Archive for the ‘personal finance’ Category

30 second video: protect your emergency cash like a chess match queen
May 22, 2008

New shoes, new iMac, & old cash worries:
It’s fun spending cash reserved for emergencies.

Even more than fun – it’s bloody easy!

It’s easy to break discipline & access those dollars meant to protect from rainy days. But since that approach has made my family more vulnerable financially, it’s time to rethink. The short-term benefits of a change are clear.

Emergency cash reserves & chess: create the pawns

After 7.5 years of marriage, these prove true:

  • if we have only one stash of cash, we’ll spend it. It matters not if it’s reserved for emergencies. We’ll spend it on non-urgent desires. Do these desires help us be more effective sometimes? You bet. But occasionally our compulsion runs rampant.
  • it’s time to view emergency reserves like a chess queen and find ways to protect her.
  • thus it’s time to create the ‘chess pawns’ in our personal finance life.

The Pawns are the soul of the game. -Francois Philidor

For the past few months, I’ve tested a new strategy. And it’s producing positive results for Sean and me. The goals are two-fold: truly learn to reserve emergency funds for unforeseen, urgent cases; and next, create a system to enable that habit.

Here’s what we did:

  • set-up (10) online sub-savings accounts via ING Direct, in addition to our main emergency cash reserves account. These are metaphorically ‘chess pawns’ protecting the emergency cash ‘queen’. In the past, we dipped into cash reserves for these reasons; so we decided to designate sub-accounts to ideally prevent future dipping.
  • each month, monies direct to these sub-accounts i.e. medical/dental; clothes/dry cleaning; annual visit to parents; pet care; computer/tech; family gifts; books/education; condo; Alaskan trip for parents by 2012; relocation expenses.
  • each pay cycle, 12% auto-deposits into emergency cash savings with app. 3% funneling to the sub-account buckets. And so far for one business quarter, the emergency bucket has stabilized and steadily increased since we use those other sub-accounts for spending choices. Hooray!
  • Note: at least so far, we don’t necessarily spend monies each month that were allocated to those sub-accounts. Yet if for example my husband needs Ruby on Rails books for his coding library, he has accessible, dedicated funds for that decision.

Pawns, marriage partners, & the psycho-summary:
It’s just another way to budget. But the tangible existence of these ‘pawn’ sub-accounts has helped us stay on track with building emergency cash. And it’s helped to clarify spending priorities.

It’s working too from a psychological perspective aka it’s less stressful in the guilt department. In the past, I’d mentally beat up on my husband and me for dipping into emergency reserves for play or even basic needs like new shoes (…to replace that broken heel). Footnote: guilt drains marital trust and fun for sure!

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my husband, me, & our financial habits make front page of business section in washington post
February 10, 2008

wash post photo jill sean
photo by Lois Raimondo, Washington Post, 2/10/08

What a blast!

It was published today, in the Washington Post’s business section — with our happy mugs below the fold (& as the second photo in the online slideshow).

Talking with Post reporter Nancy Trejos was a comfortable, positive experience. She expressed a lot of interest in different facets of family finance, especially in the face of a slowing economy & home sales.

Thanks Shashi Bellamkonda for connecting Nancy, Sean, & me.

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2007 goals met & missed (plus recalling family mantra for ‘tell the truth!’)
January 7, 2008

[blip.tv ?posts_id=588693&dest=21480]

I heard that as a kid growing up from Oklahoma relatives – said when it was really time to tell the truth! I love it. And for whatever reason, it surmounts my agnosticism & paraphrases the need for honesty to this day.

In that spirit…:

Life balance goals met & missed (2006 vs 2007)

Come to Jesus 2006:

-on dining out: spent $11k (what's that phrase…'ignorance is bliss'?!)

