Time to Refinance? - My Dollar Plan
I'm not quite ready to jump into the Real Estate market, mainly because I don't know how long I'll be in this city or where I ultimately want to end up but Madison is a mortgage and refinance expert and I love reading about her expertise and strategies regarding just about everything financial.
Suze Orman 'Save Yourself' TD Ameritrade Offer - My Money Blog
Jonathan's post is the reason I'm considering trying out this offer. He always does a great job of finding good deals and breaking out the actual return on your money. This blog is always a great read.
The Boomers Go Bust: What Can We Learn? - The Simple Dollar
This is a great post for those of us who are just starting out and trying to figure out a long-term retirement strategy in the midst of this unprecedented economic crisis.
Shares, not dollars - Well-Heeled
This is such a fun blog to read and check out the awesome savings/investment bars and goals for a 24-year-old!
Loose Ends - MFA or Bust
I love reading this blog, partially because of the background of NYC. The salary negotiation in this post is awesome and I wish I would have been a little better about my own new job negotiation. Hopefully I can keep some of these tips in mind for mid-year reviews though!
Saturday, January 17, 2009
Thursday, January 1, 2009
2009 Financial Goals
I am trying to make these goals achievable yet challenging and though I am not writing with the intent to change them, if this year is any indicator, I may change my mind about my priorities and end up altering them mid-year or so...
Roth IRA
I just changed jobs and am rolling over my old 401(k) into Vanguard's 2050 Target Retirement Fund (changed my mind from the 2045). I haven't decided if I am going to put an additional $3,000 in as part of my 2008 Roth IRA (like Money Maus, I know I shouldn't be nervous about this because I'm young and have the time to wait out the market but I do see the benefit of cash savings that may ultimately turn into a downpayment, as well). Regardless, I am definitely committing to fully funding $5,000 into my 2009 Roth IRA in this same fund. I will do this by setting aside $210 from each paycheck. I'm not sure how these contributions will work (go to ING first and then Vanguard once a month?) until I get my account set up and figure out the rules around it.
401(k)
Unfortunately, my new job doesn't have a Roth 401(k). It also doesn't have as great of a match as my previous employer (only 50% match up to 5% of salary with a 5-year vesting timeline). Regardless, I will contribute 5% to make my total retirement contributions 15% and the slight tax benefits will be a nice boost to my paycheck, especially since my base salary is declining ever so slightly in the new position (overall comp should be the same though!) I won't be eligible until March so my total contributions should be $2,115.
Emergency Fund
I am going to contribute $700/month to this fund. I already have $5,000 in it now and I will earn some interest (however pitiful it may be) but I will likely tap it for some various things throughout the year too so I am going to make a goal of $14,000. I will also throw my tax refund in here if I get one. I plan on keeping it with E*Trade because I'm not interested in rate-chasing unless some other amazing offer appears. This $14,000 may end up higher if I decide to use that $3,000 to pad my cash savings instead of the Roth IRA because of this rocky economy. I'm also thinking of doing Suze Orman's Save Yourself Account for the $100 bonus so $100/month of the $700 might start going there instead.
Travel/Holiday/Gift Fund
I want to go on at least one big trip and maybe a smaller long weekend trip or two in addition to possibly having a wedding or two to attend so travel could end up being a pretty big expense this year. In addition, I'd like to be able to dip into this for gifts and even holiday travel if possible. I have $160 in there now and am going to contribute $115 per pay period for the rest of my 25 pay periods in 2009 for a total of about $3,035 plus interest total over the course of the year. Again, this will be a fluctuating fund so it will be a little hard to track but I have my contributions from my checking to ING Savings on autopilot for my biweekly paydays so I should be all set to go.
Roth IRA
I just changed jobs and am rolling over my old 401(k) into Vanguard's 2050 Target Retirement Fund (changed my mind from the 2045). I haven't decided if I am going to put an additional $3,000 in as part of my 2008 Roth IRA (like Money Maus, I know I shouldn't be nervous about this because I'm young and have the time to wait out the market but I do see the benefit of cash savings that may ultimately turn into a downpayment, as well). Regardless, I am definitely committing to fully funding $5,000 into my 2009 Roth IRA in this same fund. I will do this by setting aside $210 from each paycheck. I'm not sure how these contributions will work (go to ING first and then Vanguard once a month?) until I get my account set up and figure out the rules around it.
