How I found out about it
I was waiting (maybe not so patiently) at a local bank to set up a checking account for the new cub scout pack we are joining. They had a den of 2nd graders last year, but relied very heavily on the district to support them, with a new den coming in, we are being encouraged to start setting up some things on our own. One item was the checking account. Since I am treasurer for another organization, I volunteered to take this on. (some of you will recognize this as the diversion it was to keep myself out of the den mom slot) Anyways, long story longer, I was watching the local bank channel while waiting and they had a short piece on National 401k day. I had never heard of such a thing, so I checked it out when I got back to the office.
September 5, 2008
Is the designated day this year for promoting 401k. The website is a little lean on details, but seems to operate more as a resource center for companies looking to promote enrollment in the 401k. This is something I personally feel strongly about since I work in IT and have been at many companies where the average age is fairly young. Those of us who have been around the block a few times gaze wistfully at those years and years of account growth potential. Those with time on their hands often don't realize the value of what they have.
How hard a decision is free money?
In many situations, companies will match up to a certain percentage of what the employee contributes. This is free money. Seriously. All you have to do to is give up a little now to get twice as much (really more, but stay with me) later. Ok, so you finally go back to that new employee orientation stack of papers they gave you the first day. Find the match %. It may be more complex then dollar for dollar, but that is ok. Say 50% of 4%. What does that mean? if you put in 4% of your salary, the company will give 2% or put another way, .50 for each 1.00 you contribute. The frosting on this cake is that you don't pay taxes on the 4% you contribute, its taken out before your taxes are figured out. And why am I assuming you are contributing at least 4%? Because who would leave money on the table like that? Do you really walk by that $10 bill sitting on the ground when no one else is even close to it. I thought not.
After the dive, then what?
Ok once you get the form filled out and the contributions moving you are in good shape. If you chose the lifecycle fund, you didn't have to think much at all. If you made things more complicated you may have to watch things a little bit more - still only 1 time a year. The next step is to increase your contribution. The best time to do this is when you get a raise. Say you are doing great and get a 4% raise. I would recommend you take 2% for your 401k and 2% for savings or investing depending on how your other financial goals are doing. You will get to the point when you can look the financial planner in the eye and say, "Yes, I am saving my maximum for retirement.
Wednesday, September 10, 2008
Saturday, September 6, 2008
To have or to hold (onto)
Ridding the house of "Stuff"
I am ruthless when it comes to going through closets, drawers, boxes, etc and purging. Assuming, of course, that I get around to it. That is where I fall down. I work very hard to make sure that I pack up the kids clothes when I change over seasons, but no other part of the house has such a schedule. I used to use those found evenings when my husband would go away or just go out late, but we don't do that anymore. :) So my challenge has been how to get back on track. I recently moved my daughter into a larger room from the nurser/office she was in. I used this opportunity to go through the contents of both closets and purge them of any office supplies, out grown clothes, toys etc that had been stashed away for "later use". I gave an old laptop to my MIL and tried to freecycle a few other things. Most didn't get picked up, so they go into the garage for the charity pick up. Once something hits the garage it is gone for good in my mind. My purging ways seem to have rubbed off on my husband, because today I found old softball uniforms and other assorted clothes in the get rid of pile.
What about the "Hard" stuff
So you are thinking, well of course, I put together bags of stuff to give to charity too. Clothes that no longer have use due to not fitting etc. There are so many things that we have that still have "life" in them. I just put about 10 picture frames into the garage pile. This article by JD at Get Rich Slowly is a great example of the internal struggle people go through. Books seem to be a favorite to hang onto. I certainly can relate to this. I have recently turned to the library as a frugal alternative to the bookstore. Not only will this reduce the books in my house to hold onto, but is a bonus for my checking account.
Get more life out of your stuff
Last year I invited my friends over one Sunday afternoon and told them to bring a bag. I had them go through all the outgrown kids clothes and take what they wanted for their kids. This way I didn't have to determine who should get what or possible foist too small clothes on someone. They only took what they needed/wanted and I was assured that they would be put to good use. I plan to do this same this year, maybe even next weekend and I can't wait to get the boxes out of my living room! Since we wear mostly hand-me-downs, it is nice to be able to help others' budgets and their time. I know sometimes it is time consuming to find the best place for things to go, but it is worth the time. The crib hasn't sold on craigslist yet, so I will be trying to find a new mother or domestic abuse shelter that might need it.
