Friday, December 21, 2007

Financial Goals for 2008

Its nearing the end of the year and its time for me to finalize my goals for the coming year.

So far I've narrowed down the list of goals to the following:
1. Have a Net Worth of $105,000*
2. Fully Fund my 401k and Roth IRA
3. Diversify Roth IRA
4. Get Next Promotion
5. Get Ready to Buy a House ???

My Action plans are:
1. Have Net Worth of $105,000 - My net worth is currently slightly above $85k, to reach the $105k I plan to fully fund my 401k ($15,500), fully fund my Roth IRA ($4,000), and save $1000 "cash". To save the $1000 I plan to set aside $100 every month with the exception of November and December. Those months I'll use the $100 to go towards my gift shopping budget.

2. Fully Fund my 401k and Roth IRA - To continue to fully fund my 401k I will leave my automatic payroll deduction contribution at 27%. Since I just opened my Roth IRA this year with money saved outside of the account I will need to establish an electronic transfer on a regular basis. I plan to contribute $330 per month towards my Roth IRA but will need to investigate Vanguard to find the best way to contribute to minimize fees (ie. contribute $990 quarterly, $165 bi-weekly, etc.). I plan to have this investigation completed by January 31st.

3. Diversify Roth IRA - This one will require some more investigation on my part. I know the minimum transaction required to start a different fund in vanguard is $3,000. So I will need what the best method to procure the other fund (ie. sell some of my S&P 500 fund and invest in the other or lump sum contribution). I plan to have this work complete by February 29th.

4. Get Promotion - This one takes a little more finesse. At this point I feel like I was hired in at a lower level than my experience and work load would normally bring and most of the reason for this is that I only recently graduated college; however I been working for my company for a little over 5 years. I went along with this because I was assured I would advance quickly. To ensure I get a promotion before the end of the year I need to: 1. Continue to do an "amazing" job on every task 2. List my responsibilities and compare to established tables for positions 3. Talk to my boss about the discrepancy I find in responsibilities and position and request to know the steps I need to take to make it to the next level (additional tasks to take on, people to talk to etc). 4. Continue to Ace my Performance Review and take the opportunities that are offered to me

5. Get Ready to Buy a House - This one I'm a little unsure of. A couple of years I ago I couldn't wait to buy my first house, I saw it as the key to success, but now I'm not so sure. While I feel I have more than a sufficient down payment to put down on a house I'm not sure if I'm ready for the additional upkeep on a house, plus there's the added monthly costs I would incur. So for this goal I'm going to leave it open and allow myself to investigate more by researching my options to make a sound financial decision.

*I calculate my net worth by the value of my assets in banks/brokerages. I do not include the value of my car or personal possessions. I also do not figure in debt because I have none other than a credit card I pay the full balance monthly, if at some point I develop debt/liabilities I will include that in my net worth calculations.

Thursday, December 20, 2007

Finances and Family

Just read a very interesting post called My mother-in-law thinks we're cheap! and it hit home for me. My grandma used to guilt my mom into buying her expensive presents that my mom could ill afford. And the worst part of the whole situation was my grandmother was not living a life of poverty in fact she could afford a lot more luxuries than my mom, since grandma had my grandfather's extremely large estate, pension, social security while my mom is a single parent school teacher with two children still at home to raise.

Come to think of it none of my family are good with finances. I know I certainly didn't get my financial beliefs - like no debt - from their example. I do think my fear of debt is motivated by my fear of having the financial life they live.

All of the women in my family are poor money managers, which used to scare the living day lights out of me (and still does at times).

My mom's pretty much been in debt her entire adult life. This year for the first time in 30 years she was breifly in the black and not in the red hole known as credit card dept. This brief reprieve from debt was because my grandmother passed away and my mom received some life insurance benefits. My mom and I talked long and hard about her getting out of debt but after only two months my mom was back in debt (granted not as much, yet). My mom realizes she's got a problem with managing her money and that I'm relatively financially adept so she comes to me frequently for help. Several times over the years I help her establish a budget, help her track her finances, help her develop a get out of debt plan but with in a matter of days she gets frustrated at having to keep up with it the plan of action and quits.

My grandma was similarly heavily in credit card debt, however she never fully admitted a problem.

My granny (my dad's mom) is also in debt, but this only came to light about four months ago when my CPA uncle was helping her to consolidate some retirement saving accounts. The embarrassment of this coming out to the family has motivated my granny to get out of debt. She now lives on a strict budget. So I guess there's hope yet for me that I won't turn out financially like my female relatives.

