I’m going to start my financial history in June of 2006, the summer I graduated from college. I had just moved home with my parents (rent-free) and was interning as a research engineer until I found a permanent job. The following table shows my financial status as of June 2006. My savings account consisted of money from summer internships during my college years. My checking account was the remainder from my various college jobs and non-financially responsible escapades. The taxable Schwab account consists of Target Stock and came from my Grandma as a high school graduation present. As described on the about page, my parents drilled the idea of paying off credit card balances in full every month. The only liability to my name at this point was my student loan. I didn’t pay off my college loan since the interest rate didn’t kick in until February of 2007.
At the end of 2006 I had increased my net worth from $7,015.09 to $22,478.25. My savings account saw a decrease in value as I used part of it for a down payment for a NEW car in July. As soon as I drove off the lot the car lost enough value that I will probably buy my next car as a factory certified pre-owned car. I was able to get 3.9% financing so all is not lost. I took my best guess as to the value of my car at the end of 2006, but I do not have an exact value. I began working for my current employer in August of 2006, which yielded a pretty substantial boost in my income, which can be seen in the checking account boost. In November of 2006 I moved out of my parents house with a high school buddy, which was well worth it despite decreasing my saving ability. Finally I loaned $1,000 to my sister interest free so she could enjoy life while working part time in graduate school.
By the end of June 2007 my Net Worth had grown to $38,810.51. A few major changes occurred during the first six months of 2007. I closed my savings account and transferred the remainder into my checking account. The savings account interest rate was only 0.50% APY, which made the savings account pretty pointless. I paid off my student loans from my checking account at the end of February before they started accruing interest. I invested $5,000 in a Target Date Retirement Fund Roth IRA through Vanguard ($4,000 for 2006 and $1,000 for 2007). I invested $5,000 total into the Roth IRA since it was the minimum amount to prevent paying unnecessary fees. Finally, I gained control over a Vanguard US Growth Fund that my Aunt/Godmother had been putting money in throughout my childhood.
The following six months again produced some significant changes in assets and a significant investment goal was created. My checking account significantly decreased in value as I transferred most of the money to a CapitalOne money market rewards account. When I opened the MMA, I searched around for high interest rate savings accounts. I decided upon the CapitalOne MMA since it had an APY in the 4s and I earned rewards based on my monthly average account value. These rewards combined with my CapitalOne No Hassle Miles card rewards have already allowed me to travel to Boston for free! I try to keep about $2,000 in my checking account to pay bills.
At the end of July I moved to a cheaper apartment with a one year lease and began searching for condos. I just hated the idea of throwing away hard earned money on rent and I really liked the idea of tax deductions and home equity. Additionally, I HATE moving. In December I signed for a condo that is going to be completed in October of 2008 and started saving every penny I could find and living as frugally as possible. In November I had started tutoring high school students in math and science as a self-employed contractor in anticipation of saving for a condo.
The first half of 2008 was a hardcore effort to reach my 20% down payment goal to prevent paying private mortgage insurance. Savings account interest rates dropped around the nation, including my MMA to 2.7% APY. I opened a CD with Countrywide at 4.75% with $20,000. The only other major change in the asset category is my earnest money. I had to put down 5% down as earnest money do lock in my condo. This 5% is applied towards my 20% downpayment, however, they will only put it in an account that earns 0.5% APY, which is ridiculous. How difficult is it to put the earnest money in a FDIC insured CD or MMA?
At any rate this first post is a great example for why I’m starting this blog. It has already forced me to go over financial information that I would have previously barely looked at. It’s beneficial to calculate net worth periodically to see how much your savings efforts are really paying off. It’s pretty easy to see that picking up a second job and moving to a cheaper apartment really helped my down payment saving efforts. I’m planning on posting my financial status at the end/beginning of every month to keep myself accountable in my savings goals. I hope you enjoyed reading about the beginnings of my financial career.