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.
Brian is a 30-year-old software engineer. He and his wife have two young children, and their finances are in transition as they get used to dropping down to one income from two. They have student loans and a mortgage, and usually pay their credit card balances off each month. Brian and his wife want to get their finances in order so that they can retire comfortably and help their children pay for college. (Read Brian’s update from last month.)
Brian’s Net Worth Statement
Brian’s Income Statement
Comments and analysis from Brian
This month is about insurance. We have home and auto insurance through USAA, which has been a pleasant experience the few times I had to deal with them. I get medical and life insurance through my employer and have coverage for my wife and children, as well as myself. I think I am covered and have no plans to change my insurance in the near term.
Like I said last time, this month I got a big return from taxes (all of the Other income was taxes) which was a nice boost to my cash flow. We did have a pretty expensive unplanned expense this month, which did put our expenses over my normal income. That expense was renewing my wife’s teaching license. We learned that if we did not renew she would not get grandfathered into the new system and that it would require a lot of work and possibly money to get back into teaching.
At the end of the month meeting I have with my wife, we noticed the groceries were still high; the main problem was all the little trips really added up. Previously, we were grocery shopping for two weeks at a time, but this doesn’t seem to work, since we are still running out to get items that we forgot, or that we need because the meal plan changed. This month we are going to try one-week trips. For the first week we plan to eat mostly from our pantry.
Another goal is to make just one trip and set a dollar amount for the week. This month we did have the last of our annual expenses come out. In the end, this month was not a great month, and we are still working on cutting back.
I did get my withholding changed so my monthly income will be going up next month.
Feedback from Jeff Rose, CFP
Jeff provides encouragement to Brian, as well as offering some solid tips on saving money on insurance. If you want to save money on your policies, Jeff’s advice is solid.
Feedback from Luke Landes
Looking at the pure numbers on the income sheet, it’s a good thing you had that tax refund coming in this month. Now, it’s not like you couldn’t have been to handle your expenses as they were, but the refund kept your cash flow positive for the month.
I’ll be interested in hearing more about how you find your success in reducing your grocery expenses.
Good job in optimizing your withholding. Reducing your potential tax refund next year puts more cash in your pocket throughout the year, and that gives you a little more of a cash flow cushion, and possibly the opportunity to invest and get a better return than the 0% loan you’re giving the government. If, however, you find your finances are in better shape with the “forced savings” over overpaying your tax through the year, it’s still a legitimate choice.
Published or updated March 27, 2014.