2012 Financial Goals: Update

It's been a long time since I've done one of these but I'm back! I have had a lot of changes to my finances, mainly I'm in the process of buying my first home!  From a purely financial standpoint this may not have been the best decision, however the home is in an ideal neighborhood, I LOVE the house and can see myself (and my fiance and future family) there for a long time, so I'm comfortable with my choice.



Save $4000 by January 2013 I've added about $2200 to my savings this year and so far I haven't touched any of the money that has been added to my savings account since I opened it.  I'm scheduled to close on the house in about 2 weeks and unfortunately I will have to pull out about $1500 for closing.

Maintain a buffer of $100 in my monthly budget. From March to May I maintained about a $400 buffer each month.  In June I went on a vacation and had some minor expenses relating to the house (ex paying for a home inspection) so this buffer was only $49.  I did put down a $1000 deposit to secure the venue for my wedding next year, but I didn't include this in my monthly budget because I have been saving cash and gifts from family members in an envelope labeled Wedding Fund (old school, I know).

Maintain $0 credit card debt.
I used my credit card for my regular monthly expenses (grocery, gas, etc.) and pay the balance in full by the end of the month.  So far this year I've gotten a $50 Gift Card using my credit card reward points and by next month I should have enough points for another $25 card!

Open a Roth IRA

Haven't done this yet. 

2012 Financial Goals: February Update

Save $4000 by January 2013 I contributed $210 to my savings account this month through automatic direct deposit. I also took part of my tax refund along with some of my "buffer" in my checking account and added $600 to savings, so I've already saved about $1000 so far this year!

Maintain a buffer of $100 in my monthly budget. I've really been sticking to this one, and February was almost as good as January.  By the end of the month I had an extra $650 left over after expenses and savings!

Maintain $0 credit card debt.
I used my credit card for my regular monthly expenses (grocery, gas, etc.) and paid the balance in full by the end of the month.

Open a Roth IRA

Haven't done this yet. 

How Your Mindset Hurts Your Finances: 3 Examples

“I work hard to make this money, so I’m going to enjoy it!”

It’s true, you probably worked hard to earn your money.  But think about all the hours you had to put in to earn your salary…then think about how quickly money can fly out your hands.  It only takes minutes to swipe your debit card and lose $50 on a “quick run” to Target, or to hit the checkout button at Amazon and purchase the assortment of items that you’ve had patiently waiting  in the shopping cart.  Spending money is easy-it’s quick, there are so many ways to spend it, and lots of people who get paid to entice you to spend.  Because spending is so easy to do, it is easy to get yourself in trouble by overspending, sinking into debt, and racking up credit card interest charges or bank overdraft fees.  Also, maintaining the habit of spending all your money is risky; in the event of an emergency—such as illness, job loss, or needing household repairs—you will not have the money to cover these unexpected expenses, which would then lead you into debt.

“I’ll worry about tomorrow when it gets here!”

If retirement is over 20 years away, it may not be one of the things at the forefront of your mind, but ignoring it can have dire consequences.  You don’t want to work until you are 70 years old because that’s the only way you will have enough money to survive.  There may come a time when you are no longer able to work to support yourself; the decisions you make today can affect your financial security and the quality of your life during that time.  In addition to planning for retirement and funding a retirement plan, it’s important to consider what the future economy will look like.  Consider inflation, which means that the dollar you have to day will have less purchasing power in the future.  Skimping on your retirement contributions or underestimating how much is needed in the future will leave you with an unpleasant surprise when retirement age arrives.  Lastly, procrastinating when it comes to retirement contributions—or even procrastinating about adding to your savings account—means you miss out on the benefit of time.  The earlier the save, the more time you have to make your money grow.  "Someone who puts $4,000 a year into retirement accounts starting at 22 can have $1 million by age 62, assuming 8% average annual returns. Wait 10 years to start contributing, and you'd have to put in more than twice as much -- $8,800 a year -- to reach the same goal."

source

“I can afford that, it’s ONLY $x (or $x per month)!” 

