• Posts Tagged ‘savings’

    How Small Savings Can Go a Long Way

    by  • May 14, 2013 • Tagged: ,  • Comments

    Even if I am exceptionally good at saving and budgeting money I often forget about small expenses, and whoever said “Don’t sweat the small stuff” obviously didn’t have an expensive daily coffee habit. Despite being organised and striving to be financially secure, if I look at my weekly purchases there are so many small ways I could save money. All these small things add up, and at the end of the month I could have saved myself a lot of money if I had just been more conscientious.

    Now it’s not worth beating yourself up about that extra cup of coffee or the magazine you did not really need, but when you fritter away money on small expenses it can make a large dent in your potential savings. Those 3 take away cups of coffee a day add up and could be your whole credit card payment at the end of the month.

    More often than not we don’t count small things unless we are really broke and watching every penny. But in order to be financially secure and stable accounting for every penny needs to happen all the time. Work out how much you spend on little things and see if you can make changes to your daily routine that will help you save cash. A little monetary consideration before you put your hand in your pocket is worthwhile and there are many alternatives to spending on the little things so you can save for the big.

    For example; if you buy 2 coffees a day, cut down to one and either keep instant coffee in your drawer at work or drink water. If you enjoy a quick visit to the casino every few days switch to mobile casino gaming as you will avoid a whole slew of small expenses such as gratuities, parking fees and exorbitant drinks prices. Snacking can also be an expensive trait and homemade snacks are generally healthier and cheaper to make, as are home cooked meals over ready meals or take always.

    You will be amazed at how little purchases can add up and if you monitor your minor expenses you may find you could even afford a holiday or a weekend away with the small change you have saved.

    Do you have any tips for cutting back small scale spending to save big?

    Don’t Spend Your Savings!

    by  • March 13, 2013 • Tagged: ,  • Comments

    Maybe it’s a problem unique to me, but every time I used to find a way to trim my budget, I ended up just spending the savings.

    Spending My Savings

    Prime example – I used to spend roughly $3 per workday on coffee drinks, which multiplied by 20 workdays a month, meant that I coughed up $60 a month minimum on coffee.  I know, I was blowing through money fast…like getting a payday loan in 15 minutes fast…but it was my vice.  But my new employer provides free coffee at work.  Not just any coffee either, but coffee brewed with an individual brewing system so it was always frothy and fresh.  Yum.

    When I was checking my credit card bill on the first month after starting my new job, I realized how much I was saving effortlessly by just not going on the morning coffee shop run!  I was thrilled and I chalked it up to being an awesome job perk.

    But after getting really happy that I was saving $60 a month on coffee, I ended up justifying purchasing a $10 clearance blouse that I did not need.  That was followed by using premium oil during my next oil change for $15 extra.  And then I spent $3 more to park near my work building. Why not?  I was saving $60 a month incidentally anyways.

    Justifications

    See, I easily justified spending every dime of my accidental savings on stuff that did not improve my quality of life.  Looking at my monthly statement again, I realized I was justifying myself into spending enough to compensate for all of my coffee savings!  I was wasting my easy savings! Admittedly, my monthly budget was not impacted, but my ability to save was.

    I have since capped my automatic lifestyle inflation.  I think the solution for me is to try to ignore (and thus not celebrating) saving money.  I would rather not notice the savings until they are safely tucked into a savings account, where I can celebrate them by just glancing at my statement. Seeing my savings account increase has made the extra cash seem like tangible savings, not merely free-floating credit for me to spend.

    In all honestly, the coffee budget itself was probably ridiculous.  But justifying spending that money even when my coffee needs were satisfied was just insane.  Currently, I have my morning beverage costs in check.

    Do you have a trouble actually saving money saved?

    Emergency Fund as Self-Insurance (and Giveaway!)

    by  • November 1, 2012 • Tagged: , , ,  • Comments

    emergency fund

    Ours is locked up more securely.

    In eight years, we have been extremely lucky in that we have never had to tap into our emergency fund. As such, it’s a been a while since I’ve actively thought about it. There’s a myriad of ways that our emergency fund helps us on our path to financial security. We see it as a form of self-insurance, in that it helps us to avoid financial catastrophe should an unplanned unfortunate event happen to us. Here’s some of the ways that we’re protected.

    Income Replacement

    We’ve both been happily employed at our jobs for eight years. While we’ve both had some scares of layoffs, we’ve both been lucky and have avoided cuts. We can’t always depend on luck to keep saving us, so we’ve built up a cash cushion to replace our income should we find ourselves unemployed. This is obviously the main use of an emergency fund, but it also has other, indirect uses.

    Credit Score Protection

    By having a cash supply to fall back on, we’d be able to pay our bills on time, even if that means we pay only the minimums. Credit scores are becoming increasingly important, not only for getting good rates on home or auto loans, but also for insurance rates and even to determine whether you get a job. Even paying one bill more than 30 days past the due date can have unforgivingly deliterious effects on credit scores. It would be such a bummer for one late payment to ruin years of building good credit. (By the way, we use Credit Karma to monitor our credit score – here’s our review of Credit Karma and you can sign up for Credit Karma here!)

