I updated my financial progress on NetworthIQ today. I was pleased to note that my overall change was greater than my take home pay. Probably half of that is due to a stock market uptick today. I updated my cash cushion goal progress as well. This month I've been splitting all my extra money 50/50 between growing my cash cushion and paying down my car loan. This is referred to in personal finance circles as "snow flaking." Any extra money you make, no matter how small, goes to a specific goal such as paying down debt. For example, sell something on craigslist for $15, deposit that money, and add it to your student loan payment. Small snowflake payments add up quickly and your debt shrinks rapidly. Since I've been using things like maturing CD's, it's been more like a snow avalanche. That $600 government rebate check is coming this month, so I expect to put an extra $300 in savings and $300 towards my loan principle.
My lending club assets grew by $79 this past month. Since lending club has temporarily stopped taking new money from lenders, this is pretty much all interest. NetworthIQ says thats a 0.98% monthly change, which means my yearly return is 11.76%. Now thats something to get excited about. Maintaining a 14% average loan interest rate, and with a 1% Lending Club fee, that maximum obtainable interest rate would be 12.8%. I'm not getting the maximum rate of return because 1) inefficiencies from my relativly small sum of money invested 2) I can't reinvest anything at the moment. I expect that until Lending Club starts allowing new investments again, my monthly rate of return will drop.
I completed the transfer of money from Sharebuilder to Zecco, and setup a limit order so that when my ETF falls below $54.00 it will buy back those shares I sold. The sell price was 54.33, so that will make up for my loss in the transfer. I think if I buy back the same security within 30 days it doesn't count as a capitol loss, even if I actually did lose money. That assume the stock falls below $54. Todays market uptick gave me a moments despair at the thought that I would have to buy it back at a higher price. There is always the possibility that the ETF value will not fall below $54 per share, but I hope normal market fluctuations will see me through.
On the down side of things, Zecco took an extra money transfer from my checking account for the same amount as the Sharebuilder transfer. Since this was several thousand dollars, this was not very convenient for me. Luckily I was just paid so my checking account wasn't totally depleted, but I'm not in the habit of keeping large quantities of money there very long. Thankfully, I always keep a minimum $1000 reserve in my linked savings account. This serves as overdraft protection (in case I'm not keeping up with quicken), and for cases like today when I need a large cash infusion quickly. The reserve gives me some time to initiate a cash transfer from my emergency fund account, which takes about 3 days. In this case, I expect to just transfer the money back from Zecco, but that will also take 3 days. I plan to call Zecco in the morning with an irate complaint. I understand though that sometimes these things happen (Zecco isn't the first to make this mistake). Since I have the back up savings to take care of pending expenses. I'm not really all that irate.
I switched enough cash to checking so that If my rent check posts while the money is being transferred back to my account, it will be covered. Also, my vanguard IRA contribution will post tomorrow. That alone would have caused an overdraft. That $1000 savings is not something I consider part of my cash cushion, it is my C.M.A. fund for times like today. Although, now that I think about it, what if the transaction had posted a 3rd time? Would overdraft protection have left me with nothing in both accounts? I'll have to look into that.
I'm curious though about my blog readers situations. If you had an unexpected $2000 draft on your checking account, how would you handle it? Post a reply in the comments section.
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