Maybe I should lay off the financial publications, but just finished "Coffee House Investor" and decided to bite the bullet and open up a Vanguard account.
Finished paperwork today with my signature guarantee to transfer my IRA at TIAA-CREF to V.
Perhaps I should have waited until we're at our new address... unfortunately, I was having nightmares about losing paperwork, so this way it's done.
Picked up DS's new glasses today... they make him look VERY handsome. Will need to get some sort of strap to keep them around his neck for all of the sailing expeditions this summer. No sense in dropping $250 worth into the lake!
Viewing the 'saving' Category
Maybe I should lay off the financial publications, but just finished "Coffee House Investor" and decided to bite the bullet and open up a Vanguard account.
Spent a few hours on Fidelity.com last night looking at mutual funds for my pension $$ I should be receiving any day... (and then send off to Fidelity to join the other retirement stuff). It'll bump my retirement fund savings to $11k/$12k which isn't a lot, but better than nothing! I need to allocate a little better if I'm going to live through these big ups and downs in the market... maybe some bonds instead of NO bonds... I hadn't purcased any bonds before because I thought I was strong enough to stand the risk of all stocks... but watching my portfolio this last week has really made me think "BALANCE" - I need to balance my portfolio.
With the house money in a few weeks, I'll probably place it in Vanguard, in a nice index fund with low management fees and no 12b1 fees, but then I'd have a little at TIAA-CREF, Fidelity AND Vanguard which I don't think is too smart. The thing is that I love my Social Choice fund and the other growth fund at CREF and my retirement stuff was already at Fidelity, so I kept it there and I haven't opened anything at Vanguard, yet, but I love their index funds. Unfortunately, Fidelity charges $75 per transaction which makes me cringe. Oh, what to do, what to do. The cash that I'm not putting into the Roth will be around $10k and it'll go into ING until I get a handle on what to do with it.
I've probably already posted on my worries about this money, but it's something that is still hanging over my head... I don't want to screw up... since:
a) I'm not working
b) this is the last windfall I'll probably get in a loooonnnngggg time
c) I need a "girl's safety net" to feel comfortable
d) doubtful that I'll inherit any money
e) doubtful that I'll be making any significant money in the next couple of years since I'll be home with the little one
Back to the research.
Ah, and the credit card is back in the dungeon of our closet since I had started spending a little on it... $100 for summer shoes for DS and I which we needed, but I don't ever, ever want to have a credit card balance again. EVER! Which means cash, baby. Being in credit debt rebound is tough.
My SO got me a European charge card from his bank the other day so that we can use Euros for the coming year from his bank account over there. (This is the year we'll be making about half of our salary for education pursuits).
It got me thinking again about the book that had the 50%Needs, 30%Wants, 20%Savings strategy that I've been using for the last year. Pregnancy has affected my brain, so I can't remember the title, but it's a great book.
Anyhow, the writer's talk about how in the 1950's a person COULDN'T really go over their credit line, and COULDN'T spend more than 25% of their income(or so) on their house and the banks WOULD NOT loan the money for a new car that they didn't think you could afford (using much stricter guidelines than they do now). Etc., etc., etc. Their point was that "fixed" expenses were much much lower than they are/can be today. Hence, many people are in straight jackets because of their fixed expenses.
Back to this charge card thing... SO tells me that I have a credit limit each month, but that the bank automatically takes the payment out monthly and pays the card off in full. He didn't have to sign up for this, they just don't have "credit cards" where he's from, they have "charge cards" like the American Express card that HAS TO BE PAID OFF and if you don't have the money, they revoke the card. That's it. End of story. Is this why Europe has a higher savings rate on the whole than we do? Which brings me to the question at the title of this entry, at what point should financial institutions be held accountable?