401(k)
Unfortunately, my new job doesn't have a Roth 401(k). It also doesn't have as great of a match as my previous employer (only 50% match up to 5% of salary with a 5-year vesting timeline). Regardless, I will contribute 5% to make my total retirement contributions 15% and the slight tax benefits will be a nice boost to my paycheck, especially since my base salary is declining ever so slightly in the new position (overall comp should be the same though!) I won't be eligible until March so my total contributions should be $2,115.
Emergency Fund
I am going to contribute $700/month to this fund. I already have $5,000 in it now and I will earn some interest (however pitiful it may be) but I will likely tap it for some various things throughout the year too so I am going to make a goal of $14,000. I will also throw my tax refund in here if I get one. I plan on keeping it with E*Trade because I'm not interested in rate-chasing unless some other amazing offer appears. This $14,000 may end up higher if I decide to use that $3,000 to pad my cash savings instead of the Roth IRA because of this rocky economy. I'm also thinking of doing Suze Orman's Save Yourself Account for the $100 bonus so $100/month of the $700 might start going there instead.
Travel/Holiday/Gift Fund
I want to go on at least one big trip and maybe a smaller long weekend trip or two in addition to possibly having a wedding or two to attend so travel could end up being a pretty big expense this year. In addition, I'd like to be able to dip into this for gifts and even holiday travel if possible. I have $160 in there now and am going to contribute $115 per pay period for the rest of my 25 pay periods in 2009 for a total of about $3,035 plus interest total over the course of the year. Again, this will be a fluctuating fund so it will be a little hard to track but I have my contributions from my checking to ING Savings on autopilot for my biweekly paydays so I should be all set to go.
Let's Try This Again...
Well, I definitely dropped the ball on keeping with this blog since May but I am going to try to recommit for the New Year. Fortunately, just because I haven't been writing doesn't mean I haven't been sticking with my financial goals. I have had some personal issues derail or postpone some of my plans but, overall, I'm doing pretty well!
Looking back at my 2008 Financial Goals:
I am just dollars short of saving $3,000 for my Roth IRA goal in my ING Direct savings account (paying 2.5% interest right now). I actually did reach $3,000 but transferred some out to my savings account to make that $5,000 (instead of $4,500) because of the crazy economy. I change my mind every day about whether I should go ahead and stick the $3,000 into the Roth IRA (either all or part since I am rolling over my old 401(k) and therefore won't need to worry about the $3,000 minimum buy-in!) or leave it in savings for a little more cash cushion/security. More on that to come, I suppose...
For my Roth 401(k), I just squeaked in past $5,000 this morning, as of 1/1/09! I was down about 42% for the year so, though I know I contributed a lot more than this $5,000, I'll consider this pretty good.
Student Loans are gone as of 11/4/08! This achievement was pushed back a bit by some expensive emergency travel this summer but they're gone and with rates of 4.5%, 5.0%, and 6.8%, putting my money to work for them this past year was definitely a win over anything else I could have done (at least in the short term).
My Emergency Fund is at $5,200 ($5,000 in an E*Trade account at 3.01% and $200 as a cushion in my Citibank checking account which pays no interest). I've changed the $300 cash cushion to $200 since I tend to overdraw into my cushion each month (bad!) and in a real emergency, this would likely be more accurate.
My Holiday/Gift Fund was depleted by the holidays and I think I am going to up my contributions to this a bit in 2009 and use it for Travel as well. My Moving/Computer Fund is no longer necessary as I am hoping to avoid a move in 2009 and have gotten a new (to me) computer that will suffice for now.
Now, a lot of this success was bolstered by very generous year-end holiday cash gifts but not so much so that my work didn't pay off. I have done pretty well minimizing my spending on clothes but Starbucks (and eating out in general) has been giving me a literal run for my money as the cold weather has set in. I will try to cut that down in the new year as well. So, these numbers could be better, could be worse but, all in all, I think I'm doing pretty well and am excited to see what 2009 brings financially and otherwise. Next post will be 2009 goals!
Looking back at my 2008 Financial Goals:
I am just dollars short of saving $3,000 for my Roth IRA goal in my ING Direct savings account (paying 2.5% interest right now). I actually did reach $3,000 but transferred some out to my savings account to make that $5,000 (instead of $4,500) because of the crazy economy. I change my mind every day about whether I should go ahead and stick the $3,000 into the Roth IRA (either all or part since I am rolling over my old 401(k) and therefore won't need to worry about the $3,000 minimum buy-in!) or leave it in savings for a little more cash cushion/security. More on that to come, I suppose...