A low purchase price may make you feel better about spending your money, but make no mistake-there are more factors to consider when making a purchase.  A low price means very little if the item you get is of poor quality and will need to be repaired or replaced in the near future.  Also, the purchase price is hardly ever the “real” price of an object.  Whether it is tailor fees for a jacket, replacement ink cartridges for a new printer, or a data package for a new cell phone, most purchase require additional service charges.  Ignoring these additional costs can result in a seemingly minute cash expenditure that creates a big dent in your budget in the future.  Likewise, signing up for monthly subscriptions like gym memberships or cable services can negatively affects your budget  as you are increasing your fixed monthly expenses, leave you more cash strapped each month.   You are agreeing to regularly pay a guaranteed debt, while your future income may not be guaranteed.  The future is unknown, and in the face of an emergency, you may find yourself unable to meet these financial obligations.  There may be fees for late or missed payments, and even penalties for cancelling these services, so it is in your best interest to think long and hard before entering into one of these agreements. 

2012 Financial Goals: January Update

Save $4000 by January 2013 I contributed $210 to my savings account this month through automatic direct deposit. In the next week or so, I will transfer a lump sum ($300-500) into my savings account. Wondering where I'm going to get that lump sum? Keep reading...

Maintain a buffer of $100 in my monthly budget. I did a great job of limiting my shopping and my restaurant meals this month.  I went out to eat only 4 times this month and what shopping I did was from the clearance rack.  By the end of the month I had an extra $700 left over after expenses and savings!

Maintain $0 credit card debt.
I used my credit card for my regular monthly expenses (grocery, gas, etc.) and paid the balance in full by the end of the month.

Open a Roth IRA

Haven't done this yet. 

Guest Blogging Round-up: December

Last year  I wrote about all things finance from the young adult’s perspective in a series called Pennies-Nickel-Dollars over at Pretty Natural Divas.  Take a look at my posts from December:  


The Hidden Costs of Shopping A purchase is never just a purchase. A warning about additional costs associated with shopping. 


6 Money-Saving Apps  6 smartphone apps to make your shopping easier and save you money. 


On The Web: Money Article Round-up Highlights of my favorite personal finance articles I found on the web. 


New Year, New Goals Goal-setting tips, just in time for the New Year!




Happy Reading! 

Money Lesson: Don't Eat The Cookie!

Recently I shared some of my financial goals for the year, but I didn't tell you all about the other life goals that I have. One is to improve my eating habits, and part of the way I've been doing that is to track calories and keep a food diary using the My Fitness Pal app on my iPhone. My motivation was tested when my fiance decided to make some chocolate chip cookies. I had space in my calorie count for the day to have a cookie, so of course I was ready to run in the kitchen to get one...BUT, I decided to enter the cookie into my food diary before actually eating it, and boy did this make all the difference.

The app I use tells me how much progress you can make in 5 weeks if everyday you ate like you did today (in terms of calories consumed). By eating this 150 calorie cookie and getting into the habit of "splurging" on an extra 150 calories each day, the amount of weight I can lose in 5 weeks would be decreased by 1.5lbs. This was a light bulb moment for me...when it comes to health or even money, each seemingly small decision you make is important, as they collectively form your set of habits that will either lead you to your goal, or lead you astray. That afternoon vending machine break and the weekly trip to Target that leaves you $20 poorer each time may seem like small amounts of money, but added together can really hurt your budget. 

Every time you make a bad decision, it becomes easier and easier to make another one. Also, each bad decision makes it easier to fall off the wagon of change because even though we all know that you can make mistakes along our journey, we all have had times where we accept mistakes as failure and just stop trying all together.

To commit to a lifestyle change, we have to first commit to taking the journey one decision at a time. At each "checkpoint" (decision), we have to decide whether to move closer to our goals, or to move further away. We will have missteps along the way, but we just need to work on making those mistakes occur further and further apart.

I think this commercial from Fidelity illustrates my point pretty well:

2012 Financial Goals

It's a new year, so it is the perfect time for a new set of goals.  I made awesome strides in my financial life in 2012, and I hope to continue that success into 2012.  Here is a list of my goals for 2012, along with ideas for behaviors that I can do to help achieve them. 

Save $4000 by January 2013

• Direct deposits to savings: Already set, with the current setting can save about $2500 without doing anything else.  May increase the amount saved each month.
• Save 50% (or more) of tax refund.  I saved a good portion of my refund last year and used part of it to pay off credit card. 
• Increase income.  This year I will be eligible for a promotion at work that comes with a 10% raise.  Also use money earned from Swagbucks (gift cards), online surveys, and credit card rewards to decrease some of my regular expenses instead of using it to buy frivolous stuff

Maintain a buffer of $100 in my monthly budget.  A few times in 2011 I went over my budget (note: I think of my savings as a bill I have to pay, so I didn’t actually spend more than I earned, just cut into the amount of money I put into savings each month).  After I build up a few months of a buffer I will transfer that amount to my savings account.