Isn't this a little hard on the individuals who borrow this money to be in such financial difficulties? How does it affect a person/family's quality of life if they're in debt up to their eyeballs? Yes, I know, people need to take responsibility for themselves at some point, but that would mean they'd need to be educated as well... kind of like those hazardous messages on cigarettes. If a person hasn't been taught, how are they to KNOW? It took me a long time to get out of debt. What would life have been like if I hadn't gotten into debt in the first place... ? Did it kill me to eat macaroni and cheese dinner 4 nights a week because my house payment and credit card bills took up almost all of my paycheck? Nooooo.... and it's my fault. I just wonder for the rest of our kids, our future, "what if?" What if companies were forced into more reasonable borrowing percentages? And what if credit card companies were required to have higher minimum percentages on the balances owed? The list is endless and this is long. I just got that charge card application in my hand and had to wonder how it is that we're going to compete with the rest of the world when we as a people have no savings.
P.S. Contrary 1 - couldn't figure out how to send a private email like the old set-up on the site. I'll keep looking. And baselle... I don't get the emails when comments are posted, but see above. I'll keep looking.
My (old) employer just sent me forms to fill out for my pension. I was floored that I had acquired $4,500 in the 5.5 years that I worked there since I was expecting more like $1,000. Excellent because I only managed to save about $6,500 on my own in the company retirement account and it's only up to about $6,900 these days. (They had no match since they offer the pension). The pension money will be a really nice addition.
DH needs to sign in front of a notary since I'm opting out of the annuity ($11/mo. for the rest of my life and $5/mo. for DH LOL) and rolling over the pension to my TIAA-CREF account. I had added $800 into my traditional IRA for 2005, and had thought I would transfer it over to Vanguard, but I think I will give it some time. There's so much going on right now that I kind of just want expense stuff settled.
I will be completely debt-free in June this year and it will be the first time since I was 18 years old with my first car loan. We'll be renting on the west coast for the year and since our house is sold... just need to wait for the closing date. Wow. It feels so great to have a little bit of money stashed away.
Turns out that I only have ~$14,000 in retirement accounts, but that's okay because I'm trying very hard to build up money in other areas. Now that I haven't been working for a month and won't probably be working for awhile, it's going to be tough, but DH will be supporting us on his salary and when the baby comes, I'd still like to work a few hours each week tutoring or whatnot.
Having been gone for a month has allowed me the great opportunity to see my house in a new light. I've started sorting through my bookshelves again and I'm setting things aside for a garage sale or donation. No sense in taking my college textbooks with us since i haven't opened them in almost ten years and there's no sense in moving things that I really don't have an attachment to.
My ex sister-in-law gave us some baby blankets and I think I'll keep all but one of them... it's knitted and very pretty, but I just don't like things that are scratchy and have holes in them. And... there's probably someone out there who would be thrilled to have a knitted baby blanket.
Finished reading "Being Peace" and Thich Nhat Hanh says that people who choose to have children should try to find ways of contributing and helping the world. I agree with this. We could have adopted, but DH would really like to have children from his own gene pool... not sure, yet, how to contribute, but in the meantime, I'm definitely recycling more (office paper is a pain to recycle in our town, but I think it's my responsibility to make the effort) and instead of dumping our old paint cans in the garbage can like I know many people do... we'll be taking them down to the hazardous waste department.
It really is a lot of work, but golly, I look at the impact we're having on this world and frankly, I'd like to leave as small of a footprint as possible.
I also finished reading "Good in Bed" since it was recommended by Laura and I can second the recommendation. It may have been hormones, but I cried during the hospital parts. I think most people can relate.
Saving for the future and beyond, Jorge
Thanks, Kashi - I think you're right and I bought the bag. It really is fabulous and I've never seen a bag like it.
Back in the U.S. is interesting. I've spent almost $100 my first day home. Ouch! Had to change the title for my car, $14, faxed an important document long distance, $6, took a friend to lunch $12, bought two donuts $1.90, allowance to DS $10, developed photos $30, and a few more things. Crazy how the cash flies out of one's wallet.
Received a nice surprise in the mail from the grandparents... and have set up a deposit to ING in two days after the check clears.
