Category Archives: Saving

Forced Savings Plan

Last year we were really motivated to save up for house purchase. It was exciting to see a set percentage go to our savings account, so that one day we could buy our very first house. The down payment savings account increased every month little by little. The goal motivated us to watch our spending.

Now that we have bought a house we need new goals to motivated us again. Especially me. I like goals. Without goals I tend to just drift away aimlessly.

For us, it’s much easier to save an allocated amount every month. We are not very good at watching our spend and hope we come under in order to meet our budget.

So our plan this year is to set automated saving withdrawals every month.

How does this work?

For example, one of our goals this year is to maximize our retirement contributions. I already have a set percentage being withdrawn from my paycheck that goes straight to my 401K. Last week I also set up a monthly ROTH IRA contribution with Vanguard. This will ensure by the end of 2013, I will have my ROTH IRA maximized. My husband does not have a retirement plan available through his work. I’m going to set up a Traditional IRA with Vanguard. Every month a set amount will be withdrawn from our savings account to the Traditional IRA. This will ensure have retirement covered.

I’m considering starting a brokerage account with Vanguard (After-Tax) and having a monthly contribution go to a set of mutual funds. This probably won’t be a huge amount but at least I know it’ll be set aside for our future.

Vanguard_Retirement_Savings_Master_Trust_212439

My husband and I have been talking more and more about financial independence. We don’t want to be stuck in the grind forever working for the man. One day we hope to have the freedom to say F*** You!

A forced savings plan is one way to get there. It’s also psychological. Just like every month I make sure all our bills are paid, I will make sure there’s enough in the account for our contributions to be withdrawn from on a periodic basis.

I have found myself buying things for our house and I realize when start making updates that the house needs (remember, it’s a fixer upper), our costs will be higher than when we were renting an apartment.

Have you started automatic savings? Has it been helpful so far?

Ways to Have Fun Without Dipping Into Savings

Check out my staff post on Dimespring. It’s titled Ways to Have Fun Without Dipping Into Savings.

It seems like bills never end. I finish paying off the electricity bill, only to have the Internet bill show up. I know lots of families struggle to make ends meet. My husband and I jokingly say that at this point in our lives, we work to survive. After all, most of our budget goes to food and living expenses. So it’s a relief for our pocketbooks when we find ways to entertain ourselves for less.

Check out the different ways you can have fun on the cheap.

Let me know what you think!

Summer Fun, 1983

Summer Fun, 1983 (Photo credit: Franklin B Thompson)

 

Enhanced by Zemanta

Saving Submissions and other Rants

Well, it’s Wednesday, the day before Turkey Day in the US. Are all my American counterparts ready to eat some turkey??? Gobble Gobble.

So this week I am claiming saving submissions at work. I negotiated with suppliers on two parts :) with the aid of one of the category managers. The first two submissions total up to $25,000!!! These are baby submissions. The submissions the category managers submit are usually in the hundreds of thousands, if not millions. Hopefully, in two years I will be a category manager, if not sooner!!! By the way, I work in sourcing. In laymen terms, sourcing is the arm of a company that flexes its muscle when the company needs cost reductions, and makes its suppliers reduce their prices. Competition leads to lower prices. And a company always needs cost reductions!!!

So, not only am I thinking about money in my personal life (ahem..personal finance blogger), I also work and think with money every day. Sometimes thinking about so money does drive me a little crazy, so I’m not sure if I suggest it.

Here are my Thanksgiving Plans:

  • Thursday – Spend it with in-laws and family. Eat turkey and try not to watch football
  • Friday – Go shop for XBOX 360 in the morning, hit the road to go see my parents. Spend afternoon and evening with parents.
  • Saturday – Spend morning with parents and little brother. Drive back to Dallas in the evening.
  • Sunday- Recover

Anybody else shopping for an XBOX 360? What deals have you found so far? What are you doing for Thanksgiving???

Money Should Make Money Right?

Money should be making money right? 

Personal finance bloggers are huge advocates of building emergency funds of 6 months of expenses. It’s actually one of my goals. We want to have saved $20,000 by the end of the year. I’m not sure if we will meet that goal, but at least we will come close to it.

Last night, I bought $3,000 worth of VGHCX shares. I figured since the market was slightly down, I would take advantage of it. After transferring the money to Vanguard, our savings account decreased to $9,000. I want to open my husband’s ROTH IRA, which means I will have to invest $3,000 minimum in his Vanguard ROTH IRA. If I do this our emergency fund will decrease to another $3,000. Granted if I want a month our savings account will stay flat, since I will contribute what we saved in October + November to the ROTH IRA.

