Poorer Than You

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Net Worth Update: March 2018

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I’m sorry, I can’t even with an intro today. This month’s net worth is so wackadoodle, I just have to dig right into it so that you can see. Because this month, up is down, left is right, cats and dogs living together, mass hysteria, and me saying I can’t do an intro and then doing one! So let’s go:

Change: -$3,793 or -4.44%

March Net Worth TOTAL: $81,600

March 2018 Net Worth Chart | Poorer Than YouMarch 2018 Net Worth Breakdown | Poorer Than You

Any number of things might jump out at you when you look at the chart and numbers this month. But, 10-to-1 odds (or something, I don’t actually know how odds work) the thing that you first noticed was holy crap look at the chart it went down for the first time in what, a year and a half?!? Yup.

The last time I had a downturn in the chart was November 2016. What happened back then? Oh, I only had a baby where the pregnancy and birth cost me over $7,500 out of pocket, that’s all. And yet, that month, the ol’ net worth was only down -$2,058, so what’s this month’s excuse with nearly double the loss?

Buckle in, friend, because this net worth update is about to get weird.

Cash: -$1,668 (but you’d think it would be up!)

Hey-o, our tax refunds came in! And they were not small, as I mentioned last month. My “Other Assets” category was up +$6341 last month, so shouldn’t cash be up this month since that money actually hit the account (thanks, IRS!)? Er, well, nope. I redistributed that cash refund, and a lot more this month.

I’ve described in previous net worth updates “the Marriage Bonus,” where sometimes my net worth climbs up simply because we moved money from my husband’s name to mine (and we don’t combine net worth numbers because some people are not internet bloggers who want their net worth broadcast on the internet, even if they married someone who is that). Well, this month, instead of a Marriage Bonus, there came A RECKONING.

Bane is Gotham's Reckoning

This month, we moved money from my name to my husband’s name. We opened a new Insight Card with attached 5% savings account in his name, and I kerplunked most of the tax refund into the new account.

Why put that tax refund into a savings account instead of investing it inside an IRA or something like that? Especially when one of my goals for this year is to max out our IRAs but “put a bunch o’ money in a savings account this year” is not on the goals list? A few reasons, one of which is aw dang that FDIC-insured 5% return is pretty hard to say “no” to.

Another reason is that I’m not sure which type of IRA will be best for us this year—Roth or Traditional? Bit o’ both? I don’t want to mess around with recharacterizing IRA contributions (urgh, that phrase alone is super boring and complicated, no thanks). I’d rather just park it in a mega-high-yield savings account until we get a better idea how this tax year is going to shape up.

There’s a third, crazypants complicated reason, but that has to deal with two of the categories on the Debts side of my net worth, so let’s just keep moving and we’ll get there faster.

Retirement: +$3,786 (Even though the markets are down. That’s good, right? Right?)

Okay, so if the stock market is down but my retirement accounts are up… what the heck? Why would I be up when the markets are down?!? I invest in broad index funds that should be a near-perfect match for what “the market” is doing!

Because I made a over $5,500 in contributions to my 2017 retirement accounts (Traditional IRA and the employer side of my Solo 401(k)), that’s why.

Are you putting together why I’m not super-duper happy about my accounts being up? Because I put in over $5,500 and the accounts only went up by $3,786. Because, wait for it… aw dangit the markets are down and they stole mah money$$$$$.

Nah, it’s okay. I’m not really upset. More slightly perturbed at how it makes my numbers look. Like there isn’t enough other crazy stuff happening this month, eh? But I always know that in the long run it’s better for me if the markets are down while I’m investing (buying stocks on sale). Yeah, yeah, yeah.

Hades: Okay, fine, fine. I'm cool. I'm fine.

Other: -$6,382

This was just my tax refund going from “this is money owed to me” to becoming real money that I had in hand (Cash category). You know, for a hot second. Before I did all the stuff to it. But we’ve already tackled that, so moving on…

Student Loans: -$4,403 / Credit Card: +$4,164

You: Stephanie wtf happened here did you put a bunch of your student loans on a credit card what kind of a crazy person are you?

Me: Yes that is a thing that happened. And I’m this kind of a crazy person: this is only about a third of what I did. The rest will hit next month because credit card companies and student loan servicers are both really sloooow at processing things.

You: Whaaaaaaaaaat?

Back to me for the rest of the post because this is not about you: I don’t want to get too deep into this right now because it’s going to be a separate blog post likely three separate blog posts because I used three different methods to do this. But the real-real-short version is that I successfully transferred a bunch of my student loan debt (previously 4.75% interest) to a promotional credit card offer (0% interest with no balance transfer fee, for 15 months).

And that’s why we put the tax refund into savings accounts instead of locked up in a retirement account – the tax refund is earmarked to pay off the credit card balance right before the 15 month promo period ends.