Seeing my loved ones struggle in debt really does motivate me to continue saving, stick to a budget, and always ask myself before purchasing: a) Does this purchase fit in my budget and do I have the money right now to purchase it? b) Do I really need this thing-a-ma-bob and do I have the room for it? c) Will this purchase bring me satisfaction 2 years from now or would knowing I have money in the bank make me happier? If any of my answers to those three question are "no" then its not meant for me to purchase.

Wednesday, December 19, 2007

Why "Savy"

So I was getting ready to add my post for the day when I realized I missed spelled my blog name and corresponding URL. I'm thinking oh great...this whole new idea of blogging is really going well...can't even get the correct URL. (said with only a touch of sarcasm in my voice)

I wish I had some clear come back as to my real motivations for calling it Saving "Savy" like it was intentional to make my blog specific, especially since I just realize someone else has a blog Saving "Savvy" or that I did it on purpose because I was saving that extra "v". Really it just further goes to prove that I'm an engineer and not an English major, but I try. So as you read through my blog please consider this is one *smart* chica, but no English major. :)

PS If you do know your grammar and spelling better than I do please feel free to correct any errors you see.

Tuesday, December 18, 2007

Roth IRA

I am so proud of myself today, I finally opened a Roth IRA. I had been thinking about doing this for about 8 months, even have been saving for it but the idea of actually opening it and then choosing the mutual funds was so overwhelming to me. For some reason today it dawned on me that the end of the year is nearing and I realized if I didn't do it this week I wouldn't contribute for 2007 (yes I know I can contribute per the IRS rules until my tax bill is due - April 15). This realization propelled me to action and so I go online and you know what - it took no time. I probably spent all of 10 minutes on line and bamm I was done! It's amazing what you'll put off that really isn't a big deal.

In case you're curious about the Roth IRA, I opened it at Vanguard primarily because my company's 401k plan is with Vanguard and it make it easier on me to have it all in one location. I'm a firm believe that the key to success is to keep it simple. On top of keeping it "all in the family" I also opted for Vanguard because of their no load fees and no account management fees (provided you opt for the web based mailing in lieu of paper mailers) plus I like Vanguard's 500 Index Fund which is tied to the S&P 500. All in all in about 10 minutes worth of time I successfully completed a task I'd been putting off for months.

Monday, December 17, 2007

Who Is Future Millionaire

I thought I'd take a few minutes and introduce myself.

About a year ago I graduated college. On the financial side, I put myself through school working full time one semester and then taking classes and working part time the next, yep it took me a little longer to graduate but I gained amazing experience in my industry while not going into debt to graduate.

I work as a Project Engineer for the same large construction company I worked for while in college. (Yep that's me at work in the picture, I'm thinking with all my safety gear on I'll be hard to recognize). In my spare time I enjoy volunteering weekly at our local food bank, running (completed my first half marathon in March and am doing my first full marathon this coming March), spending time with my family and friends, reading (fiction and finance), and soon it looks like I'll be adding blogging to my list.

I've always been money conscious but it wasn't until recently that I really started getting into "aggressively" saving. The motivation to start getting more serious about my money was gained through reading financial blogs and starting to track every cent that came in and went out by using Wesabe which is like a cross between Money or Quicken and Facebook. I have to say its one of the coolest things out there and IMHO it sure beets Money or Quicken because you can access it from any computer.

My biggest reason for getting more actively involved with my finances is that I realized one of the thing I want out of life is financial independence. Nope, don’t want to quit my day job, after all I haven't been doing it all that long and get immense personally satisfaction from my job, rather I want to have the security and peace of mind to not live pay check to pay check and when I’m eventually ready to retire have the ability to do so in the lifestyle I've become accustomed to. I also think I'd like to have the ability (i.e. enough money saved) to retire early if I desire, since one of my passions is volunteer work I'd love to have the opportunity to do that full time and early retirement would allow that, but alas I'm getting ahead of myself.

Well that's the 5 cent tour of my life, I hope you enjoy and are interested enough to read this blog.

Beginning of a New Era - the Start of Saving Savy

Today is a new day. Today's the day I start my financial blog.

I'm really excited about it. Over the past several months I've become a devout financial blog reader and was inspired by some of my favorites to start tracking my financial goals via a blog. Check out my favorites on the left hand side of the page.

I hope you enjoy my blog. One of the biggest reason's I started it was because I really enjoyed the comments and feedback from reads to the bloggers of sites I follow and wanted to have that same type of interaction, so with that said, please make my day and leave me comments.

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