    Ability to Keep Moving Forward

    If one of us were to lose our jobs, we would be job searching full-throttle in order to fill the income gap. Having an emergency fund would allow us to concentrate mostly on finding a new job that suited us, and not having to get a job in the meantime in order to make ends meet. This way, we can allocate all of our efforts into finding a long-term solution for employment, which in the long run will allow us to build our financial resources even further.

    Ability to Seize Oppotunities

    Once in a while, I like to imagine that I’d come across a business opportunity that I couldn’t pass up, but would be very risky. By having an emergency fund, I’d be able to pursue (with the ok of the spouse, of course) an opportunity knowing that the financial impact would be minimized. In realty, the best opportunities that have come up so far are fantastic sales that we couldn’t pass up. Either way, having the emergency fund allows us to take advantage of opportunities while minimizing our risk.

    Peace of Mind

    The most important asset that an emergency fund brings to us is peace of mind. Just knowing that we would be able to tackle life obstacles without major financial distractions allows us to sleep much more soundly at night. We already have a lot of stress on our plates and it is a relief that we don’t have to worry about what will happen should one of us lose our jobs.

    Do you have an emergency fund? In what ways are you protected by having one?

    image: Tax Credits

    Giveaway!

    We’ve partnered up with SavingsAdvice.com to offer you the chance of winning $100 through PayPal or as an Amazon Giftcard. This is a great way to start or supplement an emergency fund. Entering is easy – all you have to do it like our Facebook Page. You can get additional entries by doing any of the other activities. That’s it! The contest is open until November 10. Good luck!

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    What You Save in a Hurry

    by  • October 15, 2012 • Tagged: , ,  • Comments

    Pearl river fire

    Thankfully, the Situation Wasn't This Dire

    There are many benefits to our current situation, beyond the obvious points of no-rent and free food. The students here are genuinely interesting, intellectually engaged kids who are, by and large, well-behaved and very nice. There are times when I feel like a den-mother, asking nineteen-year-olds what kind of cookies they’d like at a study break, or how their roommate situation is going (My husband, Brad, try as he might, is not exceptional at navigating female housing conflicts).

    And then there are moments when I remember that we do live with college students, smart and lovely though they may be. One of those moments was a few nights ago. After a totally normal evening, we had just gone to sleep when I heard shrieking in the hallway. Whatever, it’s college, it happens, I thought. And then there was the banging. The very insistent banging on our door. I turned to Brad, who falls asleep ten times faster than I do.

    “Someone’s knocking on the door.”

    “Huhwhat?”

    “Get up, someone’s knocking on the door.”

    “[inarticulate mumbling]”

    And then I heard the fire alarm. While Brad stumbled around in the dark, looking for his glasses, I headed to our front door and poked my head out, to see what was going on. That’s when the very dense, acrid smoke hit, and I realized it might not be the usual shenanigans.

    “THE HALLWAY IS FILLED WITH SMOKE, GET YOUR SHOES ON.”

    While Brad glacially moved towards his sneakers (one thing I learned from this experience is that he is apparently not the crisis management in this relationship), I grabbed my phone and my purse, and we headed out the door and into the street. There, the girls who live on our floor explained that they had put a plastic tea kettle on the electric coil stove (WHAT? WHY?) and it had melted (WELL YES OBVIOUSLY IT MELTED). While Brad told them it was fine, and made sure they had turned off the stove before leaving (they had), I called the authorities, who sent over two trucks full of thoroughly annoyed looking firemen. They aired out the hallway, made sure the stove was safe, and after we gave all of the university authorities our information, they headed off into the night.

    Despite the obvious questions this situation raised, like why these students thought it was a good idea to put plastic on a hot burner (for privacy purposes I won’t say which university we’re associated with, but I will say that if you’re smart enough to get into this school, you should be smart enough not to put a PLASTIC TEA KETTLE ON A BURNER), another was what we’d save, and what we’d lose, in a real emergency. The first item on my list is Brad – while watching him come out of his slumber more slowly than I’ve seen babies crawl across a football field, I realized that my hyper-anxiety at least enables me to be immediately on the alert in a situation like this, and to get him out the door and to safety as soon as possible. But after that? Well, I grabbed my phone because I figured we’d need it, and my bag because it was by the door. But that was it. (You might notice our cat is missing – he has the miserable habit of running very far under a variety of furniture when something scares him, and we’re trying to figure out how we could get him out of the building, if it came to that, without killing ourselves in the process.) But everything else is (maybe literally) toast. And in that moment, when I realized that our building might actually be on fire, that wasn’t even a concern. It’s a relief to know that my miserly ways don’t extend to those terrible moments of decision, when saving your money might mean losing what actually matters.

    image: Steve Wilson

    Save Money by Being Married/Antisocial

    by  • May 15, 2012 • Tagged: , , ,  • Comments

    Tastes Good Regardless of Location Consumed

    Tastes Good Regardless of Location Consumed

    My husband, Brad, is in the midst of his last school-related work before his summer (of more working) begins. He’ll be done on Friday, and the other day we had the following interaction:

    Abby: Hey, since you’ll be done on Friday, do you want to go out for drinks to celebrate?