The buyers for the house would like us to fix two things on the house (they just had it inspected on Friday). One is some sort of backdraft on the water heater and the other is to call an electrician to fix a couple of wires that aren't connected to anything on the fuse box. Hopefully the fixes won't cost more than $150.
Tired, and ready for bed already.
Fellin' good with a 50€ note still in my pocket. I spent 10.30€ on groceries yesterday and ate in for supper. Spent 1.20€ for the bus last night and this morning... 2.10€ for some rolls and a big bottle of water for lunch today.
Brittany asked if I used any software to track my spending and the answer is, "not really." I tried Quicken a few years ago and screwed it up so much that I didn't want to try again. I have used Excel to track my spending and find totals, but that turned out to be cumbersome as well. Today, I keep my networth and account information locked up in an Excel sheet that I tally up monthly or more on average and this seems to work well for me. I have my budgets for house and personal also within my Excel worksheets as well as my goals for the coming year and next five years. And... I keep a list of wants... so that when I feel the desire to spend more than $50, or am just feeling rich, I can take a look at my wants list and figure out what to spend it on... I think this helps to spend money on things I really desire instead of something I see in passing. It works the other way, too. When I see something I want and it costs a fair bit of change, I place it on the want list. It'll be there tomorrow or the next day if I really want it. There are so many places to buy things nowadays!!!
To track spending, I usually just use a pencil and a small notebook. The notebook also has rough guesstimates on what things cost in the grocery store so that I can compare before purchasing. I think this is a good habit.
Cash is also my friend. When I used the credit or debit cards more, I always spent a heck of a lot more money. When I take my cash out every week or two weeks, I know exactly how much I have left to spend. Works great!
There is a teacher I met here who wears their clothes at least 4 or 5 times before washing them. How very different from the US, eh? She's from the U.K. and just seems to feel more comfortable with not spending so much money on washing clothing... it doesn't get all that dirty during the day while teaching students and she changes clothes when she gets home to save the good stuff. What a fantastic way to live!
In the U.S., it seems that people are expected to not wear an outfit if they wore it the week before or something. Silly. Clothes are just clothes and I would assume that if you don't spend your money on clothes, you have a heck of a lot more in your savings account!!!! Ha!
I'm currently living in a very conservative city and nylons are the norm until summer hits. Well, this weather is too hot for nylons on my bulging belly (even the low cut ones) so I didn't wear any today. If I have any more glances from men checking out my legs, I'm going to knock them on their butt! Sometimes, it just takes too much energy to blend in like a native - especially when one is pregnant!
So, yesterday, Besides the two bus trips (about .60) each, I went to the bakery and picked up a late evening snack for 1.97€ and I also spent .87 for a stamp. I think I already marked down the bakery run earlier in the day.
The bakeries here are so very wonderful. I haven't tried everything, yet, but the bakery workers are very helpful.
I must be getting a lot bigger than I was when I arrived because people have started giving up their seats for me on the bus. It's quite sweet of them and I really appreciate the thoughtfulness.
I knew it would happen, but it really does get tiring of having bread, cheese, and meat every day of the week. Sigh. Ah well. I made eggs last night (cheap dinner!) and they tasted great. Just a little salt, pepper and olive oil.
This morning, I spent 1.25€ on an ensaimada and a roll for lunch to eat with my meat, cheese, butter and later I'll have to go buy an avocado or tomato to spruce up my sandwich a bit.
I'm visiting friends over the weekend in Germany, so hopefully expenses will be at a minimum... will probably have to take advantage of their washing machine, however... I wouldn't be able to get my clothes washed and dried before I leave.
Trying to be frugal away from home,
Thanks, baselle, for the link to MorningStar's article on TIAA-CREF. I believe that I, too, will be moving my account from there.
My traditional IRA only had $2300 in the account and after looking at Vanguard's web site, an individual needs $3000 minimum for the IRA account rollovers. So... I sent an extra $800 into TIAA-CREF so that I can eventually transfer to Vanguard. Haven't put anything in IRA's for 2005 since I was too lazy to open a Roth, hadn't been interested in contributing to the traditional and had been sending 20% gross income into my 403(b) anyway. My other retirement stuff is with Fidelity. Unfortunately, I've never bothered to try to figure out their fees (wrong move) and tried to find them today online with no luck. Must be looking in the wrong place, eh? I'll end up calling them on Monday to see what fees they actually collect and take it from there as to what I want to do with the money.
