Living Paycheck to Paycheck

I’ve updated my Net Worth since it’s the first of the month.  For some reason, it won’t show up as a picture on my side bar, so I have a link to my page under the blogroll.  I may end up moving it to a more prominent spot.  Right now you can access it here.  My net worth has risen $1,978 in the last month to -$9,406.  This is for a few reasons:

1.  Last month I didn’t take into account my 401K from my current employer.  At this point, I’m only contributing 3% of my salary (they match 50% up to that point), so it’s less than $800, but it’s still something.

2.  I contributed $1000 to a traditional IRA and it’s already gained more than $20 in interest.

3.  I changed my car loan agreement with my dad, lowering my interest rate to 6% and extending the length of the loan.  My car loan total is a little misleading because I have down the entire balance plus the interest I’ll be paying, assuming I pay exactly $88.71/month (until November 2010), $5000 November 2008, and $500 November 2010.  So my balance is lower than indicated, but I don’t keep my amortization schedule sheet on hand to determine exactly what my balance is each month.  I might start doing that in November after I pay the big lump sum.  My student loan balance is calculated for me, so that is correct.

Soon I should be receiving my $600 tax rebate and my over $1600 tax refund, which will be nice.  I’ve thought about changing my withholding, but I haven’t yet worked a full January-December year yet, so I think that I’ll wait until next year to look at that.

This month I’m also going to track what I spend, which I’m looking forward to and dreading all at once.

I finished my taxes last night, which makes me feel like I am slightly less of a slacker than the ones who wait until today to start.  My federal return was set to be about $1379, until I took advantage of being able to put money into a traditional IRA.  Since money is rather tight right now, I couldn’t afford to put in much, so I put $1000 into Vanguard’s Star Fund.  I didn’t research funds or anything, but that was the only fund with such a low buy-in.  If it turns out that I don’t like it, later I will roll it over into a different fund.  Now my return will be about $1529 (?), not including the $165 from Virginia and the $600 rebate that I’ll get later.

When talking about contributing to retirement when one is young, I hate when others say that “you can’t afford not to!”  Sure.  I realize the impact of compounding interest and all, but sometimes a person really has no money to spare unless he or she wants to go into more debt.  I would love to be putting tons of money into an IRA right now, but I can barely swing this.  I’m taking my total (state+federal) return from about $1486 to $691.  I’m happy that I was able to put something in, though, especially with the economy the way it currently is.  As my dad says, the economy will eventually make a large push back, rocketing the values of current holdings.