rainbowphoenix in Tennessee is doing 36 things including…

Save money


 

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rainbowphoenix has written 9 entries about this goal

about 1 months of bills in savings now

As of tomorrow’s deposit, I have exceeded the savings goal I had when I listed this goal. With that deposit, I am only about 63% done with my current savings goal. The idea of savings money and of paying off debt has stopped being two seperate concepts but two parts of my overall financial management plan. As such, I’m going to end this piece of compartmentalization by marking this goal complete.

How did I reach my goal? I created a line for emergency savings in my budget. It wasn’t much but it was enough to have me reach my annual goal by year’s end. I also deposited money that I found here and there—lose chain-n-such, on occassion. The key is I didn’t spend from the pot I’ve been building. I have my first goal for emergency savings in the bank. Yea!



More from Ramsey- investments

Saving should not last for more than 5 years. After that 5th year, it becomes an investment. Investments should have at least a 6% interest rate to account for inflation. Inflation averages 4-4.5% each year.

The more liquid (easier to access the cash), the less payoff. Higher interest rate accounts are less liquid. Money market accounts, etc. are good for emergency funds.

CDs are not a good long-term option. Fine for short-term.

Single stocks—dangerous. Might get 7% increase over time but stock market averages 12%. Diversity, please.

Bonds- company in debt to you. Return comes as interest rates fluctuate. Few people do well with one large bond. Again, diversify.

Mutual funds- investors pool their money to invest. Someone else (a professional) manages it.

I’m in the midst of this CD but I have to leave. lata.



Dave Ramsey

My sister is a big fan of Dave Ramsey and loaned me his CDs a few months ago for me to listen. I’m finally doing it. He’s a good speaker. I’m not sure that I’m learning a lot from him, but I’m engaged. I think the envelope system is the most exciting/important for me thing he’s said and I learned that from my job this past year so…. He has 7 baby steps to financial independence.

Step 1: Put 1,000 into an emergency fund ($500 if income is under 20,000 annually).

Step 2: Pay off all debt utilizing the “debt snowball” (except the house).

So, I’m currently saving less than I should so I can pay more on debt. So, I’m flipping his order of things. He does make sense. If something comes up and you don’t have a significant sum saved (1,000), then you’re likely to use credit cards yet again. I recently faced that situation but luckily only spent $29 on my credit card. If my income taxes weren’t here, I would have probably put $329 on credit. I don’t really want to use my emergency fund that I’m building to pay for transportation stuff. I want to build it so when I’m out on my own, I’ll have it to pay for housing, utilities, etc. if needed. I have a seperate savings fund for car needs (which I just wiped out due to a car emergency). I don’t doubt that Dave is right on this; I just don’t want to switch my game plan 6 months into the year.

Snowball—I considered that but decided against it. Instead, I looked at how much I needed to pay each company in order to pay them off in 2 years. I figure eliminating cards wouldn’t matter to me. I’m reconsidering that. Somehow, I’ve been paying citibank more than my other cards and should be done with them by this time next year. Every few months, I seem to be paying them about $10 more and someone else about $10 less. I am quite excited about watching their balance fall. Now, I’m thinking of seriously switching to a 1 year interest free card as I anticipate saving about $275 that way. I’m thinking of not transferring the citi amount so I can feel the thrill of paying them off. If I don’t move that balance, I’ll pay bout $90 in interest on that card this year. I’ll save $70 by transferring but lose the thrill of paying them off. I don’t know. Maybe that doesn’t matter much. $275 is less than 2 months worth of payments. I don’t know; I don’t know. Dave isn’t a fan of transfers. I called 2 of my 3 credit card companies last night and both of them refuse to lower my interest rate because I’m less than 5% above prime. Anyhow, back to Dave….

Step 3: Put 3-6 months worth of expenses into savings

Step 4: Invest 15% of household income into Roth IRAs and pre-tax retirement

Step 5: College Funding

Step 6: Pay off home early

Step 7: Build wealth! (mutual funds/real estate)

I don’t think that was my plan. Right now, it looks more like I’m:

1) Paying off debt. Saving some money but debt focused.

2) Putting 1,000 into emergency

3) Investing money while still saving some. I need to learn more about investment options to determine what I want to do. I’m thinking (1) bonds, (2) CD—maybe getting mom to lock money with me, (3 & 4) mutual fund and some kind of stock retirement thing, (5) very focused on retirement savings programs, IRAs-n-such

college funding is unknown. I have no kids but would like to do something to help make sure my nieces & nephews are taken care of, at least the youngest 3.

house early—I don’t have one. Still, Ramsey convinced me that a 15 year mortgage is the way to go. It makes a lot of sense, like a repayment plan of longer than 10 years made no sense for my student loan (or maybe it was a 10 year option with less being paid up front. still.)

build wealth—I thought that was happening through step 4.