For my Roth 401(k), I just squeaked in past $5,000 this morning, as of 1/1/09! I was down about 42% for the year so, though I know I contributed a lot more than this $5,000, I'll consider this pretty good.
Student Loans are gone as of 11/4/08! This achievement was pushed back a bit by some expensive emergency travel this summer but they're gone and with rates of 4.5%, 5.0%, and 6.8%, putting my money to work for them this past year was definitely a win over anything else I could have done (at least in the short term).
My Emergency Fund is at $5,200 ($5,000 in an E*Trade account at 3.01% and $200 as a cushion in my Citibank checking account which pays no interest). I've changed the $300 cash cushion to $200 since I tend to overdraw into my cushion each month (bad!) and in a real emergency, this would likely be more accurate.
My Holiday/Gift Fund was depleted by the holidays and I think I am going to up my contributions to this a bit in 2009 and use it for Travel as well. My Moving/Computer Fund is no longer necessary as I am hoping to avoid a move in 2009 and have gotten a new (to me) computer that will suffice for now.
Now, a lot of this success was bolstered by very generous year-end holiday cash gifts but not so much so that my work didn't pay off. I have done pretty well minimizing my spending on clothes but Starbucks (and eating out in general) has been giving me a literal run for my money as the cold weather has set in. I will try to cut that down in the new year as well. So, these numbers could be better, could be worse but, all in all, I think I'm doing pretty well and am excited to see what 2009 brings financially and otherwise. Next post will be 2009 goals!
Monday, May 19, 2008
Frustration
I've been feeling a little bummed lately about my finances. I make good money and had been consistently meeting my goals of putting 10% in my Roth 401(k), a (very little) bit in savings, and a large chunk towards my student loans every month. So, slowly but steadily, my e-fund was building up and my debts were going down. And now I've hit a little bump in the road because of a few things coming together all at once: like English Major, I had a hefty security deposit due on my new apartment on top of having to pay the first month's rent early, getting the utilities switched over led to the realization that we owe some back payments on gas, and last but not least, my computer is nearing its end and will need to be replaced. I have some money coming in from my taxes and I wanted to put most of it towards my student loans and some of it towards my Roth IRA fund. I know the better thing right now would be to put it in my e-fund and push back my loan repayment a month or so but I don't want to! That said, I am still likely going to rethink some of my plan because that e-fund is getting pretty low and as much as I don't want to see my loan repayment slow down, I also don't like seeing so little in the bank. It makes me feel like I have nothing to show for my dedication to financial freedom.
On a related note, I was thinking how things would be so different if I didn't have these loans (and believe me, I know they could be much, much worse). But, a year out of college and over 6 months into the work force, I don't have very much to show for my financial savvy compared to a lot of other people my age who went to less expensive schools or had their parents pay their whole way. I thought, these people may be in the same place that I am (i.e. a year at a well-paying job behind them and not very much in savings) but they have other stuff to show for it: not stressing about how they are allocating every paycheck, nicer apartments, nice clothes, more dinners out, cool trips, and the list goes on. Or, they have been able to save more than I have because they don't have debt and are well on their way to a nice down payment or capital for starting a business. But what I realized is that you can't compare yourself to anyone but yourself and my other "self" could have had all of those "fun" things this past year but she would also have $12,000 more in debt and an even smaller 401(k) balance. I don't have quite the head start that some people have upon graduation but it could be a lot worse and I have to remember that I'm very lucky to have the education, job, and, most importantly, people in my life that have put me in such a good situation. Plus, when I do reach my goals, it will be nice to know that they weren't handed to me, that I worked to achieve them.
On a related note, I was thinking how things would be so different if I didn't have these loans (and believe me, I know they could be much, much worse). But, a year out of college and over 6 months into the work force, I don't have very much to show for my financial savvy compared to a lot of other people my age who went to less expensive schools or had their parents pay their whole way. I thought, these people may be in the same place that I am (i.e. a year at a well-paying job behind them and not very much in savings) but they have other stuff to show for it: not stressing about how they are allocating every paycheck, nicer apartments, nice clothes, more dinners out, cool trips, and the list goes on. Or, they have been able to save more than I have because they don't have debt and are well on their way to a nice down payment or capital for starting a business. But what I realized is that you can't compare yourself to anyone but yourself and my other "self" could have had all of those "fun" things this past year but she would also have $12,000 more in debt and an even smaller 401(k) balance. I don't have quite the head start that some people have upon graduation but it could be a lot worse and I have to remember that I'm very lucky to have the education, job, and, most importantly, people in my life that have put me in such a good situation. Plus, when I do reach my goals, it will be nice to know that they weren't handed to me, that I worked to achieve them.
