$48000 Goal: 3 Months In (An Update)
I began 2007 with a goal of saving 60% of my gross income ($48,000).
(On this blog, whenever I say “my” I am referring to “household” income.)
So far, I have fully funded my daughter’s ESA for 2006 and 2007, fully funded my Roth IRA for 2006, and fully funded my wife’s Roth IRA for 2006.
(In order to fully fund both Roth IRAs before April 2007, I “dipped” into my ING Direct Savings Account. I am now aggressively “paying myself back”.)
If I plan to live without borrowing money, I have to save a considerable amount of money. I need to have savings for major purchases that will occur in the next few years AND I need to save as much as I can in my retirement accounts. Remember, I don’t plan to borrow money EVER.
Here is a chart detailing my progress thus far:
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If you subtract $16000 (my pre-tax retirement contributions) from $48000 (my total ’savings’ goal for 2007) you get $32,000. I have “saved” $13000 of the $32000 in various types of accounts. If you add back the $5000 that I owe myself, you get a total of $8000 saved in 2007. $8000 is 1/4 of the way to $32000, so I am RIGHT ON TRACK! I will be focusing on TWO things in the next few months. I need to put $5000 back into my ING Direct Account, and I need to fund my son’s 2006 ESA, BEFORE April 17, 2007. I will likely withdraw $1000 from my Brokerage Account and then withdraw an additional $1000 from next week’s paycheck.
Just a word to all of you who are wondering about whether or not it pays to “pay attention to your finances”. The definitive answer, from my experience, is YES!
NCN Reaches The FINAL FOUR!
Free Money Finance has been running a “March Madness” style tournament, pitting personal finance bloggers against one another in a battle to the DEATH! (OK, maybe not to the “death”… but it would be cool to win!) My post, Avoid 10 Common Debt Reduction Mistakes, has made it to the final four. My competition, Five Cent Nickel, is a great blogger, and a good friend. Still, I’d like to crush him beneath my boot! Seriously, check out the Final Four posts over at Free Money Finance, and, if you like it, leave a comment at FMF to vote for my post.
Fixing My Finances: 10 Lessons I’ve Learned (Part 2)
This post is part 2 of the “Fixing My Finances” series. Part 1, Fixing My Finances: Lessons I’ve Learned, click here.
There are times when a numbered list is the best way to communicate a series of interconnected points. So, I present 10 (of the many) lessons that I’ve learned over the past two years.
1. I need a specific plan and a specific goal. I do not work well with “generalizations”. I set a specific goal with a specific date for completion, and create a plan (budget) with specific guidelines.
2. I am motivated by the emotional impact of achieving a goal. While I enjoy considering the “math” behind certain financial decisions, I am motivated by the “rush” that I receive when I actually do something.
3. I enjoy the peace that comes from being debt free. While I know that I could use a credit card for monthly expenses, I enjoy my cash-only experience.
4. I will spend money (unnecessarily) when I feel tired, angry, or frustrated. Whenever I purchase an item to meet an emotional need, I inevitably end up feeling worse.
5. I have learned to surround myself with people who are “pulling” for me and not “pushing” against me. I need lots and lots of “at-a-boys” and “way-to-gos”. It is OK to be proud whenever you accomplish a task.
6. I should never up-size, go-large, or up-grade a meal. I am always full about 2/3 of the way into any meal, and when I up-size a meal, I feel compelled to eat every last mouthful. I should not put myself in a position where I feel guilty for “not eating”.
7. I know less about “finance” than most people who write about finance. But, I think that I have (at least) a little understanding of the “personal” side of personal finance. 95% of people (in my opinion) are motivated by their emotions (fears and hopes). If I can couple my emotional responses together with the knowledge that I am gaining, I can change my future (and my children’s futures).
8. I am a much harder worker than I ever realized. Before, I was working for someone. Now, I’m working for “my future”. I still have the same job, but now I have new motivations, desires, goals, plans, and dreams.
9. I wasted SO many years and I worry that I have waited too long to “turn my ship around…” I hope that I am saving enough, investing enough, and learning enough.
10. I am extremely blessed to have a wife who trusts me, supports me, corrects me, prays for me, and believes in me. A budget is just a peace of paper. Real, meaningful change takes place in the soul, the heart, the spirit, and the mind.
If you have changed you financial future (or are in the process of doing so) feel free to share the lessons that you have learned. Leave a comment and you might just inspire someone else!
Wow, That Was Fast! Georgia Income Tax Refund Received
Seven days ago, I filed my federal and state income taxes.
Expecting refunds, I chose to have them directly deposited to my ING Direct account. I logged in this morning, and I have ALREADY received my state income tax refund. The state of Georgia Department of Revenue is “on the ball”! Both of my refunds will be deposited into my recently depleted Emergency Fund.
My Georgia income tax refund was less than $50. Last year, my refund took about three weeks to process, so you can imagine how shocked I was to see my 2006 refund processed so quickly. It would be interesting to get a look “behind-the-scenes” and see exactly how they process the thousands of returns they receive.
I wonder how long it will take for the IRS to process my refund. (As a side note: Don’t we have enough smart people in this country so that we could simplify this entire process? Why does our tax code have to be so complex / complicated?)
Financial Inventory Worsheet For My Spouse
I am the “nerd” in our family, so I pay our bills and manage our investments.
(Here’s a post about how I avoid arguing with my spouse about money. My wife is awesome, but she’s not all that interested in the “mechanics” of our finances.)
Every three of four months, I create a Financial Inventory Worksheet for my wife. I keep one copy at home and one copy at my office. The worksheet allows me to keep track of various accounts, balances, and passwords. I print out the inventory worksheet and fill it out by hand. If something were to happen to me (injury, death, etc.), my wife would have access to all account information. I always “date” the worksheet and include an estimated balance for each account.
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Oh yeah. I make sure that I don’t just leave this piece of paper lying around the house. Seriously, a piece of paper with bank account numbers and passwords could potentially be misused.
| Account | Account Number | Telephone | Website | User Name | Password | Balance |
| Date This Document Was Created: |
Here’s a post I wrote a few months ago, entitled “What If I Die?”. Not my favorite topic, to be sure. But, these are things for which we must prepare.
Have You Seen This? ING Direct Updates “Tips and Tools” Section
I just went to login to my ING Direct account and I noticed that they have updated their “Tips & Tools” section. If you are interested in checking out their selection of FREE on-line (and printable) personal finance tools, follow these directions:
(You DO NOT have to be an ING Direct customer to access these free tips and tools!)
1. Go to www.ingdirect.com
2. Click “View My Account”
3. On the left-hand side, you will see a button labeled “Tips & Tools”. Click it.
4. You will now see several resources, including resources for parents and teachers. I suggest clicking on the middle selection, labeled “Customer Corner”.
5. You will be taken to a page with TONS of FREE worksheets, on-line calculators, and printable resources. I suggest clicking on the selection labeled “Calculators/Worksheets”.
6. Check it out! ING provides a whole page of budget worksheets, inventory worksheets, and financial calculators.
I really like my ING Direct account. I think that it is cool that they have decided to provide these free resources. (By the way, I’m not getting paid to talk about ING Direct. I just like their site.) A nerd like me could spend several hours clicking through all of this free personal finance fun! Worksheets rock!
