Category — Personal Finance

I created a budget on paper that seemed reasonable, but I found it so hard to stay on track without removing some of the hanging out with friends portion. Basically, I created a budget of $700 for Food/Groceries/Going Out in July 2010. A figure for NYC that can easily be diminished in a few days. I went to $1,006 for the month… I also added some debt with credit cards, even though I made a $1,000 payment to one of my cards. I went over my budget, even though I was tracking it in Mint.com and via an app on my phone by making the conscious choice to actually go out and enjoy even though I knew I shouldn’t.
This has to stop.
I can’t afford to keep doing this as it will cut into my long term savings goals. I’m sure I can find other ways to enjoy life without having to constantly go out. So this month I promise to make lunch more often at home and drink only 1 drink while out. No more buying a round of drinks for people and such. We’ll see how this goes, as I’ve already gone out one night to celebrate moving into my new apartment and spent a bunch of money. I view this however as money that needed to be spent to thank the people that helped me move. My tracking mechanism for the month will be how much my networth goes up back on track and controlling the food and going out category for $700 dollars. Given a four week period for the month that amounts to $175/week in spending in all of those categories.
So I will write at the end of every 7 day period the amount of money that I’ve spent in the category and how much I have left. Hopefully this closer public tracking will force me to change my methods. I’m already in trouble for the first week, so I hope I can control it the second week. Here it goes..

Having a steady job certainly is a good thing, especially in this economy. However, it never hurts if you take on an extra project on the side if it will help bring in some extra money that you didn’t have before!
Easier said than done, but the opportunities do exist to not only earn money, but develop new skills.
For example, I took on a web design project that focused entirely in Flash. I’ve never really programmed in Flash, but it was always something that I wanted to do. This project allowed me to learn more about Flash, while still earning a bit of money. Grant it, the money I made, $500, was not even equivalent to earning minimum wage per hour spent, but it provided an incentive for me to learn while earning money at the same time. This has also helped build exposure to future clients.
I would definitely encourage anyone to look around for opportunities to apply their skills. It could be as simple as enjoying the outdoors and giving hiking tours on weekends, or mowing a few lawns for neighbors that don’t have the time!

Well I am a week into getting a budget together. This part involves just recording everything that you spend your money on. I started with a small notebook, but that was  impractical as I didn’t have it with me always. Instead, I created a memo entry on my BlackBerry and I keep track that way. Each day I enter more information starting with the date then underneath all of the expenses for that day. Something like this:
2/1
3 – bfst
10 – lunch
…
The hard part has been to actually write down the expense. It takes some getting used to write it down, but once you get a hang of it, it becomes almost automatic.
I will update this post with the first weeks numbers.

I’ve seen quite a few blogs out there that have set SMART goals, meaning Specific, Measurable, Attainable, Realistic, and Time bound. There are different variations of what it means, but what it comes down to is creating goals that you can ultimately reach and helping you reach them by answering some crucial questions. This is similar to how I setup my 50, 30, 20 split of my income. Once it was set, it was easy to achieve because I knew how much to focus on them. I also put by each goal whether or not I am automating the process. I feel that is very important, it makes not seeing the money in the account much easier. I found this quote by Lord Kelvin, a famous scientist, to be quite useful – “If you can not measure it, you can not improve it.” So here we go..

My goals for 2010 (starting on Feb 1st 2010)

1.) Establish a $12,000 emergency fund by December 2010. Right now I’m at $4,300 and with bi-weekly $250 contributions I can reach this goal. (Automated)
Specific – Yes, an exact amount.
Measurable – Yes.
Attainable – Yes. I laid out the entire plan.
Realistic – Yes. I can save that much per paycheck.
Timebound – Yes. I set a deadline of Dec 2010.

