Well, it's been a while since I've sat down to do a blog entry. I have no financial tips in this blog--just some thoughts and musings.
It appears that the last time that I wrote was Sept. 11 of 2011- and here I am five months later writing another entry. I think about the time between my last posting and now and I think to myself what has happened. Well, nothing too much in life has changed. Arizona is still nice in the winters and I'm enjoying the mild weather. I am still working at the same firm and I am still trying to pin down a passion. So...as mentioned, not too much has changed... =) If only navigating life were as easy as navigating through school. I wish life had benchmarks that could tell me if I'm headed in the right direction towards finding career fulfillment.
I had to go to jury duty today. My very first time! The experience was long and interesting. It was hours upon hours of sitting in a room, but I'm glad that I served my civic duty. Hopefully I won't be called again while I am here in Arizona. It really is a lot of sitting around as people had warned me before. I was going to use the time to be productive---plan things, but I went to bed so late last night that I was super tired and just sat and listened to music.
Ok- this is my boring entry- but it's just putting thoughts to paper. At least I have done that this time. :)
Thursday, February 9, 2012
Sunday, September 11, 2011
Best things in life are free...
Today is a day of remembrance of an incredibly tragic day in American history. When the September 11th attacks happened, I was a sophomore in high school and I remember sitting in my AP Biology class discussing with classmates the events of what was happening on the East Coast. I remember the sense of incredible sadness and disbelief I felt in knowing that people could perpetrate such an act. On this tenth anniversary, I feel so blessed to be an American and to live in the best country in the world.
In thinking about what to write for this blog entry, I decided to reflect on the quote that the "best things in life are free." Sometimes, it's easy to feel "poor" because we have bills, student loans, and other obligations to pay. Because of this, we may lose sight of the riches that we have in our life including: health, family, and friends--these are invaluable and irreplaceable in my opinion. We may not always have the largest bank account, but wealth can be measured in multiple different ways. With that in mind, I decided to share some of my favorite free things or low-cost things in life:
1) Public Library/Used Book Store: Anyone that knows me knows that I'm a huge nerd. I love to read and I am a big fan of the public library. My parents instilled an appreciation of education and learning in me because they once told me, "You can have all the riches in the world, but all of that can be taken away. The things that cannot be taken away is your mind and your education." Growing up, my family didn't have cable and I read a lot of books. I remember going to library since I was a little girl and getting to pick out any book that I wanted to read. It was always so exciting. I remember getting my first library card when I was 7 and signing the back of it with my newly learned cursive skills. I love that the library offers books, magazines, and DVDs available for checking out. I really enjoy sitting and flipping through all the issues of a certain magazine or even flipping through magazines that I would never spend money on like the tabloids (hahah..yes, I admit..some tabloids are my guilty pleasure) And most library systems are connected in which if your local library doesn't offer a book, you can request a book from another branch. Reading is a great past-time and I don't feel the need to buy a book just to read it once. If I end up loving a book and I need my own copy, I prefer a used bookstore or buying a used copy on Amazon. To me, there is no difference between a new book and and a gently used book since they have the same purpose..for my eyeballs to read. :-)
2) Nature: I think God's paintings are the best paintings in the world. There are no words to describe a beautiful sunrise or sunset. In my opinion, the outdoors and nature are amongst the best free things in life. I have a desk job where I sit in front of computer for 8-10 hours a day. Therefore, whenever I have a chance, I try to get outside and enjoy a run or a walk or a hike. It's hard to always do this since I live in the blazing desert which has some unforgiving temperatures, but for about half the year, it is nice and I live right along a river wash where there's a great trail to run. It's great to find a park or a trail near you to get some fresh air. In San Diego, I love hiking at Torrey Pines since there is nothing quite like hiking a mountain next to the ocean. There are spectacular views, it's a great cardiovascular activity, and it's a good way to be social and catch up friends who join you on the hike, run, or walk. It doesn't cost anything to step outside your door and exercise so take advantage of what the great outdoors has to offer!
3) Podcasts: iTunes offers a pretty good selection of free Podcasts. These are both audio only and some are episodes of shows. Two of my favorite podcasts are financial ones: The Suze Orman Show and the Dave Ramsey radio show. I like to download Podcasts onto my phone and listen to them at the gym when I'm on the elliptical. Seth doesn't understand how I listen to them at the gym, but it gives me something to concentrate on while I'm working out so I enjoy it. The Suze Orman show is the actual show that you can download so I don't even watch it on TV anymore, I just download it from iTunes. Her show is not always applicable, but I do find some of her tips relevant and I like her attitude of People First, then Money, then Things. The Dave Ramsey show was introduced to me a friend and his big message is to live a debt free life and adjusting your life to achieve this goal.
