Naked With Cash is an ongoing series at Consumerism Commentary in which readers share their households’ finances with other readers. These participants benefit from the accountability that comes from tracking their finances publicly and the feedback of the four expert Certified Financial Planners (CFPs).
This year, we have four participants who will share their financial reports, exposing the results of their financial choices. Each participant is paired with one of our Certified Financial Planners. The experts will provide insight and guidance that will help our participants take their finances to the next level by the end of 2014. Learn about this year’s participants and experts.
Betsey is a 27-year-old government analyst. She recently moved 500 miles to start a new job with the government. She is single, and lives with two roommates, with whom she can split rent and utilities. They occasionally split grocery costs. Betsey has a net worth $10,268, and her assets include a bank account, IRA, security deposit, and I-bonds. She has $3,418 in credit card debt.
Betsey’s Net Worth Statement
Betsey’s Income Statement
Betsey’s comments and analysis
2013 was a good year. I increased my net worth by 247% from December 2012, started saving for retirement and landed a new job (more on this below). I have a lot of comments this month because the past few months of income and expenses have been anything but typical.
New job: Last year, I held a research fellowship at a government agency. I loved the job, had great coworkers and grew a lot professionally in the role, but I was classified as a research participant rather than an employee, so I had to pay self-employment taxes and health insurance out of pocket, and I received no benefits. I had three option years left in my contract, but my boss encouraged me to apply for a leadership development program. I was selected and secured a new job in September at a different agency with benefits, a $24,000 raise, and many opportunities for career development and promotion.
Moving: In order to take the new job, I had to move about 500 miles. I flew down twice in October for an orientation day and to scout apartments. My transfer date to the new agency also happened to be right in the middle of the October government shutdown, so I lost about two weeks of income and did not get any back pay after the furlough ended. Because I was uncertain when the shutdown would end, I put my moving expenses (about $760) and my living expenses until I got my first paycheck on a promotional 0% APR credit card, which I am now paying down before the interest kicks in. Most of the moving expenses will be deducted on my taxes this year.
Other income and other expenses were very high in October because I paid a security deposit on my new place and received back rent I was owed from a former roommate. Travel and restaurant expenses were unusually high in November and December because I was traveling for work, but the reimbursements are reflected in other income for December.
I usually stay on top of categorizing expenses in Mint regularly, but October was a really hectic month and I didn’t track as closely as usual. Spending $905 for restaurants seems extremely high, and it’s possible some purchases were miscategorized. Shopping in October and November covered some thrift store and Ebay purchases for new work clothes (my new position has a more formal dress code than my former agency) and covered holiday gifts in December.
Other: Fees are for a new credit card that I am using to get a big mileage reward bonus. I’m reporting salary and benefits as my net pay (including 401(k) contributions) after all taxes and my pension contribution. I’m not currently tracking the value of that annuity in my net worth. About $1,700 of my credit card debt is at 0% interest and the rest is on cards paid off in full every month.
I am hoping my income/expense statements are more normal in 2014, and that I can keep increasing my net worth while I begin saving to buy a house.
Feedback from Sara Stanich, CFP
Sara Stanich talks about automated savings, and the importance of having clear goals when making money decisions.
Feedback from Luke Landes
This new position sounds like a great progression for your career. How do you like living in the Washington, D.C. area?
You mention you have placed your moving expenses on a credit card with a 0% APR for a limited time. Is the other credit card debt on a separate card, and do you pay that off in full each month? I see your interest expense was been two dollars in October and November, so it seems like you aren’t paying any credit card interest. If that’s the case, that’s fantastic.
Your managing to keep your expenses relatively low. I could say something about shifting your food expenses from dining out in restaurants to groceries, but I understand first-hand the difficulties with that. I live alone and cooking for myself is a chore, not an activity. And I’m sure that with your move, it takes time to get things settled.
I like how quickly you’re increasing your 401(k) in the new position.
I’m looking forward to seeing your next financial update! Thanks for participating in Naked With Cash this year.
Updated June 22, 2016 and originally published January 31, 2014. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.