    Brad: Maybe.

    Abby: What if we just go to [NAME OF NEIGHBORHOOD BAR] and get some dessert and a beer?

    Brad: I guess.

    Abby: . . . or do you just want to sit in the apartment and drink the beer we have in the fridge and eat a sleeve of Thin Mints?

    Brad: Yeah, that sounds perfect, actually.

    Sometimes, I read personal finance articles and the comments associated with them, and wonder how these people, most of whom are my age, spend so much money on going out. What are you doing? I think. Why can’t you just drink a beer at home? And then I realize – not everyone has the advantage of living with one of the few people they can stand for long periods of time. Don’t get me wrong – I like to dress up in something other than $6 men’s sweatpants from Target, and enjoy a nice gin cocktail with people to whom I am not married every once in awhile. But most of the time, my husband and I are each other’s company, and we like it that way. The added benefit, which we often don’t consider, is how much money it saves us. Consider some of our favorite activities:

    • Ordering takeout from the exceptionally delicious pasta place near our apartment and consuming it in our apartment.
    • Sitting with (nice – we do spend a little on our home-bound alcohol) beers in our apartment, while I watch something on Netflix and Brad half-watches, but mostly catches up on college sports blogs.
    • Ordering takeout from the great Taiwanese restaurant nearby and eating it in our apartment (sensing a trend?).


    Besides our penchant for carb-heavy takeout for which we don’t have to change out of sweatpants, we spend a lot of time hanging out with each other in the apartment (particularly in the colder months up here, which is almost all year long). And the natural consequence of this is that we don’t go out as much as we would if were single. We don’t feel compelled to head to a local bar that often, because the beer we would get there is the same beer we can consume in the comfort of our home, as is the company.

    As I said, this doesn’t mean I never get out. There are work happy hours, friends to meet with over a glass of wine, and potlucks that I attend. But after reading that some people my age go out on a near-daily basis, I can see how my generation can become mired in credit card debt after an accumulated however-many drinks consumed. It gets pricey, and we’re lucky to be cutting our expenses through our anti-social/homebody/married tendencies.

    How do you manage your social expenses?

    image: Jeramey Jannene

    Save Money With Us at ImpulseSave!

    by  • April 27, 2012 • Tagged: , ,  • Comments

    Oink oink

    One of the financial skills that we’ve kinda let lapse over the last few years is saving money. Pretty basic, but we’re terrible at it.

    What we’re really good at is impulse spending. We should get a medal or award for it.

    Well, from here on out, we’re going to change that. And we’re going to use ImpulseSave to help us.

    What is ImpulseSave?

    You know how when you’re out and you see something awesome like a CHOCOLATE CHESS PIE WITH A WHISKEY RYE CARAMEL SAUCE and then you HAVE TO HAVE IT NOM NOM NOM???? Then you realize ohmygosh it’s $28 for a pie? But then you remember that you have some ice cream at home? Awesome, you’ve just SAVED $28!! But how do you really SAVE that $28??

    With ImpulseSave, it’s as easy as texting “Saved $28 on ridiculously tasty but expensive pie.” Boom! $28 is moved to a savings account. Not only can you save by text message, but also by Instagram (!), going on their website, and soon by an iPhone app! That’s how ImpulseSave makes saving easy and awesome.

    Goal-oriented Savings

    In addition to making savings easy, ImpulseSave also has features that make saving meaningful and even…fun. First, you can set goals like “Startup company fund to mine asteroids” or “Box of kittens”. When you save, you can specify which goal you’d like to put the savings towards. Then, you specify how much you want to automatically save per week, minimum of $5, towards that goal. Why autosave? Let’s face it, if you can’t put at least $5 weekly into a goal, you’re not going to get serious about saving. (Don’t worry, you can pause anytime, but you should only do so if you REALLY need to!)

    To keep you updated and accountable towards your goals, ImpulseSave will send you weekly updates on your goal progress. Each time you save, you’ll get a little cheer from ImpulseSave to keep you on your way. Also, you can save socially by letting other people know when, how much, and for what you’re saving! It’s pretty awesome and when you sign up for an account through our website, we’ll be ImpulseSaving together!

    Sign Up and Security

    Signing up is easy, and dare I say…fun. Everything is done electronically, including sending over a copy of identification to open up a savings account. It’s pretty cool that I could just hold up my ID to my laptop camera and be on my way – welcome to the future! There’s no fee to join, nor are there any pesky balance transfer fees. All of your information is securely stored under Fort Knox-like conditions, and the bank is FDIC insured.

    If you sign up and stall out somewhere in the process, you’ll get friendly reminder emails to get you to finish. To my surprise, one of the emails was the following from Alysa Seeland, the community manager at ImpulseSave:

    I noticed you haven’t finished opening your ImpulseSave account, so I thought I’d take a minute to share my story.

