I am Cash Poor
No surprise here - as I suggested when I was setting my 2006 goals, I knew I was going to be spending a lot of cash this year. A quick glance at my August net worth readily reveals I now have negative net cash (Cash - CC Balances).
I stretched and put 20% down on the new property I purchased; last month I bought an engagement ring; and for the 2nd half of 2006 I am on a temporary assignment in New York (basically doubling my living expenses). All of these things have sucked the cash out of my balance sheet and I am now very cash poor.
Yes, this cash situation is a bit manufactured by me. I stretched to put 20% down on the property I purchased using all the cash (and then some with short term financing on an equity line) I had available at the time.
The good news in all this is I don't think I am going to have any liquidity problems. I have 2 outstanding 0% balance transfers totally nearly $40k, and a HELOC on my 1st property to cover any short term situations. If I plan correctly, I should be able to adjust my spending for long enough to recover my cash position.
However, the bad news is I am currently short $7,500 when you look at my available cash and the amounts owed on my outstanding balance transfers (ignoring offsetting assets such as stocks in taxable brokerage accounts). In addition, things will probably get worse before they start to get better.
Now that I am engaged, a wedding (and all the expenses that come with it) is looming in the background. I have some outstanding repairs that need to be done in the short term on my new property (est $2.5k) and a remodel project I am planning for the 1st half of 2007 (est $4k). All of these major expenses are going to have me in a tight situation for a long period of time.
|Current Net Cash (Available cash - 0%BTs)||-$7,500|
|Repairs to New Property (Sept 2006)||-$2,500|
|Remodel Project (Mar 2007)||-$4,000|
|Wedding (Fall 2007?)||-$??,???k|
|Net Total||[A very tight cash situation]|
It would be easy enough to just slow down my retirement contributions or stock investments to raise additional cash to help me get though this. However, I see this as an opportunity to challenge myself to control expenses, maintain my current savings routines, and recover my cash position. My goal has got to be to have as little or no impact on my current savings routines as possible. If I can get through this without significant impact to my savings/retirement contributions I believe this will be a huge win and could result in significant progress in my financial goals.
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