All posts by 1MansMoney

I am a guy pushing 40 that is married to a beautiful woman in her 30's. If I can only have as much luck with our finances.
Money Musings

Trying to Rationalize Splurging

Our condo is getting some major work done, paid for by the HOA, but we’ve lost use of our family room for a couple of weeks.

The splurging all began when, in the process of moving our furniture out of the family room, we broke our cheap IKEA entertainment stand. We found a nice, smaller replacement stand for only $99. Not bad, but we figured our 15-year old speaker towers and clunky 4-piece stereo/DVD system was going to look poor on the new stand, espcially hooked up to our 1-year old plasma (last years splurge). So, we bought a 5-channel Panasonic Home Theater System at Costco for $399. It’s sweet, and here’s how we rationalized the purchase:

Pros
Nice sounding and looking
Requires less than 1/2 of the space as our old system
iPod hook up so we can have all of our music available at the touch of a button
$60 of the cost was covered by selling our old stereo system

Cons
Price
Our old system still worked

We probably could have got away with using our old system a couple of more years but what the heck, we treated ourselves. We can’t wait to get our family room back so we can watch a movie using our new home theater system. It will also be nice to have more space in our little condo.

Credit Cards

Citibank Wants To Give Me Money?

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I used to have a ton of credit card debit (click this link to read the details). Thankfully, those days are long behind me. While I never got behind in any of my credit card payments, keeping track of the statements/payments for 6-7 credit cards was tough.

Well, it turns out that back in 2004, I overpaid my Citibank credit card when closing the account. I guess I moved addresses immediately after closing the account, because Citibank lost contact with me. Last week, I received a letter from Citibank stating that they have been trying to track me down to give me a $92.80 refund check for my overpayment in 2004. Wow, nice surprise.

Since I’ve moved 4 times since the address that had in their system, they required that I get a form notarized proving who I am. The notary cost me $10.00, but I should get the $92.80 check in about 4 weeks.

Thank you Citibank.

Money Musings

Don’t Be A Baby

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This blog is officially 1 year old! Just a baby compared to most blogs.

I began 1MansMoney 12 months ago with a post about our negative net worth. Since then, we have turned things around and now have a positive net worth. We also have one year under our belt towards achieving our goal of financial independence and retiring early.

I give credit for our financial success to God because this is all His anyways, to my wife because she’s my inspiration, and to our families for their guidance. I also have to give credit to this blog for helping us keep better track of where we were at and where we are going.

For those of you that want to get out of debt and plan for retirement, I encourage you to consider starting a blog. Any goal worth achieving requires a plan and follow thru. I find that this blog is a terrific tool. I liken it to a financial diary that, since others read it, helps provide accountability and feedback.

I can’t wait until a year from now when 1MansMoney is in its terrible 2’s.

Income Statement

February 2008 Income Statement

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Wow, we went over budget in almost ever category this month (click on spreadsheet below). Income taxes, vaccines for our dog, food/drinks for a party, gifts, carpet cleaning, replacing our entertainment stand, eating out for our birthdays and Valentine’s Day. You name it we did it.

Thankfully, we had some extra income this month. My wife earned a $59.50 commission, I cashed out $1,239.53 of my company vacation, we earned a $25 HSBC credit card reward, and our neighbor paid us $96 for 6 months of internet.

Next month, in addition to our standard monthly income, my wife may earn an extra ~$1,000 commission from her company. This would help us fund our Roth IRAs. Expensewise, we have a large property tax bill due that will ding our savings pretty good.

Net Worth

February 2008 Net Worth Update (+$3,014.03)

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February was a very good net worth increase month. Our net worth increased $3,014.03 from January to $27,693.81 (click on spreadsheet below). We are currently at 57.94% of our 2008 net worth goal of $47,800.

What worked this month?
Our retirement accounts (401k and Roth IRAs) went up by a total of $1,579.60! Thanks in part to our $400 contribution to our Roth IRA’s. We also continued our 2nd mortgage accelerated payment plan by cashing out 6 days of my company vacation time for $1,239.53 and paying that directly to our 2nd mortgage principle.

What did not work this month?
We had to dip into our savings account to pay our Federal and State income taxes. We had planned for this so, in reality, I’m not sure it should fall into the category “what didn’t work”.

What’s coming next month?
My wife has been doing great at her new job and may get a $1,000 commission next month. We hope to use this money to fund our Roth IRAs a bit more. We also have our property taxes due next month. Thankfully, our property taxes will be less than expected since we got our property value reassessed.

Debt

Why Pay Down The 2nd?

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We recently had a friend ask us why we are paying down our condos 2nd mortgage at an accelerated rate. I think it makes sense for a few good reasons:

1. It is our highest interest rate debt at 8.55%.
2. Once we pay it off we can:
a. Stay in our condo & have an additional $411.33/month to put towards saving for a house.
b. Buy a house and pretty much break even on renting out our condo.
c. Sell our condo, if necessary, and hopefully not be upside down.
3. We don’t have kids yet and can afford to pay extra to our mortgage.

Deals and Bargains

Business Trip Miles

I just returned from a business trip to the East Coast, earning me another 9,941 Delta SkyMiles. Since I am Gold Medallion level, Delta doubles my miles each flight, making these longer trips a nice way to gain SkyMiles.

My total Delta SkyMiles balance is now 72,139 – just about time to start thinking about when we are going to use these for a vacation.

Deals and Bargains

Cashing In On Vacation Time

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To help us continue our accelerated 2nd mortgage payments progress, I cashed out 6 days of my company vacation time for $1,239.53.

Since I have been with my company seven years, I receive 19 paid days off a year. This is more time that I really need. Being able to cash out some of my vacation time is a nice perk.

My 4.5% raise last month brought my salary to $69,030/annually. By cashing in the 6 days of vacation I essentially gave myself an additional ~1.8% raise for the year, bringing my income to $70,269.53 this year.

Budget

2007 Income Taxes

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We completed our 2007 taxes this weekend. This was our 2nd year using Turbo Tax and it was once again very helpful. My wife is really the one that completes most of the forms, I simply supply some numbers from our records and help with proofreading.

Thanks to multiple itemized deductions, include $22K in mortgage interest, my wife’s business expenses, and charitable donations, we only owed $387 to federal and $307 to state. That’s pretty close to hitting the mark of zero, neither owing a ton of money or giving the government an interest free loan until you get your refund.

It feels good to have our taxes done, even if we do owe a bit. We’ve scheduled the federal and state payments to be transferred from our checking account in a couple of weeks.

Emergency Fund

Chasing Savings Account Rates

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When we first opened our Emigrant Direct savings account ~1 year ago, the APY was 5.15%. Since then, the APY has been reduced multiple times, and is currently at 3.60%. Emigrant Direct has worked well for us, but we’ve been disappointed with how much the APY has dropped over the year.

Today, my wife saw an E*TRADE ad on television mentioning their 4.40% APY savings account. After checking out their website, we decided to apply. Like Emigrant Direct, E*TRADE does not have minimums balances or account fees and is FDIC-insured up to $100,000.

The new E*TRADE account will be opened within a couple of days, at which time we will begin moving our $6,051.84 Emigrant Direct balance to the E*TRADE account. We understand the futility of switching banks everytime rates drop a bit, however, we feel it’s worth it to go from 3.60% APY to 4.40% APY.