    My husband and I are newlyweds, aka newbies to this whole finances thing. Despite our lack of knowledge, we saved $2,800 in six months with ImpusleSave – ka-ching!

    The best part is, ImpulseSave is FREE, social and totally fun: you and I can share saves, challenge someone to a save-off, or just make like the Little Engine That Could while ImpulseSave encourage us all the way!

    I think that this is awesome. These emails could have been lifeless and boring, but it is a nice personal touch.

    A Video Is Worth A Thousand Words

    Don’t feel like wading through a review? Watch the video below to learn more.

    How It Works from ImpulseSave on Vimeo.

    Is Misery Worth It?

    by  • March 21, 2012 • Tagged: , ,  • Comments

    Metro North, My Old Friend

    Metro North, My Old Friend

    Image: F. Hoffnar

    When I graduated from college in 2008, like many people my age, I graduated with debt. Thanks to my college’s stellar financial aid policy, a generous parent who believed the cost of higher education was worth it, and some substantial saving on my own part, that debt was a very reasonable amount (more than $10,000, but less than $20,000). I knew that I wanted to be rid of it as soon as possible, both to have that mental burden lifted (because I am the kind of person who is HAUNTED by finances), and because I would be unlikely to find any kind of savings vehicle that would produce a higher interest rate on the cash I had than the interest rates on my student loans.

    Because I am a little bit of a wacko, I decided I could pay this off in a year. I would be working in New York City, and while my salary would be low (hurray publishing jobs!) I would be able to live at home and save money (this is a great advantage that I know many, many young people don’t have, and I realize how lucky I am).

    I’ll say a few things about “saving money” in New York City – even the cheapest things are painfully expensive, and the easiest things are kind of miserable. I wasn’t paying rent, but I was paying about $300 in commuter expenses a month. I was living at home, but I was traveling almost two hours each way, every day, and it took its toll. I was paying off my debt, but I was skipping happy hours and lunches out to do so. After six months of this, I was worn out. After a year, I was miserable.

    I won’t go into the details of said misery, because no one wants to hear the whining of a lucky post-grad who managed to pay off her debt. But I will say that year took its toll. Yes, I’d paid off my debt, and saved up a nice-sized emergency fund for the future, and even splurged a little in-between, setting aside money for furniture for my future apartment (IKEA, of course) and a monetary gift for my sister before she went abroad her junior year of college. But there were days when I felt so beaten down, when all I wanted was to get more sleep and time to myself instead of rushing to catch a subway, then a train, then a bus; when I wished I could stay out late with friends at a bar without torturing myself over the cost or falling asleep before the night even started.

    Sometimes I wonder if the monetary savings of that year were worth the emotional and physical toll. What, exactly, is the cost of our current happiness? Is it worth it if the future payoff is great? Or should we not torture ourselves quite so much in exchange for financial payoff?

    Spending the Savings

    by  • March 12, 2012 • Tagged: ,  • Comments

    Money Jar

    Breaking into my stash for a good cause.

    Image: Tom Small

    There are moments when I look at my savings accounts as abstract items not to be used – pristine, shining examples of my frugality that are there for looking, but not for touching. And then there are the moments when my apprehension disappears, and I understand why I continually add to them in the first place.

    Recently, a situation arose in which a friend of mine left her home for some time, and would need (or like, or want – however you want to put it) visitors. This was a medical situation, and one in which I knew I would, without question, figure out a plan to accommodate that desire. Old friends aren’t something you should play around with – they’re rare (I realize this as more of my local friends express astonishment at my old friendships) and important, and worth some inconveniences – even of the financial kind. And so I set to planning a somewhat last minute trip, and one that certainly wasn’t budgeted for.

    Enter the “Travel Fund.” My husband and I set aside money into this fund for a few reasons: to have money to travel when the opportunity arises (see: Spain), and to have money that we won’t feel miserable about spending when the need arises (see: out of town weddings, unexpected situations like the one I now encounter). There’s something slightly less depressing about spending money that you’ve already earmarked for the purpose, particularly when it’s a surprise expense. I was able to pull some cash from that to pay for train tickets, hotel rooms, and anything else that arises (meals, taxis, etc.).

    After spending years and years constantly worried about where money was coming from, and if I was saving enough for any future problems, it’s an incredible relief to be able to do this – to pick up and help in a stressful situation without the added stress of wondering how I’m going to pay for it. That’s not to say that I’m not still careful about this kind of spending, and apprehensive – only that I know I can do it, and try to use that knowledge to set aside any concern I have over cost. I may agonize for hours over whether or not I really need that dress or pair of shoes, but this was a no-brainer. The money would be spent, the cause was important, and that’s the end of that.

    Are there moments when you’ve viewed your savings accounts in a different light, or been happy to have the money to spend when you needed it?

