As featured in The Wall Street Journal, Money Magazine, and more!
     

Kathleen February 2013 Net Worth

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


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.

Sara Stanich, CFP appears courtesy of Stanich Group and Cultivating Wealth.

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 April 17, 2013 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.

Email Email Print Print
avatar
Points: ♦127,435
Rank: Platinum
About the author

Luke Landes, also known as Flexo, 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 him and follow Luke Landes on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar Anne

Congratulations on paying off your student loan! And how exciting that your car loan will be gone so soon. How much extra cash will that free up per month?

I think automating your savings (maybe equal to your past debt payments or something) is a great idea, because yah lifestyle creep happens and protecting ourselves from ourselves is a smart move.

I’m assuming your credit card is paid in full each month — this is just the balance from the last day of February?

Reply to this comment

avatar Kathleen

Yep, credit cards are paid in full each month (which is why I don’t like listing them here!). This last month had a bicycle on it, so it was higher than usual. I’m thinking of NOT automating my IRA and just putting every last bit of my tax refund there, freeing up hundreds of dollars a month. That way, I can automatically save (hopefully) close to $1000 a month.

Reply to this comment

avatar Anne

The downside to a lump contribution is missing out on dollar-cost-averaging. The markets are at a high right now, and while they could go up, individual shares and whatnot are more expensive. Still, investing period is better than nothing at all!

You could also put your tax refund in a separate bank account, out of your day-to-day spending, and have automatic contributions come from THAT account if you did want to do the dollar-cost-averaging approach.

Reply to this comment

avatar SteveDH

HOLY COW SHE JUST TYPED THAT -

Reply to this comment

avatar SteveDH

Oh wait, I can say more. You’re certainly headed in the right direction. Listing credit card debt is necessary to reflect an accurate net worth even when it’s paid off each month. Your plans and goal setting will guide you well and a lot can be said for living without long-term debt. On the other hand debt can be used wisely and shouldn’t be dismissed out-of-hand. Your fear of spending more because you have more available has a strong historical record that doesn’t bode well for a lot of folks. A strong emphasis on managing your cash flow might be a solution. Automated contribution are a cash flow tool because it accomplishes much the same thing as your “hidden” saving account.

Reply to this comment

Leave a Comment

Connect with Facebook

Note: Use your name or a unique handle, not the name of a website or business. No deep links or business URLs are allowed. Spam, including promotional linking to a company website, will be deleted. By submitting your comment you are agreeing to these terms and conditions.

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Previous post:

Next post: