Boring

I haven't posted in a bit because things have been moving along. Nothing spectacular, except the performance of the stock market. I held out investing my bonus in January, now I wish I had dumped it all into the market and ridden this high. I'm still waiting to see if there's any kind of dip and will invest then. 

I'm still spending too much money on food, but did cut down on lunch spending by going to the grocery store 1x a week and making lunch at work instead of buying it every day. I think that helped offset some food expenses.

I worked out I've been spending about $500 a month on healthcare expenses, in addition to the $200 I put aside in my flex spending. I don't really feel like there are ways to reduce this expense. I'd rather reduce in other areas if I need to.

To date this year I have barely spent anything on clothes. As a result, I feel a kind of pent up demand. I fully anticipate increasing spending in this area in the rest of the year. I had consciously held off on clothing purchases to try to offset my significant healthcare spending.

I'll do a mid-year budget update in early July, along with a networth update.

When does getting a check for $4K in the mail suck?

When you get it because your 401K plan has failed the IRS' non-discrimination test and the amount is being refunded from your 401K contribution for 2012 and will increase your taxable income in 2013!!! Boo. Sooooooooooooooooo annoying.

I do everything right to save for retirement and the government penalizes me at every turn -- my IRA contribution (which I max out every year) is not deductible. Now my only tax advantaged account which I am legally allowed to contribute $17,500 to (or whatever the # is) is reduced by several thousand dollars -- more than 20% of my contribution returned!!! I think the government should encourage everyone to save, and if "high income" savers save more they shouldn't be penalized. In reality, the government probably does not do this because they care about encouraging lower income savers, but because they want to get their hands on as much income as possible from high-income earners so they can tax it.  Ugh. Well, I'm just going to have to save more in my taxable account and spend less to make up for the government's constant blocking of my attempts to save in tax-advantaged accounts.

Plugging Along

Not too much new to report, but I realized I didn't post in February which is probably the first month in a long time that I haven't.  I'm in the midst of doing my taxes and despite the evil AMT it looks like thanks to my mortgage interest I will get approximately double my refund of last year. I should be looking at a sweet $6500 refund check(s) between state and federal. 

In terms of spending, I've been spending A LOT on the health & wellness category. I started another alternative medicine therapy to try to get a chronic condition I have under control. It's costing me $90 a week. I already pay $100 a week (or more) for an alternative treatment. Thank goodness for flex spending. I checked and I have a balance of like $1,800 I think that I have to use by June which will be no problem at all. I've also for the last month or so been trying to cut back in other areas to make up for it including eating out, buying clothes and furniture and anywhere else I can think of.

The market is on FIRE, which is awesome, but I also have a lot of cash from my bonus and from selling loser investments at the end of last year just sitting in my brokerage account waiting to invest. I'm not making what I call the "great investment mistake of 2007" again, so holding the cash until the line trends in the other direction. That said, for the last few years I have kicked myself for not following the sell in May & go away adage. I think I'm going to get hosed moving forward on taxes on investment gains though so I don't think I should sell my portfolio. Plus, all those transaction fees bite into gains.

I'll post a networth update in early April.

Does More Money Make Us Fat?

One thing I never expected to miss when I moved from my 4th floor walkup was the stairs. Or the weekly trip to the laundromat. Or hauling heavy things up the stairs. Or all the stairs I had to walk in my old commute.  Or not having a dishwasher. I joke that moving to my condo was akin to the industrial revolution, my own personal industrial revolution. But now that I've left the pre-modern world behind and have all the "mod cons" of a dishwasher, a washer dryer in my house and a short flight of stairs to climb, I find I miss the old "inconveniences" because I get a lot less exercise. I thought when I moved I would use the time I gained to work out more, but that hasn't happened. I don't know where the time went. But I have definitely gained a few pounds since moving and I really miss having to work as hard physically to do my daily tasks. I was reminded of that when reading this special report on obesity in the Economist. A really interesting read: http://www.economist.com/news/special-report/21568065-world-getting-wider-says-charlotte-howard-what-can-be-done-about-it-big

New Way of Looking at a Goal

So over the last week or so I've gotten really excited about a new strategy that I can use to reach my ultimate financial goal: to payoff the mortgage. When I first got my mortgage I thought I would pre-pay in order to shave years and interest off the mortgage. So I set up auto pre-pay of $500 a month, which essentially doubles my principal payment to about $1,000 a month. However, I also thought I would pre-pay a big lump sum each January post-bonus/end of year. The more I read and talked to my Learnvest adviser, the more I realized that pre-paying the mortgage is not actually the best strategy.  Instead, I should invest the money. I like this idea because it gives me liquidity in case of an emergency. That said, I hadn't found a way to track how much I would need to save over how long a time period to reach this goal. Then this week on Mint.com I was like "wow, what if I just create a mortgage-payoff goal" which I did. I input my mortgage balance as the amount of $ I want to save for the goal and then I linked all of my non-retirement savings accounts to the goal. I have a balance of about $200K in those accounts. I've got about $329K to payoff on the mortgage. Hence I need to save about $129 to pay this off. 

Then today I started thinking about the power of compounding, because this money is invested. Some in CDs, but some in my brokerage account. Sooooo this Mint goal isn't taking into account investment gains/interest. So with my planned monthly contributions and any investment gains/interest, I should be able to reach my goal a lot more quickly. I have a goal of 10 years right now, but when I play with savings calculators, I can possibly reach this goal in 5 years if I earn returns of 5%. Which is a little aggressive because some of this money is in CDs paying 2%.
Anyway, I just feel much more energized about my savings outside of retirement now, because I am saving for a purpose and each month I'll be able to see, thanks to Mint.com, exactly how much closer I am to reaching my goal.

Networth Milestone: 500K!

I'm excited because today I updated my net worth entry on NetworthIQ for Q4 2012 and I've crossed the 500K threshold!!! I also checked back over the last 4 years of net worth entries and realized that I tend to jump by about 100K a year. Which is insane. And only possible because of the generous bonuses I have been receiving. So I'd like to be around 600K this time next year. That would be sweet. Ultimately, I think I'll feel a lot more secure once my net worth hits 1 million (of course it won't all be liquid). Hopefully that will be in about 5 years. That's a great long term goal. Then maybe I'll feel like I can chill out a bit more about life and not have to have such a stressful (but for the most part manageable and sometimes even fun) job.

Credit Score Blues

I checked my credit score today, something I hadn't done since September (spurred on by the NY Times story about dating and credit scores). So annoying!! Because my mortgage took 4 months to get and I applied with several lenders, I have like 3-6 inquiries on my report, which brought down my score a lot. I also (god forbid), opened up a Best Buy credit card and a new Mastercard in May after I moved. The credit scoring algorithm is dumb - too dumb to know that all those inquiries on my report are related to my mortgage. Whatever, I know my score will "recover" at some point, and it's not like it's low -- about 720-750 depending on the bureau. It is ridiculous though that someone who has never missed a payment and pays off their credit card every month has anything other than a perfect score!