May Financial Report – Cash is King

Alas, I have found some time to sit down and give an update on our Household’s finances through the month of May (Yes I do know it is four days till the end of June). I have previously made post using graphs to visually illustrate how we have been progressing through our financial lives and thought this month I would put together a one stop shop table to highlight our financial positions changes.

The Table

As you can see we had a very good month. Some quick highlights are as follows:

Revenue vs Expenses

  • In our Revenue we had a slight bump due to an account issue in which my PTO day was removed from my normal hours. So I got paid for 88 hours in one pay period which was corrected in June as I was paid 72 hours the next one.
  • Expense management continues to be a high point for the month of May as we were able to come in our lowest month yet since we have been tracking our finances as shown in the below graph. (Though not the lowest month ever when one considers months in which no student loan payment was made this month was the lowest realized month in expenses to date)

Student Loans

  • Did not pay anything to Student Loans this month as currently working out a $300 discrepancy between their two systems. In Grace Period until June 17, 2010. This in turn had a significant impact in improving our savings and cash position for the month of May.

Cash Flow

  • Made a major movement of cash and savings into the Stock Market. Previously, we had been keeping $1,000 in a Bank of America Savings Account (0.20% Annually) to back up our Checking Account for overdraft. If you have followed us for any time we keep our Checking Account relatively flush with cash so the chances of us tapping into our BoA Savings were nil without us knowing making that cushion of cash not needed. So we decided to move that asset into the stock market and purchased more PDLI in anticipation of the November special dividend of $0.50 per share. Also accounts for the loss of $500.00 in our money market account as that too was used to purchase additional shares.

Investments

  • We now have a significant stock position which is our future down-payment on our first home. As we understand it we are approximately 12 to 18 months away from a potential move and thus have time to do some medium plays in the market.
  • We made a major play diverting funds from non-producing assets and investing into the market. While we are not anticipating any immediate returns, and are even prepared for some short-term losses, we are 90% confident that we will return our equity with a 5% to 10% ROI in the months of October or November.
  • Over the past month both of our 401k plans took a small beating. This is not to worrisome as we are both in our 20s and will surely recoup any losses over the long-term.

Net Worth

The nature of net worth is such that as long as you are deliberate in your money management you can improve it by saving or spending. This month was a saving change that results in a dramatic net worth improvement.

As this graph illustrates, despite the loss in our 401ks, we are still on track to break into a positive net worth within the next 2-3 months. Also, if you take a second to consider that this graph is only one years worth of data it is striking to see how much progress we have been able to make over such a short period of time.

Conclusion

Now May was a great month for our financial household, but one would be foolish to consider the present with no thoughts of the future. We have two major events coming in the near future that will have a huge impact on our finances.

  1. Wife will be quitting her job at the end of June
  2. Baby will be arriving in August

My wife and I have talked though at length what kind of impact her staying home will have and both are in agreement over the long-term it will be the best decision for our family. We both find extreme positive value in having a parent home full-time to raise a child and by taking off from June until delivery will give her time to unwind from her professional worries and finish the nesting process.

We continue to work towards reducing our monthly expenses to bring them into line with our future reduced income and have made great strides, as demonstrated above, in reaching those goals.

We put our student loans on hold with only a few more days left of the grace period before the full weight of the principle starts to accumulate interest. This was a decision we made in order to build up a larger cash position in preparation of the delivery and the unknown expenses it may pose.

Additionally, going forward we will likely be reducing our student loan payments from the supercharged $1,000+ amounts down to a more reasonable $500 per month (minimum due is around $390) rate and see if our budget can handle the additional payments while still making accelerated payments towards the principle.

May Budget Review
Total Revenue: $  6,554.66 Date: 5/31/2010
Total Expenses: $  3,354.70
Net Savings: $  3,199.96 48.82%
List of Assets: Change from PM Revenues:
BoA Checking $  5,212.56 $          (239.44) Job 1 $3,239.69
BoA Savings $     209.44 $          (790.93) Job 2 $2,461.00
BoA Credit Card $     244.68 $             87.25 Merril Lynch $   500.00
ING Savings $      20.97 $               0.06 Misc. Checks $   353.97
Stocks $15,755.58 $        4,552.08 $6,554.66
Money Market $        1.60 $          (519.35)
$21,444.83 Expenses:
Fixed Expenses $1,572.62 46.88%
List of Long Term Assets: Stores $   563.03 16.78%
401K (Job 1) $  3,727.76 $            (37.18) Auto $     45.78 1.36%
401k (Job 2) $  1,726.46 $          (114.67) Entertainment $     84.41 2.52%
$  5,454.22 Restaurants $   352.66 10.51%
Gas Stations $   156.13 4.65%
List of Liabilities: Online $          - 0.00%
Subsidized $  8,500.00 $                  - Cash $          - 0.00%
Subsidized $17,000.00 $                  - Tithe $   423.34 12.62%
Unsub @ 6.8% $  4,378.95 $       (1,718.22) Student Loans $          - 0.00%
$29,878.95 Other $   156.73 4.67%
$3,354.70 100%
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About odysseustoday

25 year old man starting his financial journey.
This entry was posted in Expense Management, Finances, Monthly Report and tagged , , , . Bookmark the permalink.

3 Responses to May Financial Report – Cash is King

  1. Pingback: June Financial Report – Stash the Cash | Odysseustoday's Blog

  2. Nitric Oxide says:

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  3. Pingback: Moving Expenses- Cost of moving 0.9 Miles | Odysseustoday's Blog

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