Debt and Savings Update 2007 #3 - 12/31/2007

This is my last financial "snapshot" of 2007.

For me, 2007 is the year I finally got my act together and started my financial makeover. After years of carrying credit card and other consumer debt, I am tired of living paycheck to paycheck, floating through on credit cards, and paying out a full month's worth of expenses annually in finance charges alone.

I am looking forward to 2008, a year to continue my progress towards a brighter picture of personal finance - turn the occasional crisis into a mere inconvenience with emergency savings, lay a better framework for the years to come through investing, and most importantly, reduce the consumer debt so we can stop throwing our money away on interest payments.

So, here is the our Debt and Savings Update for 12/31/2007:

Savings - $890.53

Goal Savings (ING) - $190.53
Short-Term Emergency (Key) - $200.00 (Target: $500.00)
Short-Term Emergency (USAA) - $500.00
Long-Term Emergency (UFB) - $0

The Short-Term Emergency accounts are linked to each of our checking accounts and are there to help in a pinch if we fall short between paychecks. The challenge with these accounts will be their accessibility and the temptation to use them for impulse purchases. The target for the short-term emergency accounts is $500 each, enough to cover most of the little emergencies without putting too much money in a low-yield account.

The Long-Term Emergency account is my priority for the beginning of 2008. The initial goal for the account is $1,000, to cover any minor unexpected expenses, with the ultimate goal being 3-6 months of living expenses. I just opened an account at UFB with 5.10% APY, and plan to start automatic contributions with my next paycheck.

Investments - $2,195.12

Edward Jones - $1,870.12
Prosper - $175.00*
Lending Club - $150.00*

The EJ account will eventually be our house downpayment, and is growing slowly but surely. I opened the two P2P accounts more out of curiosity and boredom, but mathematically the returns seem to be worth the increased risk. I want to see how these first few loans work out. I am going to report the total value of the account, as remaining loan principle plus current account balance, for lack of any better idea how to report the value of the investment.

Debt - $43,545.67

Universal - $8,250.00 (1.99%)
Capital One - $0.00 (15.4%)
Citi - $2,970.00 (10.24%)
USAA - $10,231.07 (11.65%)
Student Loan - $4,424.39 (6.97%)
Toyota Loan - $15,622.64 (7.4%)
Medical Loan - $192.44 (0%)
Medical Debt - $1,855.13 (0%)

I made substantial progress on the medical loan, thanks to my christmas bonus and some other gifts. I will have the full medical loan paid off on February 1. The USAA Credit Card should be the next debt target, but I am contemplating hitting Citi first, since the interest rates are so close and the Citi balance is so much lower - it will be a psychological boost to pay the balance in full, and I think I can do it in a couple of months.

Total Net Worth - $40,460.02 (-)

Comparison:
12/15/2007: $44,616.04 (-)
12/3/2007: $46,230.24 (-)

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