Staying busy with work

I have not blogged in the past several days as I have been staying busy with work that has kept me out of town. In fact, I am out of town again as I write this. I am glad to be staying busy with work as it makes me feel more secure in my job. In today's economy anyone can be laid off at any time it seems.

My heart goes out to those folks who through no fault of their own suddnely find themselves out of work. It is not fair. I try not to be political in this blog but the Republicans in congress don't seem to care about the plight of the average American.

I will get off my soap box now.

The housing crisis and me

Over the next several months I will probably write about my thoughts on the housing crisis. It is going to effect me in ways I did not expect it to. I plan to move in with my girlfriend in the next 12 months and that means I need to sell my current townhouse. I have resigned myself to the fact that I will most likely lose money on the sale but I am just not sure how big the loss will be.

I figure I have a cash loss and an economic loss. The cash loss is equal to the cash proceeds after the real estate commission and the mortgage is paid off. The economic loss is the cash loss offset by any tax benefits I have received as a result of owning the house such as my larger itemized deduction due to mortgage interest and real estate taxes. The economic loss is less than the cash loss.

I am fortunate that I do not have to sell if the loss is too great. I am not going to be foreclosed on or anything like that and I could potentially rent it out to cover some of the mortgage if I cannot sell it next year.

I am also wondering if I when I go to sell the house if I should empty it out completely or show it with my furniture in it? I guess my real estate agent can help me with that one.

Selling a house?

Home Prices Drop Most in Areas with Long Commutes

NPR aired an interesting story describing the way that the suburbs are being effected more by the housing downturn. I own a townhome that is less than 3 miles from downtown so I am feeling a little luckier about my location, especially since I plan to put it on the market at the end of 2008 so that I can move in with my significant other.

When I bought it in 2006 I knew that it was not going to be somewhere that I would live for many years but then again I did not see the downturn coming and how it would eventually effect my ability to sell it when I wanted to.

Hopefully, its proximity to downtown will be a plus.

Impact of federal withholding change

This week's paycheck is the first showing my new withholding. I had previously claimed only one federal exemption but now I am claiming 4. The difference is about $74 every two weeks. Starting next month I am going to add that to my savings each paycheck.

I did not change my state withholding so I expect to still get a $1,200 refund next year. My federal refund will be in the $3,000 to $3,500 range instead of $5,300 like it was this year. I think the extra $74 will do more for me sitting in a savings account then as a future tax refund.

Living Debt Free

I am toying with the idea of paying off my car with my 2008 federal tax refund. I have done some initial calculations and figured that I will be getting a refund of about $3,500 for my federal taxes and $1,200 for my state taxes. I have lowered my withholding amounts to be able to put more in my savings and 401k so my federal refund will be smaller next year. Still $3,500 is nothing to sneeze at.

If I pay off my car next Feb/March then I can put an additional $500 on my student loan every month and that would mean that my student loan would be paid off in June 2010. I consolidated my loans back in 2001 (before the interest rates dropped so much, unfortunately) and they are on a 15 year repayment plan. My income is too high to deduct any of the interest so it is definitely in my best interest to go ahead and pay them off as soon as possible.

I am looking forward to the day when the only debt I have is a mortgage.

Vanguard Voyager Services

In the next year I am hoping to amass enough in my retirement accounts to qualify for Vanguard's Voyager services. That tier of service requires $100,000 to $500,000 in all of your Vanguard accounts. I am within $20,000 so if the stock market would start behaving I could qualify in the next 12 months. I am mainly hoping to use the discounted financial planner service.

Does anyone currently have such services from Vanguard?

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Upromise Account Anniversary

I just passed my one year anniversary in the Upromise program and my account is worth only $7.76. Gadzooks! I am not sure how much I need to accumulate to get anything transferred to my Sallie Mae loan. At this rate my student loan will be paid off before I receive any benefit. To be fair I really only accumulate anything from my grocery shopping. However, I did buy some Eddie Bauer clothes online last month and $2.65 was added to my account for that purchase.

Last weekend in NYC

I spent last weekend with the love of my life in NYC. We had a blast but it was not cheap. I spent a total of $472 for the weekend. Below is the breakdown:

• Food $170
• Souvenirs $18
• Tours $81
• Plane ticket $203

My girlfriend paid for the hotel since her company paid for her plane ticket. She also bought a really nice dinner one night and tickets to an off broadway show. We went to the 86th floor of the Empire State Building where she asked me to marry her. Of course I said yes.

In the next year we plan to move in together in her house. I will need to sell my townhouse and that is another story for another day.

March 2008 Spending

Yes it is very ugly! I bought a bicycle that cost me $1,062 including new bike shoes and a speedometer. The good thing is that in April I received a $337.50 reimbursement from my employer for it and I will receive another $220 in June. So at the end of the day the bike only cost me $504.50.

Obviously it was not just the new bike that sent me over the edge with my spending, I also paid $150 on my Citibank Visa balance that I did not include in my original budget, I had extra pet expenses related to pet medications ($119) and pet sitter expenses ($74). My travel expense was high in March due to a weekend at a cabin. Some months I will not have any travel expense.

Note that the monthly averages are equal to the yearly amounts divided by 12. Items like my salary have higher monthly averages due to me only getting paid twice in March. Some months I will receive 3 paychecks so it will average out.

All in all, I hope to do a little better next month. It is hard because I am in a new relationship and we have a lot of things we want to do (eat out, travel, etc.). As the relationship settles in there will be less expenses.

March 2008 Net Worth

My net worth rose last month primarily due to the pay down of debt. I am continuing to may off my credit card debt (excluding Amex which is paid off every month). This morning I paid another $245 on the credit cards to get my balance down to $373. For those of you who are not familiar with my blog, my $618 in credit card debt is at 0% interest until August 2008.

My retirement accounts continue to take a beating. I was able to add $268 to my savings and increase the equity in my house by $306 from paying on my mortgage. If only the stock market would get back to where it was 6 months ago I would have over $110,000 in net worth!