We got news!
Oh my god, I really MUST spend the money in my FSA, I'm running out of time.
I totally forgot to do another monthly review! Look forward to February's review next week.
I now have $3,829.17 in savings for down payment and closing costs.
My Credit Sesame score has not updated yet and is still at 754.
Also my Credit Karma score hasn't changed from 766.
I finally submitted my mortgage application and was approved for up to $130,000 but requested the letter state $100,000.
I spoke to a real estate agent, and have an appointment tomorrow to meet her.
Showing posts with label savings. Show all posts
Showing posts with label savings. Show all posts
Friday, March 2, 2012
Friday, February 10, 2012
One more Friday
So here we are again, time to look at where I stand in relation to where I'm going.
I've still not touched that FSA and really need to get something done with the $358 in there.
I now have $3,754.17 in savings for down payment and closing costs.
My Credit Sesame score has gone down, it is now at 754. I don't know exactly why, but it might have to do with the recent credit card I started a couple months ago. I'm not sure exactly how quickly things like that affect the score, but of the things they list that may affect it. I'm still over 740, which is good. I also had a decent amount of debt on one credit card, which may have also decreased my score, but that has been paid down decently by now.
I just signed up for a new service Credit Karma, and my score listed there is 766 which is great! This score seems similar to the Credit Sesame score, and I think it is pretty close to an official credit score.
I spoke to my first lender yesterday! I haven't filled out any paperwork yet, because I'm waiting to hear back from my friend about how I should do this, but I'm at least on my way!
I've still not touched that FSA and really need to get something done with the $358 in there.
I now have $3,754.17 in savings for down payment and closing costs.
My Credit Sesame score has gone down, it is now at 754. I don't know exactly why, but it might have to do with the recent credit card I started a couple months ago. I'm not sure exactly how quickly things like that affect the score, but of the things they list that may affect it. I'm still over 740, which is good. I also had a decent amount of debt on one credit card, which may have also decreased my score, but that has been paid down decently by now.
I just signed up for a new service Credit Karma, and my score listed there is 766 which is great! This score seems similar to the Credit Sesame score, and I think it is pretty close to an official credit score.
I spoke to my first lender yesterday! I haven't filled out any paperwork yet, because I'm waiting to hear back from my friend about how I should do this, but I'm at least on my way!
Thursday, January 26, 2012
My Financial Past
So, I've alluded to this a little in previous posts, but I figure I should give you guys a rundown on what has brought me to where I am now. I have worked for as long as I can remember. My parents were avid sci-fi fans and we went to conventions to sell merchandise in the dealers rooms, and many times I'd be left in charge of the table. Outside of that, I had a paper route and in my off time I would help my mother collect UPCs and coupons.
We were a very thrifty family. My mother had coupons for everything, she would trade with people through the mail even. We had filing cabinets full of UPCs saved in case there was a future rebate. I was taught at an early age the value of a dollar and how to stretch your money, but it never really sunk in.
At around 10 years old, my family moved down to Georgia. Things worked differently here, kids didn't have paper routes. It wasn't until I was 15 that I really started working again. I would go and help out at the local comic book store in exchange for credit I could use to buy comics with. It was good work, I loved the people and had a great time.
A little while later, when I got my own car, I had bills to pay, so I needed real money. After that I worked a few different jobs; I worked at a few fast food restaurants and even did a stint in retail. After high school, it was time for me to move out on my own, and like every other grown-up, I got credit!
That was a bad idea. Eventually, I was maxed out on all my credit cards and overdrafting my checking account all the time. In the end, at age 21, I was near bankruptcy, although somehow I never quite got there. I defaulted on 3 or 4 different credit cards, and eventually had no credit and only lived off what I made each paycheck.
You'd think I would have learned from that, but it wasn't until 2-3 years ago that I finally changed my life. I found Quickenonline, and it saved me. The feature that let you put in recurring bills and estimate your bank account on any given day was all it took for me to stop overdrafting. I would estimate that over the course of 10 years, I paid at least $9,000 in overdraft fees. Not to mention all the other fees on credit cards for being over the limit and only paying minimum payments.
But my story doesn't end there, because eventually, those defaulted credit cards drop off your credit report. And what happens then? You can get more credit cards. And I did, and I wasn't smart the second time either. I never let the cards go over the limit, but I carried balances, for a long time. And I'm sure I've paid my fair share of interest these past few years. But then something changed, I got to claim a dependent on my taxes, and my return was HUGE! And I paid off my credit cards! And now I barely carry any balance from month to month, and pay off most of my cards each month.
