Although it’s a little late this month, it’s now time to share my personal finances. I’ve been doing this roughly every month since Consumerism Commentary started in July 2003. I did recently make one important change — I am no longer counting my “business” bank accounts in my net worth. I’m trying to separate my business, which consists mainly of Consumerism Commentary, from my personal accounts.

October was an interesting month. I traveled to my brother’s wedding in California, so there were a number of extraordinary expenses related to the event. I do have some good news, however. The IRS has approved the reclassification of my side business from a sole proprietor LLC to an S-Corporation. this should result in a refund of over $8,000 from my 2008 tax payments.

It could take a while to receive the refund, so I’m not planning anything for it yet, but it will most likely stay in a savings account for a while.

Here are the numbers.

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Personal Balance Sheet, October 2009

Earlier this year, I added my investment portfolio to the group of reports I publish on Consumerism Commentary on a regular basis. Every three months, I share my investment balances and performances. I include Quicken’s calculation of the year-to-date average annual rate of return for an idea of how each investment is performing this year.

I add to my investments periodically, depending on the investment type.

I invest in my 401(k) every two weeks when I receive a paycheck. Out of the investments listed below, I only add to four investments, in equal amount: Large Cap Value, International Equity, Large Cap Growth, and Commercial Real Estate. My employer matches up to 4% of my salary. Half of the match is invested in company stock and half is invested to match my allocation rules.

At the beginning of each month, I invest $1,000 in the Vanguard Total Stock Market Index Fund (VTSMX) at Vanguard. This automatic investment usually receives the fund price on the last day of the month, but the funds are not deducted from my linked bank account until the first day of the following month.

Those are my only automatic investments. I also invest in an IRA once a year after completing my tax return.

Here are my investment account balances and performance numbers as of September 30.

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Flexo’s Investment Portfolio, 3Q 2009

Now that I am working with an accountant, I have been making some changes to the way I track my finances. By the end of the year, I hope to have all of my business-related finances in QuickBooks. Although I am not quite at that point, I am working to separate my personal finances from by business finances. Currently, I tend to move money from my business bank accounts to my personal bank accounts as needed, which makes it difficult to track.

The report I publish on Consumerism Commentary each month will no longer contain anything business related. Any business bank accounts or credit cards will not be listed. I also won’t be publishing my business income online.

This change has affect by net worth numbers going back several years, so if you compare today’s report with any prior month’s report, the bottom lines will be significantly different.

September was another good month in terms of income. My online business continue to diversify and grow. Even with a significant payment to the IRS for quarterly estimated taxes, I managed to bring more in money than I spent. While I won’t be including a full income and expense report, I will post a quarterly investment report shortly.

Personal balance sheet and net worth statement

Feel free to ask any questions. I will be posting a quarterly investment summary shortly.

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Personal Balance Sheet, September 2009

You may have noticed that over the past few days, Consumerism Commentary has been featuring a number of guest authors. A few weeks ago, I wrote about the cost of funerals, inspired by the passing of my paternal grandmother. My maternal grandmother entered hospice care around that same time, and a few days ago, she passed away. I decided to travel to California on short notice to be with my family on the west coast for a short time. I appreciate the assistance with Consumerism Commentary provided by our writers Smithee and Jeff as well as the guest authors.

Every month, I publish personal finance reports to keep myself accountable for my financial decisions, and the travel I mentioned above is the reason August’s report is a little later than it would be otherwise.

2009 continues to be a successful year, but I have some room for improvement. My “modified net worth” includes the balance of all my bank accounts, investment accounts, invoices I have sent out to those I do business with that have not been paid yet, invoices I have received that I have yet to pay, and credit card expenses which I pay off every month. This “modified net worth” is reflected on the bottom line of the first report.

While August’s net worth is up, I expect September’s to be down due mainly to the quarterly tax payment that I will be sending to the IRS. September’s expenses will also reflect the airfare for the flight to California, which was purchased only one day in advance. Most airlines do not offer bereavement rates, or if they do, they are inconsequential discounts off a full fare. I’ll write about this in a future article.

In terms of income, August was a healthy month for my side business, but there is a lot of unexplored opportunity yet to be tapped. With all the projects I am involved in, it’s increasingly difficult to keep track of and manage everything. Additionally, I seem to be getting headaches more often, possibly due to spending too much time in front of computer monitors. At the end of last year, I decided to let the recession play out before deciding whether to leave my full-time job and pursue my side projects full-time. We’ll see how much longer I can continue both aspects of my life.

I’ve also noticed that the automated charitable payments I had been making seem to have stopped, and I’m wondering if that is a result of a change in my credit card number. Once I have a chance, this is something I’ll need to look into.

Continue reading to see my balance sheet and income statement without any further commentary. You can click on the reports to zoom in to full size. If you have reasonable questions, feel free to post them and I will answer.

Personal balance sheet and net worth statement

Income and expense report

If you have any questions, feel free to post them below.

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Personal Balance Sheet, Net Worth, Income, and Expenses, August 2009

This year is passing by too quickly. It is time again for my monthly financial reports, originally designed to keep myself accountable for my financial (usually, spending) decisions. This was a technique that has worked well for about nine years, the last six of which have included this monthly public review.

July was a strong month due to two important factors. First, there were three paychecks in this month rather than the usual two. As months are not divided evenly or equally into weeks, two months each year contain two biweekly paychecks, and July was one such month in 2009. Also, the stock market performed well in July, buoying my investments.

Overall, with a “modified net worth” approach $256,000, which may exceed that amount with some details still pending, I am up almost 40% for the year.

Some of my charitable contributions are taken care of automatically, but the payments seem to have stopped. This is likely a result of a credit card number change recently. My income and expenses report has reminded me to update my payment information on file with the organizations I contribute to.

Almost $500 in dining out? I don’t see how that’s possible, but that should be a wake-up call. I need to make better usage of the grocery store.

Continue reading for the details without further commentary. Many of the questions you might have have been answered in previous months, but if you have any questions, leave them below.

If you have any questions, please enter them here.

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Personal Balance Sheet, Net Worth, Income, and Expenses, July 2009

We have reached the half-way mark for 2009, and time certainly does fly when you keep busy. As long-time readers know, the original purpose of Consumerism Commentary was to keep myself accountable for my own financial decisions and to blog about interesting things I find on the web. I freely admit that Consumerism Commentary has expanded quite a bit since the first post in 2003. One thing that has remained constant is the monthly report of my finances.

