Progress, but just barely

I checked my investment account balances a few too many times over the past month. I watched them dip and dance several times. I’m bracing myself for a downturn sometime in the near future, rather than steady gain.

Net Worth: $33,537

Trend spotting with regular tracking

Derek’s student loan hasn’t budged in balance in MONTHS! His payment literally just covers the monthly interest that is accruing. For a long time, his payment was less than the interest, and so his balance grew even though he dedicated money to it every month. I see why he hates student loans and swears it’ll never disappear. My grad debt is growing! And I’m only paying down my undergrad debt by like $20 a month. It’s kinda demoralizing. And I’m torn between trying to make more progress on these debts and staying focused on the goal to actually have cash savings to possibly purchase a house.

Financing mistakes

I made a series of blunders calculating our tax burden for 2016. These blunders only became apparent as I plugged all our numbers into H&R Block’s online tax software. We were going  to owe money.

And, with precious little in my savings coffers, I turned to financing. If you’re going to finance stupidity, it’s at least important to be smart about it. As you can see, we’ve got 9 credit cards between us both. Rather than just putting the tax bill directly onto one of our cards, I made sure to find a way to secure a minimal interest rate and avoid paying the IRS’ fees for credit card payment. Our best deal was a 0% interest for 12 months balance transfer offer, which came with paper checks. Total cost to access this credit was a 2% balance transfer fee on the amount. So, I happily wrote myself a check for $3000 to cover the tax bill, deposited into our joint checking account, and ate the $60 lesson learned balance transfer fee along with a side of humble pie.

Taxes are a Numbers Game

One great thing about doing your own taxes using an online system like H&R Block or Turbo tax, is that you can play with the numbers. So, I tested out various scenarios of the numbers we could control: “What if we could contribute $11,000 to our 2016 IRAs?” “What if I had $200 more in business expenses?” “What if I increased my SEP IRA contribution?”

I found that if we could scrounge up $11,000, we’d perhaps not owe money and even receive a refund. Well, there was no $11,000 to be had in my accounts, and so I knew we’d owe. But, I still minimized the amount we owed by carefully scrutinizing every other element.

In the end, I learned $700 into Derek’s IRA and another $150 in my SEP IRA disproportionately helped reduce our taxable income by pushing us just over income limit thresholds. It reduced my self-employment taxes and allowed Derek to claim “savers credit.”

My future self owes me a lot of money

I’m a little nervous that my future self now owes me over $11,000. April was also a banner month for spending as we got socked with a lot of one time a year costs. Our usual 4.5k monthly spending ballooned up to about $8,000.

I’m trying not to fret and trying to focus on plodding forward.

2017 Net Worth Tracker:

January: $14,107
February: $21,285
March: $30,016
April: $32,939