-on cooking for family: avoided learning how

-on retirement savings: had diddle for a plan

-on spending habits: didn't have a clue

-on tax protection: accrued $7k tax bill (paid for via credit card…gulp)

Come to Jesus 2007:

-on dining out: cut that puppy DOWN & roughly ended year spending app. $1.5k

-on cooking for family: learned! We spent app. $5k on groceries this year. And my husband was fantastic in brainstorming ideas & being patient with sometimes a very smoky home (I'd like to think my self-esteem is pretty strong being 37 and admitting this … or just SILLY)

-on retirement savings: met with financial planners & invested 12% income toward a specific plan (as in we now know 'the number' to save for by retirement age). I disagreed with some planners' suggestion on how much to save for. More on that later.

-on spending habits: set an actual plan and more regularly audited habits via Quicken. Frankly I didn't audit them habitually. I attempted tracking via our spending plan which wasn't comprehensive. It's time for me to buck up and do that download account process per Quicken.

-on tax protection: our pre-tax retirement contributions lowered our taxable income; I also worked from home (resigned from high stress management job & made far less money). That fact as pros & cons but it was a great year for re-gaining sanity, renewing/building communities online and off, & gaining a few clients. And the reduced stress enhanced the marriage (ain't that right honey??). NOTE: That $7k tax bill balance decreased some (see below).

The main goal for 2008 is two-fold: to completely pay-off that '06 puke-vomit-ick-tax-bill (paid for via credit card in '07) and to build six months worth of savings.

QUESTION TO YOU:

What life balance/personal finance goal motivates you for 2008? …Any come-to-Jesus moments of your own last year?

HAPPY NEW YEAR! And thanks for your ideas & motivation throughout last year. Your insight and humor strengthened resolve.

MORE FROM:

Get Rich Slowly shares factory worker's story to millionaire retirement. This guy's simple, prudent decisions inspire!

– Playful, honest journey through spending plans at Budgeting Babe;

-Clear, actionable approach for starting 2008 … Chirs Brogan shares (3) words that help him decide or decline next steps.

stock market meets the drakestail & the millionaire mommy next door
November 29, 2007

Good ‘ole Drakestail keeps saying the same phrase throughout the story, most seriously toward the King who owes Drakestail cash.

Quack! Quack! Quack! When shall I get my money back?

That’s how I feel when seeing our investments take dives with the shaky Dow lately. Wise folks emphasize the long view when investing which I intellectually support and understand. But Holy Smokes I’ve really become addicted to torturing myself by looking daily at our accounts’ performance.

And it’s a habit I’VE GOT to break less I go bonkers.

So I laughed out load reading Drakestail over the weekend (…sucker for fairy tales which of note I didn’t become until after age 30). I emotionally, desperately wanted to some how chase the stock market as if it was an actual person – or the would be King being chased by Drakestail – and demand our lost investments back.

Alas the personal finance blogosphere has been AWESOME in rejuvenating and stabilizing my investment outlook. Take the long view sista.

If Drakestail were real and here today, he might say…:

QUACK QUACK QUACK THINK LONG TERM ON YOUR MONEY TRACK!

More From:
The goddess of all things financially independent on how her portfolio continues to thrive despite current market pukeville.

$1million by 2012: dream it, plan it, live it
October 13, 2007

So it’s time to take ownership & aim big.

I remember once being fearless in the face of challenges and dreams — going after them was the fun rush of life. Then on the financial front – I learned how much it costs to retire, to retire with decent health care protection, to raise children and their education, to run one’s own business, and more …. my momentum to achieve sobered-up.

Why is that? Maybe it’s just looking at too much at once -vs- one step at a time. Maybe it’s taking one’s self too seriously. Maybe dreams were too high with resources & energy too low. Is it even possible to have dreams too high?

…a mix of all likely but here’s the sitch: family members need our help. They’d never, ever ask for financial support. But bottom line, their situations are precarious & their means too small to evoke stability on their own. My judgment could be off but after reviewing all up, down, and sideways my husband and I agree taking action helps more than fretting.

And results just don’t fall from the sky. So can we realistically help? yes. Can we preserve our basic needs & personal savings plan too? yes. So is it time for a plan?

Yes and here it is:

$1million by 2012 (that’s $1million in overall paper value vs net).