So far this year, my “modified net worth” has increased about 30% since the end of 2008. Despite fluctuating levels of income and irregular expenses, this seems to be in line with my earning and saving pattern for the past several years. This modified net worth is not a true net worth because I do not include some items like my household inventory and tax liability. I would also need to include the value of my business to get a full accounting of what I am worth financially, but I just like to keep things simple. I do include the private-party sale value of my car from Edmunds.com even though I do not intend to sell, and I only update the value once or twice a year. And if I decide to buy a house, I would include its value as well.

The quarterly tax payment due in June took a bite out of my monthly income. I plan for this my transferring a portion of my other earned income into an account earmarked for tax payments each month, but income will likely not keep pace with my estimations.

Continue reading to see my balance sheet and income statement without commentary. You can click on the reports to zoom in to full size. If you have reasonable questions, feel free to post them and I will answer. I will include my quarterly investment report in a following post.

Personal balance sheet and net worth statement

Income and expense report

If you have any questions, feel free to post them here.

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Personal Balance Sheet, Net Worth, Income, and Expenses, June 2009

Happy Independence Day to anyone celebrating today! I’m celebrating by spending time with friends later and sharing my investment portfolio with readers now.

Last month, I began sharing my investment portfolio more in-depth than I have in the past. This is part of a renewed effort to make myself more familiar with the investments I have chosen and to develop a better overall investing strategy for multiple targets and time horizons. This will also help with determining the proper asset allocation for my investments.

The last time I rebalanced was when my 401(k) was basically my only investment. At that time, I configured my account to automatically rebalance my portfolio every quarter. Now, with investments scattered in IRAs at two different companies and non-retirement investments in the mix as well, it has been more difficult to determine what I should be doing with my investments.

First, according to Quicken, here is my overall asset allocation for my investment account only.

Investment allocation

If this allocation were to include all assets, it would be heavily weighted towards cash. The chart above only takes into account cash held in investment accounts and cash that is part of a mutual fund’s mix. The “Other Asset Class” consists of the Real Estate Fund in my 401(k). Unfortunately, the asset mix categories are not configurable by Quicken. Each investment must be assigned one or more of the existing categories.

Here is the detailed breakdown, account by account.

Flexo’s investment detail

I provided an explanation for these investments last month, so I won’t repeat that here. The YTD performance calculation comes from Quicken’s internal rate of return included in the Investment Performance report. It is the “average annual return” for each investment.

The investments where I have been dollar-cost averaging as the stock market increased have performed worse than the investments I have not added funds to. As I continue buying, I’m buying at higher prices as the fund values increase, so my performance will continue to get worse. That is a drawback to periodic investing, such as the biweekly investment into my 401(k) or my monthly investment of VTSMX. Dollar-cost averaging works better when the stock market is declining, assuming values return to a high at some point in the future.

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Flexo’s Investment Portfolio, 2Q 2009

Although I post my financial reports each month to keep myself accountable for my financial decisions, I have moved to summarizing my investments rather than listing all the details. My reports now simply separate my investments between retirement and non-retirement accounts.

An important part of anyone’s finances is how investments are allocated among stocks, bonds, or other forms of investments like real estate. It’s also important to look at asset allocation at a deeper level, such as the size of the company invested (large-cap, small-cap, etc.) or the type of bonds (municipal, corporate, etc.).

Continue reading for my investment account balances by investment as of May 31, 2009. I will also explain why I have invested as I have.

The investment in AIVSX was held in an Universal Transfers to Minors Act (UTMA) account until I graduated from college. At one point, I was adding to this account monthly until I realized that a front-end load of 5.25% was immediately reducing any return I was earning. In September 2004, the discount brokerage decided to start changing an annual fee for holding this account, so I removed the funds from the company immediately and moved it into Scottrade.

The investments in the iShares exchange-traded fund, Microsoft, and Akamai were made with free money from ShareBuilder. All three investments have lost money since I first used bonuses from Sharebuilder to dabble, but I can’t complain.

I joined my company too late after its initial public offering, so I did not qualify for stock options like many of my colleagues. I do, however, invest ten percent of my salary in company stock through a special discounted purchase plan. Originally, my intent was to sell each quarter’s lot of shares as soon as I qualify to do so, but the recession has brought the stock price down. I may be tempting fate, but I plan to wait until the end of the year to sell the shares I’ve accumulated since the price started decreasing.

My 401(K) is a hodge-podge. Unfortunately, there are not many low-cost options available. Even the lone index fund has high fees. When I originally started with the company, I chose one of the allocation-building options based on an “aggressive” risk profile, but I’ve messed around with the allocation too often without rebalancing. Studies have shown that 401(k)s perform better when employees leave leave them alone, so one of my goals for the end of the year is determine what I want my 401(k) to look like and stick with it.

Moving forward, I’ll include my investment portfolio with my monthly financial reports, but only at the end of each quarter. Even with Quicken, it’s difficult to properly calculate my investment performance (the internal rate of return), but I’d like to include some measure of performance each quarter.

Another investment-related goal for this year is to determine whether I should start investing in an education savings account or 529 for a possible future child’s education before knowing whether I will have children.

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Flexo’s Investment Portfolio, May 2009

Every month, consistently for the past few years, I take the opportunity at the beginning of the month to develop financial reports. The first report I post every month outlines my “modified” net worth, basically a balance sheet including my bank accounts, investments, the approximate value of my car, and my credit cards. Following the net worth report, I publish an income and expense report. This includes details about the income I earned during the month as well as my discretionary and non-discretionary expenses during the same period of time.

After my net worth decreased last month, mainly due to a large tax payment and poor market performance, my net worth is back up 6.3% for the month of May. Income, on the other hand, is significantly down this month, more in line with my expectations moving forward.

Keep reading this article to see my May financial reports. I will not give further commentary, but I will answer any reasonable questions.

Personal balance sheet and net worth statement

Income and expense report

If you have questions, feel free to post them here.

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Personal Balance Sheet, Net Worth, Income, and Expenses, May 2009

Each month I open my personal copy of Quicken Home & Business to the public. This tradition was the original impetus for creating Consumerism Commentary in 2003. At that time, at the age of 27, I was about one year into managing my own finances. Prior to that, my own money was mostly something I ignored. That was not a successful approach, so I made the decision to switch gears.

Since then, I have been posting my net worth statement here, keeping myself accountable for my decisions. More recently, I expanded this voyeuristic exhibitionism to include a report listing my income and expenses. The two reports help provide a fuller picture of my finances.

April was not a bad month for my finances in general, but my net worth decreased this month. The biggest driver for the decrease was the check I wrote to the IRS. A large tax bill means I’ve been doing something right on the income side of the equation. Speaking of income, I saw an expected decrease this month. I also expect a bigger decrease for May. Keep reading for my balance sheet and income statement. I’ve included thumbnails in the post, and you can click on the images to zoom in.

Personal balance sheet and net worth statement

Income and expense report

As I mentioned last month, I do not plan to offer additional commentary, but I will answer questions if anyone has any.

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Personal Balance Sheet, Net Worth, Income, and Expenses, April 2009

If you have been following Consumerism Commentary, you might be aware that I publish a monthly report of my financial well-being, and I have been doing so since 2003. Here is my latest balance sheet, whose bottom line represents my “modified net worth.” That number has increased in March by 12%.

Rather than provide all the commentary as I have done in the past, from now on I plan on posting the reports without additional commentary. I will be happy to answer questions or take suggestions, however.

Continue reading for the reports. Thumbnails are included in the post below. Click on the images to see larger versions of the reports.

Personal balance sheet and net worth statement

Income and expense report

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Personal Balance Sheet, Net Worth, Income, and Expenses, March 2009

Did you read my February balance sheet? This article contains my personal income statement, which goes hand-in-hand with the balance sheet. These two reports provide a relatively complete accounting of my financial standing and progress.

February was short, but good for a number of reasons. Setting personal records, my gross income and net income for the month were higher than any other month I’ve experienced. This was thanks mostly to the biggest month in terms of visitors to Consumerism Commentary since I created this website in 2003. It seems to be an anomaly; I expect traffic to return to normal, but it’s quite possible to see similar surges again this year. I don’t count on it, however.

I don’t generally like to write about blogging on Consumerism Commentary. I write about personal finance, not about blogging. On the bottom line in February, I managed to save over $22,000. Please keep in mind this is a theoretical amount; it depends on me receiving checks. There is still some income I recorded last year that I have not yet received. Keep reading this article for the numbers and explanations.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.

Income

In February, I received my annual bonus for my day job, where I work for a large financial company. The bonus is included in the “Salary and Benefits” line. While my company wasn’t subject to the issues that brought several financial companies down last year, we were still significantly affected by the industry and the stock market. Management started early preparing us early for low bonuses and salary increases. This was my first year as an “exempt” employee, which carries with it a wider bonus range. I didn’t receive a bonus that reflected my performance, however. My annual increase was not significant, either, but combined with a promotion and raise last year, I’m still doing better. Even though it wasn’t great, my boss explained that my increase was twice the size the average increase of the entire department.

The annual increase doesn’t take effect until the first paycheck in March.

I still have decisions to make. Time I spend working on my business pays off better than time I spend working at my day job. Leaving my relatively stable career would offer more time to devote to writing, but it would also entail finding my own medical insurance coverage and dealing with a less than stable income.

Expenses

There is nothing out of the ordinary to report here. I purchased some new clothing, recorded under the “Household” category. I have been holding onto a lot of old clothing. Some of my shirts, while still in very good condition, were more than ten years old. I decided to replace some old clothing, most likely acquired during college, with new, better quality items. I should continue to clean out my wardrobe about twice each year. I’m finding it hard to adapt from my old approach of spending as little money on clothing as possible. In February, I purchased new sneakers, new work-quality pants (for a financial company, we’re surprisingly casually dresses), and several new shirts which I found for great prices.

This month, I plan to purchase airline tickets for a vacation in April. Besides tax, rent, and possibly utilities, this should be my largest expense of March.

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Personal Income Statement, February 2009

Over the course of February, my “modified net worth” grew 7.5% despite yet another unremarkable month for the stock market. As of the end of the month, my bottom line — a variation of net worth — surpassed $200,000, but was still below my original goal for December 31, 2008.

Every month, I post several personal finance reports on Consumerism Commentary to help keep myself accountable for my financial decisions. It’s a tradition that dates back to July 2003, when my net worth was about $13,000. This was just a few months after my net worth surpassed $0 for the first time.

Take a look at the numbers first, then read some of the following explanatory remarks. You can click on the graphic to view a larger version of the report.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.

Current assets

The first line, “Cash in Banks,” includes savings and checking accounts, as well as cash held in brokerage accounts. This is a lot of money to have uninvested, but I do have a reason. I expect to have large bills from the IRS and the State of New Jersey when I file my taxes. The cash will also help when I place a down payment on a house, and that is something I have been saying for a few years. I am not excited about “settling down;” I have not yet decided where I’d like to live on a more permanent basis.

“Accounts Receivable” includes money due to me by clients. I still have a significant bill outstanding from a major advertiser, which I hope to resolve this month. I’d prefer to keep Accounts Receivable low while keeping income high; this would mean that clients are paying quickly.

Long-term assets

My investments look depressing. When I view these numbers each month, I struggle to keep in mind that I am investing for the long term. While experts say that equities will significantly beat inflation over the long term, I wonder if that is still true. There have been several period in history in which investing in companies wouldn’t have paid off, like the period of time we call the Middle Ages. Are we in store for a prolonged global economic crisis? When I ever make back the money I “lost” in my lifetime? We may never see the incredible growth of most of the twentieth century United States again.

We talk about the tech stock bubble of the 1990s and the real estate bubble of the 2000s, but perhaps we should be looking at the global economic bubble of the eighteenth through twenty-first centuries.

I also include the value of my car, a 2004 Honda Civic, as a long-term asset. In February, I adjusted the value of my car over the prior year using the value listed on edmunds.com. After over a year of no change in value, the price dropped about $1,000. I went back and split this decrease roughly evenly. So past dates in this report will conflict more with prior net worth reports posted here.

Current Liabilities

“Accounts Payable” mostly consists of outstanding credit card balances. I use one credit card for personal expenses — as many regular expenses I can charge to the card — and one for business expenses. Both cards earn cash back rewards. I find that I don’t spend significantly more using a credit card than I do with cash, so the method of payment doesn’t matter to me. I’d prefer to earn a few hundred dollars in cash back each year, particularly if my spending level would be roughly the same otherwise.

I no longer have any long-term liabilities, but that will change at the point in the future at which I decide to purchase a house.

Thanks for reading through this entire article. Please feel free to ask any questions. I’m completely open about my finances while I remain quiet about my identity. These reports are the primary reasons I do not divulge my name. I’d prefer to avoid a co-worker or future employer discovering more than they need to know.

I plan to post my income and expense report for February tomorrow morning. That report is generally more exciting than this balance sheet; well, it is as exciting as a financial report can be.

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Personal Balance Sheet and Net Worth, February 2009

This post contains my monthly income and expense report. If you haven’t viewed my January balance sheet, read that first. I review these reports on a monthly basis, though I may soon move to quarterly, to ensure my finances are staying on track and I’m making sound decisions with my money.