    Running Our Way To Savings

    by  • March 9, 2012 • Tagged: , ,  • Comments


    Money Goal illustration

    Catch that bag with the dollar sign on it!

    image: HikingArtist.com

    My wife and I have recently started going for regular runs. We aren’t training for anything (yet), but we enjoy the fresh air and the activity. We relish the chance to switch up the routine in the evenings and come back home with a runner’s high. And, of course, we both like the idea of burning calories and promoting our long-term health in a way that only running can.

    But ultimately we are also running as a way to improve our savings and our finances.

    That’s right – running has been shown to correlate with higher degrees of effective money management, especially among hard-core participants of the sport. This is likely a result of qualities that are instilled in runners and then translate favorably into personal finance. Here are a few of the main ones:

    • Delayed gratification. People who are able to show restraint and delay their gratification have been shown to be better money-savers in the long term. And no activity teaches delayed gratification quite like running does. Anyone who has ever gasped their way through a mid-winter 45 minute run probably understands that few of the joys of running are realized until after the jaunt is complete.
    • Lower stress. Regular exercise contributes to lower stress levels, which in turn breed happier individuals. Moreover, happy people have been proven to make more prudent financial decisions. By running, then, my wife and I can boost both our mental health and our savings account at the same time.
    • Plans and promises. Few people can become regular runners without planning ahead, making commitments, and holding long-term goals. They may not want to head outside and embark on a run after a long day at work, but they realize that doing so is in their best long-term interests. Consequently, runners make a promise to themselves that they will remain committed in their training – a promise similar to the one couples make when they are looking to save for retirement.

    These are just a few of the main ways that running and saving go hand-in-hand. If you have the traits to be a dedicated runner, you likely also have what it takes to make smart financial decisions.

    And if you don’t have those traits, there’s no better way to start nurturing them than by lacing up your shoes and heading out for a run.

    On Sudden Saving

    by  • March 1, 2012 • Tagged: , ,  • Comments

    Trevi Fountain

    This, or retirement?

    In the Spring of 2010, my husband and I found ourselves on the receiving end of a bit of excellent luck. As a graduate student, he was eligible to apply for a position in one of the undergraduate dorms of the university he attends. This role would entail some advising and programming responsibilities for the students, in exchange for a rent-free apartment and meal plan. When he was offered the position, I did a happy dance, and immediately proceeded to order a label-maker I’d had my eye on for ages and until then had deemed a frivolous purchase (I am a woman of simple, and sometimes embarrassing, tastes).

    When the high of the news had worn off (dinner out when we feel like it! turning the heat up instead of putting on another sweater!), we realized we’d need to consider where all of that money – previously earmarked for rent – would now be going. As a non-profit employee and a graduate student, we were suddenly presented with savings opportunities we had rarely previously considered. There were a few obvious choices – if we ever wanted to buy a house, we could suddenly spend our twenties saving for a down-payment. We could greatly increase our retirement contributions. We could pay down student loans with terrible interest rates.

    But besides the obvious choices, we took this as an opportunity to put aside money forthose things we’d always wanted to do, but never thought possible. We gave ourselves a few months of “free-saving” – time to put money towards things that might not be as practical as the obvious choices, like a house or an IRA. My mother has always wanted to go to Italy, and she would never do it on her own. So, for her 60th birthday, I presented her with a trip abroad, courtesy of several months earmarking cash in a little fund called “Italy Trip.” My husband’s sisters are in college, and face the daunting reality of student loans when they graduate. He’s put some cash aside to help ease that load.

    Could we have taken those few months and started stashing cash responsibly? Of course. But by the time I have enough disposable income to take my mother to Italy on a whim, it might be too late. Careers and age intervene, and so I seized the opportunity. Could my husband wait until his sisters are ten years into loan repayment to start sending cash their way on birthdays and holidays? Yes, but how nice will it be for them to see a little bit of that burden lifted as they leave that graduation stage in a few years? There’s a lot to be said for responsible saving, but I can’t say I feel too much guilt over those early months of less-than-austere planning.

    Have you ever been presented with a windfall, and put it toward less-than-practical plans?

    image: Chris Wee

    Better Late Than Never – 2012 Financial Goals

    by  • February 27, 2012 • Tagged: , , , ,  • Comments

    goals

    Number #1 is REALLY important.

    image: JohnONolan

    The last time that we made publicly available financial goals was in 2009. That’s like, before the dinosaurs in internet time. Sure it’s almost March, but that doesn’t mean that it’s too late to make goals for 2012. The goals this year won’t be too different from years past, which goes to show that we’re still struggling with the same things. Old habits are hard to break. Without further ado, here’s our goals for this year:

    1. Increase our savings to $30,000 to purchase a home.  If I ever get around to another net worth post, you’ll see that we have between $18K and $19K in the bank. Sad, because it around the same amount we’ve had for the last two years.  We’d like to put a substantial amount of money down on a home; considering home prices in Chicago, we’ll be able to make a 10% down payment with $30K. I still think that renting isn’t a bad deal, especially with our cheap $1,000 per month rent, but our family’s life situation has changed enough that buying a home makes more sense to us. I just hope that interest rates don’t go up too much in the next year.