It makes my stomach tight writing this out, tight as in nervous. But Jonny Goldstein just published his big dream. And his resolve and zeal are contagious.

So here it is:

Summary of Intent:

We are millionaires by 2012. By that year, we will have built our financial wealth to at least $1million through dedicated & united partnership to include: multiple income streams, property ownership in secondary cities, tax control, & wealth protection. Our love of life motivates this intent – and our family, whom we most dearly want to help.

It’s posted at our desks.

…along with the plan, the numbers, the benchmarks, a list of mentors (…need to contact them), & somewhere deep down is something that feels like resolve.

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beckoning budgets & cursing like a turk
September 24, 2007

Yikes it was a tough call — listening to that inner budgetary voice vs the call to wander lust.

For a few weeks, I planned on going with Sean to Istanbul and producing a few live Web shows like Jonny Goldstein does each week.

Yet the truth is, we already savored Hawaii this summer – an opportunity brought about through Sean’s work as well. My expenses for that were out of pocket too, like Istanbul would’ve been.

I’m not sure what tipped the final call not to go…except going to Istanbul felt like it would undermine this year’s financial goals. And the husband doesn’t need the wife going everywhere with ’em, eh?!

Ah but we’ve tested the Web cams for live overseas chats during his trip!

More from:
Get Rich Slowly offers an encouraging post on living debt-free (…a key reason why Istanbul was let go; wow could I sound more pathetic?!);

negotiation tactics & feeling strange: haggling down your credit card rate
September 18, 2007

I called two weeks ago to request our credit card rate be reduced; they complied with a one percentage point reduction.

I’m torn on this whole issue. Because for the sake of true blue ownership — I knew the terms of this card and used it anyway, fully aware. Yet at the same time, my husband and I have been steady customers/consumers for years. I’d like to lean on our long term customer relationship with this company and re-negotiate, again, a better rate.

I’d rather my husband and I not apply for another card since it dings one’s credit report. Our available credit-to-debt ratio is reasonably healthy as well; this single VISA is our sole credit card with a balance (and the only one we utilize in emergencies).

By golly I’m knockin’ on their door again and will relay results.

More from:
CNNMoney just celebrated their 35th year; they released sound wisdom on improving one’s credit score plus included effective tips on negotiating lower credit card rates, assessing your salary is on-par with industry, & claiming tax exemptions to avoid overpayment to the Fed.

cooking with camera samurai: photographer pal teaches how to save $11k
September 14, 2007

We’ll be in the kitchen tonight learning acorn squash & eggplant.

Look out for on-video results next week and more tips on how at-home dining can preserve your bottom line.

Have an awesome weekend.

More from:
Camera Samurai’s fine photo education;
DC Media Makers, a media literacy group specializing in online video; Carl & I are both members.

edelman’s financial planner, part 2: integrity trumps a short-term sale
September 12, 2007

Last week’s Edelman rep owns a completely different philosophy.

After a few hours of reviewing our situation, he offered to draft an official financial plan – an $800 service. But he immediately said directing that $800 toward our debt pay off would be his first recommendation … vs investing it toward his fees at this time.

Impressive.

More from:

  • Edelman’s financial planner post, part 1
  • Code of Ethics per the folks at Certified Financial Planners Board of Standards.

reviewing one’s portfolio, investing money, & the duh factor
September 11, 2007

I meet with the administrator of our retirement plan tomorrow and look forward to nailing down:

  • what our monthly contributions should be to retire age 65 with 75% of current salary;
  • what our monthly contributions should be to retire age 65 with 100% of current salary (omg that seems nuts but heck why not know the number);
  • and the biggie: what our current allocations should be to achieve any or all of above.

I predict we have too many domestic equities (vs having at least some international stocks). But at this point I’m talking out the wazoo.

Considering one’s age & risk tolerance are key, sure. Yet it’s perspective and context that I crave from tomorrow’s discussion (a follow-up to this first meeting).

Beckoning to tomorrow’s planner:

Help us afford more than tooth picks & water during our sunset years!

More to follow post meeting manana.

More from:
Our retirement plan administrator TIAA-CREF