Free Gas

Another benefit that we received as a result of purchasing the new (old) car is $35 worth of FREE gas. The credit union we funded the loan thru gave us a $10 gas card since a friend referred us to them, we also received another $25 gas card since we opened an auto loan within 30 days of our new credit union membership. They’re not big perks, but they’re free.

Opened Roth IRA

As you may recall, we opened a Roth IRA for my wife last month. I’m happy to report that we just opened a Roth IRA with Vanguard for myself as well. I invested in Vanguard’s Total Stock Market Index Fund (VTSMX).

We had planned to open my Roth IRA next month, but I received a $1,000 reimbursement check from my company a month or two before the business expense will post to my credit card. So, we used the $1,000 reimbursement check and $2,000 from our savings account to open my Roth IRA. The $1,000 business expense will be paid off (using savings) as soon as it posts to my credit card. In the meantime, it has allowed us to open my Roth IRA a little sooner than expected.

So, my wife and I each have $3,000 in our Roth IRA’s thus far for 2007. We plan to contribute another $1,000 each in the coming months to fully fund our Roth IRA’s for 2007.

The Benefits Of Acupunture

My wife has suffered with severe allergies her whole life, and none of the prescriptions her doctors have provided gave any lasting relief. She began going to an acupuncturist a little over a year ago on the recommendation of a friend. I’m a bit of a skeptic, so I didn’t expect results from such an unusual field of medicine. Acupuncture seemed so foreign to me and more of a novelty than anything. However, after a few visits, she was able to reduce her allergy medicine and, eventually, quit taking the medicine altogether. I was surprised at the results – there was no doubt that she was feeling much better.

Fast forward to March 2007 (when we combined our finances): My wife quit going to the acupuncturist because she was feeling better and wanted to help us save the money. As a result, her allergies have begun to worsen again. That being said, we have decided to add the $60 acupuncturist visit to our monthly budget beginning this month.

Although I wouldn’t believe it if I didn’t see it, this is money well spent.

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.

The Value Of A Dollar

My parents did a great job of teaching me the value of a dollar.

I've never wanted for anything. I was blessed by them paying my way thru college (school, room, and board), paying for nice family vacations to Europe, and generally helping me when I was short on cash. But, at the same time, I started working at age 15-1/2, paid for half of my first car (they paid the other half), and have never been unemployed.

I remember at a young age my Dad explaining to me that, if I started saving early enough, I could have over $1,000,000 by the time I retire. I still have a 2001 Kiplinger Magazine article that he mail to me regarding making the most of your 401(k) early on.

My Mom is equally financially savvey. You should hear her negotiate a deal - no one drives a harder bargain. My Dad once calculated that my Mom saved our family roughly $600 a month just by shopping around for the best value, buying in bulk, cooking meals at home, etc.

I have friends who go on multiple expensive vacations each year, eat out for most meals, and buy the latest gadgets. I'm sure it's fun now, but I wonder what planning, if any, they're doing for the future.

I'm very lucky to have parents who taught me the balance between having fun and planning for the future. Thanks Mom and Dad!

Memorial Day

My Wife and I just returned from spending some time with her dad and mother-in-law on the lake. Lots of sun, food, and fun.

It's important to remember that today is a day of remembrance for those who have died in our nation's service. Please take a moment to remember our fallen soldiers.

Cash Back Credit Cards

My wife and I pay most of our monthly bills using our Citi Dividend Platinum Select MasterCard cash back credit card. We pay for our groceries, gas, cable/internet, gifts, etc. using the card. We have also arranged to have my Wife's medical insurance bill, my cell phone bill, and our Blockbuster Total Access bill automatically charged to the card each month. There are only a few things that we can't charge to the cash back card such as our mortgages, HOA dues, and auto loans.

We have been averaging a $50 cash back reward every two months since we started paying our bills with the card 4 months ago. It's important to note that there is a $300/year maximum to the cash back rewards. If we reach the maximum, we will then begin using our HSBC Platinum MasterCard cash back credit card. I am currently using the HSBC cash back card for my business trips, to help keep work expenses separate from our monthly bills. I average $25-$50 cash back every three months, just for charging business trips to the card.

It's not a ton of money, but since we're paying the bills anyways, we might as well get a percent or two of our money back. Besides, charging the bills to our cash back card helps with our month-to-month cash flow. And, of course, we always pay the credit card bill in full each month so that no interest is accrued.

If you're not taking advantage of cash back credit cards, you may want to consider it.

Hard Math

I rarely eat fast food anymore, but got the urge to indulge in a value meal.