We filed our taxes which is a big relief. I was negligent, however, and didn't include my 2005 traditional IRA contribution! Doh! We're getting $1,000 back and I haven't done the calculations to see if it would make a difference, yet. Is it hard to do an amended return? Does anyone know? Is it worth it?
I have three bank accounts and am in the process of closing one of them. Actually, 2 are credit unions, 1's a bank and I'm closing one of the credit union accounts. The bank has the mortgage and the other credit union is very good at trying to provide value to their customers. I'll keep both of them open as I've read so very many horror stories about people who have quit their jobs and find that they are no longer worthy of credit... even if they have lots of money in the bank. Okay, so I don't have lots of money in the bank, less than $200 actually, but I still want to keep my lines of credit and my credit cards open!
DH is taking me out to dinner to celebrate my last days at work. There's a lot to do at the house, though, so I won't be sitting idle!
Till the next time,
Using "Overcoming Underearning" the book, this is just an entry for me to keep straight what it is I want and where I'm at. Easier for me to find again than entering in a paper journal
What DO I want?
*I want to stop using debt - even though it gets paid off monthly except the house, I spend more than I should and then juggle to make sure it's paid and don't incur finance charges. My mother always did the same thing and I want to break the habit - CASH ONLY and don't touch savings!!
*I want to make sure I always get paid what I'm worth, for most of my skills, they're within a range of $20-50+ per hour.
*I want to find out where I am mentally to achieve where I want to be financially
*I want to update my resume and CV so that I'm ready when opportunity strikes!
*I want to run my own business because I'd be good at it and following someone else's vision is boring
If I had six months to live, what would I be doing?
*I'd be spending as much time as possible visiting family, then I'd travel to the one or two countries or states on my "must see" list, I'd be making sure my will/durable power of attorney for healthcare/living will were in order, and I'd be taking the time to enjoy my last days
Where would I be living/Who would you be with?
*At home, with my loved ones, or traveling with loved ones
What would you change? What would you add? What would you eliminate?
*I'd want to make sure I left my children an inheritance - something to help them through university or buy a house, I'd be more forthright in expressing my appreciation to folks, I wouldn't hesitate about spending $3 on a malt (they're my favorite treat), and I'd try to be kinder to those I encounter in this life.
Affirmations to wealth taken from aforementioned book by Barbara Stanny:
-I am confident in my ability to make money
-I always live below my means
-I love money and appreciate what it does for me
-I am very optimistic about my financial future
-I experience very little fear or uncertainty around money
-I am determined to get paid what I am worth
-I am passionate about my work
-I have very supportive, nurturing relationships (including spouse)
-I like wealthy people
-I have little or no credit card debt
-I intentionally get myself in situations beyond my ability and then rise to them
-I am resilient and able to bounce back when I fail
-I am filled with gratitude for the success I've achieved
-I work very hard, but I know I don't have to do everything myself. I know how to delegate and set limits
-I am tenacious in achieving my goals
We're eating home more now and I have a year to plan my re-entry into working for money. These explorations allow me to stay on track.
Previously, I had written about how we were selling the house this spring/summer and how I was confused as to what I should do with the money.
I had figured:
$4,000 into a Roth
some money into ING CD's...
and I had no idea what to do with the rest.
I found my answer this weekend in the book, "Prince Charming Isn't Coming."
First of all, I found out what I didn't want to do with my money - I didn't want my money languishing in something that would cause inflation to take over. I didn't want to use the money for everyday expenses and I didn't want to lose my money.
