Getting Back to the Financial Oversharing

I've been overspending badly the past few months, a fact that is making me more and more nervous, especially since there are major life/income changes coming up. (Long story short: I'm returning to college in the fall to take classes, do unpaid work in a lab, and get ready for grad school. Long story long to be posted later.)

So here's the brief overview of where I stand. Keep in mind the categories were all assigned back when I was still planning to teach for a third year so things may shift if/when I end up dipping into savings next year.

• Emergency fund (I Bonds, value takes into account penalty for cashing out early):$8,459
  
• Checking account at old hometown bank: $500
• House fund at old hometown bank (15 month c.d. with 2.27% apy that will mature in February): $9,000
  
• Checking account at USAA: $600
• Health Savings account: $1,000
• Roth IRA (VBINX, already maxed out for 2010): $14,600
  
• Car fund at FNBO Direct: $9,600
• House fund at FNBO Direct: $600

I've also made mandatory contributions of about $4,000 to the state teacher retirement system that I'll probably withdraw since I can roll them into an IRA. (Since I don't anticipate teaching in the state's public schools again and strongly suspect that over the coming decades protecting the contributions of someone who only taught in the state for two years won't be a high priority, I assume this is the best idea, but I'm open to advice.)

Making this list served as a nice reminder that I haven't torpedoed my financial future yet. Next year may be another story, however.

Where I stand

I'm still feeling unmotivated about finances these days. I feel like I've been spending with wild abandon these past few months, but I'm still socking away a decent amount. The picture wouldn't be quite so pretty if it weren't for stipends from a couple of great professional development sessions this summer, however. (Does attending science teacher training count as a side hustle?) I know it is time to get serious about living beneath my means again.

As of yesterday, my financial picture looked like this:

Life Happens fund (in USAA savings): $1,000
Personal escrow (in USAA savings): $260.83
Emergency fund (in I Bonds): $8,050 + accumulated interest
Roth IRA (in Vanguard Balanced index 60/40 Total U.S. Stock/Total U.S.Bond): whatever remains of the $5,000 I put in in May of '08 (I've put a moratorium on checking.)
Main savings (in FNBO): $20,683.41
Account I only use in summers (Hometown bank checking): $1,000
Account opened to get sign up bonus (ING): $275
Account I really ought to close (HSBC): $1.79
Paycheck I got on Friday and haven't cashed yet (all going to some sort of savings):$1,071

I don't count my main USAA checking account because as far as I'm concerned, that money is as good as already spent on daily living. I should probably exclude personal escrow for similar reasons, and $5,000 of my main savings account will be 2009's Roth contributions. By that methodology, I'm a twenty three year old with a salary of just over $35,000 who has over $27,081.20 in addition to fully funding an IRA for two years. That doesn't look so bad.

Except that I won't be making $35,000 for long. Teaching is going much better, so much so that I'm leaning toward spending a third year in the Delta, but after that I still think graduate school is the right path for me. My feelings of missing research aren't diminishing any. Getting that Ph.D. is going to mean several years of probably making just enough to get by. I need to regain my sense of urgency now so I'll still be in decent financial shape when I'm thirty.

Setting savings goals

It's tricky to figure out what appropriate savings goals are while in college. Most of the advice out there is geared to folks who have a full-time jobs, bills, and a normal adult lives. College students are generally assumed to be nearly broke, except in the occasional articles focusing on very young entrepreneurs who suddenly became amazingly wealthy through creativity, luck, and insane drive

I fit into neither of those categories. Through good fortune with scholarships (and parents who were happy to not have to pay for tuition or room and board and have thus been overly generous in insisting on paying for some incidental expenses) I am in better financial shape than many my age. I have no school debts and have accumulated a chunk of savings by saving scholarship stipends and summer income. Today, not including loose change and after spending money on rent that will eventually be reimbursed, my net worth is $15,746.25.

Many months ago, the goal was to save $10,000 before finishing college. It's probably time to revise that goal. It seemed like a nice round number, attainable, and enough to live on for many months in a worst case scenario. Now, if I manage to avoid dipping further into my savings between now and when I get a "real job" rather than an internship that is technically a fellowship, I'll be able to fully fund a roth and still keep the emergency reserve. Would it be silly to try to not dip into my savings for the next year but spend the interest? Is it reasonable to take a hiatus from savings?

It might be good to scrimp and save for a down payment, but buying a house will be several years in the future. An extra few dollars a week now could make a fairly dramatic difference in my day to day life, and an extra couple hundred bucks in savings probably won't make much difference once I have a job. Yet, it feels irresponsible to slack off.