February 09 Net Worth Update: Emergency Fund here I come!

This is the third month that I have been keeping up with my Net Worth and its feeling good. I think punching these numbers every month are one of the most rewarding part of budgeting and saving. This is the one day of celebration of looking back and seeing a job well done. None of this budgeting and saving would be worth it if you cant sit back and look at your wealth start to accumulate. I used to get a lot of enjoyment out of working hard and going out and spending my hard earned money. Now, my enjoyment is working hard and putting in the numbers and seeing my money growing. Well besides my 401k and Roth IRA which are getting pounded but this is a long term investment and I have faith that one day it will be back up.

Here is the breakdown:

Cash Savings: this is a big jump in saving of $1557.23. Within this cash saving I am currently saving an emergency fund that is at about $9,537.23 which is in a money market account. The other is starting to go towards a house down payment and other month to month bills and living expenses.

Stocks/Brokerage: took a bit of a dip this month. Most of this is wrapped up in stock from a past employer. Its from a employee stock option plan that I was able to buy the stock at a 15% discount and I was really sitting good about a year ago. The stock itself has gone down more than 45% so at this point I think I am going to wait it out. I have just a small amount into a sharebuilder account with some quicksilver stock (ZQK).

Retirement 401k: continues to take a dip…I currently have one 401k with my old company that I haven’t rolled over yet which is taking a huge hit (-13.82%) $12,188. My other 401k with my new company is actually doing pretty well (+39.00%) $3,046.00.Retirement Roth IRA is down (-14.67%) to $3507.00 but I remain putting money into it. I feel like in the long run that this will be one of my best investments. I am currently trying to figure out how to put the $5,000.00 MAX in this year.

Credit Cards: $404.80 – this is just there because of flights I booked for our trip out to California in April, these will be paid off before interest is applied. I use credit cards for flights, big purchases or anything I need a warranty for. (since credit cards covers extended warranties)

Car Loan: Starting to think about putting more towards the minimal payment.

So I just keep rolling along and waiting for this market to turn around and get my retirement headed in the right instead of the wrong direction.

The showdown 401k vs Roth IRA?

Recently my company cut back on matching my 401k while the economy is upside down. I feel like I am at a bout (temporarily) with investing in my retirement…which one of these is the strongest investment at this current time.

Currently I am putting around 8% of my pay check into my 401k which is actually not losing money at the moment. It will come out to about $6160.08 at the end of the year. This money is also pre-taxed and by making pre-tax contributions, I am lowering my current taxable income.

With my Roth IRA which is after tax contributions, I am currently putting away $200.00/month = $2400.00/year with the limit on the Roth capped at $5000.00.

I am trying to figure out which should win this round? Maybe cut back 2% on my 401k which would put an additional $1540.00 in my Roth for a total of $3940.00/year and making my 401k total to $4620.00/year.

I know once my company starts matching again that I will bump it back up. During the meantime do I add more to my Roth or keep everything where it's at? I will keep you posted I need to do some more research. Please leave feedback!

Reaching Goals

I remember receiving my Tax return last year and thinking to myself that I did not need a new TV, surfboard, or any other materialistic object. Even though it hurt hearing about other peoples purchases. The years before I had received my check from the IRS and had decided to open a Roth IRA with the return so I was used to not spending it as soon as I got. Last years check came about this time and I could have added to the Roth but I decided I needed to have some cash to sit on.

At this point I had no idea that the economy was about to go through such a severe recession. So I opened up a money market account which at the time was paying out about 4% yield which is down 2.70%. I have been putting $390.00 every paycheck which is twice a month into this money market which at the moment is serving as my emergency fund. It is also auto drafted out of my paycheck so i have no temptation to spend it.

I have set a goal of around $10,000 for my emergency fund and I am so glad right now I decided to do so. You never know what could happen and it feels good being able to see that if something where to happen with my job I would not be hurting as much as if I didn't have one in place. I am one or two paychecks away from reaching one of my first financial goals I have set out for myself and it feels really good. I will move on to my other goals I have set and start to knock them off next.

I must say that all this personal finance starts with setting goals and reaching everyday to accomplish them. It will be a great feeling when I see that money sitting there waiting for a storm to come. I have been blessed and never been through a financial storm and I hope I never will, but if I do, I will be at least somewhat prepared.

About My Money Shrugged

My Money Shrugged is a journey with my personal finances, life and my future. I am a 31 year old living in North Carolina. The name is inspired by a book I am currently reading "Atlas Shrugged" by Ayn Rand. This blog is where personal fiance meets Atlas Shrugged. The theme of Atlas Shrugged is the role of the mind in man's life and, consequently, presentation of a new morality: the morality of rational self-interest. My self interest in creating this blog is my personal finances and so it is a nod to the book.

I recently moved from Los Angeles to the east coast to start a better life for myself. Not that I wasn't having fun or anything, but I was not able to live within my means and was constantly living pay check to paycheck. I was investing in a 401k, employee stock option plan, and whatever was left over I was adding to my Roth IRA but was never able to save up and emergency fund or for anything else.

Once I moved back east I finally for the first time, had money and had no idea what to do with it. First thing I decided to do was to build a budget. Unfortunately for me I had never really created one so I searched and found a ton of personal finance blogs. With a little research I found people blogging about the same situation that I was in. I created a detailed budget and was amazed at how much I could save and really wouldn't have to sacrifice that much with the way I live. (I could have saved money in LA if I had just sat down and create a budget for myself). And this is how I got into the whole PF blogging and been throwing around the idea of starting my own blog to keep me on track with my spending and budgeting.

Some of my goals and some of the purpose of creating this blog is to track and keep myself honest about my personal finances and to track my progress of one day owning a house that is affordable. I have been double timing it to save up an emergency fund that would last me 6 months if something was to happen in this economy. I have also been working to max out my Roth IRA for the first time this year and along all this saving up as much as I can for a 20% down payment for a house.

Some of my personal interests are GOD, my relationship with my awesome girlfriend and family, surfing, cooking, any sports, art, advertising, and music, all which inspire me everyday that I am blessed to be here!

I can promise you that I don't know everything about finances and please take my words only as inspiration, motivation or anything else that might help with your own personal situation.

Please feel free to leave comments and I would love everyone's opinions on the way I am handling my finances because after all this is here ONLY to keep you and me motivated and to keep my finances in check.

I am sure you will find multiple spelling mistakes and not very good english so please skip the comments unless you just want to rant.