I kind of referenced it in a past post, but I received word that I got offered a new job — which I accepted — earlier this week. It’s a marketing writer position for an enterprise software company close to where I live. I feel it’s the next step for me, a growing company, and counting furloughs and pay cuts I’ve taken at my current job … a 50 percent pay raise.
While I’m extremely happy about these prospects, it leads me to believe it’s time to revisit what I have been doing with my finances. Sure, I’m still going to do the same things — budget, save, etc. — but with more money coming in every couple of weeks there are bound to be some changes.
For starters, I believe that I’ll actually be able to save a full 10 percent out of each paycheck, instead of saving just 5 percent while I had 5 percent deducted automatically into a company-sponsored 401(k). This means I can save more toward my goals faster, and I can also set aside money to try and pay down my federal student loan debt quicker.
Speaking of student loan debt, because I paid a little more than $16,500 in one shot to take care of my private student loans, I’m a little unbalanced now when it comes to my cash vs. stocks. vs. bonds vs. other allocations. I’m a bit stock heavy, though not as much as I thought. Even though I’m relatively young and should be more aggressive by holding a higher percentage of stock, I want to have a little more of a balance in case the stock market corrects itself again soon.
As it stands now, I have 37 percent of my portfolio in cash, and 48 percent in an array of stocks, whether it is the one I inherited, the few shares of gold I bought years ago, or the retirement accounts I have set up. I want to pull those two percentages a bit closer to each other.
I am going to do that by splitting up the inherited stock into thirds. One-third of that stock, one-third pulled out into a money market in my Charles Schwab account, and one-third in some exchange traded funds. I really don’t want all of that money in virtually one share of stock — sure, if the stock market does really well I make a lot of money. But if the market takes a nosedive, I lose quite a bit. I want to shelter myself from that.
I also need to find out the proper procedures to roll over my 401(k) into an IRA — I’ll probably but it into my Schwab account so that I can easily check in on it. I also need to ensure I have finished all of my duties before my last day on the job, December 22. I have vacation time coming to me before I take on my new role in 2010, so there’s plenty of time for me to sit down and make all of these decisions.
Making more is great, but I will have to ensure that I do not create some bad habits now that I’ll have more room to breathe (financially). I believe I’ve laid a good foundation, and now I can finally start to expand.