Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.
Kathleen is thirty-one years old, single, and living in Portland, Oregon. She loves her job, even if it isn’t very lucrative. With her $33,000 income last year, she’s looking to make more money from “side hustles” this year, such as her blog, Frugal Portland. To learn more about Kathleen, read her bio here. Kathleen is on Team Sara, with Certified Financial Planner Sara Stanich.
Kathleen’s report this month, below, includes Kathleen’s progress over the three months leading up to the end of February 2013. Following Kathleen’s own self-analysis, Sara Stanich will offer thoughts from her perspective.
Comments and analysis from Kathleen
This month was a big month for me. I finally paid off my student loans! My plans are to pay off my car loan this month, finish my taxes, and put the refund into a savings account that I will hide from my accounts in Mint. That way, I won’t “know” about it, won’t be able to tap into it, but I’ll still be able to use it toward my goals. I found a checking account at a credit union that will earn me 2%, which I’ll take, since that’s 1.5% more than my current savings account earns.
Since debt freedom is within my reach (HOLY COW I JUST TYPED THAT), I’m readjusting my goals. I want to save for vacation. I want to TAKE a vacation! I want to save 6 months living expenses. I want to save 50% of my after-tax income. I want to max out my IRA. Siphoning money into a savings account that I don’t “see” as my real money will keep me from feeling flush. My biggest concern is that I’ll just end up spending more money now that I have a bit more breathing room.
I’m not ready to talk about investing yet, since I feel like I need a healthier savings cushion before I do that.
Feedback from Sara Stanich, CFP
Cheers to paying off your student loans, Kathleen! Many of your peers will be shocked to learn it can be done!
It’s good that you are thinking about your “next” financial goals. Increasing your cash cushion and saving (and taking) vacation are really good ones. Are your IRA contributions automated, so you are set up for the year?
Also, why has your credit card debt been creeping up? It’s not out of control by any means, but it’s moving in the wrong direction. Keep an eye on that.
This communication is intended only for the person or entity to which it is addressed. Any taking of any action in reliance upon, this information by persons or entities other than the intended recipient is not recommended. Any information provided is for informational purposes only and does not constitute a recommendation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision. Raymond James and Sara Stanich, CFP, are not affiliated with and do not endorse, authorize or sponsor any third party websites, their respective sponsors, or user comments found on this or other sites.
Updated June 22, 2016 and originally published March 21, 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.