• Tell myself no when I’m lusting after an item in the store
• Limit costly restaurant meals
• Use cash when shopping for personal supplies, clothes, food, etc to make sure I stick to the monthly budget.

Maintain $0 credit card debt. 

• Pay credit card balance in full each month
• For major purchases and wedding purchases, create separate savings account/sub-account to take care of it instead of using credit card.

Open a Roth IRA

• Read blogs, books, etc to research options

Guest Blogging Round-up: November

Every Thursday, I write about all things finance from the young adult’s perspective in a series called Pennies-Nickel-Dollars over at Pretty Natural Divas.  Take a look at my posts from October and be sure to check me out  each and every Thursday! 


Pennies-Nickels-Dollars: Managing Student Loans  Tips to help you minimize and manage student loans before, during, an after college.

No Job & No Savings, Could You Survive? A look at the online game Spent that simulates the feeling financial hardship. 

5 ways cleaning out your closet can make/save you money  How to find money in your closet!

Money Lesson: Be Observant

Last weekend, I needed to do a little shopping so I headed out to Target.  I saw a large package of toilet paper was on sale for $12 so I quickly grabbed one and headed to the checkout line.  The cashier rang up my purchase and called out the total, but as I pulled out my debit card and began to swipe, I paused..."Could you repeat that total?"  Turns out the toilet paper rang up as the original price of $15...

The same night, my fiancé and I decided to go out to eat.  We had great food, a really nice waitress, and everything was going fine...until the bill came.  There was an extra item listed on our receipt and--had I not noticed--we would have been overcharged by about $5!

So, there were mistakes on two separate occasions in the same night that could have cost me money...BUT, by paying attention as the transactions were taking place, I was able to catch these mistakes and save a few dollars.  It may not seem like $3-5 is a lot of money, but considering all the purchases you make every single month, if even a few result in you being overcharged then that $3-5 can add up!  Make sure you observant when making purchases and review all your receipts!

Layaway: Good, Bad or In Between?

With the holiday season quickly approaching, I’ve noticed some major retailers advertising the return of their Layaway programs. These programs work by allowing a customer to make a small down payment on items they want to buy, and make a series of payments over the course of a few weeks to finish paying for the items. In return, the retailer will guarantee that the item is in stock when it comes time for the customer to pick it up after the last payment is made. There is a service fee associated with layaway, and a customer may be faced with cancellation fees if they miss payments or decide to cancel the layaway plan. However, from looking at both the Walmart and Kmart layaway plans, service fees generally are between $5-10, and customers can get a refund if they decide to cancel the layaway.

I’ve never used layaway before and I’m not planning to use it in the future, but I am curious to know if it is a truly a benefit for shoppers. I can think of a few “pros” for using layaway:

Journey to Fitness: Finances and Beyond

For the past month, I have been working on creating a more healthy lifestyle.  Keeping track of my budget has become pretty routine for me, but working on fitness, nutrition, and finances at the same time is tough!   Whenever I'm faced with a challenge or feel a bit overwhelmed, I try to simplify things as much as possible by making connections between seemingly unrelated things. In doing that I find that I get a better understanding of each individual task, and can come up with ways to tackle them both at the same time.  So in an effort to help me (and hopefully you all as well!), I've brainstormed some ways that the journey to health and fitness and the journey to financial fitness are alike.  

Both require you to manage 2 main elements.  Whether it is income vs expenses or calorie intake vs calories burned, you have to be aware of what goes in and what goes out.

Making Savings Fun

What you see above is my new money bank and also one of my favorite gifts that I got for Christmas. Yes, it's technically for kids, but it is absolutely adorable and makes me smile. It is designed like an ATM machine equipped with an ATM card and secret pin. It automatically counts the money I "deposit" and keeps track of my "balance." My boyfriend and I are using it to build our "weekend getaway" fund...granted we are only depositing coins so we're not expecting this to pay for the entire trip, but every little bit helps (and it's much better than having change weighing down my purse or filling up the upholder in my car).

Now the main reason I love this litte bank is because it makes saving money FUN. I get the rush and instant gratification that I don't feel when my money is automatically transferred each month. I hear the "ca-ching!" when the coins drop inside.  Plus it's something me and the boyfriend can do together, which is always nice!

So, how do you have fun with your savings?  Any tools (or toys)?  Tell me :)