Snapshot then and now.

[MaxPowers]

So I am trying to track my expenses and net worth. I think I am doing fairly well, what do you think?
Income: 4017 (as of 22 APR)
Taxes/soc/health insurance/ext: 575 (22 APR)
spending:
I spend 15-Dec ___22-Apr
Insurance 144 _____ 144
Electric 60 ________ 60
Cable 44 _________ 28
Rent 418 _________ 415
Loan 220 ________ 0
IRA 417 _________ 417
gas 55 __________ 55
phone 80 ________ 30
food 250 ________300

total 1688 _______ 1449

Net Worth: (not including assets)
oct 25 2008
Cash $13,664.35
IRA $5,426.55
Stocks $0
SDP $6,050
Total $25,140.90

Dec 15 2010
Cash 15000
IRA 23000
Stocks 38000
total 76000

april 22 2011
Cash 20000
IRA 26600
Stocks 44500
total 91100

Cash on the 1st in my main account
1-Aug 15157
1-Sep 16200
1-Oct 16000
1-Nov 17350
1-Dec 15200
1-Jan 13800
Feb-11 15000
Mar-11 12300
Apr-11 18300

So what do you think? I am 26, single, and an E6 in the Army. I spend a lot on stuff that I do not budget for, but I have fun.I analyze things before I buy, but never over analyze. But lots of money slips through the cracks and I need to get a leash on that. I do not have financial trouble so I don't worry about my finances. One question I had was, how did I make $15000 in 4 months?

[97guns]

THINGS START ADDING UP REALLY QUICK by the time you know it you'll have enough cash for the down on a house or buying one outright.

[jpg7n16]

I think you're holding WAY too much in cash. If you need the liquidity, have you considered bond mutual funds?

You should have between 3-6 months expenses held in cash. Your non-savings (non-tax) monthly expenses are about $1500(includes health insurance), plus you have some unaccounted for expenses (about 750/month, see below), and you have $20k on hand. That's way too much, unless you have a short term goal you're saving for. If you want the liquidity, or are risk averse, I'd probably move about $10k to a mid-term bond fund. If you can tolerate the risk, I'd move it to my stocks (unless you're saving it up for a short term goal)


How did you make $15k in 4 months? That's easier to explain.

Your income is $4017, part of your 'expenses' were IRA contributions (which is not a true 'expense' per se as it's just added to your IRA balance each month), so your non-saving expenses were $1607 = net gain per month of $2410. Times 4 = 9,640.

Then your stocks increased in value from $38,000 to $44,500 = gain of $6500

Your IRA increased in value by 3600 of which 1668 (4*417) were contributions, so IRA investments had gains of $1932.

Total gain = $18,072 (surplus income + stock gains + IRA investment gains)

The difference is due to unaccounted for expenses over the 4 months. Given what you said in your post, you've got some expenses you don't track. These totaled about $3k for the 4 months. aka $750/month.

You might want to work on narrowing those down, as they account for nearly 30% of your overall expenses.

[MaxPowers]

Originally Posted by jpg7n16

I think you're holding WAY too much in cash. If you need the liquidity, have you considered bond mutual funds?

Thank you for the analysis. I need to watch what I am spending and budget my money more.
I have a lot of cash I know. I plan on buying a car at the end of the year/beginning of next year.
But until then, what are some stocks I can hold with low risk? Isnt a ETF better than a mutual fund? Vanguard bond ETF? which one? Maybe increase my position in some of my vanguard ETFs within my stocks like energy, financials, REIT, emerging markets, or small caps??

[jpg7n16]

Originally Posted by MaxPowers

Thank you for the analysis. I need to watch what I am spending and budget my money more.
I have a lot of cash I know. I plan on buying a car at the end of the year/beginning of next year.
But until then, what are some stocks I can hold with low risk? Isnt a ETF better than a mutual fund? Vanguard bond ETF? which one? Maybe increase my position in some of my vanguard ETFs within my stocks like energy, financials, REIT, emerging markets, or small caps??

There isn't really a stock safe enough for a 1 year timeframe. Stocks are not meant to be short term investments. Ideally, you'd like to hold them at least 5 years.

In a vacuum, you're holding way too much in cash. But if you're saving up to pay cash for a car, then that would easily explain why you need so much cash.

Knowing that you have a short-term goal you're saving for, I would keep all the $20k in cash. Either just in your bank account, or in a money market fund.


For you, I'd likely keep $10k as your emergency fund. The additional $10k would then be available for a car purchase. And then after you make the car purchase, any time you get a couple thousand over $10k, just move the excess to a bond mutual fund or ETF. Vanguard's bond ETFs would work great.

Just so you know, the longer the term for the bonds, the more fluctuations you'll experience in price. Short term bonds are more stable, long term have better yields. Not sure which is more important to you. Just something to keep in mind for after you buy your car.

[MaxPowers]

thanks. I plan on putting 10k down on a car so that works.
Where would I get into a good money market account?

[jpg7n16]

I'm afraid you'll just have to do a bit of rate-chasing. You're not gonna earn a lot. ING online pays 1%. And that's apparently pretty good. Savings Account rate information from ING DIRECT USA (I don't personally use ING online, but I've seen others on here who do. I just have my one bank account, and a Fidelity brokerage account)

But this is a link to the sticky at the top of the investing section - there's more info there about where to find the best rates than any post of mine could give you:

Online Savings Accounts & Current Rates