Many years ago, I worked for a non-profit organization and spent more money getting to work than I was earning. Eventually, spending more than I was earning presented financial problems, magnified when I lost my job, my apartment, and my girlfriend. Since then, I’ve been working to be more responsible with my personal finances. Not soon after, I started Consumerism Commentary to keep myself accountable in front of an imaginary audience. Now the audience is much less imaginary.

January was a good month in terms of income and expenses. If the rest of the year is like January, even if I experience no income growth, I will be in good shape. Of course, I would like to see growth, particularly in my business income. On the bottom line, I managed to save $10,923 this month, or 68% of my income. Keep reading to see the full report. Click on the thumbnail for a larger version of the report.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.

Income

My “Salary and Benefits” category was higher in January due to receiving three pay checks, as it happens several times each year. This line includes my gross pay from my day job, as well as employer’s matching 401(k) contribution. I’ll be contributing the maximum to my 401(k) this year, and my portion of that investment comes out of the salary.

The “Other Earned Income” line consists of any income generated by the work I do when I leave my office. For the past few years, I’ve put much of my waking life into Consumerism Commentary and a few other endeavors. For now, it’s paying off through advertising deals and writing opportunities. I expect that my good fortune won’t last forever, so I’m making as much of it as I can while always trying to think of other ideas to keep it moving forward.

Expenses

Under “Business,” it looks like I haven’t recorded all of my expenses this month. I should have about $300 for January on this line. I’ll have this fixed by the time I report February’s numbers. My business expenses are primarily web hosting fees, merchant fees for accepting payments online, and supplies. I have some major plans for Consumerism Commentary this year, and my business expenses will climb.

Otherwise, my non-discretionary and discretionary expenses are not out of the ordinary. My charitable contribution this month was a small donation directed towards an organization that performed in the Presidential Inauguration Day Parade in Washington, D.C.

I mentioned last month that I didn’t find it likely to have a year as good as 2008, but so far, 2009 is working out well. I’m trending slightly better than last year. Keeping the same level of income throughout the year is going to take a lot of hard work and a lot of time dedicated to these activities. As a single guy with not a lot of familial responsibilities, now is the best time to do this.

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Personal Income Statement, January 2009

2009 started off well. Since December 31, my “modified net worth” has increased 2.4% despite a sickly stock market, presenting a January bottom line of $188,566.

It’s not only a tradition for me to publish my monthly financial reports, this transparency is the original purpose of Consumerism Commentary. People post about their lives online for a variety of reasons. One reason is to hold themselves accountable for the decisions they make. By sharing my net worth, I’m exposing my financial decisions to the public, just like a public company submits quarterly and annual reports to the SEC. Even before Consumerism Commentary had readers, posting my numbers forces me to analyze my position and think about what I need to do in order to reach the next level or achieve another goal.

There is no intent to brag. In fact, although I’ve been lucky thanks to the popularity of Consumerism Commentary itself and the income it has presented, I do not have much to brag about. My financial condition, without income from my side business, would be much more dire. I apologize to anyone who finds these reports discouraging. I try to look at it from a different point of view; if I can succeed moderately, anyone (and many) can far surpass my meager accomplishments as of today.

Let’s get to the numbers first, and following the net worth report (balance sheet), I’ll discuss the details. Continue reading and click on the thumbnail to zoom in on the table.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.

Current Assets

“Cash in Banks” includes savings accounts, checking accounts, and money market funds. This number is increasing, but am I allowing it to get too high? First, I need money ready to go when I make my tax payment to the federal government in April. Next, I want to have cash available for a down payment. I do not have immediate plans to buy a house. My opinion is that I’d rather wait until I’m ready to settle down and start a family before taking up more space than I need. I’m not interested in buying a condominium, the typical intermediary step between apartment dwelling and home ownership. Once I decide to leave apartment living behind, I do not want to experience a pseudo-apartment.

“Accounts Receivable” is a balance I’d like to keep low, as long as that means I’m getting paid faster by clients. My business expenses and income are recorded in a somewhat “accrual” method, in which I record income when work is done, so when I receive payment about thirty days after I send the invoice, the accounting is basically a transfer between accounts receivable to cash. The biggest outstanding invoice right now is from ING Direct, who ran a major advertising campaign in December. If you visit Consumerism Commentary with your browser, you may remember the very orange ads.

Long-Term Assets

Like many people I know, my investments haven’t fared well over the past year or so. I just need to keep in mind that I am investing for the long term. Despite contributions to my retirement accounts, my balance shrunk this past month. I plan on continuing to buy as prices are low, but there’s no way to know exactly how low they’ll go.

I continue to leave my car on my balance sheet. Despite approaching 100,000 miles, edmunds.com has kept its value the same for the past year.

Current Liabilities

“Accounts Payable” represents any outstanding business bills, of which I have none at this moment. It also includes credit card balances. Last month, I initiated an automatic system to pay my Citi Dividend World MasterCard. Through Citibank’s website, I signed up for the service that pays the balance in full automatically by debiting an assigned bank account. The day the payment was due, I checked my account information and saw no scheduled payments. I paid the bill for the full amount due immediately.

The next day, I saw that the card had been paid twice. I transferred money from one ING Direct subaccount to another to ensure the payment wouldn’t bounce or dip into my overdraft line of credit. I now have a credit balance on the card, which will offset future spending.

I have no “Long-Term Liabilities,” car loans or student loans. While I’m happy to be debt free, I know it is only a temporary condition. At some point I will buy a house, and that will require a mortgage. I may replace my Civic at some point, as well, and I might choose to take advantage of a loan if the situation is right.

I’m considering reducing my financial reports to a quarterly basis rather than monthly. Although most of the work I do to put these reports together is automated thanks to Quicken and Excel, it’s still a lot of manual work. I am currently in good financial shape, as long as my income doesn’t falter. It may not make sense to continue reports on a monthly basis while my finances are running smoothly.

Look for my income and expense report, a companion to my net worth report. I will post it tonight or tomorrow. Both reports are necessary to get a full picture of my finances.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Balance Sheet, January 2009

On Saturday I posted my final balance sheet for 2008 and wrote about my progress this past year. Each month, I take a look at my income and expenses as well to get a fuller picture of my finances. This post contains my income and expense report.

December continues to be one of the most expensive months of the year. Continue reading for the details. For the end of the year, I included some yearly totals going back several years. To zoom in, click on the thumbnail version of the table.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.