One step at a time
I think another thing that gets in our way of releasing our space and therefore our thoughts and spirits is how over whelming it can be. I highly recommend taking things slowly. Once closet or drawer at a time is fine. Any success is a success and one that should be celebrated - just not with shopping! I feel freer when I have got an area into ship shape order and removed things we don't need. I wonder if others feel the same way? Is there an organization gene? Maybe a high like the endorphins runners enjoy after a great workout. Either way, it makes me feel better and I bet you will too.
I am ruthless when it comes to going through closets, drawers, boxes, etc and purging. Assuming, of course, that I get around to it. That is where I fall down. I work very hard to make sure that I pack up the kids clothes when I change over seasons, but no other part of the house has such a schedule. I used to use those found evenings when my husband would go away or just go out late, but we don't do that anymore. :) So my challenge has been how to get back on track. I recently moved my daughter into a larger room from the nurser/office she was in. I used this opportunity to go through the contents of both closets and purge them of any office supplies, out grown clothes, toys etc that had been stashed away for "later use". I gave an old laptop to my MIL and tried to freecycle a few other things. Most didn't get picked up, so they go into the garage for the charity pick up. Once something hits the garage it is gone for good in my mind. My purging ways seem to have rubbed off on my husband, because today I found old softball uniforms and other assorted clothes in the get rid of pile.
What about the "Hard" stuff
So you are thinking, well of course, I put together bags of stuff to give to charity too. Clothes that no longer have use due to not fitting etc. There are so many things that we have that still have "life" in them. I just put about 10 picture frames into the garage pile. This article by JD at Get Rich Slowly is a great example of the internal struggle people go through. Books seem to be a favorite to hang onto. I certainly can relate to this. I have recently turned to the library as a frugal alternative to the bookstore. Not only will this reduce the books in my house to hold onto, but is a bonus for my checking account.
Get more life out of your stuff
Last year I invited my friends over one Sunday afternoon and told them to bring a bag. I had them go through all the outgrown kids clothes and take what they wanted for their kids. This way I didn't have to determine who should get what or possible foist too small clothes on someone. They only took what they needed/wanted and I was assured that they would be put to good use. I plan to do this same this year, maybe even next weekend and I can't wait to get the boxes out of my living room! Since we wear mostly hand-me-downs, it is nice to be able to help others' budgets and their time. I know sometimes it is time consuming to find the best place for things to go, but it is worth the time. The crib hasn't sold on craigslist yet, so I will be trying to find a new mother or domestic abuse shelter that might need it.
One step at a time
I think another thing that gets in our way of releasing our space and therefore our thoughts and spirits is how over whelming it can be. I highly recommend taking things slowly. Once closet or drawer at a time is fine. Any success is a success and one that should be celebrated - just not with shopping! I feel freer when I have got an area into ship shape order and removed things we don't need. I wonder if others feel the same way? Is there an organization gene? Maybe a high like the endorphins runners enjoy after a great workout. Either way, it makes me feel better and I bet you will too.
Thursday, September 4, 2008
Book Review
The Millionaire Next Door
When one leads you to another
I read Frugal Dad's blog everyday and a few weeks ago he led me to this post from the Simple Dollar. Basically a compilation of finance books, the Millionaire Next Door was recommended in the comments section and available at the library. My new frugal passion led me to the library instead of the book store.
What did I learn?
I will say this book was not completely my cup of tea. It is full of statistics, something that my history major personality doesn't always appreciate. I did glean 2 concepts which I think were worth the time. The first was the equation of age/salary and target net worth. Unfortunately for us, we are about 500k behind in our targeted net worth. The other piece was the continuous focus on living below your means. We have been aggressively paying off our debts, approximately $500-1k per month over the mandatory amount.
So what to do next?
