Monday, January 12, 2009

Little Girls and the Mall

I had the privilege of taking my daughter and my niece to the mall as part of our "Daddy-Daughter" day. We had a shortened day, as we didn't get going until about 5:00 in the afternoon, so I figured that we could make a quick trip to the mall.

Well, needless to say, they loved it! And, getting a chance to spend some time with them one on one was incredible as well.

But, I really learned a little something about marketing. Namely, everything at the mall is geared towards nine to fourteen year old girls, and helping them to part with their (or Daddy's) money!

I have done well with money lately, and that is good because of the financial squalls that have been on the horizon. Not quite a storm, but it appears that January's bonus just went bye-bye. If that happens for three or four months in a row, now we have a storm, but not yet. Plus, the storm that is looming is the possibility that we may need to hire a lawyer soon (and more on that later), makes for a time to start to pile up a bit of cash.

But Wow! The mall can really give ways for you to part with that in short order!

We didn't do too bad though. I spent about $23.00 on girlie-girl accessories at, what we call the "girlie-girl" store. And, I spent about $6.00 at the bookstore on a book for my niece. That was OK, because she hasn't been much of a reader, and she is beginning to show an interest in that.

My niece is fairly new in my life, but she is already a big part of it, and she is destined to become an even bigger part! And, I certainly will have to work to teach her financial responsibility, but I know that in doing so, it will make her life better!

Thursday, January 8, 2009

Braces for my Little Girl

My wife and I took our daughter to the orthodontist yesterday. She may need some teeth pulled to make room for some other teeth, and then she might need braces as well. She still has some growing to do, so we will have to wait and see for six months. Who knows, maybe she won't have to have them after all?

What amazes me, is how conditioned they are for you to make payments to them! We did not even talk money, as it is way too early in this stage, but I saw people in there, routinely making payments. They even had a sign saying that you could now make automatic payments.

My wife and I are really on the same page now! When we were leaving, she said, "You have six months to save up so that we can pay cash for this when we go in!" I could not agree more. Braces for my daughter are no different than any other expense. I have plenty of warning about them, so there is plenty of time to save up. It is not an emergency.

It is not something that I am willing to go into debt over!

So, as much as my daughter's pretty smile means to me, I have to plan for it properly. We are debt free with the exception of our home, and I will not change that now!

Besides, maybe I can work a nice prepaid in cash deal with the orthodontist... It is worth a shot!

Wednesday, January 7, 2009

Flexible Spending Plans

I received the paperwork from my HR department at work about the flexible spending accounts, and I am now eligible!

Of course, on paper, they look like a great deal. You get to transfer money from after tax to before tax to pay expenses. If I put in the max of around $2500, I can save over $650 per year in taxes! Definitely not small potatoes! Over ten years, the time value of that money at 10% interest, would be around $11,366! Just from deferring some money after taxes to before.

And, with prescription drug co-pays, doctor's c0-pays, and other medical issues (including a daughter who might need braces), it is not a problem to spend $2500 per year.

So, what is my hesitation?

You have to file the receipt, and be reimbursed for the amount that you spend. This sounds like a first class pain in the rear end! Oh yes, if you send in the receipt on Tuesday, they will direct deposit the payment by Thursday, so it is not that long to wait...

Maybe, it is just me wondering how I am going to incorporate the spending and reimbursement into my budget spreadsheet?

But that is a problem that I am sure that I can solve!

Tuesday, January 6, 2009

Can I afford it???

I read two great posts asking that question... and helping you know how to answer it! You should check out Mr. Tough Money Love's version, and this one also by The Strump.

There is certainly some good common sense there! I love number one on Mr. Tough Money Love's...

Monday, January 5, 2009

Goals for 2009

I gave up on calling them resolutions!

I call them my goals. Resolution doesn't really accomplish much, such as I "resolve" to do something. But a goal, well, that is something that you should work towards.

I have encouraged my family members (well, at least my wife and my oldest son) to set goals of their own, but I don't think that they have paid much attention to me. Maybe goal setting isn't for everyone? But for me, it is the only way that I know I can accomplish something, to put it in writing, and refer back to it every so often.

I use my personal finance spreadsheet pretty regularly, so why not use that for goal tracking? Even for non-financial goals? So I have started. I wrote down several goals in a spreadsheet page. I will soon be making a sheet or two to track these goals, and perhaps to even make a dashboard showing progress. The financial ones are all there, so it is easy to include non-financial goals.

My goals are also subject to change. It is probably a good idea to evaluate my goals at least once per month, to make sure that they are still consistent with my overall plan.

, here is the listing of my beginning goals for 2009...

  1. To accumulate an emergency fund of around 6 months of living expenses (around $20,000)
  2. To adopt a healthier lifestyle in terms of physical excercise (excercise at least five times per week for thirty minutes per session)
  3. To read at least two personal growth non-fiction books per month
  4. To spend at least one hour per week participating in a non-writing art pursuit.
  5. To complete four online college courses (may be free courses, but must be college level)
  6. To join toastmasters to hone my speaking and reasoning skills
  7. To write in my blog, "Doing Money Right," daily.
  8. To start one other blog about another subject
  9. To solicit articles to 10 other magazines, and be published in one other magazine than I am already being published in.
  10. To continue to write for the magazine I write for, and have all articles in by deadline
  11. To begin contributing to my 401K at work as soon as eligible, and save enough this year to get the company match.
  12. To fund our vacation fund according to our planner to allow us to take a vacation during late winter 2010 (and get out of the cold for a bit!)
  13. To open a high interest checking account to hold emergency as well as other funds.
  14. To actively grow my writing business so that I earn $5000 per year.
  15. To plant a garden with the kids to watch it grow, and harvest the vegetables.
  16. To begin writing a book, and solicit a literary agent to attempt to sell it.
  17. To visit the library twice per month to help with goal number 3.
  18. To increase my income by 10% this year.
Yes, it may be aggressive, but that is how I wanted it to be. Many of these goals can be worked on simultaneously, so it is not a big problem. I will also have some goals for training and development at my job, but those will be different.

One of the customers at work was talking to me during a test drive about New Year's resolutions, and she could not believe it when I told her about my list of goals, and that I kept track of them with a spreadsheet. Yes, maybe that is a bit unusual, but how else am I going to know if I hit them or not?

I hope that everyone here will help to keep me accountable!

Sunday, January 4, 2009

The Joy of Hamburger

As I have said, groceries are one of the biggest "discretionary" budget items that my family has. It is actually the second biggest line item in our budget, after mortgage payments. So, it is the area that we can also stand to save the most money in. After all, it doesn't do me much good to complain about my mortgage payment. There is only so much that you can do for it. You can refinance, which is a good idea if you can save interest, and are staying in the house long enough for the payback to work with closing costs. You could also lengthen the term of the mortgage to lower the payment, but that will cost you more in the long run.

Given the fact that I have an interest rate of about 5.875% on what was a fifteen year mortgage, and we have about 10 years left on it, I am not about to make either change! So, grocery budget, here it is.

When I first started talking about the grocery budget, I think that my wife wanted to kill me! She is the one responsible for the meals, and she was thinking that she was already scraping by, so there certainly was no way that we could save more on groceries.

In some ways, we are spending more on groceries, but have made severe cuts to the eating out and take out departments. I didn't keep very good books before the middle of this year, so it is hard to tell exactly what the difference is, but I am pretty certain that we have saved money in the long run. My wife is also happier now, as she says she has more food than ever to work with. We still have to fine tune every once in a while, but overall, we are doing great!

I moved our upright freezer out of the basement and into the garage, where it was more easily accessed, this fall. That was a godsend in itself! Now, the wife doesn't have to go down into the basement. Out of sight, out of mind was the theme, and it was hard to tell what was in the freezer. Now, we use it all of the time.

Recently, I found boneless chicken breast for $1.05 on special into Sam's club. We had been paying $1.79 per pound (in ten pound packages) at the local discount grocery store, and it is usually around $3.99 per pound at the regular grocery stores. Needless to say, I put a case of it in my cart, and pocketed almost $30.00 over the discount store price, and closer to $80.00 per case over the regular grocery store!

We have been looking for a deal on hamburger. It seems in my family that at least three to four meals per week are hamburger based. The discount grocery store sells 80% four pound packages for $2.19 per pound, which is about the best that we have found. Today, into Sam's, we found the case pricing of hamburger... $1.56 per pound for the same 80%! A case is 80 pounds, so we would save around $50.00 per case! If you buy 4 cases per year, you save $200.00! With our family of five, this is not unreasonable at all. The savings grow even more if you buy 90%, which was only $1.60 per pound!

Just imagine the power of doing that times about 8 items???

I guess that I could say, you know that you are getting your home finances in line when you get joy in a case price of hamburger!

Friday, January 2, 2009

Roth vs. Traditional IRA

I am at least a year away from starting an IRA. I know, at 39, I should have had this done by now, and boy don't I kick myself for not starting an IRA when I began working at age 16. But, I don't think that I have done things much more differently than many other people, and there are those out there ten years older than I, still in debt, and with no retirement (or other) savings.