My reasoning: The money in our savings account is doing nothing. Seriously, we get like 12 pennies every quarter of interest. That’s awful! I’m depositing thousands of dollars to the bank, and the bank is using it to make money. Not to make ME money, to make the BANK money.

Future savings: We want to buy a house in the near future. We are going to try to save up enough money to buy one by the end of our lease Jan 2014. It’s a pretty crazy goal, but if we make it, it will be great, if we don’t, we will be $1 more dollar closer to our 20% down payment. Knowing that we can pull money from our ROTH IRA (contributions not earnings) at any time for the purchase of our house, makes me wonder if we should max out our ROTH IRA this year, hoping the stocks will make money. I mean if we have to pull $5,000 to contribute to our down payment from our ROTH IRA, maybe the account would have grown to $5300? We would pull $5000 and at least have made $300. Way more than the 12 pennies. I know this is a little risky. What if the market crashes, etc…But the money in the ROTH IRA would be a back up, Just in case we don’t raise enough money for our down payment to avoid PMI. Maybe we may decide to postpone our house purchase to increase our down payment, at least our money would be making money.

Has anybody ever done that? Let me know what your experience is. 

How Do You Determine and Prioritize Your Saving Goals?

Hi readers. It’s been a few days since I posted my last post. I’m afraid life and my laziness got in the way :/.

Just a quick update: Challenges on marital finances are still being worked out slowly. We talked about it, and came to the conclusion that we don’t want money to get in our way of happiness. We are happy with our life, and will try to figure it out as we go. As much as I want him to get involved in our finances, it stresses him out, so it’s going to take a little push here and a lot of magic to get him to start looking at our finances.

Today, I wanted to tackle some thoughts on saving goals. Ever since we started thinking about buying a house, I have been running numbers in my head. Questions like how much house can I afford, how much will our down payment be, location of our house, etc have been popping in my head! Every time I run the numbers, my head feels like it’s going to explode! You might be wondering why? After all, I am a personal finance blogger and it should be easy for me to advocate saving for a down payment, and lowering expenses to increase savings. Honestly, I often wonder how some personal finance bloggers do it because when I think of the minimum $30,000 we need for our down payment, my stomach does a flip.

Then, I think about maxing out my 401K ($17500), maxing out both our ROTH IRAs ($10,000), contributing to FSA for medical expenses like braces ($2,000), paying down car loan (-$4,000), saving for down payment ($30,000), vacation fund ($5,000) and contributing to an after tax account for investments ($????). Did I mention, we like to live our life! We are not extremely frugal by any means. Those are just some of the goals we would like to achieve in 2013. Are they do able? I have no idea. Honestly, they seem super aggressive to me.

I have read a lot of how to guides on how you can save, etc. But honestly, I like hearing about how people do it. Let me know your story.

How do you determine and prioritize your saving goals?

Saving, Debt, and Personal Goals for July-December 2012

It’s time to write down my saving and debt goals for the second half of the year. As you read on my post, Financial Choices, my finances have been driving me crazy lately. I have to admit I am a control freak when it comes to certain things. For example, if you didn’t suspect it already, I like knowing what goes in and out of the bank account, even if it makes me feel bad. I know we have been spending a lot lately, hence the bank account hemorrhage. A lot of it had to do with car purchase, moving to a new apartment, merging accounts (debt). But I think since I started working, we should start climbing up the hill, and building some financial muscle.

So, I found out some information regarding our car loan. Please let me know if this is typical of car loans, since I have never had a car loan before!The interest rate scared me the most!

  • Current Balance: $5238.19, Interest Rate 6.64% Accrues Daily

Accrues daily??? I never heard of it. I thought most loans accrued monthly. I dislike debt very much! This realization made me jump start our debt paying off efforts even if hurts a little bit in the short term.

Here is a summary of our saving and debt goals:

  • Pay off a minimum of $300 every month, starting this month, July! Send payment during the first week of the month, so money disappears from bank account.
  • Save $1,000 more in July, $3000 in August (three paychecks), $2,000 in September, $2,000 in October, $2,000 in November, $2,000 in December.
  • Put 7% to 10% in my employer’s 401K.

I am aiming really high for our savings goals, in hope, we can increase our savings account. Even if we get 50% of the way through the monthly goal, I think we are making excellent progress. This should, also, increase our net worth significantly.

