal was to always have 2 weeks of Vacation/PDO available in case of an emergency. Today, I decided to cash in 48 hours of vacation so that we can start earning interest on it.

My company’s HR Department and Accounting Department are quick - I received the check this afternoon. The gross amount was $1,526.54, but after taxes, social security, and a mandatory 401(k) contribution, the net amount is $1,219.11. What a blessing. I plan to deposit these funds into our Emigrant Direct Savings Account, and eventually use them to fund my Roth IRA.

I can cash in Vacation/PDO whenever I want, but will probably limit it to 6-8 days cashed in a year. Effectively, giving myself a 1.9 % - 2.7% raise.

Credit Score Update

Another benefit of buying a new (used) vehicle is that I was able to get updated credit scores from Experian and Equifax thru a couple of the car dealers. Best of all, my scores were they highest they have ever been.

Experian: 784
Equifax: 756

My understanding is that your credit score for financing a car may be different than your credit score for, say, financing real estate because they are calculated slightly differently. Nevertheless, it’s nice to have current credit reports to review for any discrepancies. I found none and didn’t expect to since the credit scores were strong.

Cash Back Credit Card

As I have mentioned before, my Wife and I use our Citi Dividend Platinum Select credit card most of our monthly expenses. We receive 1%-2% cash rewards for these purchases and have been averaging a $50 cash back check every two months. It’s free money for bills we have to pay anyways. Plus, charging the expenses to a credit card helps with our monthly cash flow.

Citi Bank recently sent us a special referral offer. If you would like to sign up for a Dividend Platinum Select credit card, I can request that they email you a special offer that allows you to get 5% cash back for the first six months. That’s a great deal and an easy way to keep a little more of your money. After six months, the cash back reward reverts to the standard 1%-2% cash back.

If you’re interested, let me know and I’ll request the offer be emailed to you.

Full disclosure: Citi Bank provides me a $25 reward for each approved account (up to 5 accounts). So, we’re both benefiting.

Sold One Car, Bought Another

After 3+ months of trying, we were able to sell Car 1 over the weekend. We sold it to help reduce our monthly expenses and allow us to tow a ski boat my father-in-law is giving us. So, after the selling the car, we bought a used truck.

The 2001 truck only has 55,000 miles, 11,000 less than the 2002 car we sold. We will save $140/month on car payments and $15.66/month on auto insurance. This money will be deposited into our Emigrant Direct savings account each month. An added bonus is the truck gets the same gas mileage as the car we sold.

My wife did a great job of getting us an awesome interest rate at a local credit union. She was able to secure a 5.49% rate by taking advantage of a membership discount, direct deposit discount, and auto pay discount. We’re also getting a gas card because she was referred by a friend. To contrast that, other credit unions and the dealerships were quoting us 6.90% - 7.25%.

One change to our plans is that we will not be paying off our 0% interest credit card, but instead, use the money to repay $1,000 that we had to take out of savings for the car transactions. Of this money, $523.16 was used to pay off a balance on the car we sold (we sold it for a bit less than we owed), $30.00 was used to smog the car we sold, and the balance was used as a down payment on the car we purchased.

I love my new (used) truck, and we’re saving money at the same time. It doesn’t get any better than that.

May 2007 Income Statement

We've gone over budget each month, so I decided to revise our monthly budget to more accurately reflect our expenses. Our new monthly budget is $6,113.42, to help better account for household expenses, entertainment costs, and a little extra buffer for random expenses.

Nonetheless, we still went over budget, but by a smaller margin. Our total expenses for May were $6,251.88. Click on the spreadsheet below to see the breakdown.

May 2007 Net Worth Update (+$2,604.03)

Our net worth is now at $9,042.53, a $2,604.03 increase from last month (click on the spreadsheet below). Our biggest gain came from a $600 increase in our 401(k), only $100 of which was from contributions. We also checked off another short term goal by opening a Roth IRA for my wife and funding it with $3,000 (thus the hit to our savings amount). Our liabilities were reduced by their standard monthly amounts, except for our Chase credit card that we paid $105 extra on.

God willing, we should reach a net worth milestone of $10,000 next month.