Income

The “Salary and Benefits” category includes any compensation provided to me by my employer. The amount here consists almost entirely of my salary and 401(k) match. The “Other Earned Income” line is more interesting. This is the income earned by running Consumerism Commentary and a few other internet projects.

I had a successful year in terms of income. My goal for Other Earned Income was $100,000, with $125,000 as my “stretch goal.” I almost made my stretch goal. In the current economic environment, I expect 2009 will not be as successful, but I’ll write more about that when I get to setting my 2009 financial goals.

“Dividends and Interest” is down this year, despite higher balances, thanks to banks tightening their belts and lowering interest rates. This is the only truly passive income on the report. Increasing passive income should be anyone’s goal, particularly people who would prefer not to have to trade time and effort for money.

Expenses

The “Taxes Paid” line includes every tax I’ve paid this year except sales tax. It includes the tax I’ve had withheld from my paycheck, my final state and federal tax bills after filing this past April, and the estimated quarterly payments made throughout the year. I’m going to have a significant tax bill come April, and I’m currently looking for a great tax accountant with experience with small businesses to help me file correctly and efficiently.

Lower gas prices have helped me keep my automobile expenses low in December. Entertainment expenses were high in December mainly due to some used musical equipment I purchased from my brother. He’s a guitarist who recently ended a tour with his band, and he’s looking to upgrade. I was happy to take some equipment off his hands.

My total expenses in 2008 were down from the previous year. In 2007, I moved into a new apartment and purchased some new furniture. While I did get some new furniture in 2008, I didn’t purchase as much as I did in 2007.

The reality is that I may not have another year that was as good as 2008. I’m hedging my bets as much as possible. At work, management is working hard to manage our expectations away from receiving a bonus and annual raise. In an economy such as this, we are often reminded to be thankful that we have a job. This may be true, but it should be motivation to focus on what makes me valuable to the organization, invaluable even, and perhaps there are other environments where my skills can be used further. At the same time, I need to work harder just to maintain my “extracurricular” income, also mainly due to the economy.

2009 is going to be an interesting year.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Income Statement, December 2008

The stock market found a way to trash my net worth goal last year. Had the S&P index and my company stock increased in 2008 like they did in 2007, I would have surpassed my net worth goal for the year. Investments have a way of being volatile over short periods of time, and that was the case in 2008. Rather than finishing the year with a “modified net worth” of $220,000 or so, I ended with $186,237.

For more than five years, I’ve been tracking my financial progress live on Consumerism Commentary. I don’t do this to brag; when I started this website, my situation was not as good as it was now. I track my finances publicly to keep myself accountable and to learn from others. You may notice I didn’t put my numbers in the title of this article. This will allow readers to skip articles about my financial success and failure if they desire.

Despite the stock market’s performance, and despite not achieving some of my goals, I’m happy with my progress this year. The year-end balance sheet includes the closing balances going back seven years. At that time, I had just left my job at the non-profit arts organization and trying to put my life in a new direction.

This graphic is wide, so in order to zoom in and read the numbers, click on the thumbnail.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.

Current Assets

Current Assets includes cash in bank and investment accounts, like savings, checking, and money market funds. It also includes “Accounts Receivable,” invoices I send to clients and advertisers. Accounts Receivable is a mixed blessing. It’s good when it’s high because it means my business is doing well, but it also means that I have invoices out to customers or clients, and I’m waiting for payment. I’d rather have the funds in my account quickly. I’ve never had an invoice not be paid, but I’m now looking at a few that are overdue.

Long-Term Assets

Any assets other than cash are included in Long-Term Assets, even if I plan to use the money in a few years. This is primarily my retirement funds, but I also include the value of my car and my other investments. My car has surprisingly been the best long-term asset in terms of holding value this year. According to edmunds.com, the value of my car has increased this year. I chose not take a conservative approach and not to reflect an increase in its value.

I’ve mentioned that at the end of last year, I’ve been using a strategy of buying the Vanguard Total Stock Market Index (VTSMX) on dips. There haven’t been any attractive dips lately, however, at least not when I was paying attention. I’m waiting for VTSMX to go below $18 before dollar-cost averaging down again. So far, the strategy has been a losing one, but the story isn’t over yet.

Current Liabilities

“Accounts Payable” includes unpaid business bills and credit card balances. While I’m not as diligently staying away from my credit card as I was during the November cash experiment, I’m still hardly using my credit card. I’m finding that I’m having a hard time tracking cash expenses as well as I track credit card expenses, while I’m not using my credit card to spend on anything I wouldn’t purchase anyway. I think it’s time for the cash experiment to come to an end.

Long-Term Liabilities

December 2008 was the month I became debt-free. That is, I eliminated all my long-term liabilities. The last of these was my student loan, which I paid off in full this past month.

If you look at the bottom line, you might notice that the numbers on the report above don’t match what I’ve reported previously. This month, I changed the way I report some numbers. I’ve taken my “cash” line out. This is supposed to reflect the cash I have in my wallet, but as I haven’t done a good job of tracking my cash spending for the last four years or so, this number has grown so high that it is too inaccurate. My reports now do not include my “cash” line.

All in all, my net worth increased 50% in 2008. This coming year will be a test of whether running Consumerism Commentary and the few other web projects in my portfolio is a sustainable endeavor. I have some big plans for behind the scenes here, and much of it can only be accomplished by dedicated myself full-time. On the other hand, I seem to be poised for some growth at my day job as well. With a turbulent economy predicted for this year, it’s going to be difficult for me to predict the best course of action, so I’ll see how things go — and how long I can hold onto my sanity working almost constantly.

Later this weekend I will post my income and expense report, which will provide more insight an analysis to my monthly and yearly progress.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Balance Sheet, December 2008

Along with the monthly personal balance sheet, which I use to track my net worth from month to month, I publish a report that outlines my income and expenses. The two reports together help me focus on the total picture.

My “extracurricular” income — money I’m earning outside of my day job through writing for Consumerism Commentary and a few other online endeavors — would have been lower this month if it weren’t for a surprise client at the end of the month. This push has propelled me beyond a six-figure income for blogging and writing.

Continue reading for the details, with numbers and explanations. You can zoom in by clicking on the report.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.

Income

The “Salary and Benefits” category includes everything I earn from my day job, including a 4% salary match for my 401(k). 50% of my salary, the highest percentage allowed, is diverted into my 401(k). Half of the contribution is designated before tax, while the other half is invested in a Roth 401(k). It’s too late to fully max out my 401(k) contribution this year, but I should be able to better plan my contributions next year.

