Real World Finance$

I went to play golf a few weeks ago and was planning on  using the rest of the money on a gift card my wife had given me.  Unfortunately, the golf course changed ownership over the winter and they no longer accept those gift cards.  I got in touch with the previous management company and gave them the card information.  They sent me a Pre-Paid Master Card with the balance of my gift card on it.

The pre-paid card is activated on a website and lets you track the balance on there (and add more to if of course).  I was thinking though, could the old idea of “envelope” budgeting be turned into pre-paid credit card budgeting?  Seriously, for someone like me who rarely ever uses cash, this could possibly be an interesting experiment. 

Let’s say you get individual cards for groceries, gas, eating out, etc.  Every week/paycheck/month you could transfer an amount to the balance of the card automatically from your bank.  When you are out of money on that card, it gets rejected and you have nothing left to spend on that category. 

What do you think?  Worth the effort to setup and manage?

The year is half past now.  But, as most everyone has noticed, the market has not been a pleasant thing the past couple of months since I’ve done this.  June was not exactly a pretty month and July is a big question mark at this point.  Let’s look at the real numbers though and I’ll get into it from there.

• Credit Cards - Yep, the balance went up this past month.  We had been saving for our new TV for a while.  With getting our economic stimulus we decided to go ahead and do that now.  However, since the store was running a 3 year, 0% interest deal, we put it on the card (that we already had) and I’ve set up auto payments from our bank account for the next 30 months to pay off the balance.  So, yes, we used the card, but it was planned for and will be paid off with no effort or cost.  That allows me to keep money in our savings account longer and earn more interest.
• Net Worth - Down almost $3,000 this month.  Part of that comes from the credit card, part from the retirement plan going down in value, and part from the whole roof fiasco.  Not as bad as it should have been, since the larger of the 2 payments to fix our roof didn’t clear the bank until after the first of July.  On top of that, I also wrote down the value of the car another $1,500 the month as well.  Guess things could have been worse.
• Retirement - Down almost $100!  That’s really frustrating.  Between my 401(k) contributions and my company matching contribution, there was nearly $700 put in the plan this last month.  To see the value go down like that is rather disheartening.  Guess if I hadn’t put anything in it would have been much worse!
• Cash- In addition to paying for part of the roof, we also had our 6 month insurance renewal and our annual renewal of our VoIP.  Then there were the  summer expenses for the pool, camps, golf lessons, etc.  All that added up pretty good this last month.

Now for the details on the Net Worth Update:

Of course, the month didn’t quite go as expected.  We bought the new TV right after Memorial Day and, believe it or not, the next day I noticed a wet ceiling from our leaky roof.  The total roof cost was nearly $3,000 and still 2 of that will come off of next month’s report.  So, about a thousand of our cash was from the roof.  The retirement went down because of the crappy market this last month.  I wrote down the value of the car another $1,500 as well.  That all means our assets went down over three grand.  Not exactly the picture I was hoping for this month.

 On the liabilities side, our mortgage is down slightly along with the student loan, as always.  The credit card was up some, but only about half as much as the tv cost, so it will be back down next month for sure.  The car loan took another big hit this month as the timing of things had 2 payments come out in June.  So, net effect, our total debts still went down this month, but our assets were down substantially.

Next month will be a curious one.  On one hand we will have the extra 2 grand for the roof come out along with our booking of vacation in September (we’ll be going to an all-inclusive conference on homeschooling for about a thousand bucks).  However, to offset some of that this will be my second time this year to get 3 paychecks this month.  So, baring another disastrous stock market month, our net worth might dip back down towards the -$10,000 range next month (I hope). 

Late in May my neighborhood association elected new officers.  I had thrown my name in the at for a member at-large position to get more involved in things.  Unfortunately, I was unable to attend the election meeting because I was teaching my graduate accounting course that night.

There were 3 of us running for the 2 at-large seats.  I lost the election to the 2 persons who were there for the meeting.  However, word must have gotten out as to why I wasn’t there.  It seems a couple of people thought I’d make a good candidate for the unfilled Treasurer position and wrote my name in.  Since there was no one running, my 2 votes was the winning tally and the position was mine to accept or reject (since I was a write-in only).  I considered it for a few days and decided I would make the leap and give it a try.  It’s a 2-year post and puts me as an official executive member of a not-for-profit organization.  In addition to the neighborhood group and newsletter, we also sponsor a local dog park with upwards of 600 members.

I sat and made the transition with the previous treasurer (he’d done the job the last 4 years) recently.  He’s made an extensive guide book to how he’s managed and organized everything, so that’s a bit of a help.  However, the “accounting” for the organization has been done strictly in Excel, which is not in my best interest to keep that way.  Also, with the dog park as well, we have 20-25k in the bank and it’s all in a non-interest bearing checking account.  How blah.  I’ll be working on changing that over the next few months as well.  Our local bank has several options to get us some interest on all that money.

I’ve been checking out some software to let me take care of the accounting.  Both Quicken and Microsoft have free versions of their business accounting suites.  They are some what limited, but still have all the basics that will work for most small organizations.  The trouble I’ve found so far is that only the pay for versions allow the use of classes or divisions so that I can easily keep the money for the association and the dog park separated. 

I’m still trying to find my groove and organization style for keeping records and managing the monthly reporting for association.  I’ll have another report due next week when we have our next general membership meeting.  I suppose the work I’ve done on my personal finances will help me to get more organized with the association as well.  It will also prove to be some great experience and resume padding for later.  I was already planning on taking the rest of the summer off from teaching, so I guess I’ll have some more time to get things in order. 

On another note, I know I missed my monthly progress update last month on here.  However, I did get my Net Worth IQ profile updated, so hopefully you saw that change as well.  I hope to get my regular update for June put together tonight and start those posts tomorrow.  To be honest, it won’t be pretty.  Not only did the stock market tank, but we had nearly $3,000 of repairs made to our roof.  The good news though, we paid for it with cash!  A year ago we never would have been able to do that.