My bill total came to $7.42, for which I paid with a ten dollar bill and two pennies. I received a funny look for handing over the two pennies. I guess I shouldn't have been surprised to received $2.56 as my change.

Go figure.

Just Got A Ticket

I was wondering what I should post about today and, after leaving the office, I got my answer.

Down the street from my office I noticed a number of police offices standing at a stop sign. I fastened my seatbelt before reaching them, but was still flagged to the side of the road by one of the officers. He said I was a little too late with the seatbelt and that I was receiving a seatbelt ticket.

I tried to get some sympathy, but the officer said they were out there on their day off giving out seatbelt tickets because of a government grant. He said they are taking a no tolerance position and that it had been announced on the news. I deserved the ticket so I wasn't going to push it, however, while I was waiting for my ticket, another car was pulled over near me and the driver was irate. So much so that the officer writing my ticket was called over as back-up. After dealing with the upset driver, the officer came back to my car, gave me my ticket, and sent me on my way.

I checked online and it appears that the ticket will only cost me $20.00. Not too bad for a good reminder of the importance of buckling-up.

Good Net Worth Progress

We have made good, consistent progress on our net worth and should reach a net worth milestone of $10,000 next month. In fact, if all goes as planned, our net worth in June will be roughly $11,000, half way to our 2007 goal of $22,000.

As we pay off debt and increase our investments, I’m beginning to feel how getting your money to work for you is a powerful thing. I’m sure there will be hiccups along the way but so far, we’re right on track.

Paying Off Our Chase Credit Card

My wife and I get paid every two weeks, therefore, there are two months of the year that we both receive three checks. Next month is one of those months for my wife.

We have decided to use her extra check, $1,161.67, to pay off our Chase credit card. Mathematically, this is not the right move since the card is 0% interest until March 2009. We’d be better off depositing the money into our Emigrant Direct account earning 5.05% APY and stretching the Chase credit card payments out to take advantage of the interest free period. However, the catch with the credit card is that if we are late with a payment, Chase can back-charge us interest. I hate having that hang over our heads, so from a piece-of-mind standpoint, paying off the card is the way to go for us.

It will be nice to have one less debt to worry about.

Pride of Ownership

I don’t want to put words in her mouth, but I think my wife is now as obsessed with watching our investments as I am.

One of the first things I do each morning is to check the status of our investments. Not to react to the ups and downs of the market, just because I enjoy seeing how things are going.

While my wife has been very interested and active with our investments, she hasn’t been as OCD as am I in terms of checking them daily. At least, not until recently. . .

She just opened a Roth IRA account with Vanguard over the weekend and funded it with $3,000.00. Since then, she has been getting a kick out of checking the progress each day. I’m convinced that this peaked interest has something to do with setting-up the account herself and having it in her name. There’s definitely something to be said for pride of ownership.

Going Out Is Expensive

We went out for a friend’s birthday on Saturday and ended up spending about $120.00. Back in my younger days, that might not seem like a lot of money for a night on the town, but now, it shocks me a bit.

We met up with our group of friends at 2:00pm and stayed out until 11:00pm. We got an early start because it was Cinco de Mayo, and we knew the bars would be packed. Sure enough, there was already a good crowd on hand at 2:00pm. I originally thought we’d be going home around 7:00pm, but we were having such great time that we didn’t want to leave.

I can see how people who go out multiple nights a week can have a hard time getting ahead financially. Heck, that’s part of the reason I had so much credit card debit.

Opened Roth IRA For Wife

We opened a Roth IRA for my wife this weekend, selecting the Vanguard 500 Index Fund as her investment. The Vanguard 500 Index Fund is the largest mutual fund in the world and attempts to attempt to mirror the S&P 500.

The fund has an initial minimum investment of $3,000; additional investments are $100. We plan to fully fund her Roth IRA ($4,000 in 2007) , as well as open and fully fund a Roth IRA for me.

Good Prospective Car Buyer - Follow-up

As a follow-up to my Good Prospective Car Buyer post, the lady ended up calling me to cancel the appointment because she bought a Mercedes.

I was very disappointed at first, since she seemed so interested and needed a new car (her’s was totaled in an accident). I even began looking for a possible replacement vehicle online.

My car runs and looks great, so this really isn’t a bit deal. I was just disappointed because I was already planning how we should invest the extra $150-$200 that we would be saving in car payments each month.

Carnival of Credit Report Stories

Thanks to Stephanie at Poorer Than You for hosting the Carnival of Credit Report Stories that included my post Credit Reports and Credit Scores. If you are interested in your credit reports and scores, this carnival has it all.