I, also, want to make some improvements in my personal life! :)

  • Make A’s in my Fall classes.
  • Work hard at my company and become an invaluable asset.
  • Identify a high level mentor in my workplace (I want to approach my VP).
  • Work out a minimum of 5X a week.
  • Visit family at home :)
  • Have fun with hubby and friends!

Last but not least, is my blog. I am still not sure what goals I should have for this blog. It is a hobby, and I enjoy writing just for the fact I like to share my experiences. I feel like if people had shared some of their experiences early on with me, I could have learned more. I love learning! So my goals are simple:

  • Continue to share my experiences with PF world.
  • Build relationships with fellow PG bloggers.

What do you think? Have you made your saving, debt, and personal goals for the second half of the year?

How to Save on College Medical Bills

As a college student, my budget is pretty tight. Unless it’s extremely urgent and I am about to die, I basically avoid doctors. Healthcare is super expensive! I already pay about $110 on medicine every month I need. I have my yearly checkup with my doctor back home :) . However, there are times when I cannot avoid a doctor. There are a couple of ways I saved on my medical bills in college.

First, take advantage of your school clinics! I really love my on campus clinic. When I had tonsillitis freshman year, I went to my on campus clinic, the doctor diagnosed me and gave me medicine.

Second, if you are stressed or going through some hard stuff, make an appointment with your on campus counseling center. You don’t have to pay hundreds of dollars to have someone listen to you. I’m actually a little embarrassed to admit, but I actually went to the counseling center freshman year. I was having some anxiety issues and reached out for help.

Third, if you need any dental work, check out your local dental school. I had to get my wisdom teeth removed, and it was going to be very expensive. Instead of paying $2,000, I paid $500 to get them removed. It took a bit longer to do, but the students and doctors were awesome! I would go there again to have dental work.

Fourth, working out keeps your body healthy and strong. Your immune system is stronger so you are less likely to get sick. Take some group fitness classes at your school gym, or join intramural teams, or sport clubs! They are a lot of fun and you can make friends quickly. I was in my Honors program intramural flag football and volleyball team freshman year. We sucked, but it was fun!!! I actually regret not continuing to do this after freshman year.

Hope this helps you save on some medical bills!

Three more weeks until I turn in my last assignment. It’s going to be tough. I am already stressed out! I, also, heard from one of the jobs I was interested in landing. I did not make the 2nd round. Probably because of my lack of work experience, bah. Oh well, have to stay optimistic! Crossing my fingers. Please send good vibes :)

What do you think? How much do you pay in medical bills? Do you have any more tips?

SavvyFinancialLatina

P.S. 21 Days to Go!!!!

Save Money: Skip the Car

My Dream Car: Nissan Altima

Everyone dreams of having their dream car. Having a car definitely comes with its perks: being able to go wherever you want, for example! My parents were thinking of buying me a car my sophomore year of college, but due to certain circumstances, I ended up not getting one. Not getting a car has by far been one of the savviest financial decisions this Latina has made. I saved thousands of dollars by not paying for insurance, maintenance, inspection fees, taxes, and of course, the monthly payments. Not having a car did limit my independence. It’s sucky to have to rely on public transportation and to beg my hubby for rides :p. But thinking about it now, I haven’t had to look for parking spots at my school (sucks, min of 15 minutes if you are lucky). It has probably saved me from a couple of car accidents. I am from a small town where the highway has two lanes, and I am now living in a city where there are multiple highways, people drive above 80 mph, and do not use their blinkers! It’s pretty scary. I have driven on the highways before and I freaked. I did not know which way to look! My hubby, who is an excellent driver, has totaled 3 cars (none his fault). One accident: a guy ran a red light. Another, he was waiting at a gas station exit to take a right onto the street, and two cars crashed, and collided into him. No kidding.

Since, I am becoming a “grown up” soon, I will be getting a car. I actually know what type of car I am going to get because his parents always get this “type” of brand. They have bought all their cars from one dealership, and they always get treated well. And no, it’s not a Nissan Altima. But as long as it runs, has good gas mileage, and is decent, I’ll be happy :) I haven’t started car shopping because I don’t have a job offer yet. So until that puppy comes in, I won’t step foot inside a dealership, too much temptation.

What’s my budget, you ask? Well, I plan to stay under 13K, taxes and fees, extended warranty, etc. included. I am not going above that number. More on this later :)

So, just wondering, when did you get your first car? Did your parents pay for it or did you get it? Was it a good deal? Any tips?
SavvyFinancialLatina