I haven’t finished listening to his CDs. This is just what I’ve gotten so far. Now, I need to decide whether or not I’m switching to a no interest for 12 months rate.



#10

Online surveys. Not a lot of money but every little bit counts? By year’s end, it can be enough to do one of those extras I’d like to do or buy.



msn article

Ways I can make extra money:
1) Sell things online. I’ll probably try to unload some books once I have them cleaned out.

2) Babysit. I haven’t done that in a while. The idea seems odd, something for which I am now too old. But maybe. I’m not sure how to put the word out that I’m interested.

3) Housesit. This is fun. I’ve only done it twice but would like to do it more. Again, there’s the question of how to get into “the market.”

4) Mystery shop. The msn article listed a place to sign up for free for real.

5) Medical research? The author said she’s been paid to let people draw her blood-n-such. She doesn’t test medications. It’d be nice to hear more about these kinds of opportunities.

6) Sell plasma. They rejected me the last 2 times I tried (few years back). I’m hesitant to try again and do want to donate blood before I try.

7) Sell blood. I can do it by the University. It worked the last time I tried.

8)Sell photographs. Maybe. It’ll take an up front investment to do it and I don’t know that I have much worth purchasing. But maybe I can sit down and consider this some day.

9) PRN employment. I don’t like where I am and don’t want to commit to a weekly schedule doing something else. I guess there’s another option: see who else hired PRN or seasonally. Maybe I can find something I like.

I’d like to have a 10th way but I guess this is a start. One day, I’ll consider how much money I can make doing these things and set goals on when to start trying each method. My current job pays about $16 per hour. My ideal would be 6 night per month= $384 per month. Annually, that’s an additional 4608. It seems to me that I had a $3,000/year goal, which translates to $250 per month. So, figuring out how to make $200-$300 more per month might help me let go of this burden I’m not sure I want to bare.

Oh. Savings. I guess I should have types this somewhere else. It’s probably more related to my budgeting goals than purely a savings goal but I need more to pay off more debt and take care of more needs/wants to save more. It all goes hand in hand.



emergency & general

I was thinking about my savings goal earlier today. My long-term goal is to save 6 months worth of my expenses for emergencies. I’ve basically broken that into a 6 year plan. If everything I save is for emergencies, I’m looking at not being able to use it for 4-5 years. So, I’m reshaping my goal. I still want to save about a month’s worth of expenses this year, but I’m going to reach that before December 2007. Instead of “just going on” once that goal is reached, my additional savings money will be for needs (e.g., my bed broke a week ago and I’ve been questioning how to afford a new one). It seems to me that lots of people save money but it’s not necessarily for emergencies. This is my compromise.

I don’t really expect it to take me 6 years to save 6 months worth of expenses. I just said that because my budget only allows for 1 month’s worth of savings this year. I save about 5% of my income. Experts recommend 10%. Maybe my contribution can go up with time. The thing is, my expenses will too. Ah well. We’ll see what happens.



i want more money

On the way to work this morning, I was thinking about how I don’t have/make/own enough money to buy a car next year as I need to. That disturbs me. To make me feel better, I like to think about how I’ll have $2500 saved by age 30 (5 years). Saved for emergencies. I should clarify. No clue how much will actually be in the bank. Right now, $2500 will cover me for 5 months. By then, maybe I can stay afloat for 3 even if I become unemployed. One day, I will have 6 months worth of living expenses saved for emergencies, yes I will.

$2500 isn’t much. I can’t dread on that either.

But I won’t have credit card debt by then. I reason that I save less now to pay more now and pay nothing then.

I just get nervous and antsy sometime. Like now.



Untitled

I put another $80 into savings. I am now officially making monthly deposits. Oh my!



39% there

I’ve included savings in my budget since January. I just haven’t deposited the money into my savings account. Today, I looked at my old budgeting sheets to see how much money I’ve put aside. I also counted coins that was stored in baggies to see how much they totaled. The end result is bagged and waiting for my mom to deposit into my account next week (the bank is in her building & I’d have to go to work late or leave early in order to make the deposit myself). I had more than I expected. Here it is, only March, and I’m already at 39% of my goal for the year. Of course, my budget only accounts for 72%of what I want to save. The rest is to come from things like my big push up front and money from my second job. I should be able to hold about 88% of what’s left from my day job’s check. Anyhow, yea to me for getting back on track with saving. And a bigger yea because I’m starting it with much more of a bang than I expected.



 

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