But, I am a year away, because the emergency fund it the key for this year. As you have read, my goal is $20,000 in emergency fund holdings this year. That is pretty close to six months of expenses, and, quite honestly, will be more security than I have ever known in my financial life!

My 401K at work is not all that great. There is a profit sharing portion, that we receive regardless of our contributions. Then, I believe that there is a 50% match up to a total match of $1000. I am not eligible for it yet, but I will be in July. Of course, I will be throwing in enough money to get that $1K match.

Then, IRAs for my wife and I will be started. I hear so many people talking about how great a Roth IRA is, and yes, tax free gains are great. However, I worry about that a bit. How long will a Roth stay tax free?

Think about it. With all of the class envy that seems to be increasing, and the socialist trends that want to transfer wealth from one group to another, can't anyone other than me see a Roth IRA being a target of this? Especially with Social Security in doubt?

"Wow, you have accumulated over $1 million in your Roth IRAs, and you have close to that in your after tax investments. You have done so much better than everyone else has! We don't care that you have saved a large percentage of your income for a long time, it just isn't fair that you have all that money, and get a HUGE tax break as well! You don't need us to subsidize your retirement at government expense (don't even get me started here!) with all of these tax breaks. Therefore, we are going to tax a portion of your Roth gains. Of course, it will be on a sliding scale, just to make it fair."

Or, perhaps they will just pass a law making the full amount of the gains taxable? I don't think that anyone can say with any certainty that this will not happen. This is the government we are talking about here! All it takes is to make a law, and with a government that is challenged to take more money to keep growing, and the increasing attitude that they are entitled to the money, am I the only one who can see this happening?

My hunch is to take the tax break now, with a traditional IRA, as long as I qualify. I always thought that the money now, that you can get now, is better than something that you might get in the future.

Unless I am really missing something?

Thursday, January 1, 2009

What were you taught about finances?

It is said that we pick up our money habits from our parents. I think that how your parents look at money says a great deal about how you will someday look at money.

My father never incurred debt. Debt was "evil," and if you could not afford it, you shouldn't buy it. Now, that is definitely not a bad way to live, and is a quality that I am striving for as well. Most of the money problems we face are caused by too much debt. For instance, 100% of all home foreclosures occur on houses with a mortgage!

But, my father took it to another extreme. He hoarded cash, just to hoard cash. Any money that he spent had to make more money. This was his passion, earning money, and that is where all of the resources went. Very seldom was money spent on something fun. Then again, very seldom was TIME spent on something fun, and I think that could have made up for spending money on enjoyment.

You see, his money was just to be there. His goal was, and still is, to hoard large piles of cash. He has no vision, or end goal for that cash. I think that he is looking towards a day when he can't work anymore, but the key is, when he can't work anymore. Not when he doesn't want to. He has never taken a vacation.

His love of his money has driven him to have to always be doing something that can make money. If it does not make money, it is not worth doing. Unfortunately, some of the things that he couldn't be bothered with that don't make money was spending time with his children. Unless, of course, that involved making money. But making money with the children wasn't teaching them about money, and how to do it. It was employing them in his own form of slave labor. Commissions for us from his money making ventures were not to be found. He figured that he supported us, and it was our duty to work to make him money. Unfortunately, as he has aged, he has not learned anything, and is simply carrying on the same attitudes. He hasn't seen his granchildren, to actually come and visit, for several years. When questioned about this, he will tell me that "He is always so busy, and can't possibly be expected to come and see them. However, if we would like to bring them down to him, he can take minute or two between jobs."

I have gotten over the bitterness some time ago. As I build my own "fortune," (a major goal for 2009 is an emergency fund of $20,000), I stay challenged to remember that money is just a tool. It is a way to accomplish a goal. My $20K stash has a goal... the security of my family, so that we do not have to worry about as many things. It is not a bank balance that I will worship. In addition, we have a goal to fund a vacation to Disneyworld for our family in early 2010. Of course, I also want to fund our retirement, so that I can stop working and enjoy life while I am young enough to do so. And, not be a problem for my children and grandchildren.

The lack of a realistic approach to money by my father built up a desire in my to consume, and to aquire stuff. I mean, when you grow up, and don't have stuff, perhaps there is a great deal of pent up demand.

Teach your children right about money. Debt free is excellent, but teach them that money is a tool to take care of the things important to you, and to have some fun with as well.