Well, even at 4.something%, with taxes taken out and inflation, over the long haul, I would not make money in an ING CD. And that is, what I found out, what I want. I want to make some money and grow a nest egg. Not just let it be "safe" in an FDIC insured account, even though the idea is extremely appealing, it just Doesn't work that way! My favorite chapter in the book is called, "Risk Is Not a SYnonum for Loss" and it was a chapter that really helped me to see that what I needed to do was bite the bullet and invest in the stock market. Yes, yes, I already invest in the stock market through an IRA and my retirement at work, but outside of retirement accounts, I have not invested.
So, here's my plan.
This is money for the long-term. I want it set aside for at least 7 years and probably much, much longer.
$4,000 will go into an IRA as planned, $3,000 will stay in ING as an emergency fund, the remainder will be placed into stocks or no-load stock mutual funds (wherever I can find good quality and not big fees)and next year, I'll take another $4,000 and place it into an IRA. The rest will stay outside of the retirement vehicles. This is so very scary for me. Of course, I will not buy everything all at once, since it is much, much better to dollar cost average. For example, whatever my amount, say it is $12,000, I'll divide that amount by 12 months and end up investing $1,000 each month into my chosen stocks. This recipe then calls for a "sit, wait and see" attitude since I will have done my homework and invested in stocks I think have good long-term potential. No selling at low points, no panicking, just buy and hold. Huh. Can I do it? Can I take the time to research Morningstar and Baron's and find something worthwhile? I'll have to. I think this is the only way to make sure my money doesn't stagnate.
My retirement money is in a handful of index funds, and I'm happy with that. Maybe I can do something similar with the other money.
None of this will take place until the house is sold, however, so I'd better get crackin' de-cluttering and clean, clean, clean! Not that we're a messy family, but things do tend to get away from a person. Some of the screens need to be repaired and our windows need to be washed inside and out. There is some trim that needs to be put up that requires hiring a carpenter and I need to replace a swath of carpet. Ah, yes, and we need to seal the basement concrete areas with something that will look nice. Maybe a grey will do. Since I'm pregnant, I can't do any of the painting, so that may have to get hired out. I'm budgeting about $2,000 for home fix-its in order to get a higher price for the house.
Hope it works!
My credit card statement holding year end totals arrived in my inbox yesterday. This prompted me to take a look at how my money situation has changed in the past year.
This is what I found out:
- I did not spend any money on credit card finance charges (a first since my first year in college)
- A combination of stock increases, savings, and debt reduction increased my net worth by 14% (this has since gone up more with the student loan payoff)
- There is $1,000 in an emergency fund (unheard of in my life)
- My worries about money began at "often - at least 10 times a day" and have decreased to "every now and then - once a week or so"
- I started spending allocated money for self-improvement and not feeling bad about it
I hope 2006 has as much or more to offer.
Reading these blogs has helped me very much! Watching everyone put money away and talk about how much they have built up for a financial cushion is inspiring to me.
We have three paychecks this January and I've taken $350 off the top to place into my ING account. I have a balance of $300 on my cc right now because I placed my semester's class on there, but the interest doesn't start accruing until the end of February and I'll be able to pay it off with the next two paychecks.
One of my goals for 2006 is to have $1,000 in CD's and Not To Touch It. At All. I know that the money should be there for emergencies, but in my case, that's what I have DH for (any emergencies). I laugh that I'm a partially "kept" woman, but the man can afford it. I swear he has Midas' touch sometimes.
I'll be stopping work the end of March so that I can get our house ready to sell, which means I have to save as much as possible in as short of period of time as possible. A girl needs her own nest egg and I have money in retirement plans and a cash value life insurance policy, but I wants funds and cash, too.
This is what I've been learning so that I can save:
- People don't need a ton of clothes. Keep a set mix-matchable wardrobe for work and take off the work clothes as soon as one gets home. Saves on cleaning, saves on the wear on the clothes, and a comfy pair of exercise pants and a T-shirt are so much more comfortable anyway!
- Go without the cable, the TV and anything else that might make a person want all that stuff that gets advertised. People don't Need it.
- Use Paula's beauty books to find cosmetics that don't cost an arm and a leg and work just as well as the high priced stuff.
