Mar 21, 2008

I Love Spending Money

Besides spending a gadzillion reimbursable dollars on my credit cards, I've been pretty good about spending money this past month. And that's been a good thing too, since all of my retirement and stock accounts have lost hundreds upon hundreds of dollars. My plan to spend frugally while the stock market takes a hit is not working as well as I'd like in terms of balancing my net worth. I'd like to not lose money, even if I have to deal with not making any. But my net worth keeps going up and down, and now it's on a downward trend. I don't feel like I'm spending a lot, but with half of my savings tied up in stocks and such, the recession is hitting hard.

I do trust that over time most of my stocks will go up. Or at least I hope they will. I'm not going to pull out now just because I've lost lots of money. But I'm less excited about putting more money into stocks.

I kind of wish I put more money into that liquid 4% rate CD that I got a bit less than a year ago. Now the CD rates are at like 2%. Ick. After paying off my credit cards and bills, I'm not sure where to put my money right now. I still want to max out my Roth IRA for the year, but I only have $1700 left to do that.

I'm also planning on going to Israel this summer for the birthright program. It's a free trip, but i still have to pay to get to the airport in New York (a $300 flight) and then I'll have to pay for anything I want to buy while I'm there. Also, I might want to add on some time and travel a round a bit after the official trip, which will cost more. And I promised myself that next time I travel abroad I will buy a good DSLR camera to take with me. So... I think that time might be coming up.

So I do want to have some liquid assets. But I don't want to just keep it all in my ING account, that seems kind of wasteful. As I've written before, I'm slowly adding more funds to Prosper (I'm up to $250 and 5 loans so far)... that seems to be the best way for me to make a decent rate of return on my money in these sour economic times. But the risk makes me nervous as well.

All I want to do this year is get my networh at least up to $30k. It's at $27k now but it goes up and down all the time. I'd love to get my networth to $35k this year, but it really depends how the job situation pans out, and if I can manage figuring out where to save money without losing it.



2 comments:

E.C. said...

Do you have enough money someplace completely safe and liquid to cover at least a month or two's worth of living expenses? Cars break down, extra income streams sometimes dry up temporarily,medical or dental problems occur, etc. Dropping interest rates do make savings accounts and certificates of deposit less appealing, but it is important to keep enough assets available to get you through life's minor crises without having to sell stocks while they are down. Even though earning 2% interest on a few thousand dollars seems lousy, if it saves you from having to get out of a good long-term investment to cover a short-term shortfall, keeping some money in a boring savings account can be an important part of your investment plan.

SFGal said...

e.c. --

I have $5000 in a liquid CD and $7000 in a non-liquid CD...

So, yes, I have enough emergency fund money for a few months of living expenses.

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