Sunday, May 4, 2008
Weekend Recap
I feel like I'm getting a little too comfortable with my credit cards. It's never to the point where I can't or don't pay them off at the end of the month but my cards have statement end dates that fall evenly spaced throughout the month so I can kind of leverage spending and payments - not good! I do try to put as many purchases as possible on my cards for rewards and simplifying my budget but I'm really going to work on keeping my charges on them to just what I would pay with cash. Part of the reason leveraging my payments has been so easy is that my rent goes on one of my cards and then my roommate writes me a check. After I move, that won't be the case so I'll have to change my routine of allocating my paychecks to rent and student loans. Once I figure out the switch, it won't be a problem and I think it will be a good opportunity to start fresh with keeping my credit card spending on track. However, I am a little worried about keeping my budget on track with the summer coming up. I know with the nice weather coming (it's not here quite yet!) the opportunities for going out (i.e. spending money) will be a lot more plentiful than they have been over the past few months. I am still going to aim to keep my student loan payoff schedule on track though. I really, really want to have those gone in September but that could be thrown off by my attempt to replenish my E-Fund after the blow it took from my security deposit.
Saturday, May 3, 2008
2008 Financial Goals
My financial goals for the year are still a little up in the air because some things in my life may be changing between now and then but for now, I'll mention some goals I would like to achieve by the end of 2008 and I can modify them along the way as the future becomes a little clearer.
Roth IRA
I don't know if I can fully fund this by the end of 2008, though I may be able to fully fund it for 2008 by 4/15/09. Regardless, my goal is to earmark at least $3,000 for my Roth in order to be able to buy into a Vanguard fund (most likely in this Target Fund). I'm planning on starting this ING sub-account with some of my tax refund and have bumped down my Roth 401(k) contributions from 10% to 6% (employee match magic number) and will put the difference in there too. This Roth 401(k) adjustment has to do with reaching the $3,000 buy-in for Vanguard by the end of the 2008 and not with market fear.
Roth 401(k)
If the market cooperates (not likely), I think I can get this to $5,000 by the end of the year, even with the adjustment of my contribution to 6% of my salary. It is at around $3,240 right now.
Student Loans
I am currently putting at least $1,000/month on the remaining $6,200 of my loans. They are at 4.5% and 5% and I know there are plenty of arguments against paying them off early but the way I see it is that I know I would not have been diligent about putting $1,000/month in the bank or into the stock market over the past six months. Paying these loans off gave me a concrete goal to focus on and actually sparked my interest in personal finance. So, there are worse things, no? These should be gone by the beginning of September 2008 so long as I can keep up my diligence through the coming summer months :)
Emergency Fund
It's actually at $3,600 right now ($3,300 in an E*Trade account at 3.45% and $300 as a cushion in my Citibank checking account which pays no interest). It was at $4,700 until I had to put down a hefty security deposit on my new apartment. I'm fairly comfortable with this number because I plan to get it back up to $4,500ish in the next month or so and a) I do have people to fall back on in case of job loss and b) I think this will cover expenses (not income) for at least 3 months. I have been putting $100/month in the E*Trade account but may start to funnel that money over to the Roth IRA sub-account (see above) instead. My reasoning for this is that, until I have the $3,000 for the Vanguard fund, I will have access to the Roth IRA money as cash so it can serve as a buffer to my Emergency Fund. And by the time I use that cash to fund the Roth IRA, my student loans will be paid off so I will have quite a bit more discretionary income with which to pad the E-Fund, max out my Roth 401(k), travel the world, etc. This should be the case even if I end up switching to a lower paying job (more on this later...).
Holiday/Gift Fund
I am currently putting $50/month in this ING sub-account in order to make birthday/holiday expenses a tad bit easier to absorb. So far, so good - I have about $100 in this account. It's not a huge amount but when I don't touch it, it grows consistently with every paycheck...hmmm, funny how that works... My goal is just to keep this up. It will obviously fluctuate and I don't feel the need to get it to or keep it at a certain amount (other than one above $0!)