This all goes to show that no matter how bad you are financially now, there's always hope. You just have to be willing to make changes. I could have fixed all my problems sooner, if I had only tried. All it took was being able to estimate my bills and see where all my money was going for me to realize how to fix it. If I had just started keeping a paper ledger so many years ago and actually kept on top of it, I would have been fine. But I was lazy, and didn't do it. But now I check my bank accounts every few days, watch my bills and make sure they're all paid on time, and you can too.
We were a very thrifty family. My mother had coupons for everything, she would trade with people through the mail even. We had filing cabinets full of UPCs saved in case there was a future rebate. I was taught at an early age the value of a dollar and how to stretch your money, but it never really sunk in.
At around 10 years old, my family moved down to Georgia. Things worked differently here, kids didn't have paper routes. It wasn't until I was 15 that I really started working again. I would go and help out at the local comic book store in exchange for credit I could use to buy comics with. It was good work, I loved the people and had a great time.
A little while later, when I got my own car, I had bills to pay, so I needed real money. After that I worked a few different jobs; I worked at a few fast food restaurants and even did a stint in retail. After high school, it was time for me to move out on my own, and like every other grown-up, I got credit!
That was a bad idea. Eventually, I was maxed out on all my credit cards and overdrafting my checking account all the time. In the end, at age 21, I was near bankruptcy, although somehow I never quite got there. I defaulted on 3 or 4 different credit cards, and eventually had no credit and only lived off what I made each paycheck.
You'd think I would have learned from that, but it wasn't until 2-3 years ago that I finally changed my life. I found Quickenonline, and it saved me. The feature that let you put in recurring bills and estimate your bank account on any given day was all it took for me to stop overdrafting. I would estimate that over the course of 10 years, I paid at least $9,000 in overdraft fees. Not to mention all the other fees on credit cards for being over the limit and only paying minimum payments.
But my story doesn't end there, because eventually, those defaulted credit cards drop off your credit report. And what happens then? You can get more credit cards. And I did, and I wasn't smart the second time either. I never let the cards go over the limit, but I carried balances, for a long time. And I'm sure I've paid my fair share of interest these past few years. But then something changed, I got to claim a dependent on my taxes, and my return was HUGE! And I paid off my credit cards! And now I barely carry any balance from month to month, and pay off most of my cards each month.
This all goes to show that no matter how bad you are financially now, there's always hope. You just have to be willing to make changes. I could have fixed all my problems sooner, if I had only tried. All it took was being able to estimate my bills and see where all my money was going for me to realize how to fix it. If I had just started keeping a paper ledger so many years ago and actually kept on top of it, I would have been fine. But I was lazy, and didn't do it. But now I check my bank accounts every few days, watch my bills and make sure they're all paid on time, and you can too.
Wednesday, January 18, 2012
Tax prep for 2012
So, I just filed my taxes yesterday, and already know what my estimated return is going to be. And now it's time to think about this year's taxes. Some people think it might be too early, but it all depends on how you look at taxes. Sure, it's nice to have this big check come to you once a year, it's like free money, right?
No, it's lost money. By getting money back from taxes, you are in essence giving the federal government a free loan. The money would do you more good if you reduce your withholdings and put that extra money into a savings account. As an example, if I were to pay the exact amount I owe in taxes every paycheck instead of the amount I have been, I would be getting at least $100 more per paycheck. If I then take that money and put it into my Roth IRA, I'd be nearly maxing it out each year. Or I could take that money and put it into a vacation fund, and have a few really nice getaways every year. Alternatively, you could take the money and put it into a savings account that you'll never touch except for emergencies, and then you'd be prepared for a lot of life's pitfalls.
Personally, I plan to adjust my withholdings, and max out my Roth IRA contributions. The amount of money I'll be getting from the change won't quite cover the contributions to my retirement fund, but the difference will be minimal and I'm certain I'll be able to handle it.
The one hurdle I have right now is making the actual change. I have to get in contact with human resources at my employer, and so far my luck with that isn't very good.
No, it's lost money. By getting money back from taxes, you are in essence giving the federal government a free loan. The money would do you more good if you reduce your withholdings and put that extra money into a savings account. As an example, if I were to pay the exact amount I owe in taxes every paycheck instead of the amount I have been, I would be getting at least $100 more per paycheck. If I then take that money and put it into my Roth IRA, I'd be nearly maxing it out each year. Or I could take that money and put it into a vacation fund, and have a few really nice getaways every year. Alternatively, you could take the money and put it into a savings account that you'll never touch except for emergencies, and then you'd be prepared for a lot of life's pitfalls.
Personally, I plan to adjust my withholdings, and max out my Roth IRA contributions. The amount of money I'll be getting from the change won't quite cover the contributions to my retirement fund, but the difference will be minimal and I'm certain I'll be able to handle it.
The one hurdle I have right now is making the actual change. I have to get in contact with human resources at my employer, and so far my luck with that isn't very good.