“Other Earned Income” is the line on which I record income from blogging, advertising, and writing. Basically, anything I do to earn income outside of my employment are included here. When people learn that I am earning twice as much from alternative income than I am from my day job, they ask why I don’t just quit the day job and work for myself full-time. This is the goal, and I’m getting closer. I see some trends right now pointing to lower income opportunities in 2009, so I’m going to hold onto my day job, including its benefits and relative security, for a while longer.

If the trend reverses in the first few months of next year, I may decide to reduce my hours at my day job with the intent of making blogging (and everything that goes along with it) my “day job.”

“Dividends and Interest” is my first “passive” income category. Through savings accounts and investments, I’m heading towards $2,500 earned this year by doing nothing than letting my money earn more of itself.

Expenses

My vacation helped me keep my expenses low this month. I only stopped for fuel twice and managed without a trip to the grocery store. The “Interest and Fees” category is decreasing as my student loan winds down. December should be the last month with a value in this category unless I make any money management mistakes.

Expectations for December

The holiday season is here, and I have more gifts to buy. That will most likely be my main expense for December. It will probably not be my largest expense, however. I am faced with making decisions about charitable contributions this month, like I was at the same time last year. I don’t expect my alternative income to remain this high. In fact, December might be this year’s lowest month.

In December, I will continue my November Cash Experiment. For years I’ve been using credit cards for almost all expenses, earning cash back rebates along the way. The rebates are harder to earn now, and paying cash or using checks and debit cards might subconsciously encourage me to spend less. My progress in this experiment so far has been inconclusive, but it’s not a scientific experiment anyway. After another several months, I may have enough data to determine whether I should continue using cash or allow myself the conveniences of a credit card.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Income Statement, November 2008 (Net Income: $22,787)

It doesn’t look like I’m going to meet the goal I set for myself last year. A net worth of $210,000 is out of the question unless the stock market experiences a miraculous recovery. All things considered, my finances are still in good shape.

Every month, I review my account balances and income vs. expenses to keep myself accountable for my financial situation. I’ve been posting my financial reports online for about five years.

Despite further slips in the stock market, my “modified net worth” increased in November. This is attributed to my alternative income, which will be outlined in a post later today or tomorrow. But keep reading this article to see the breakdown of my net worth.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.

Current Assets

Current Assets includes cash in bank and investment accounts, like savings, checking, and money market funds. It also includes “Accounts Receivable,” invoices I send to clients and advertisers. Accounts Receivable is increasing, which is good for business.

Long-Term Assets

Any assets other than cash are included in Long-Term Assets, even if I plan to use the money in a few years. This is primarily my retirement funds, but I also include the value of my car and my other investments. Surprisingly, my car has been the best “investment” over the past year. According to edmunds.com, my car’s value has actually increased to $9,059.

I don’t plan on reflecting that in Quicken because it doesn’t make much sense.

I’m trying not to focus on my investments. My strategy right now is to keep my head down and continue the process that should pay off in the long run: continue bi-weekly investments in my 401(k) with the same asset allocation I determined last year, invest in an SEP IRA once a year, and buy the stock market on the dips at a rate of about $500 per month.

Current Liabilities

Thanks to my November cash experiment, I have hardly used my credit card over the past month. As long as I keep this experiment going, I my current liabilities will continue to be low.

Long-Term Liabilities

I have only one long-term liability remaining, my student loan. That’s not for long, however. I’ve already scheduled my final loan payment for December 15. At that point, I will be fully debt-free for the first time since I’ve been an independent, income-earning individual.

That won’t last long. Society dictates I join the home ownership club, and that is the plan for when I feel I’m ready to “settle down.”

How was November for you, financially?

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Personal Balance Sheet, November 2008 ($180,926, +6.5%)

Despite the 6% decrease in my net worth in October, my income and expenses were healthy. My income was at my expected level for both my salary and “extracurricular” income. October’s expenses were a little higher than expected, but still within an acceptable range.

Each month, to accompany my balance sheet, I publish my income and expense report to keep myself motivated to make decent decisions about the management of my money. I’ve done a good job of using Consumerism Commentary to hold myself accountable. As my income increased, however, I’ve allowed myself more leeway while continuing to spend less than I earn.

To see my progress, continue reading this post. Click on the thumbnail for a larger version of the income statement.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.

Income

My salary and benefits consist of the paycheck I receive from my day job as well as my 401(k) matching contributions. 25% of my paycheck is invested in my 401(k) and starting in November, the percentage will increase to 50%. I will not max out my contribution this year, but I will next year after adjusting my percentage again. Also, 10% of my paycheck is diverted to my company stock purchase plan, which lately has not seemed like the benefit it once was due to the lackluster performance of my company’s stock.

The “Other Earned Income” category lists the income I receive from other activities such as writing online. At this point, I’m able to determine that changing my policy earlier this year to not accept text link advertising on this website has set my income back about one year. I mentioned last month that I am still considering leaving my day job to pursue my other interests full-time. The latest analysis claims that next year will be tough for those who earn money through advertising, so I’m going to continue taking a cautious approach.

Nondiscretionary expenses

Although I was able to save money on food and groceries last month, my expenses this month seem to have made up at least part of the difference. The recent decrease in gas prices is also helping to ease my expenses. My utilities expense was higher in October because my September electricity bill ($125) was paid in October as well as my October electricity bill ($90).

Discretionary expenses

This month, I initiated a sustainable membership with WNYC, a public radio station affiliated with National Public Radio. I listen to the station during my commute in the morning and the afternoon. Each month, $10 will be deducted from my credit card (paid off every month, of course), and included in the “Charitable Contibutions” category. WNYC is a large organization with an operating budget amounting to millions of dollars. Usually, I like my charitable contributions to make more of a difference for the organization, but I’m continuing to re-think my strategy for giving.

Every year, I travel to visit family on the west coast over Thanksgiving. I purchased tickets for my cross-country round-trip flight last week, finding a decent deal on JetBlue. I decided to pay an extra $60 to reserve seats with extra space on both ends of the vacation.

Expectations for November

I expect a decrease in my outside income in November and going forward, but I might make up for the coming month’s difference thanks to freelance writing for a major magazine. I should manage to also decrease my expenses in November. Stock market performance, with the largest effect on my net worth, is a primary concern, but I need to spend more time focusing on decreasing my expenses and increasing my income.