What I need to do next is create a budget for us to work from. This will not only allow us to figure out where our money is going, but have a more stable amount of money for debt repayment. I think I mentioned this before, but the only debt we hold right now is the equity loan and the mortgage. I would love to pay off the equity loan so we can start saving for some work we want to do on the house. Most likely first on the list would be to replace the furnace and a kitchen remodel. I started to put our information into Mint.com, but haven't gotten very far. I will report back if I get it to a point that we can get some good data out of it.
How do you best determine your snowball?
When one leads you to another
I read Frugal Dad's blog everyday and a few weeks ago he led me to this post from the Simple Dollar. Basically a compilation of finance books, the Millionaire Next Door was recommended in the comments section and available at the library. My new frugal passion led me to the library instead of the book store.
What did I learn?
I will say this book was not completely my cup of tea. It is full of statistics, something that my history major personality doesn't always appreciate. I did glean 2 concepts which I think were worth the time. The first was the equation of age/salary and target net worth. Unfortunately for us, we are about 500k behind in our targeted net worth. The other piece was the continuous focus on living below your means. We have been aggressively paying off our debts, approximately $500-1k per month over the mandatory amount.
So what to do next?
What I need to do next is create a budget for us to work from. This will not only allow us to figure out where our money is going, but have a more stable amount of money for debt repayment. I think I mentioned this before, but the only debt we hold right now is the equity loan and the mortgage. I would love to pay off the equity loan so we can start saving for some work we want to do on the house. Most likely first on the list would be to replace the furnace and a kitchen remodel. I started to put our information into Mint.com, but haven't gotten very far. I will report back if I get it to a point that we can get some good data out of it.
How do you best determine your snowball?
Tuesday, September 2, 2008
CD Rollover Day
Knew this day was coming
Our CD matured over the Labor Day weekend, so I put renewing it on my to do list for today. I wish I could tell you that I did all sorts of research at bankrate.com or some other site before I rolled over my CD, but I did not. I printed the rates from the bank's website and called the service desk. I found out I had to go to the bank in order to increase the $$ in the CD. So off I went, upping our 5k CD to 10k and receiving a rate of 3.84% for 15 months. Turns out, that was a pretty good deal, one that I got due to the Platinum relationship with them. The rate would have been 3.60% if we did not have this type of account. After checking on Bankrate, it seems like I got a good rate out, out of those available for 1 year, only one beat the 3.8%.
Maximizing the benefit of what you do anyways
I like having cash in the bank, it makes me feel secure and ready for any emergency that might come our way. I do always move money into savings when we get paid (or have it direct deposited works even better) as to keep that money "separate". As a result of liking to have cash on hand and a home equity loan that we took out a few years ago, I have a high dollar "relationship" with my bank. Turns out this gets us all sorts of small, but nice payouts. No charges for AMT (in or out of network), no charges for the account etc. Like I said, small, but they add up. If you have a similar situation, it might not be a bad idea to see what the bank can do for you, they may surprise you.
Our CD matured over the Labor Day weekend, so I put renewing it on my to do list for today. I wish I could tell you that I did all sorts of research at bankrate.com or some other site before I rolled over my CD, but I did not. I printed the rates from the bank's website and called the service desk. I found out I had to go to the bank in order to increase the $$ in the CD. So off I went, upping our 5k CD to 10k and receiving a rate of 3.84% for 15 months. Turns out, that was a pretty good deal, one that I got due to the Platinum relationship with them. The rate would have been 3.60% if we did not have this type of account. After checking on Bankrate, it seems like I got a good rate out, out of those available for 1 year, only one beat the 3.8%.
Maximizing the benefit of what you do anyways
I like having cash in the bank, it makes me feel secure and ready for any emergency that might come our way. I do always move money into savings when we get paid (or have it direct deposited works even better) as to keep that money "separate". As a result of liking to have cash on hand and a home equity loan that we took out a few years ago, I have a high dollar "relationship" with my bank. Turns out this gets us all sorts of small, but nice payouts. No charges for AMT (in or out of network), no charges for the account etc. Like I said, small, but they add up. If you have a similar situation, it might not be a bad idea to see what the bank can do for you, they may surprise you.
Subscribe to:
Posts (Atom)
Posts