    Stretch goal: Save $35,000. I may have to prostitute myself and Her and/or sell our baby.

    2. Pay off student loans that were transferred to a credit card at 1.99% for life, about $3,000. We made a transfer of $11,000 to a credit card that offered us a 1.99% APR for life  in 2007. We’ve been steadily banging away at the balance of the card, and we have a little under $3,000 remaining. This should be pretty easy and we could do this right away, but having it written down will help to ensure that we actually do it.

    Stretch goal: Get federal student loan debt balance to under $40,000. Truth is that it might be under that, I have no idea what the current balance is.

    3. Increase income by at least $1,000 per month. I’ve been diligently working my butt off in order to realize this goal. I’ve been making some crucial connections with people in my network and have been given some business opportunities from them. Ohmygosh that was so marketing-speak, so let’s try this again: I schmoozed with some people with crappy websites and they’re going to pay me to make them better. Also, this blog. It makes money. Yeah.

    Stretch goal: Increase income by $2,000 per month. I’ve done it before, I just need to do it again.

    So in the interest of transparency (which is the buzzword of the year, yeah?) I’ll post an update every month to let you know how these are going. Accountability, AMIRITE?

    How We’ve Been Doing Financially

    by  • October 10, 2011 • Tagged: , , , , ,  • Comments

    In the past two years, we haven’t been good with keeping this blog updated. As we’ve said before, finances weren’t a primary concern for us; we treat it more like a chore. Sure money is important, but for us it remains a tool that we use in order to achieve our other goals. However, like all chores, unless we keep up with it or we’ll end up with a mess. Here are some highlights as to what we’ve been up to financially:

    • Employment: We’re still at the same jobs, and consider ourselves incredibly lucky to have them in this economy. A few friends of ours have been unemployed for quite some time now and I can only imagine the stress that they’re under while they try and make ends meet.
    • Salaries: We’ve made a pittance by sticking ads on this blog. Her’s salary has remained stagnant in the last few years, and she’s still not feeling good about it. Mine, however, has continued to increase. In fact, I have increased my salary by 100% since entering the workforce. The extra cash has made it easier to get by.
    • Retirement savings: We have both increased our employer retirement plan contributions. Her is now saving 10% of her paycheck, of which the first 6% is matched 40%. For those bad at math, the match bumps up the total contribution to 12.4% per year. I’ve increased my contribution to 7% with a 3% match, for a total contribution of 10%. After the new year I’ll probably increase mine to 10%.
    • Savings: Did you know babies are expensive? In addition to buying all sorts of baby stuff, we’ve also taken a few vacations in the last 2 years. Some of them have been “paid” for by my work, some were to lands down under. We’re on track right now to replenish our savings to 3 months of our take home salary. We thought that would be an easier target because our expenses always seem variable. We assume that we could live off of that amount of money for at least 6 months.
    • Spending: In our not making finances a priority, I’m sure that we’ve spent a little more money than we’ve wanted to. Surprise surprise, daycare is our #1 expense, at 30% of our take home pay. At a distant 2nd is rent, which is 15% of our take home pay.
    • Debt: Student loans remain. We’re still not carrying balances on our credit cards – we  pay off the credit cards every month. Still making love, not debt. Oh yeah.
    I would say that we’re been doing ok with our finances. How has the last year or two been for you?

    Making Home Ownership Work

    by  • February 5, 2009 • Tagged: ,  • Comments

    Wow, a $15,000 tax credit for new homeowners? (thanks, Jim)

    Plummeting housing values?

    Ever decreasing interest rates?

    I’d be lying if I were to say that I haven’t been trolling the MLS listings for about an hour each day for the last few days, searching for our lair where we will hoard our spoils of war and amass an army of hatchlings.

    While this perfect storm of economic factors is a definite boon to us as potential home buyers, our lack of savings is looking like our largest obstacle to future home buying.

    Currently we have a little over $20,000 in cash saved up. I’m not sure how much of that is liquid; we expect to owe taxes this year and are deciding which route to take to reduce our tax burden. We’ll either contribute $10,000 into a solo 401(k) and pay the remainder of the tax out-of-pocket, or we’ll just eat the estimated $4,500 tax bill. Both options don’t leave us with much flexibility.

    We also have the two 0% student loan balance transfers. If these were 0% for life it would be an easy decision to only pay the minimums until we saved enough for a down payment. Unfortunately, the balances must be paid off by September and December, and it doesn’t look like we’ll be able to change our plan for paying these off.

    The only item in which we have any breathing room in our budget to free up some money is our Roth IRA contributions. We were planning on contributing the maximum amount to both of our Roth IRAs this year. On a monthly basis, we would be allocating $833.33 per month, an amount that, if saved, would significantly accelerate our plans to own a home. I’m not quite sure that this is anywhere near the right thing to do now.

    There’s nothing wrong with our current goals: pay off debt, save up until we have a 20% down payment, and contribute to our retirement plan. We are planning on waiting until spring of 2010 to seriously look for a home. Even writing this now I feel that waiting may be the best option because we’ll be the most financially ready then.