And that’s the (really short version of the) story of how, just when I had finished paying off my last wacky refinance-a-student-loan-to-a-0%-credit-card stunt (recall that last time, I did it by buying a couch!), I started it all over again. Now with even more craziness! But fewer couches.

Other Debts: -$232

Well this feels like a bit of an anti-climactic end, of course, after everything else. It mostly consists of “I paid the car insurance premiums for the next 6 months.” Yup. Exciting stuff!

Milestone Progress

$100,000 Net Worth: Okay so normally, I promise that I will reward milestones with gifs but there are gifs in this entry even though we made negative progress this month. But I contend that I only used Debbie Downer gifs and not fun celebratory gifs and that’s totally different.

Anyway, last month it was looking like I needed $1,461 of growth each month to get to $100k Net Worth by the end of the year. Since I slid backward so much this month (and another month passed), I now need $2044 each month to get there by December 31st. Okay, that’s… doable still. Right? Can still be done?

I like to think that all this craziness this month was worth it, because it will enable greater net worth climbs in the months to come. For example, I calculated that my student-loan-to-credit-card-refinancing will save me $50 in interest this coming month. That’s $50 that will go to loan principal instead of interest, raising my net worth by $50 more than it would have been. So that’s 2.5% of what I need right there! Hey, progress!

Was your March as insane as mine was? Please do tell! And if it wasn’t, please regale me with your tales of normalcy, because goodness knows I could probably use that. I will live vicariously through your steadiness.

If you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on the Rockstar Finance directory!

Net Worth Update: March 2017

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Happy April! Hope you enjoyed my big, wonderful April Fools’ Day joke on Saturday. Oh, and if you thought you were a smarty pants and didn’t download the ebook because you picked up on the fact that it was an April Fools’ prank? Then you got pranked as much as anyone else! Because there is some glorious actual content in that ebook for those who downloaded it and read past the “April Fools'” portion. If you love this blog, you’ll love what’s in that ebook, so check it out if you haven’t already!

And now, time for the March recap numbers:

Change: $8,433 or +22.11%

March Net Worth TOTAL: $46,582

Net Worth Graph, March 2017 - Poorer Than You

Money Money Money Money… MONEY!

Okay, so, a big jump like that? Definitely requires some explaining. (Didn’t I say in my April Fools’ post that I couldn’t post this net worth update without a serious explanation? YES AND I WAS NOT KIDDING.)

But first, let’s just celebrate:

Any excuse to use Liz Lemon gifs is a good excuse.

Alright, now that we’ve got our dancin’ on, let’s talk about where these numbers came from.

Taxes

I swear, I’ve had increases every month this year that could be attributed to taxes. That seems impossible, but it’s really not. Here’s what happened:

In 2016, my husband and I were both freelancers, which meant that we (our businesses) were responsible for withholding and paying our own taxes. We saved waaaaay more than we ultimately needed for taxes in savings accounts for our businesses. And we paid our quarterly estimated taxes throughout the year, using the “100% of the previous year’s tax burden” method. Those quarterly estimated tax payments (federal and state) were sucked right out of my savings account where I was (over)saving for taxes.

Additionally, since we were basing everything on 2015 numbers (“2015 actuals” if you want to be fancy about it), I paid more of the 2016 estimated taxes than my husband did, because in 2015, I made more. However, because of numerous factors (including my 2-month unpaid maternity “leave”), I ended up making less than he did in 2016. So, basically, he owed me some money. 😛

Our tax burden was lower than planned for because of several reasons, including getting sweet new tax deductions for having a baby, making less money because of the maternity leave, and our decision to shove as much money as possible into my HSA (Health Savings Account) and our Traditional IRAs. The HSA/IRA contributions alone resulted in a federal tax bill that was $2177 less than if we didn’t max out those accounts, and a state return that was $680 less (which actually turned it from owing, into a small refund!). So yeah, a net gain of $2857 – just for taking the extra money we’d hoarded and putting into the right investment accounts.

(At 7% interest, that $2857 will turn into about $21,748 in 30 years!)

The Marriage Bonus

Now you may read the tax info above and astutely notice “Hey! Your net worth partially rose because you took money from your husband and put it into accounts that are in your name! (The HSA and one of the IRAs.)”

You would be 100% completely right about that. And as I said, a portion of that makes sense, since I paid a greater percentage of our estimated taxes throughout the year, even though I ended up making less. But still, there’s a big chunk of my nearly-$9,000 gain this month that is just… my husband’s money being put into my name.

This is because when we got married, we decided not to combine our net worth information for this blog. It’s my blog, not his. Technically, my net worth shot up the day we got married, and it’s never been properly reflected on this graph. But over time, it’s starting to show up in little bursts, like this one.

Besides, marriage provides other net worth increases besides straight assets: you end up adding another productive partner (hopefully) to the “business” that is your estate. You split costs, like roommates, but also work together on common goals in a way that you would never do with a roommate (or maybe some people would, but those are some seriously buddy-buddy roommates if that’s the case).