2.) No Credit Card Debt
Specific – Yes. Currently I managed to payoff all of my CC debt with the exception of a self payment for previous.
Measurable – Yes. Pay off every month.
Attainable – Yes. Spend within my means and budget.
Realistic – Yes. I will always check for my balances and maintain to budget.
Timebound – Yes.. always by the end of the month “zero” out balances.

3.) Contribute 6% of my income to 401k Retirement Accounts (Automated)
Specific – Yes.
Measurable – Yes.
Attainable – Yes.
Realistic – Yes.
Timebound – Yes.

4.) Save $4,800 towards the eventual downpayment for an apartment/house (5 – 7 year goal) (Automated)
Specific – Yes. ($200/paycheck)
Measurable – Yes.
Attainable – Yes. Spend within my means and budget.
Realistic – Yes, at least according to my budget.
Timebound – Yes, 1 year then revisit. (this number might change according to how I can budget these numbers further.)

5.) Enjoy life and build some memories by taking some trips (total planned expenditure $2,000)
Specific – Yes.
Measurable – Yes.
Attainable – Yes. Budgeted, also “if” I do get a bonus this month then I will use a portion towards this goal. well no bonus.. guess I’ll have to find another way.
Realistic – Yes. I will always check for my balances and maintain to budget.
Timebound – Yes. By end of the year allocate $2,000 to a trip. *I already spent $1,000 of this money on a recent trip.*

6.) Create a budget, trim where necessary, and follow it starting April.
Specific – Yes.
Measurable – Yes. I will track my expenses thoroughly for the months of February and March to figure out the best allocation of money and where to cut back.
Attainable – Yes. As long as I always write down my cash expenses. Otherwise the rest of the purchases will be categorized on Mint.com
Realistic – Yes.
Timebound – Yes. By the end of March I should have a clearer view of my budget.

Anyway, these are my financial goals for 2010. I’m sure I’ll add some more goals as we move through the year, but I think it’s a good start.

What are your goals for 2010?

I just transferred all my savings to Ally Bank (formerly named GMAC bank). They offered a great rate I couldn’t resist (1.78%) at the current time 10-10-09 and daily compounding! How great is that? My money and interest gets compounded daily so I earn more. Good bye ING Direct with your yet again lowered rate to 1.29%. Now I have an FDIC backed bank that offers me the same, if not better, service for greater benefits. I can still do my automatic transfers for my emergency savings and regular savings, and I still have my multiple accounts. Here’s to daily compounding

Well, I think I can honestly say that when I make progress I always seem to sabotage myself and lose that lead. I start an exercise program, see results, then stop exercising.. It’s like I know that I can’t get to that finish line or it won’t be fun.
Same with personal finances. It seems like the more I save the more I spend on random things. I need to control this. So I implemented a plan that I’ve seen across the PF blogosphere. The 50-30-20 rule.

• 50 % – Essential Needs (rent/mortgage, food, cable.. etc)
• 30 % – Fun (non-essentials) (gym, eating out, vacations, books)
• 20 % – Savings (emergency fund and for the future)

I calculated this split after taxes and my contributions to my 401k, which I am happy to say I upped to 7%

Anyways, the real good part of this, I stopped my sabotage!

How you say? Well I just automated everything. I automatically deduct a set amount after each paycheck equal to the 20 % necessary for savings. ING made this quite easy. I then live on the rest.

Up next is the dreaded budget.. stay tuned

Since recently moving to a new place I’ve let go of some of my financial budgeting. Basically, before I was able to do easily stay away from temptations (mostly going out with friends), and the move created an environment that tempts me more and more.

I cannot stand it that I’ve done what I’ve done and I have to get things back in order. It all starts with tracking my expenses on a day by day basis to establish how I must adjust my budget to my new environment. On a weekly basis I will post the review of all expenses and then create a final end of month expense review. Hopefully at this time I can look back and see exactly where I have fix things. Most certainly that would be the going out portion, but it can be surprising what expenses you will find when you take a closer look.

Last time I did this exercise, I found out my largest expenditure was Target of all places.