Friday, July 11, 2008

What I don't know about my money

I've been flummoxed over the past two or three pay periods by running out of cash in my chequing account.

I mean, I'm spending below my means. At least I *think* am.

Between my regular income and my side income, I'm definitely taking in more dough than I'm putting out. That, I'm pretty sure of.

But about a week after payday, I run out of money in my chequing account. I wondered how this could possibly be happening, so I printed out two months' worth of account activity, and Amanda brought her mad math sk!llz to the table to sort things out.

The biggest cash-money outlay is for those nasty nasty cigarettes. It's stupid and crappy, so let's just acknoweldge that and get it out of the way.

Transportation is the next big chunk, between taxis and bus tickets. That's reduced, though, since I now walk home from work almost every day.

I *was* spending $5 or more each day on chocolate milk, energy drinks and frequent cinnamon buns. But since a trip to Costco for super-cheap energy drinks, and my recent diet epiphany, my daily pocket cash outlay has dropped to roughly zero.

So, why so seemingly broke? Well, two big things.

First, I'm only clearing a few hundred dollars after expenses. My partner and I worked out the math to cover regular household expenses (rent, phone, cable, power, car, insurance) and irregular expenses (apartment insurance, registration, vacation, savings). That's the majority of my main paycheque now.

Second, there's a reason my take-home pay is so anemic. I'm still pushing 10% of my pay toward the company's stock plan. They're matching 33% of that, so that's a pretty decent instant rate of return. Couple that with the crummy stock performance lately, and I'm getting a good bang for my buck. Cheaper shares means more shares bought, so when the shares go up -- please, please go up -- that's more return.

Now, that's 10% of my gross (plus another third of that, so, effectively 13% for the price of 10). That may well be more than some experts recommend saving, but if I can afford it, it's smart.

But can I afford it?

Apparently. Month-to-month, my stash is growing. A snapshot of my net worth profile over at NetworthIQ illustrates.

What's going on is this .... I'm pushing too much money from my chequing account, where my income lands on arrival, into my savings accounts. My logic has been that the savings accounts are "high-interest" -- those e-savings accounts that give you a few per cent vs. the regular accounts which might as well give you none. So when I get a payday, I pay whatever bills are around, do quick mental scratch math about how much cash I'll need 'til the next payday, and shuffle the remainder off to savings.

But my guesstimates suck. I've been spending more than I figured I would, so I end up dipping back into some of the surplus I stashed in savings so I can have cash on hand. *Some* of the surplus. There's still a surplus. So I'm still winning. It's just making a mess of my bank brain, and making it tricky for anyone to decode my monthly statements and figure out what on earth I'm trying to accomplish with all these deposits, transfers and withdrawls.

Bottom line: the bottom line says things are coming out positive and my savings are growing. I'm just jumping through too many unncesssary hoops to accomplish it. Time to give up some of the shell-game tactics. And, yes, give up the smoking so I can have more money to play with.

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