4) Online Streaming & On-Demand: TV is one of the greatest inventions for entertainment. However, there are definitely pros and cons to having cable. One of the definite cons of having cable is the cost of it. However, Seth cannot survive without his ESPN SportsCenter and live sports so we have to have cable in our family. One of the things that we have not subscribed to though is DVR or TiVo. It does seem incredibly convenient to be able to forward past all commercials and record shows so that you don't have to be home at a certain time in order to watch a show, but since we have never had it- it's not something we miss. Instead, we take advantage of our On-Demand that comes with our digital cable package and we watch shows that are available for free on-demand. Not all shows are available, but ones that we enjoy like Top Chef, Wilfred, and Glee are on there. We have the option of pausing, forwarding, and rewinding these shows. I personally like to watch Food Network and they have shows on there that aren't even shown on TV so it's a nice bonus! If you don't have On-Demand or cable, I think it's really neat that you can stream pretty much all shows online now. It's nice that both network television like ABC and FOX as well as cable networks like MTV and Bravo have full episodes online.
5) Skype/Gmail Video Chat: I love keeping in touch with people. Last Christmas, I asked for an address book for Christmas so that I would write down people's addresses to send them mail. I am someone that is always up for reconnecting with people because I believe that everyone we meet affects us in one way or another and we are who we are because of the people that have touched our lives. With technology nowadays, it's so cool to be able to video chat online via Skype or Gmail video chat with people that we may not be able to otherwise see. I love chatting with my best friend, Briana, on video chat because it's good to be able to see her face and her expressions. :-D I have a friend who has Skype dinners with his friends and it's such a good way to keep in touch and be connected with people who are far away.
These are just some of my favorite free things. It's always nice to be able to do things that don't cost money and can still result in great memories. And I will end this blog with a quote from Socrates, "He is richest who is content with the least, for content is the wealth of nature."
In thinking about what to write for this blog entry, I decided to reflect on the quote that the "best things in life are free." Sometimes, it's easy to feel "poor" because we have bills, student loans, and other obligations to pay. Because of this, we may lose sight of the riches that we have in our life including: health, family, and friends--these are invaluable and irreplaceable in my opinion. We may not always have the largest bank account, but wealth can be measured in multiple different ways. With that in mind, I decided to share some of my favorite free things or low-cost things in life:
1) Public Library/Used Book Store: Anyone that knows me knows that I'm a huge nerd. I love to read and I am a big fan of the public library. My parents instilled an appreciation of education and learning in me because they once told me, "You can have all the riches in the world, but all of that can be taken away. The things that cannot be taken away is your mind and your education." Growing up, my family didn't have cable and I read a lot of books. I remember going to library since I was a little girl and getting to pick out any book that I wanted to read. It was always so exciting. I remember getting my first library card when I was 7 and signing the back of it with my newly learned cursive skills. I love that the library offers books, magazines, and DVDs available for checking out. I really enjoy sitting and flipping through all the issues of a certain magazine or even flipping through magazines that I would never spend money on like the tabloids (hahah..yes, I admit..some tabloids are my guilty pleasure) And most library systems are connected in which if your local library doesn't offer a book, you can request a book from another branch. Reading is a great past-time and I don't feel the need to buy a book just to read it once. If I end up loving a book and I need my own copy, I prefer a used bookstore or buying a used copy on Amazon. To me, there is no difference between a new book and and a gently used book since they have the same purpose..for my eyeballs to read. :-)
2) Nature: I think God's paintings are the best paintings in the world. There are no words to describe a beautiful sunrise or sunset. In my opinion, the outdoors and nature are amongst the best free things in life. I have a desk job where I sit in front of computer for 8-10 hours a day. Therefore, whenever I have a chance, I try to get outside and enjoy a run or a walk or a hike. It's hard to always do this since I live in the blazing desert which has some unforgiving temperatures, but for about half the year, it is nice and I live right along a river wash where there's a great trail to run. It's great to find a park or a trail near you to get some fresh air. In San Diego, I love hiking at Torrey Pines since there is nothing quite like hiking a mountain next to the ocean. There are spectacular views, it's a great cardiovascular activity, and it's a good way to be social and catch up friends who join you on the hike, run, or walk. It doesn't cost anything to step outside your door and exercise so take advantage of what the great outdoors has to offer!
3) Podcasts: iTunes offers a pretty good selection of free Podcasts. These are both audio only and some are episodes of shows. Two of my favorite podcasts are financial ones: The Suze Orman Show and the Dave Ramsey radio show. I like to download Podcasts onto my phone and listen to them at the gym when I'm on the elliptical. Seth doesn't understand how I listen to them at the gym, but it gives me something to concentrate on while I'm working out so I enjoy it. The Suze Orman show is the actual show that you can download so I don't even watch it on TV anymore, I just download it from iTunes. Her show is not always applicable, but I do find some of her tips relevant and I like her attitude of People First, then Money, then Things. The Dave Ramsey show was introduced to me a friend and his big message is to live a debt free life and adjusting your life to achieve this goal.