So it’s not really surprising to see my net worth shoot up as a result of my husband and I both oversaving for taxes. That is what I call the “marriage bonus.”

Back to Work!

I got back to work after my maternity leave in February, but work really picked up again in March. I’m not running at full speed like I was before the baby – that would be insane, considering I’m working from home with the baby here. But I did ramp up somewhat in March, and I’m working on building buffer time into my life so that I can take on even more work. Mostly so that I can be flexible for my clients and handle a large workload for them during any given week, if they require it. I don’t want to turn down any work (if I can help it), and I want to stay reliable in everyone’s eyes!

So far, so good!

Instant Pot Update

Last month, I asked you all if I should get an Instant Pot. Thanks to some feedback in the comments on last month’s update, and on the Facebook page, I decided to go ahead and buy one.

It hasn’t come yet, despite shipping forever ago. I picked a cheap third-party seller on Amazon to buy from, and this is what I get. I’ve filed for a refund from Amazon, since we’re now way past the time frame where it should have arrived. I’ll probably re-buy directly from Amazon once the refund is processed… but I might set up a price alert and wait for a sale. A post by Trent on the Simple Dollar about the Instant Pot from the other day reaffirmed my reasons for wanting to get one… but also confirmed that maybe I should hold out for a good deal on it.

That’s it for this month’s update! Have you filed your taxes yet, or are you waiting until the last minute? If you’ve done it, how did that affect your net worth?

If you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Ultimate List of Blogger Net Worths over on the Rockstar Finance directory!

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How to Share a Credit Card with Your Spouse

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[It was only recently, after a year and a half of marriage, that my husband and I got our first shared credit card. We’re still working out the kinks, and considering adding my husband as an authorized user to some of my frequently-used rewards cards as well. So I was over the moon when Joshua Heckathorn of Creditnet.com reached out and offered to write a guest post on the very subject. Take it away, Josh!]

You probably share your home, bed, and maybe even your toothbrush from time to time with your spouse. But what about your credit cards?

If you haven’t quite taken your financial relationship to this level yet, but feel like you’re finally ready to take the leap, follow these tips to make sure you do it right and avoid the most common mistakes.

How to Share a Credit Card With Your Spouse

Add Your Spouse as an Authorized User

The easiest way to share your credit card with a new spouse is to call your credit card issuer and simply add your significant other as an authorized user. Your spouse will then receive a new credit card in his or her name, although you will both share access to the same account and the same credit limit.

Before making the call to your credit issuer, it’s always wise to sit down and have a conversation with your spouse about what types of monthly expenses will be charged to the card and how much of the available credit limit you plan to use each month. In order to maximize each of your FICO credit scores, you’ll want to ideally keep your credit utilization ratio under 10 percent, so take the time to talk through the numbers before you both begin using the card.

Don’t be afraid to communicate openly about spending habits and the importance of sticking to your outlined budget. Trusting each other’s spending habits is vital to the process, and if the trust just isn’t there yet then maybe you still need more time before taking the next step.

Set Up Mobile Access and Text Alerts

The biggest red flag to watch out for is an unexpected charge that doesn’t fall in line with the budget you previously discussed. However, the great thing about credit cards is it’s so convenient to track all spending on your account.

Make sure you set up mobile access from your phones so you can check charges 24/7, and you may even be able to set up text alerts for any charges above a certain amount. If so, do it. This will allow you both to stay on top of your spending and immediately discuss anything that doesn’t seem to fall in line with your agreed upon budget.

Review Accounts Together on a Monthly Basis

Credit cards also make it extremely easy to review your spending on a monthly basis. So set aside 15 minutes each month to log on to your online account together, review charges, compare to your budget, and talk through how you did.

Did you stick to your plan and stay within your budget? Awesome. Go out and celebrate by doing something inexpensive that you both love.

Did you miss the mark for this month? Don’t be argumentative or point fingers at who made what mistake. Instead, make a new plan of action together and do a better job of tracking all charges during the following month. Understand that it can take some time to sync spending habits in a marriage, so don’t expect your spouse to change overnight.

Communication is Key

The biggest mistake couples make is failing to have a detailed discussion up front regarding monthly expenses and what types of things will be charged to the credit card. It seems simple enough, but many married couples just ignore this step, which often results in some fairly unpleasant conversations down the road.

So do yourselves a favor and talk through your budget, set expectations, and track your monthly expenditures together. If you do so, sharing a credit card can be an excellent way to not only improve both of your credit scores but also enjoy earning some great credit card rewards along the way.

Joshua Heckathorn runs Creditnet.com, a free resource to help consumers learn more about credit and compare credit cards online. He is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years. Joshua resides in Seattle and holds an MBA and B.S. in finance.

 

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