Wednesday, April 02, 2008

Income Statement Adjustment

Man, have I been busy!

So in the spirit of my dedication to being wealthy, I have spent time over the last 2 days normalizing my life.

First, I updated my spreadsheet with new net worth information. Things are progressing steadily there, although as I write this, I get the feeling I won't be able to re-balance and execute trades before the end of today's trading. Oh well.

I then adjusted my 401(k) contributions. While not changing the percentage this time, I changed the elections to be a bit more aggressive. While I'm well aware of Warren Buffett's admonitions that future earnings on equities will likely be in the mid to low single digits annually for some time, I think this holds less overseas. Thus, I increased the money market contribution to 15% (so I have some more dry powder); moved 20% to the emerging markets option ('s recommendation); moved 20% to the international company index fund ( recommended 30%); moved 20% to the small company fund and 20% to the large company index fund. I can't remember's suggestions on those but I believe I'm in line with them. They recommended 10% in the REIT selection, while I ratcheted down from 10% to 5% there. (That's where the money market increase came from.) We'll see how this goes. All of this year's performance has come from contributions, both individual and employer. I'm down a bit over $2000 just on market performance.

I also checked my pay stub and found that my next check will be a bit larger due to the reduced 401(k) contribution. Most of this will either end up directed into a new savings account for investment, or toward my credit card debt. Even after all of this, my spreadsheet is showing $500 which is unallocated and basically unaccounted for.

I also restarted tracking my expenses in my spreadsheet again. I'd been off this through February and March, to my chagrin as I now have catching up to do. This will show me if I really have that extra $500 every month; I expect to fill in March just to get a recent baseline. If I do, I'll apply most of it to the credit card (maybe 80%) and the remainder to savings or fun. Most likely it will be fun since I have a bunch of plans for enjoying the summer with my friends and family.

The extra $500 in monthly income is a bit unnerving, however. I say that because I feel as though I'm on the edge financially, or at least closer than I'd like to be. Maybe that's because of my aggressive savings goal due to my underfunded emergency savings account. However, I think the bigger concern is that I haven't tracked expenses for the last 2 months so I'm just nervous about how much I may be overspending. It's all in your head, right?

There will be a few other changes coming, so stay tuned...

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