Monday, January 16, 2012
Save it or spend it?
So, after my earlier post, I had a thought about all the money I have set aside for retirement; I might actually be able to take some money out of my 401(k) for the down payment on a house. It really does sound like a good idea, would allow me to buy a better house, without paying a whole lot more per month. So, before I even looked into the requirements and hurdles I'd have to jump through to get the money, I decided instead to look at the impact doing that would have on my retirement.
I popped on over to Bankrate.com's calculators and checked out the difference between how much I'd have saved for retirement if I started with what I have, or $10,000 less (for the down payment). Obviously, all the numbers are fudged a bit, I have no idea how much any of it will be worth, but with the numbers that were already filled in, by having $10,000 less in my retirement account I would end up with over $100,000 less when I retire.
If I adjust the annual rate of return down, it makes an even bigger impact in the percentage of money I lose over time. At half the return rate, it eats away almost half the money I have saved. Now, none of these calculations take into account any ongoing savings, because those numbers won't change one way or another based on this choice.
So, is it worth taking $10,000 out of my 401(k) for the down payment on a house? No, not at all. Putting that extra amount of money down on a house would save me just around $20,000. But keeping it in my retirement account will net me a lot more than that.
I popped on over to Bankrate.com's calculators and checked out the difference between how much I'd have saved for retirement if I started with what I have, or $10,000 less (for the down payment). Obviously, all the numbers are fudged a bit, I have no idea how much any of it will be worth, but with the numbers that were already filled in, by having $10,000 less in my retirement account I would end up with over $100,000 less when I retire.
If I adjust the annual rate of return down, it makes an even bigger impact in the percentage of money I lose over time. At half the return rate, it eats away almost half the money I have saved. Now, none of these calculations take into account any ongoing savings, because those numbers won't change one way or another based on this choice.
So, is it worth taking $10,000 out of my 401(k) for the down payment on a house? No, not at all. Putting that extra amount of money down on a house would save me just around $20,000. But keeping it in my retirement account will net me a lot more than that.
Saving for the future
So, here I am, 33 years old and thinking about retirement. You might think I'm too young to be thinking about retirement, and you couldn't be more wrong. Everyone, no matter how young should be working towards a comfortable retirement. ING has this cool tool that lets you enter a bit of information and compare your retirement savings against other people based on your age, gender, income, etc. So, I put in my information and come back with just over 1,000 people like me who filled out the form, and compared to them, I'm doing great. On average, people like me have barely socked away $10k for retirement, and I'm over double that amount.
To be honest, all the money I have set aside for retirement has been within the past year. The first, best, most important thing you can do to save for your retirement is start early. If I had started saving for retirement when I was first offered a 401(k) I would have so much more money waiting for me. A great article I found at Clark Howard's site compares what it takes to retire a millionaire. The later you start, the more you have to save every month to make up for it. If you save $2000 a year (that's only $167 a month) for 7 years starting at age 15, you will have over $1 million by the time you reach 65. If you keep saving for the full 50 years starting at 15, you will have over $2 million!
According to the site I need to save between $5,000 and $10,000 a year to be a millionaire when I want to retire. How in the world will I do that? Well, I haven't completely figured that out yet, but to start, if your company has a 401(k), use it! Max that sucker out as much as you can for your employer match (if there is one). I had the opportunity to do that many years ago when I was much younger and stupid with money. I chose not to contribute and in doing so wasted free money. If your employer offers a match on funds invested, even if it's only 50% match of up to 6% base salary, and you don't take full advantage of it, you're basically saying No to a raise of 3%!
Beyond your employer's 401(k) you have other investment options. Some are more complicated than others, and some require more money to start. Clark's site has a good list of investment options broken down by how much money you need to get started.
I chose to start a Roth IRA. I knew for a while that was what I wanted to do for my personal retirement account, the tax benefits are better than other investment options, and I liked the fact that I'd be using post-tax dollars to invest. I chose the Vanguard STAR because from the research I did, it appeared to do well historically, and I had heard good things about the fund.
The problem was, I didn't have $1,000 to start the fund, and I felt overwhelmed trying to save up that much money. It actually took me a couple years to finally start the fund after I had decided I was going to. Eventually, I ended up taking the money from my tax returns one year and used those to begin. I could have chosen a fund that required less money to start, but I felt that the Vanguard STAR was the best choice for me.
After getting the fund started, the rest was easy, I have the fund automatically taking money out every paycheck, and can simply increase that over time until I reach the maximum amount of money I can invest per year.
Everyone has to make their own decisions when it comes to retirement, but I urge anyone who isn't doing anything about it to start right away. The sooner you start saving, the more money you'll have!