    But wow, a $15,000 tax credit is going to be difficult to pass up.

    Financial Goals for 2009

    by  • January 19, 2009 • Tagged: , , , , ,  • Comments

    While we are already pretty well into 2009, it isn’t too late for us to officially declare our 2009 financial goals. We’re now married, so our financial priorities have changed accordingly…and they happen to be house and baby, not necessarily in that order and probably not for at least a year from now. That said, 2009 is going to be a year of heavy financial preparation. Here’s what we’re setting out to accomplish:

    Pay off student loans that have been transferred to 0% balance transfer (BT) cards

    In late 2008 both Her and I opened 0% BT credit cards for the purpose of paying off the remainder of the private student loans. The total amount was a little over $13,000, and we started making payments in December 2008. The cards’ BT rate expiration dates are this year in September and December. Therefore, we’re going to pay off the cards in order of BT rate expiration. We’re allocating $1,000 per month towards paying off those cards. That way, we should be making our last payment in December 2009.

    While we’re paying these off we’re paying the minimums, about $400 total, towards the other student loans that aren’t at 0%.

    That brings us to a total of ~$1,400 per month for student loan payments. Ouch.

    Stretch goal: pay off half of the student loan on the 1.9% BT, about $4,000

    Save $15,000 for a down payment for a house

    We’ve written a lot of posts on our ideas on housing. Summary: we want to buy, but haven’t had any money so we’ve rented and get a great deal, now we’re saving, but have no idea where or when we’re buying, but no suburbs, please.

    Of the above summary, the most tangible thing we can do to move forward with our housing decision is to save, save, and save. We’re socking away $300 per paycheck into savings with automatic deposits.

    Stretch goal: Save $20,000. This is entirely possible, but with the way the economy is going we’re not going to get our hopes up.

    Contribute the maximum to our Roth IRAs, $10,000 total

    …this of course assumes that we will be able to contribute to Roth IRAs. We’re actually going to start this in April when our taxes have been all sorted out, and contribute until April of 2010. Our monthly contributions to our Roth IRAs will amount to $833.33.

    Stretch goal: Be comfortable with our cash flow so that we can increase our 401(k)/SIMPLE IRA contributions at work by at least 1%. Alternatively, we can also put money into a Self-Employed 401(k), starting out with 5% of our business income.

    I’ll check in with these goals every quarter to see how we’re doing. How are your goals shaping up for this year?

    A Look Back At 2008

    by  • January 9, 2009 • Tagged: , , , , ,  • Comments

    Whew, 2008 was quite a year. For us, it will forever be remembered as the year that we got married! But what else happened this year for us financially?

    Life
    To cut expenses, we cut Netflix out of our life. We also cut back on weekend trips. I was officially diagnosed with depression and learned some of socioeconomic aspects of dealing with it. After we were married, our first fight was about…money. It wasn’t as bad as the financial infidelity that Her’s brother went through.

    Budget
    After much trial and error, we finally made a budget that we stick to.

    Housing
    Our crazy but generous landlord increased our rent a whopping $8 per month.

    Saving
    We started a Big Dreams Savings Fund with the spoils of our wedding and related showers. We’ve decided that 2009 will be a balls-to-the-wall savings year.

    Debt
    The biggest news was the huge gift we received that wiped a good portion of the student loan debt. We even succeeded in not taking any more debt for the wedding and the honeymoon. As newlyweds, we’ve decided that tackling the student loans will be our first financial priority.

    Taxes
    This year taxes got crazy. I had a hard time dealing with them early in the year but somehow figured it out. But, at the end of this year I went back to a dumbfounded state about taxes. We didn’t know if we would have to pay taxes on the student loan gift payment, but it turns out that we didn’t have to.

    In 2008 we were light on the posts, especially the meaty financial ones. Our main focus was on the wedding and not much else. Since we now have a future together to plan for we have a lot of financial stuff to talk about in the upcoming months. Stay tuned!

    Our 2009 New Year’s Resolution: Save Like Crazy!

    by  • January 1, 2009 • Tagged:   • Comments

    Today we sat down and had a discussion we’ve been putting off for a while: family planning. We both want to have children, although we hadn’t sorted out the timing yet. We have already achieved many milestones that will help us prepare to be parents. We have completed our educations, have steady jobs with benefits like health insurance and family leave, and have some money in savings. We even have our own apartment that, while not ideal for a family, would certainly suffice. And this year, we got married. But there is one thing that would round out our preparations and make us feel really-for-reals ready…a home of our own!

    We want to be responsible and put a big down payment on a home so we can minimize our mortgage liability. Right now, we don’t exactly have big piles of cash laying around. So, we decided that our goal for this year is to save like crazy. Like, balls-to-the-wall crazy savers. Our plan is to cut out unnecessary expenses like dinners out, and help keep each other on track. Our hope is to have enough saved for a down payment by spring 2010, and then start thinking about kids. Wish us luck!

    What is your New Year’s Resolution?