In November I plan to experiment with a cash-only payment option. Where possible, I plan to use only cash rather than credit cards to see if the change has an effect on my level of spending. This is will be somewhat difficult when I purchase gas for my car; I’ll need to make sure I withdraw enough from the ATM. This will also limit my ability to purchase items online, which is unfortunate due to Amazon.com’s low prices when compared to local stores at which I usually browse. It will be an interesting experiment.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Income Statement, October 2008 (Net Income: $9,074)

Following the end of each month, I publicly review my personal financial condition. This is the primary reason I do not use my full name on this blog; I’d like to be able to continue sharing the specific details of my finances without providing people who know my in “real life” the ability to search for my identity online and discover Consumerism Commentary. A few friends and family are familiar with Consumerism Commentary, but that’s the extent of my publicity among people who may want to know more about me.

Like September, I ended the month with a lower “modified net worth” than I had when the month began. October was worse that September, however. My bottom line was $162,881 in October, down over 6% for the month.

Continue reading this post for the report including some explanations.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.

Current Assets

This category includes savings and checking accounts (”Cash in Banks”) as well as anything owed to me by clients or advertisers (”Accounts Receivable”). I also include balances in investment accounts that are invested in money market mutual funds. In October, I moved a sizable portion of my high-yield savings to a tax-exempt money market fund (VNJXX) and so far it hasn’t paid off well.

Long-Term Assets

The Long-Term Assets category consists of my investment accounts, including medium-term investments and brokerage accounts as well as my retirement accounts. As I mentioned above, if I have money market funds in my investment accounts, I include that above in “Cash in Banks.” Since money market funds are almost fully liquid, it makes sense to include them as current assets.

Checking my investment balances last month was upsetting. Along with the stock market in general, my investments fared poorly. Despite putting thousands of dollars into the market over the past year, the account values are below their levels from one year ago. The performance of the stock market is the sole reason that achieving my net worth goal of $210,000 for the end of 2008 seems like a fantasy.

Nevertheless, I have increased my 401(k) contributions from 25% of my salary, split almost evenly between traditional 401(k) and Roth 401(k), to 50% of my salary. I won’t max out my 401(k) contributions this year, but I should be able to plan better for next year.

Current Liabilities

Accounts Payable includes any money I owe within one year, including credit card balances and any bills I owe. Most bills I simply record as an expense once they are paid, but some I record as a liability when the expense is incurred, such as expenses for anyone who works for me. My credit cards are paid in full every month to avoid fees and interest expenses.

Long-Term Liabilities

Once I’ve been free of a car loan for two years, that item will drop off the report. My student loan is almost paid off, and I’ve been increasing the amount paid for the last several months in order to meet my goal of eliminating this by the end of 2008. I should achieve this goal, paying about half of the loan balance this week and the remainder in December. The interest rate is low, but still higher than most of my savings accounts. Unfortunately, I do not qualify for a tax deduction on student loan interest paid.

I will soon post my income and expense report for October, coinciding with this balance sheet.

How was your performance in October? I hope you performed better than my 6% decrease.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Balance Sheet, October 2008 ($164,209, -6.1%)

While September wasn’t as bountiful as August, I’m still adding to my bottom line. Even though my balance sheet showed a decline, it was mainly due to unrealized losses in investments, not a lack of income.

Each month, to accompany my balance sheet, I publish my income and expense report to keep myself motivated to make decent decisions about the management of my money. I’ve done a good job of using Consumerism Commentary to hold myself accountable. As my income increased, however, I’ve allowed myself more leeway while continuing to spend less than I earn.

Over the last few years, a larger percentage of my income has come due to the blog itself, a situation that was not originally part of the plan. To see my progress, continue reading this post. Click on the thumbnail for a larger version of the income statement.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.

If you’ve been following Consumerism Commentary, you may notice that I’ve revised the report a little. This new version of the income statement consolidates business expenses and separates “nondiscretionary” from “discretionary” personal expenses.

Income

My salary plus my employer’s matching contribution to my 401(k) adds up to exactly $4,000 each month ($6,000 in two-paycheck months) since my promotion and second raise earlier this year. I guess the question now is how long to continue working at this job while I’m earning more than twice as much outside of it.

There are two main reasons to stay at my current corporate job for the short-term, the subsidized medical and dental benefits and the relatively stable source of income compared to an unsteady and untested self-employment income. I continue to evaluate this every month to determine whether the free time granted by quitting this job would allow me to earn as much as my day job salary, benefits, and subsidies.

Nondiscretionary expenses

With a concerted effort, I was able to save money on groceries this month. I’ve already made up for that savings with a large supermarket visit this past weekend to stock up on food for a few weeks as well as by spending more money on dining out.

September’s healthcare expense resulted from a trip to the dentist this past month which involved some work not covered by insurance. The expense made up for the savings in my electricity bill, which was lower due to more favorable temperatures.

Discretionary expenses

A friend of mine is involved with the search for a cure to Polycisctic Kidney Disease. I helped her run a fundraising event in September and helped with a small contribution. Before the year is over, I have more decisions to make about charitable contributions.

At the end of last year, I created a charitable gift fund to help organize my charity, but I invested in the stock market, which has faced a significant decline this year. I think I learned from this mistake and will in the future put any money destined for charity within a year into a money market fund; the money invested in the stock market will be for future charitable contributions.

This still leaves the question of where to invest, the subject of another post.

My “Dining Out” category probably doesn’t my actual expense. I have been less diligent about tracking my cash spending. In order to fix this problem, I am trying out a new piece of software for my BlackBerry. My first obstacle is remembering to use it.

Expectations for October

This month I should see nothing out of the ordinary in terms of my salary. I am working harder to increase my business income this month, however. Most of my time is spent writing, which doesn’t come as easily to me as it does to others. However, through speaking to colleagues, I believe I have a lot of room to increase my income, so this month my plan is to determine how I can bring that income up to the level of comparable individuals.

In October, I plan to purchase airline tickets to visit my family on the west coast, and travel expenses seem to increase all the time. It’s getting more difficult to find deals on flights.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Income Statement, September 2008 (Net Income: $7,473)

Every month, I publicly review my personal financial condition. If you’re wondering why I post under a pseudonym, Flexo, this is the primary reason. I’d prefer that those who know my in real life, except for a few individuals, are not aware of this information.

Reviewing my finances online helps me be accountable for my choices.

I ended September in a worse position than I started the month, like many people with money in the stock market. Here is a review of my account balances and “modified net worth.” Click on the following report for a larger image.

The above report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.

If you’ve been following Consumerism Commentary, you may have noticed that I changed the layout of the report a little. I also no longer include “cash on hand” because I don’t track that very well.

Current Assets

This category includes savings and checking accounts (”Cash in Banks”) as well as anything owed to me by clients or advertisers (”Accounts Receivable”). Cash in Banks is steadily increasing, and I’m currently making some changes. In the past few days I’ve tried to take advantage of the stock market’s declines by buying VTSMX at strategic times in a new investment account and shifting funds in my SEP IRA.

