What oh What Have I Been Up To???

1 02 2011

Like I said yesterday, I have made some big decisions lately.  You see, here’s the deal, I quit smoking for mostly financial reasons.  I wanted to save $2000 and I thought I could use my cigarette money to do that.  However, what I realized was that was very short sighted.  First of all because my health and the health of my daughter should be my first priority for quitting smoking and second because I waste way more money than just $150 a month on smokes.  I realized that in order to achieve my 2011 financial goals, I am going to have to take a broader approach and do more than just cut out lunch money and cigarettes from my budget.

Then I was introduced to and started learning about the Total Money Makeover by Dave Ramsey.  I found that I was well on track with his baby steps compared to my goals for this year and I was intrigued.  These are DR’s Baby Steps:

1. $1,000 to start an Emergency Fund (I planned to save $2000)
2. Pay off all debt using the Debt Snowball (I am virtually debt free now.  I have no medical, CC, home ownership bills at all!)
3. Three to six months of expenses in savings (This I didn’t consider but I am now.)
4. Invest 15 percent of household income into Roth IRAs and pre-tax retirement (I am at the 6% match at my job for my 403b.  I’ll increase that by any amount of raise I get at my job annually.)
5. College funding for children (OK so I’m a bad mom on this tip)
6. Pay off home early (My plan all along has been to save enough money to pay for a house cash within the next 5 years)
7. Build wealth and give!(I already give when I can.  I am looking forward to giving more.)

I really do feel like I am mostly on track with them and even better, I am making positive steps toward reaching my goals.  Another thing I did while I was away was my taxes.  They were submitted before 2/1/11!  Not a big deal for some, but a huge deal for me.  My refund will be enough for me to put my emergency fund away to the tune of $1500, start my 3-6 month expenses fund, AND buy a new digital camera because the one I have now is kaput!

I am so committed to moving out of my apartment this summer.  For a second there, I found myself trying to justify another year here, but there is no way that I want my 6 month expenses to be over $10,000 and they will be if I stay here.  The rent expense alone would be $7,200!  That is just a waste if you ask me.

I also bought my first book on investing, The Bogleheads Guide to Investing. This book came highly recommended to me and has some really good reviews on Amazon.  I am looking forward to learning more about what is going on with that 6% of my income that I am contributing to my 403b.

In addition to that, financial independence is about more than just not having to work for someone else, it is about making reasonable and responsible choices with my money for years to come.  I have about $800 sitting in a pension from an old employer as well that I am going to roll over into Vanguard IRA that I can manage myself.  I think it’s entirely reasonable and responsible of me to put that money somewhere else that will work better for me.

I was initially planning on stopping my 403b contributions for 90 days in order to save my emergency fund, but now I don’t have to.   I actually only started contributing to it last April.  The crazy part is that I started out at 4% for a couple of months and then I upped it to 6% and still I contributed over $2000 on my own last year.  I can’t wait to see what I can get in there this year.

Investing is something that I have always found interesting.  For someone who was never good with numbers, the theories behind investing were always something that I could easily grasp.  I always surprise people when they try to “explain” investing to me by explaining a thing or two to them as well.  I used to subscribe to a lot of finance magazines when I was younger, but for whatever reason, while I could grasp the concepts, I could not figure how to actually apply the practice in my life.  I’ve figured it out now and I am so on it.  I am even thinking about trying to get an investment club started with some of my friends and family.  Sometimes I wonder where I would be if I had been able to apply the practice 15 years ago, but then I figure who cares I can’t go back anyway.

The last thing that I did was that I spent some time on Mint.com this weekend figuring out their budgeting feature.  I’m sure that I am probabply making it harder for myself than I need to, but I will confess that I am confused.  Am I supposed to do everything off of my debit card now so that each penny is accounted for in the budget or am I supposed to come back daily with receipts and enter them into there?  I just don’t get how it is supposed to stay current.  If I can’t get it down by the end of this month, then I will just do a paper budget.  That is probably a better idea anyway because it is easier to get my daughter involved in the process.

So while I have been away, as you can see, I have been a busy girl doing big things!  So where are you with your financial goals for this year?  What steps have you taken to get where you want to be?  Got any advice or suggestions for me on Mint.com?  Any recommendations on other budgeting tools?  Please leave a comment and lets keep each other encouraged!




One response

1 02 2011

Okay girl! You are moving forward in leaps and bounds….I now need to take direction from you….what a motivator you are! Congrats on all you have accomplished in such a short time.

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