Wednesday, May 7, 2008

I needed a budget!

One of my New Year resolutions for 2008 was to start keeping a monthly budget and tracking all of my expenditures for the year, beginning in February. This was quite a challenging goal for me, as I've never been able to keep up this type of constant commitment for long, as evidenced by the countless aborted journals, sporadically-updated blogs, and ruefully-abandoned exercise plans I've had in my life.

Thus, I'm very happy to report that, as of May 1, I've now kept up my budget and expense tracking for a full 3 months! It's a truly great feeling to know, not just guess or hope, that I'm spending less than I make and putting aside money for longer term goals. Also, the budgeting and expense recording is actually much easier and less time-consuming than I had originally thought - and after 3 months, has now become a habit.

I'm using a tool called You Need A Budget (YNAB) for the budgeting and tracking - basically a souped-up Excel sheet with some budgeting philosophies built-in. YNAB costs $20 for the basic version, but the built-in functionality has made the process much quicker and less painful - and thus easier to keep up! - than it could have been. However, a homemade Excel sheet or free pre-built tool will also get the job done. (One tool I have heard good things about is PearBudget, although I've never used it myself.)

For those who are fortunate enough to not be in debt or living paycheck-to-paycheck, maintaining a budget and keeping track of all expenditures may seem like overkill for a problem that doesn't exist. However, the process itself is invaluable as it forces me to actively think about and manage my finances, and take ownership of everything I make and spend. Since I know exactly where every dollar goes, it keeps me from ever feeling like my money just disappears. Plus, it gives me historical data of my spending patterns, and that should be really fun to play with for a numbers geek like me!

Thursday, May 1, 2008

Financial Update - May 2008

Cash - $13.00
Banking - $5,501.52
Savings bonds - $5,000.00
401k (vested) - $6,955.23
Roth IRA - $12,832.21
529 - $3,376.40
Brokerage - $426.02

Credit Cards (PIF every month) - $613.29
Rent (outstanding check) - $973.67

Net Worth: $32,517.42
+9.15% change since last month!


It was a very good month, thanks to the rebounding stock market and no big-ticket purchases. I was aiming to pass the $30k mark, so it's a great feeling to just blow by it with nary a glance.

My (measly) 401k company match for 2007 posted this month, but since I have only been here a year and a half, I am not yet vested in any of it! I've adjusted the 401k number this month to only show my vested balance.

Also, my much-anticipated I bonds purchase (electronic, via TreasuryDirect) went off smoothly on the 29th. Although the annual limit is $10k, I only purchased the $5k of electronic bonds this time, both to avoid depleting all of my liquid funds in case of emergency, and also to still have the chance to purchase more in October if the rates remain high.

Checking the TreasuryDirect site today, I see that the new fixed rate for I bonds has dropped to 0.00% (wow!) so I'm glad to have locked in the 1.2% rate from before!