February was an interesting month!

Income:  Income listed is 4852$, about 1200 more than my salary!  4963$ Tax refund, mostly applied to close out one of my four loans at 4395$.

Expenses: Great month on my expenses!  I met my budget cuts with ease, mainly due to cooking and having bought pretty much everything I need for now.  I haven’t been able to buy the kitchen supplies I need to pursue Four Hour Chef, but that’s okay to push back.  Non monthly costs were 54$ to file my taxes and 811$ on vacation.  This was my first month having 500$ auto withdrawn for RIRA, boy is that hard to make back with travel!  Oh and I looked up my auto insurance cost, it was 535$ for the whole year, paid around August 1st, not a bad price at all.

Current loan debt 23,232$.

Current net worth -14,935.30$ (Note: I’m now excluding retirement savings from net worth)

Tomorrow I’m finally heading out on another travel job, so wohoo for more money!  One step closer to paying off my debt and eventual financial independence!

I feel great about my financial situation!  It’s tough to plan with such a sporadic travel schedule, but I’m ahead of the curve and shouldn’t have any trouble meeting my goal of paying off my debt by December 31st if things continue as they have been.

In other financial related news, my current roommate is moving out and I found a replacement who will stay at least 3 months!

I recently looked at my finances (last post) and thought, holy crap I’m spending way too much.  So, for the next three months I’m challenging myself to cut my food, shopping, and entertainment budgets to half.  I will do this by cutting back a little each month to give myself time to adjust.

The stars indicate that for those months I will be using my shopping budget to purchase cooking utensils for Four Hour Chef.  Total spending across all three categories drops from 953$ to 450$, a savings of 503$ per month, or dropping to 53% spending.

This won’t be easy (250$ a month on food is less than 10$ a day), but I am going to go at it with gusto.  With travel for work it actually becomes much easier!

January is winding down and so here is my monthly financial roundup.  I am currently on track to meet my budget for this month, with roughly 125$ to live off of until the end of the month.

My current budget is pretty high at 2000$/month, and obviously looking at it that’s mostly going into Food, Entertainment, and Shopping (953$).  Loosely, my goal is to decrease that 300$ to 500$ per month, but I can meet my financial goals without doing that.

I really have no idea how people are alive, have kids, etc!  I make good money, 70k/year, and I’m not exactly rolling in dough.  After taxes, 500$/month into a Roth IRA, 6% of my paycheck towards my 401k, and my budget, I only have 935$ left over!  That means I have to work 2 months to live 1 month off my savings, or that it would take a year to afford a new economy far.

Loan Outlook

I currently have 27,793.06$ in loan debt.  I set a goal in Mint to pay that off by the end of this year, which will require me to pay 2600$/month for the rest of the year (not January).  That’s 1665$ more per month than I have, which will have to be made up by earning extra money by travelling for work.  This amounts to basically 10 days of travel for work per month, definitely within reach.  Extra travel will help pay off loans faster minimizing interest or going into my emergency fund or into my car fund.

Flow breakdown and budget

Via Tim Ferriss’s website via guest post from Ramit Sethi of IWTYTBR.

Above is a picture of Ramit’s basic finance system.  Last year I spent most of my money building up some liquid cash for emergencies, and now I’m finally able to buckle down and lay down the framework for my financial system. Here’s my breakdown:

Salary: 70k before travel bonuses.  Shooting for 100k with 50% travel

401k: 6% pre tax, with 3% match from company (match goes straight to company stock if I’m reading correctly).  My 6% goes to 20% large, medium, and small cap index funds and 40% international index funds with about a 70 30 split between developed and developing countries.

Roth IRA: Just set it up with 2k for last year (adding another 3k when I can later this month), and 500 auto deposit from checking on the first of the month, starting next month (5500 total which is the max).  It is unlikely I will reach the 110k max income for depositing into a roth ira.  Roth IRA directly invests in a retirement lifecycle fund (VFIFX).

The rest of my budget is (aka credit card/miscellaneous bills in the above picture):

250 on shopping (also absorbs miscellaneous costs such as motor oil)

162 on gas (includes 1 trip to OC per month)

250 toward entertainment (mostly bars, can also absorb unforseen expenses)

480 for food and dining (high because I eat out a lot due to travel, trying to cut back).

Plus 360 going toward minimum payment on student loans.

Travel decreases how much I spend, but I keep a fixed budget which means I can spend my food/entertainment budget on more shopping or more extravagance.

That covers about 70% of my non bonus budget.  Everything else goes to building my liquid cash/emergency fund (currently low), and once those are full, toward paying off my college loans ASAP.

Account breakdown

Checking:

Bank of America normal no fee account: standing balance of 1k, just as a backup.

Schwab High Yield Investor Checking: Holds entire emergency fund of 5k to 10k, primary account that receives money and pays out to credit cards, etc.  Earns a ridiculously small amount of interest, but I need to stay liquid due to large expenses for work, otherwise I’d keep 2k in it.

Savings:

ING Orange Savings Account: Only holds 1k, earns so little money, much better to put my money toward my loans which cost me a guaranteed 7%.

Retirement:

401k: Mostly using for match, when I change jobs I can roll it into my Roth IRA.  Also using to decrease my taxable income.

Roth IRA: Used to shelter money from future taxes.  I was planning to wait until after I paid off my debt, but realized I can withdraw money for my first house when it is needed, so this doesn’t keep me from being too liquid.  If I’m buying a second house, I doubt the money in here would matter much to me.

Credit:

Starwood Preferred Guest AMEX: Primary credit card, used to earn points!

BOA Power Rewards card: Used to keep credit line for credit score purposes, and is my primary backup for when AMEX isn’t accepted.  AKA my In ‘n Out card.

Citi Thank You card: Kept almost purely for credit score purposes, will be kept alive with a small charge every other month, and acts as a buffer to absorb unforeseen costs (covered a hospital bill for me for a few days).

Loans:

UCI Grad School Loans: 27,000 ish owed at 6%

Outlook

Before I opened my retirement accounts, I had hoped to pay off my student loans by August, but now December 31st seems a worthy goal.  My new goal: By December 31st, 2013, owe no money to anyone, have $15,000 principal invested in retirement accounts, and have roughly $10,000 liquid cash emergency fund.

All that’s left to do is change all my billing dates to the first of the month (amex and citi card), contribute 3k to my roth ira for last year. Oh, and get started on travelling 120 days this year 🙂