Most of my Cash in Banks is earning a decent interest rate in high-yield savings accounts, and in October, I’ve already moved $10,000 into a tax-exempt money market fund (which in next month’s report will appear under the “Investments” category.

Long-Term Assets

I consider my Investments, which include accounts at brokerages and mutual funds, as “Long-Term Assets” even though some of the funds are money markets, designed for medium-term investing (less than 5 years). The category includes accounts at ShareBuilder, Vanguard, Scottrade, as well as my company stock held at E*TRADE.

The “Retirement” category includes my 401(k), Roth IRAs, and SEP IRAs. Even though I contributed to the 401(k) this month as I do every month, the total of these accounts experienced a 9% decline thanks to decreases in the stock market. The time horizon for retirement is several decades; I don’t expect to retire for a long time. These market swings don’t bother me.

This month I will take a look at my 401(k) to ensure that I will max out my contributions. My salary isn’t great, and I would be able to contribute the maximum tanks only to income generated outside my day job.

Current Liabilities

Accounts Payable includes any money I owe within one year, including credit card balances and any bills I owe. Most bills I simply record as an expense once they are paid, but some I record as a liability when the expense is incurred, such as expenses for anyone who works for me. My credit cards are paid in full every month to avoid fees and interest expenses.

Long-Term Liabilities

It has been almost a year since I’ve had a loan for my car, so that line will soon drop off of the report. My student loan is almost paid off, and I’ve been increasing the amount paid for the last several months in order to meet my goal of eliminating this by the end of 2008. The interest rate is low, but still higher than most of my savings accounts. Unfortunately, I do not qualify for a tax deduction on student loan interest paid.

This report only tells part of the story; later this weekend, I will post my income and expense report for September.

Overall, my “modified net worth” decreased almost 1% this past month, but that’s not bad considering how much of my assets are tied up in the stock market and its performance. How did you do this month?

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Balance Sheet, September 2008 ($171,916, -0.8%)

I mentioned in my August net worth report that there were three main reasons for my 7.7% increase. One reason was the stock market, which slightly lifted some of my investments. The other two reasons should be apparent from the income and expense report that is included in this post.

My net income for the month was $11,582. That’s the highest monthly amount on the bottom line I’ve ever had when not including realized gains. In fact, my August total beats my 2004 full year total. Continue reading for the full report and details. Click on the image for a larger version of the report.

Answers to Frequently Asked Questions.

The report is made with Intuit Quicken and Microsoft Excel. Here’s an income and expense report Excel template.

Explanation and Details.

My salary line is larger than usual this month. Thanks to the biweekly payment schedule, I received three paychecks in August. When you budget on a monthly basis, three-paycheck months are big boosts to cash flow. Business income was also larger this month, thanks to a multi-month advertising deal. I’ve sent out the invoice, but haven’t received the payment yet. I consider the income recorded even though I the money is not yet in my hands. If for some reason the deal falls through, I will have to cancel the invoice and adjust my income for August after the fact.

I’m thankful of what I’ve been able to accomplish so far with my “side business.” Consumerism Commentary itself is the main driver of this income, but there are a few extra endeavors that contribute. I’m not convinced that this level of income is sustainable forever, so I’m trying to make the most of it now. I’ve considered many times leaving my day job and devoting an additional 8 hours a day to writing and managing websites, but I’ve delayed that decision for a while.

Then again, right now I have few responsibilities to people other than myself. This might be the perfect time to take a risk. On the other hand, I have a lot of flexibility and “social capital” at my day job right now. There are many factors to weigh before making this decision, but it is frustrating that I have to do all my writing and webmastering between 6:00 pm and around 2:00 am, at the same time I also need to be cooking dinner, doing chores, and spending time with my girlfriend. Those precious 8 hours “lost” to a moderately-paying but relatively-secure corporate job might be better spent working for myself.

I’ve spent about $500 so far replacing items stolen from my car last weekend. I think I’m going to pass on replacing my GPS navigation system. Another notable purchase this month is a pair of running shoes. I’ve started walking during my lunch hour at work, trying to maintain four miles per hour for about thirty minutes. My sneakers don’t provide the right kind of support, so I went to an expert who analyzed my gait and recommended shoes that will provide support where I need it.

I expect September to be a slower month. While my regular income will remain constant — I will receive only two paychecks this month — I expect a decrease in overall income. My goal for now is to keep income from my websites equal to or greater than income from my day job, and that might take some extra work, and some luck, through the end of the year.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Personal Income Statement, August 2008 (Net Income: $11,582)

It’s a long-standing tradition at Consumerism Commentary to review the details of my finances at the end of every month, and it’s that time again. I start with a “net worth report,” a list of my bank account, credit card, and loan account balances, investment values, and some more ethereal numbers like my car’s value and “accounts receivable.”

August helped me out financially for a few reasons, two of which I’ll explain in the forthcoming income and expense report. The third reason is the stock market, slightly up in the month of August, buoying my investments tied to market indexes. In total, my accounts were up 7.7% over the month, the largest monthly increase this year. The bottom line of this report is a modified net worth of $174,669. I call this a “modified” net worth because the report is more complete than a list of bank account balances but not quite as complicated as a net worth figure that a business might use.

For the details, continue reading. Click on the thumbnail for a larger report.

Answers to Frequently Asked Questions

• The report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.
• The credit card balance is paid off every month and earns cash back.
• My student loan interest rate is 4.25% and my savings account interest rates are mostly above 3.0%.
• I determine the value of my car using the private party value from edmunds.com, but only several times a year.

Explanations and Details

My savings is now at the highest level it has ever been. While I’ve been fine with accumulating a large bank account balance in order to prepare for the purchase of a house someday, and I’m not in any rush, I’m starting to feel that I need to revise my strategy. With savings rates losing ground to inflation, I could probably stand to move some money into CDs and more into other investments. Paying off my student loan would save me $30 to $40 a month in interest.

The “Accounts Receivable” balance seems unnaturally high. It may be time to try to clean up that account to see if I’ve received payments that I haven’t applied to an invoice. If that’s the case, it would mean that rather than “moving” money from Accounts Receivable to a bank account line, the payments may be listed in two places.

In August, I increased the amount of money I directed towards paying off my student loan to $1,200, continuing the trend of increased payments since the beginning of the year.

I’ll have more to write about in my income and expense report, which will be posted later today.

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Personal Balance Sheet, August 2008 ($174,669, +7.7%)