It’s been an exciting month and full of random expenses such as the $225 home inspection fee and weekly expenses associated with our Saturday morning tailgates. However, we still managed to show a positive increase in our total net worth. It’s nice to still have significant influence over this number, through either reducing expenses and/or earning income. I don’t think it will be too long before the market is the primary indicator of our total gain or loss each month.

Cash – $42,126
Our cash reserves have still been growing in anticipation of our closing date this Friday.

Stocks – $1,030
Our two cars are completely paid for. So instead of sending a monthly car payment to the bank, we’ve recently started investing $350 per month in a mutual fund. There are some risks associated with this strategy, but they are risks we are both comfortable with. This strategy was solely inspired by Dave Ramsey’s Drive Free, Retire Rich.

Retirement – $18,531
We are still saving roughly 15% of our gross take home pay for retirement. I believe the market is down slightly from my last update, but our contributions and employers’ matches still made for a slight positive increase.

Cars – $11,875
The value of our cars is an estimation from Kelly Blue Book.

Student Loans – $7,405
Still looking forward to getting rid of these next spring. After sending our lender the $8,000 from our first time home buyer’s tax credit, I’ll still have a few hundred dollars left.

Here are a few stories that caught my attention this week:

Weakonomics (@weakonomics) reminded me of better days, back when I was still in school. Want to figure out how risky a stock or your portfolio is compared to the market average? Check out Weakon 238: Stock Beta.

Jim (@Bargaineering) gives an update regarding the $8,000 First Time Home Buyer Credit. If you are in the military serving our country, you’ll want to be sure and read this one. $8,000 First Time Home Buyer Credit To Be Extended for Military

Studenomics (@studenomics) questions the common advice stating that you should hurry through college so that you can get it over with while your still young, regardless of the costs or student loans it may require. He explores the pros of taking fewer classes each term in an effort to pay for more of it as you go. Effective Method For Killing Student Debt and When to Apply It.

I hope you enjoy these posts and have a great weekend!

I recently updated my personal Facebook and Twitter status to the following:

"I will be getting my money's worth at the gym later today." 

A few hours later, a friend left the following comment:

"That's an expensive workout!" 

Unfortunately, she is right and she of all people would know.  We are coworkers and members of the same gym.  She works out 6 -7 days per week while I have worked out 6-7 times the past 3 months.  Her comment inspired me to figure out just how much how I was paying per workout.

I'm contracted to pay $50 per month over a two year period.  That means I'll be dropping $1,200 total over this two year period.  That sounds pretty expensive, and regardless of how often I go, it's still $600 per year.  Assuming my friend has the same contract and attends 6 times per week during this two year period, or 624 times, then her cost per workout would be $1.92.  Not bad.  Especially when you consider the other cost benefits associated with good health.  Assuming I continue going to the gym twice per month over the next two years, or 48 times, then my cost per workout would be $25!  Now that is an expensive workout!

I am giving Feedburner a try. Just posting to see if I receive the update in my email.

It’s always nice when the opportunity to earn some extra cash presents itself.  This could be anything from the opportunity to work overtime at your steady job to earning money from something you consider a hobby.  For example, I am spending this weekend performing with the local symphony. I have a music performance degree and while I don’t even come close to earning my entire income from performing, the few hundred dollars that this kind of gig pays does provide a nice supplement from time to time. 

In addition to my extra income, my wife picked up additional work last month and will receive her payment just in time for Christmas.  She is a college professor and was paid a few hundred dollars to review a publisher’s new textbook.  I’m not sure if she enjoyed reviewing that textbook as much as I did playing, but if she did, I’m not sure I’ll ever understand!

So how should you handle unexpected income? This will depend on the current state of your finances and your future goals, which may be very complex.   Ross Perot once stated, “I’ve never ever tried to give people financial advice through the newspapers — I’m afraid they’ll listen to me.” He continued saying, ”I’d need to look at each and every person or business situation under a microscope.”  With that in mind, here are three simple options that we considered:

Apply It To Your Outstanding Debt

If you are carrying several thousands of dollars in high interest debt, it makes sense to pay this debt off as quickly as possible.  It doesn’t make much sense to stash your money in a savings account earning 2% when you are being charged 13% (or higher) on your credit card balance.  (Even if you have no credit card or other high interest debt, you might consider paying off those old student loans that are still hanging around. Over the long run you might be able to earn a higher rate of return in the market, but the peace of mind gained by being free of debt can be priceless.)

Save or Invest

If you are debt free, or at least “high interest” debt free, you could save for a rainy day by funding 3 to 6 months of expenses.  You could also save for a future big item purchase such as a down payment for a home, or invest for your future by placing your money in real estate or the stock market.  After all, if this extra $500 were to earn an average 10% return in the stock market over the next 40 years, it would be worth over $26,000.

Spend The Money (Afterall, you earned it!)

If your financial life is in good shape, then enjoy what you’ve earned! I’ll eventually post what I consider financially fit, but for now, let’s assume you have no high interest debt, live on a budget that works, and consistently spend less than you earn.  Just make sure you avoid the temptation to buy that $1500 plasma TV if your unexpected income only totaled $1000.

Again, these are only three options that you might consider.  Personally, we decided to throw our extra income at my student loans in an effort to accomplish our current goal of becoming debt free.