To be honest, all the money I have set aside for retirement has been within the past year. The first, best, most important thing you can do to save for your retirement is start early. If I had started saving for retirement when I was first offered a 401(k) I would have so much more money waiting for me. A great article I found at Clark Howard's site compares what it takes to retire a millionaire. The later you start, the more you have to save every month to make up for it. If you save $2000 a year (that's only $167 a month) for 7 years starting at age 15, you will have over $1 million by the time you reach 65. If you keep saving for the full 50 years starting at 15, you will have over $2 million!
According to the site I need to save between $5,000 and $10,000 a year to be a millionaire when I want to retire. How in the world will I do that? Well, I haven't completely figured that out yet, but to start, if your company has a 401(k), use it! Max that sucker out as much as you can for your employer match (if there is one). I had the opportunity to do that many years ago when I was much younger and stupid with money. I chose not to contribute and in doing so wasted free money. If your employer offers a match on funds invested, even if it's only 50% match of up to 6% base salary, and you don't take full advantage of it, you're basically saying No to a raise of 3%!
Beyond your employer's 401(k) you have other investment options. Some are more complicated than others, and some require more money to start. Clark's site has a good list of investment options broken down by how much money you need to get started.
I chose to start a Roth IRA. I knew for a while that was what I wanted to do for my personal retirement account, the tax benefits are better than other investment options, and I liked the fact that I'd be using post-tax dollars to invest. I chose the Vanguard STAR because from the research I did, it appeared to do well historically, and I had heard good things about the fund.
The problem was, I didn't have $1,000 to start the fund, and I felt overwhelmed trying to save up that much money. It actually took me a couple years to finally start the fund after I had decided I was going to. Eventually, I ended up taking the money from my tax returns one year and used those to begin. I could have chosen a fund that required less money to start, but I felt that the Vanguard STAR was the best choice for me.
After getting the fund started, the rest was easy, I have the fund automatically taking money out every paycheck, and can simply increase that over time until I reach the maximum amount of money I can invest per year.
Everyone has to make their own decisions when it comes to retirement, but I urge anyone who isn't doing anything about it to start right away. The sooner you start saving, the more money you'll have!
Friday, January 13, 2012
How do I save money?
Now, this topic could be read in a couple of different ways, so I'll try to cover savings, money you stash away for a rainy day or specific purposed. I'll cover ways to actually save money day-to-day in another topic.
So, how do you start saving? It's really hard to do when you live paycheck to paycheck. By the time you get your paycheck, almost every dime from the last one is gone. There doesn't seem to be any wiggle room, how can you save money you don't have? Well, the best way is to never have the money to begin with. Do you really think you'll notice a huge difference if you get $25 less from your paycheck? I doubt it, because I don't. So, when you get paid, set aside $25 in a savings account.
If you get your checks direct deposited, it's even easier, because all you have to do is tell your employer to deposit the $25 in one account and the rest in another, you never see or touch it. Personally, I have 4 different savings account, and I sock away $25-50 into each one of those accounts each paycheck.
The next problem is, how do you not spend the money? You have this ever-increasing balance in a checking account, and you might get the urge to spend it, but it's really easy to keep from doing that. Make sure your savings account is hard to access. Using an online account does just that. You can still get money out when you need it but it takes a few days and some planning, so you'll be less inclined to move the money around.
One great online-only bank I highly recommend is INGDirect. If you're interested, I would gladly send you a referral to them, which will net you an easy $25 just for starting an account, just drop me a line and I'll get you a link.
Please don't forget to check out the free online book linked to the right, "You Need a Budget (the book)" where you'll get even more ideas and ways to start saving money.
So, how do you start saving? It's really hard to do when you live paycheck to paycheck. By the time you get your paycheck, almost every dime from the last one is gone. There doesn't seem to be any wiggle room, how can you save money you don't have? Well, the best way is to never have the money to begin with. Do you really think you'll notice a huge difference if you get $25 less from your paycheck? I doubt it, because I don't. So, when you get paid, set aside $25 in a savings account.
If you get your checks direct deposited, it's even easier, because all you have to do is tell your employer to deposit the $25 in one account and the rest in another, you never see or touch it. Personally, I have 4 different savings account, and I sock away $25-50 into each one of those accounts each paycheck.
The next problem is, how do you not spend the money? You have this ever-increasing balance in a checking account, and you might get the urge to spend it, but it's really easy to keep from doing that. Make sure your savings account is hard to access. Using an online account does just that. You can still get money out when you need it but it takes a few days and some planning, so you'll be less inclined to move the money around.
One great online-only bank I highly recommend is INGDirect. If you're interested, I would gladly send you a referral to them, which will net you an easy $25 just for starting an account, just drop me a line and I'll get you a link.
Please don't forget to check out the free online book linked to the right, "You Need a Budget (the book)" where you'll get even more ideas and ways to start saving money.
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