Category Archive: Savings Story

Reworking My Savings Goal And Thinking About Buying A House

Currently, we live in a house provided by my employer.  We love our house, but at some point in the future, we’ll want to buy our own house.  To that end, I’ve created a new savings goal.

For the past six months, I’ve been tracking housing costs in our local area.  We have picked out three or four subdivisions that we really like, and we’ve calculated our ‘maximum amount we’ll pay for a new home’.  While I’d love to pay cash for the house, that may not be realistic.  But, I do hope to put at least 20% down so that we can get a conventional loan and avoid PMI.

I have run several calculations, including pricing the loan for 15 and 30 years, raising and lowering the interest rate, and manipulating the down payment.  For our price range, the ‘worst case scenario’ for our mortgage payments would be roughly $2,000 per month.  (The actual payment would be calculated when we took out the loan, and would be based on exactly how much we borrow and rates at the time we take out the loan.  According to my calculations, the monthly payment will be somewhere between $1200 and $2000.)

For the next twelve months, I’ll ‘pretend’ to have a mortgage.  By paying myself $2000 a month – stashing it away in my ING Direct Savings Account – I’ll accomplish two goals.  First, I’ll prove to myself that I can make these payments.  And, second, I’ll rapidly build a substantial down payment.  Win, win!

If I save $2,000 a month for 12 months, I’ll have $24,000.  If I add that to the $7,000 already in my non-retirement savings, I’ll have $31,000.  But, since I’m not a fan of the number 31, I’ll fix my goal at $33,000.  My actual monthly goal will be $2166.66.

I’ll track my progress over at the No Credit Needed Network.  Here’s my current chart – SavingsNCN.  This new goal replaces my old goal (of saving $16,000 this year).  I just never could get excited about that old goal, but I’m stoked about the new one.

Do you create goals?  If so, how agressive are you?  I like to set super-agressive goals and then push myself.

Continue Reading

$48,000 Goal Update: 11 Months And 1 Van Later

My goal for 2007 is to “save” $48,000 in various retirement, education, and investment accounts.

Click here to read all posts associated with my $48000 goal.

Click here to read about my savings and investing goals for 2007.

Here’s my updated chart with detailed information:

48c.png

As you can see, I’m going to miss my goal… by more than $20,000! Yikes, right? Well, it’s not nearly as ‘bad’ as it seems.

My primary mini-goals were to fully-fund our retirement accounts. I managed to fully-fund my 403b, my wife’s pension plan, my Roth IRA (for 2006 and 2007) and my wife’s Roth IRA (for 2006 and 2007). I also fully-funded my daughter’s ESA (for 2006 and 2007). Mid-year, I decided not to fund my son’s ESA in 2007. I am going to fund his ESA in 2008. I also put $1000 into my standard brokerage account. All-in-all, I was able to put $38,000 into various retirement / education/ brokerage accounts.

But, all did not go as planned. First, when I opened my wife’s Roth IRA, I “borrowed” $5000 from my ING Direct Savings account. (I wanted to fund the Roth for 2006 and April 15th was right around the corner.) Then, in October, our old van began to “die” – so we decided to use some of our savings and purchase a newer van. So, instead of ADDING $10,000 to my savings, I actually DEPLETED my savings by $12,000. (I’ve managed to ‘payback’ $3,000.)

There are two ways to look at 2007. On the one hand, I managed to fully-fund 4 retirement accounts AND buy a newer car with cash. On the other hand, I missed my original goal and I actually lowered my “savings”.

Personally, I’ll always view 2007 as a success. While I did not reach my goal, I reached several “mini-goals”. In 2008, I’ll work to rebuild my “savings” – and I’ll continue to fully-fund the retirement/education accounts.

I still have a month to go and I’ll be working VERY hard to rebuild my savings account. I’m a little bummed to see the hit that our savings took, but I’m very, very happy with the newer van.

Continue Reading

$48,000 Goal Update: 9 Months (Roth IRAs Fully-Funded!)

I’m working towards saving $48,000 this year, which is 60% of our gross household income.

Click here to read all posts associated with my $48000 goal.

Click here to read about my savings and investing goals for 2007.

Here’s my updated chart with detailed information:

48sep.png

Explanation

My Roth = $8000 ($4000 for 2006 and 2007)

Wife’s Roth = $8000 ($4000 for 2006 and 2007)

ING (Repay $5000) = I ‘borrowed’ $5000 form my savings so that I could fully-fund the Roth IRAs for 2006.  I am in the process of ‘paying myself back’.

Next Step:  Open and fund ESA for my son.

(You can also follow my progress over at the No Credit Needed Network: NCN 2007)

Continue Reading

$48,000 Goal Update: 8 Months

I’m working towards saving $48,000 this year, which is 60% of our gross household income.

Click here to read all posts associated with my $48000 goal.

Click here to read about my savings and investing goals for 2007.

Here’s my updated chart with detailed information:

48now.png

Explanation: I ‘borrowed’ $5000 from my ING Direct Savings Account so that I could fully-fund my Roth IRA for 2006.  I’m in the process of ‘paying myself back’.  Since last month, I’ve managed to deposit $2000 into my wife’s Roth and an additional $1500 into my ING Directs Savings Account.

At this point, I should have saved $4000 per month for a total of $32000.  But, I’ve only managed to save $28,500, so I’m $3500 “short” of where I had hoped to be.  Why?  When calculating my budget for 2007, I made a major miscalculation and forgot about a $500 per month recurring expense.  Still, I pretty pleased with my progress and I’ll be working very hard to reach my goal by December.

(You can also follow my progress over at the No Credit Needed Network: NCN 2007)

Continue Reading