    Protecting Our Big Dreams Fund From Ourselves (and the Volatile Market)

    by  • November 21, 2008 • Tagged: , ,  • Comments

    Back in July when Her had a wedding shower, she setup an ING Direct subaccount named “Big Dreams Fund” so that we could stash our wedding gift money there.

    And that’s about how far we got. For the most part, our wedding gift money hasn’t moved from our checking account. While we’re pretty good with our current budgeting scheme, we’re worried that the longer we wait to move our money, the more we may be tempted to spend it on hookers and blow (or unicorns and leprechauns).

    We know ourselves pretty well, and we’re definitely out-of-sight-out-of-mind kind of people. But because of the nature of this money, we thought instead of just sticking our money into an online savings account we’d go an extra step further to protect it from ourselves. To do that, we’re going to setup a certificate of deposit (CD) ladder.

    We’re going to do this for a few reasons. First, CDs can be found that have higher interest rates than most online savings accounts. Second, as long as the CDs are insured they are a relatively stable short to intermediate term investment – a very good thing in today’s market. Finally (an most importantly to us), there is a penalty for withdrawing the money before the CD matures. This last point is crucial for us to keep our grubby little hands off of it so that it can grow.

    Hopefully our strategy now will let us truly realize our big dreams.

    We’re not going to explain CD ladders because it has been done much better in other places. For more information, check out the following:

    “Mine” vs. “Ours” — A Newleywed’s Case Study

    by  • September 17, 2008 • Tagged: , , ,  • Comments

    Thewriter lives in Chicago, just got married, and writes about money and writing over at The Writer’s Coin.

    For the most part, my new wife and myself have done pretty well when it comes to adjusting to the financial side of married life. We created a joint bank account and the first few months have worked really well — we’re living our lives and we’re putting away a good amount of money. There have been some hiccups along the way, we aren’t the Brady Bunch or anything (nevermind the kids part, that’s a whole other ballpark). We’ve had our fair share of disagreements over things like emergency funds and semantics about targeted savings accounts, but overall we’re good.

    This past month, something new came up that had us clashing again. It’s interesting that such minor things can cause such a lack of understanding between two people that love each other so much. The issue: I get paid twice a month but M gets paid every Friday, which means she’ll have four “extra” paychecks over the course of a year. When I got paid every two weeks, I had the same problem and I just treated it like found money — it went straight into my ING savings account.

    M, however, didn’t see it that way. She would rather have it accounted for throughout the year and taken into full consideration when we budget out how we spend money on a day-to-day basis. This way would give us a bump in the amount of money we have to spend every month. Which is understandable because if you don’t count that money, on paper it looks like she’s not “contributing” as much to “our” finances (marriage invites the liberal use of quotes and air quotes — get used to it) than she’s actually making. So she wanted our budgeting spreadsheet to reflect that money.

    I wasn’t thinking about that and stressed that this was a great way of saving even more money (me being greedy and cheap). Instead of bringing it into the budget (where it would likely get spent, I’ve learned), I wanted to shoot it straight into our joint ING account.

    Then things got defensive. I kind of understood her point, but I still wanted to “win” the argument, prove I was right and get some extra saving going into our coffers. It wasn’t “my” money being accounted for, so what did I care? She could tell and wasn’t going to give in easily. It was late and her last attempt to foil me was to say that she would “forget” to transfer new money over on months where there was an extra paycheck. I countered with this jewel: “I’ll remind you.”

    Now, it was late and we had just gone through our budget, so things were a little tense. So we left it at that and let it soak in for a few days. The next week was an extra paycheck week and I brought it up. We had cooled down a little — I wasn’t out to “win” and she wasn’t out to stop me from winning. We both realized that, in the end, it’s “our money” (there is that beautiful phrase single people dread to hear) and it doesn’t matter how we account for it as long as we end up deciding it together and being responsible about it.

    The lesson? Money makes us defensive and edgy because what used to be “mine” is no longer. Not just with money, with everything. Sharing isn’t easy, especially when it comes to such a contentious thing as money. But that’s the lesson learned here — that money, like everything else, is no longer “yours.” When you marry someone everything becomes “ours” and the sooner you realize that, the easier it’ll be for you to let this kind of this just roll right off your back.

    The Big Dreams Savings Fund

    by  • July 22, 2008 • Tagged: , ,  • Comments

    This weekend we received our first cash wedding gift ($50). As we sat down to write a thank you note, we considered what to do with the cash. If we deposited it into our regular account, it would be gone almost immediately; probably spent on something frivolous and forgettable. So our first thought was to designate a separate account just for wedding gifts. But what to do with this account? Save up for our first home? Plan an anniversary vacation?

    There are many possibilities and we haven’t exactly mapped out our future just yet. We logged in to ING Direct so that we could create a sub-account and not open an entirely new account. Him suggested we name the account the “The Big Dreams” fund. We’ll save all our wedding gifts there, and someday when we have a really important purchase to make, we’ll use the cash for that. This way we’ll have something wonderful to remind us of our wedding and the kindness of our friends and family.

    What did you do with your cash wedding gifts?