- Cut your own hair in between shapings. My hubby trims my "do" at around the 5th or 6th week after a cut which means I can go another 5 or 6 weeks (and sometimes more) without having to spend the $25.
- Have one good pair of "heels", one good pair of "flats", running shoes for exercise, lace-up shoes that don't go outside for the FLYLADY and one pair of casual shoes for loafing around in khaki's. A person does not need a lot of shoes. They take up space, get in the way, and are completely unnecessary.
- Give kids an allowace. Let them be responsible for buying any toys, video games, and other clutter creators. DS knows that we'll buy him clothes twice a year, pay for his school activities and his food for the house. If he wants to eat out and we don't, then he gets to pay for it. He's definitely learning the value of a dollar and how easy it is to go from being able to afford something to not being able to afford it!
- Don't go out a lot. Invite friends over for potluck. Enjoy the conversation instead of needing to be "entertained".
- Rent DVD's from the library. No need to see a film right out of the box office.
- Don't drive a car. Or at least cut down on it. I drive possibly 2 or 3 days a week max. Take the bus, walk or ride my bike on other days. Good for me, good for the environment and great for my car. I never have to get the oil changed on the date.
- Air dry clothing (now that our basement doesn't stink, I can safely line dry again). lol
- I keep a coin pig. When it gets full, I take it to the bank. $40-$70 later, I'm that much richer in my savings account.
I'm sure there are probably other things I've been doing to save, but those are the big ones. I need to write down my goals for the next few months, though, so that I can see exactly where I'm going.
My parents are having an estate sale this weekend that I have some items in - hopefully I'll get some $$ for it!!!
A healthy bank account (and a healthy baby!) are very important to me this year.
Cardinal rule #324 don't buy items other than groceries at the grocery store - you'll pay more. Rule #623 use your coupons to save money, etc., etc. Well, I didn't follow the rules tonight other than making sure my belly was full before I went, but it looks to me like I have spent quite a few dollars LESS than I would have at any other store. ALDI's has arrived. It's been in town for a few months and I've gone there occasionally, but after spending the last few weeks price comparing and checking out some food samples from ALDI's, I'm hooked.
$1.99 for liquid laundry detergent... 34 loads (and nobody uses a full cup anyway)
$.39 for baking soda
$.89 for Pringles
In sum, $52.15 for 32 items and that included vitamins, red meat, cheeses, and condiments.
Wal-mart is not a hero in our household. We loathe their big ugly stores and their abuse of employees. Anyone read "Nickel and Dimed?" If you've ever felt humiliated and over-controlled, and taken advantage of in your job, you'll definitely understand. Wal-mart is the antithesis of creativity for its employees. In the marketplace, however, they're brilliant.
Anyway, we don't like shopping at Wal-mart, but have in the past because sometimes we don't have the money to go to the smaller stores.
Since ALDI's arrived, I don't think we'll need to go to Wal-mart anymore. Have we jumped from the frying pan into the fire? I'm not sure. I only know that ALDI is a German company. They keep very few people on staff, the items are not on shelves (saves $ on labor), they only take cash or debit cards, you have to put a quarter in the grocery cart to use it (no need to pay somebody to herd the carts back to the building) and they have everything a person needs. They have many wants as well.
My last deposit to ING will be ready tomorrow and I'll "withdraw" the money into a CD. I was waiting for the balance in the savings account to get a little bigger before putting it in a certificate of deposit. I'm starting a laddering system and am very proud of myself. This is my first $500 saved just from paychecks and not from windfalls from family, etc. I think it marks progress and I'm pretty proud. I've always had to have money set aside automatically so I wouldn't touch it, for example, my retirement funded before I saw the cash. This cash in the CD will be money that I have physically set aside - on my own. Woohoo!
The stink is not gone, yet, but it's better. I've opened one of the vents in the basement a little tiny bit to help with the air circulation, too. I'm giving the baking soda one week to work it's magic, I'm going to mop the floor in the laundry room one more time and if those don't work, I swear I'll call the cadaver clean-up crew.