Moving/Computer Fund
As I said, a move is in the future. Moving costs money :( I also have a computer that has come back from the dead numerous times. My guess is that it will need to be replaced within the next year but I'm happy to keep it for as long as it continues to do what I need it to so we'll see... Anyway, $44/month is going into this ING sub-account right now and should help with these expenses when they come up. This will function similarly to the Holiday/Gift Fund - the amount will fluctuate and I'm more concerned with it keeping me from having to dip into E-Fund savings than anything else.
Roth IRA
I don't know if I can fully fund this by the end of 2008, though I may be able to fully fund it for 2008 by 4/15/09. Regardless, my goal is to earmark at least $3,000 for my Roth in order to be able to buy into a Vanguard fund (most likely in this Target Fund). I'm planning on starting this ING sub-account with some of my tax refund and have bumped down my Roth 401(k) contributions from 10% to 6% (employee match magic number) and will put the difference in there too. This Roth 401(k) adjustment has to do with reaching the $3,000 buy-in for Vanguard by the end of the 2008 and not with market fear.
Roth 401(k)
If the market cooperates (not likely), I think I can get this to $5,000 by the end of the year, even with the adjustment of my contribution to 6% of my salary. It is at around $3,240 right now.
Student Loans
I am currently putting at least $1,000/month on the remaining $6,200 of my loans. They are at 4.5% and 5% and I know there are plenty of arguments against paying them off early but the way I see it is that I know I would not have been diligent about putting $1,000/month in the bank or into the stock market over the past six months. Paying these loans off gave me a concrete goal to focus on and actually sparked my interest in personal finance. So, there are worse things, no? These should be gone by the beginning of September 2008 so long as I can keep up my diligence through the coming summer months :)
Emergency Fund
It's actually at $3,600 right now ($3,300 in an E*Trade account at 3.45% and $300 as a cushion in my Citibank checking account which pays no interest). It was at $4,700 until I had to put down a hefty security deposit on my new apartment. I'm fairly comfortable with this number because I plan to get it back up to $4,500ish in the next month or so and a) I do have people to fall back on in case of job loss and b) I think this will cover expenses (not income) for at least 3 months. I have been putting $100/month in the E*Trade account but may start to funnel that money over to the Roth IRA sub-account (see above) instead. My reasoning for this is that, until I have the $3,000 for the Vanguard fund, I will have access to the Roth IRA money as cash so it can serve as a buffer to my Emergency Fund. And by the time I use that cash to fund the Roth IRA, my student loans will be paid off so I will have quite a bit more discretionary income with which to pad the E-Fund, max out my Roth 401(k), travel the world, etc. This should be the case even if I end up switching to a lower paying job (more on this later...).
Holiday/Gift Fund
I am currently putting $50/month in this ING sub-account in order to make birthday/holiday expenses a tad bit easier to absorb. So far, so good - I have about $100 in this account. It's not a huge amount but when I don't touch it, it grows consistently with every paycheck...hmmm, funny how that works... My goal is just to keep this up. It will obviously fluctuate and I don't feel the need to get it to or keep it at a certain amount (other than one above $0!)
Moving/Computer Fund
As I said, a move is in the future. Moving costs money :( I also have a computer that has come back from the dead numerous times. My guess is that it will need to be replaced within the next year but I'm happy to keep it for as long as it continues to do what I need it to so we'll see... Anyway, $44/month is going into this ING sub-account right now and should help with these expenses when they come up. This will function similarly to the Holiday/Gift Fund - the amount will fluctuate and I'm more concerned with it keeping me from having to dip into E-Fund savings than anything else.
Wednesday, April 23, 2008
Welcome!
After enjoying reading about the lives of some of my peers so much, I've decided to bite the bullet and join you all. I am a fairly recent college grad (also an English major!) who enjoys, among other things, reading, cooking/baking, running, baseball games, tailgating, and spending time with family and friends. I have made good progress in paying down some student loan debt and am aiming to be completely debt-free by September '08. In the meantime, I am struggling with some of the same things a lot of you (Shuchong, Well-Heeled, English Major, and Meg) are. I don't feel ready to be a "grown-up" but I'm trying to make choices now that will make the transition over the next few years a little bit easier. However, I don't want my extreme interest in my finances, and the mostly undefined goals related to them, to get in the way of really enjoying my life in both the simplest and grandest of ways on a daily basis. I'm not sure how often I'll be posting but I hope to make it a pretty regular thing. Thanks for reading!
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