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JW, October 2013 Net Worth

This article was written by in Naked With Cash. 5 comments.


In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

JW is thirty-one years old and a father of two. He works in retail and is underemployed, and his wife and kids are on state medical plans. Their household income is supplemented by SNAP (food stamps). Read his bio for more information about his family’s situation.

His goal is to be able to provide for his family while still tithing 10% of his income to his church. JW is on Team Neal, with Certified Financial Planner Neal Frankle. Get up-to-date on JW’s progress by reviewing his update from last month.

JW’s own analysis and comments are followed by feedback from Neal Frankle and Jacob Wade of I Heart Budgets.

Neal Frankle, CFP appears courtesy of Wealth Pilgrim and Wealth Resources Group.

JW’s comments and analysis

Medical expenses: My wife fell and we ended up going to the doctor to get an x-ray. I was expecting it to be between $1,000 and $1,500 for the x-ray and follow-up appointments. We will be able to cover this out of our Health Savings Account (HSA). It ended up being nothing but a little sprain. The total remaining bills are $769. The payment did not post before the end of the month but will post early next month.

Affordable Care Act: Since the open exchanges went online on October 1 we have completed our application and will have health insurance coverage for everyone beginning on January 1. Like many who tried to use the websites, I did have some errors, it but was successful before the end of the month. I was unable to complete the application before the open enrollment period at work ended. We decided to decline coverage through work and risk the options on the exchange being more affordable. Things worked out, and our coverage through the exchange comes in at an $87 monthly savings over the cost of the policy through work.

Work and 401(k): My annual review came through. This year I received a 4% pay raise. We decided to put the whole amount of the raise into my 401(k). That way, it will seem like there has been no change in pay, but it will increase our retirement funds. My company will match the first 4%. Between pay dates and the gap between filling out the paperwork there is nothing in the account yet, but it will start next month.

Income and expenses: During the month we brought in $2,560 in income. The majority of this was from my job. Expenses were broken up in the following categories: Automotive $406; business and money making efforts $295; education $130; food $938, including food stamps ($287) and restaurants ($43); donations $300; holiday spending $142; health spending $259 (covered by the HSA); hotel for next month’s Family Planning Conference $160; other spending under $200. Total for the month was a net increase of around $300.

Feedback from Neal Frankle, CFP

Congratulations on the pay increase. Was that in line with what you expected? Just curious. I would love to know if the company is expanding or not. If your firm is generally not handing out raises and you just pulled this one down, that says a lot.

I am also pleased that you decided to apply that money towards your 401(k). Many people spend their raises or only contribute up to the employer match. That’s a mistake, and I am glad you recognize it. By socking away as much as possible in your 401(k) first, you get the biggest bang for your buck. Lower income taxes and more tax deferred growth. Nice. The remaining question on this is how that money is invested presently.

Feedback from Jacob Wade of I Heart Budgets

I’m sorry to hear about your wife’s injury, how terrible. I am glad to hear that your HSA was useful in covering the expenses in this scenario. And it’s also great (and seemingly rare) to hear that you were able to obtain health insurance through the new ACA site, and came in at a cost savings. Well done!

Putting your raise into the 401(k) was a great move as well. If you have already hit the company match of 4%, though, I recommend putting additional retirement contributions toward an IRA instead. Most 401(k)s have higher fees than you can find with a good IRA, and you can even opt for a Roth IRA for future tax advantage if you expect your taxable income to rise. Of course, consult a financial planning pro before making any decisions.

Feedback from Luke Landes

The 4% raise is fantastic, and you made a great decision to set that raise aside for retirement without any chance of it getting into your hands.

I’ve been trying to select a new health insurance plan via the federal website, Healthcare.gov, because my state government opted out of a state-run exchange, and I have been having a difficult time of it. I’m glad to hear you were able to sign up for insurance through an exchange and that you experienced savings over the plan offered by your employer.

Great job at keeping your month’s expenses under your income! All in all, this has been an excellent month with good news in every area of your finances. Keep it up!

Published or updated November 19, 2013. 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.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar qixx ♦1,895 (Half-Dollar)

@Neal
The maximum possible pay increase this year was 4% so it was what i was expecting. The company is expanding but does keep close tabs on pay increases. The pay raise brings us to the company match at this point. Perhaps future pay raises will be the time to increase this amount. The amount i contribute will be in the Vanguard Institutional Index (VINIX). Company match is credited as Company Unitized Stock. I’m not yet sure how that work with my selections. Will it immediately sell and buy into VINIX or will it only sell during quarterly rebalancing. HR was not very helpful so i’m taking a wait and see approach and look at changes next year.

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avatar qixx ♦1,895 (Half-Dollar)

The quarter ended and rebalancing did not affect my Company Unitized Stock. I either need to change my rebalance options or rebalancing will not affect the company stock match and i’ll need to decide when and how much to sell.

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avatar qixx ♦1,895 (Half-Dollar)

@Jacob
Roth IRAs are new to me. I had never heard of them until a couple months ago. Any recommendations for learning about them? I’m only at the company match level until the next pay increase so i have months at least if not a full year to find out my options.

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avatar qixx ♦1,895 (Half-Dollar)

@Luke
To complete mine, through my state exchange, i had to call the contact us number. After a verification call (they made while i was on hold) and a quick change to account for the correct information i was able to complete my application without further issues. Have you tried the online chat or phone options? Could be worth the time spent.

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avatar Luke Landes ♦127,550 (Platinum)

I have tried online chat, and they said an expert would follow up with a call this past Monday. That never happened.

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