4) Online Streaming & On-Demand: TV is one of the greatest inventions for entertainment. However, there are definitely pros and cons to having cable. One of the definite cons of having cable is the cost of it. However, Seth cannot survive without his ESPN SportsCenter and live sports so we have to have cable in our family. One of the things that we have not subscribed to though is DVR or TiVo. It does seem incredibly convenient to be able to forward past all commercials and record shows so that you don't have to be home at a certain time in order to watch a show, but since we have never had it- it's not something we miss. Instead, we take advantage of our On-Demand that comes with our digital cable package and we watch shows that are available for free on-demand. Not all shows are available, but ones that we enjoy like Top Chef, Wilfred, and Glee are on there. We have the option of pausing, forwarding, and rewinding these shows. I personally like to watch Food Network and they have shows on there that aren't even shown on TV so it's a nice bonus! If you don't have On-Demand or cable, I think it's really neat that you can stream pretty much all shows online now. It's nice that both network television like ABC and FOX as well as cable networks like MTV and Bravo have full episodes online.
5) Skype/Gmail Video Chat: I love keeping in touch with people. Last Christmas, I asked for an address book for Christmas so that I would write down people's addresses to send them mail. I am someone that is always up for reconnecting with people because I believe that everyone we meet affects us in one way or another and we are who we are because of the people that have touched our lives. With technology nowadays, it's so cool to be able to video chat online via Skype or Gmail video chat with people that we may not be able to otherwise see. I love chatting with my best friend, Briana, on video chat because it's good to be able to see her face and her expressions. :-D I have a friend who has Skype dinners with his friends and it's such a good way to keep in touch and be connected with people who are far away.
These are just some of my favorite free things. It's always nice to be able to do things that don't cost money and can still result in great memories. And I will end this blog with a quote from Socrates, "He is richest who is content with the least, for content is the wealth of nature."
Sunday, September 4, 2011
Labor of love
In honor of Labor Day tomorrow, I have decided to title this blog entry "Labor of Love". This expression basically means to do something without expectation of compensation or reward. As we grow up, there are expectations placed upon us by society to act a certain way or to achieve a certain level of success. Then, before we know it, we are "grown up" up and we have responsibilities, bills, and other adult problems. The danger of this is that one day we can wake up and realize that we haven't done anything for ourselves to make ourselves happy.
I believe emotional wealth aka personal fulfillment is equally as important as monetary wealth. For me, these two things go hand in hand. I know that money doesn't buy happiness, but at the same time, I am a realist and I know that it does buy a lot. I don't need to be a billionaire like Bill Gates to be happy, but I do need to be able to support my family and if I want to splurge once in a while on something- I have to know that when I do this, I'm not building debt or putting my family in a worse off financial position. So, here are my 3 thoughts for balancing being fiscally responsible and finding personal fulfillment.
1) Create Goals- I remember sitting in my 8th grade "Life Skills" class writing goals down such as "Get straight A's" and "Go to college". My goals now have obviously changed, but I have found that this exercise of writing down goals is still a good practice because it makes you put your thoughts on paper and it's not just floating around in your head. Seth and I have an annual goal-writing session where we spend 15 minutes just writing down our following financial goals:
- Short term goals: 1-5 years (i.e. Buy a new laptop, have (insert amount) in savings, pay off (insert amount) in school loans, etc.)
- Long term goals: 5-10 years (i.e. Buy a home, fund (insert amount) of children's college fund, pay off school loans, etc.)
- "Wish List" - These are the items we dream about such as a vacation that involves staying at a luxury hotel or buying a Range Rover
We then compare our lists and discuss the items to see if we are on the same page and what we need to do to reach those goals. Some of these items are obviously more realistic than others, but at the same time, just writing it down allows us to dream and maybe work towards achieving those things if we choose to pursue them. I know that a Range Rover and my beloved 10 year old Toyota Camry can accomplish the same thing which is get me from Point A to Point B; but sometimes it's fun to think about getting from Point A to Point B in style. =) Whether or not we actually get a Range Rover one day doesn't matter- it's not really the point. We're always told as kids to dream and to dream big since we can achieve anything we put our mind to. It seems that we lose sight of that as we get older, but when we stop dreaming, we let ourselves forget that we can always better ourselves and become what we want to be. We become victim to our own short-sightedness.
Another item to consider is when you actually write down your goals, are they SMART? This is an acronym we used to use at E&Y and also discussed in business classes that stands for:
S- Specific
M- Measurable
A- Attainable
R- Relevant
T- Timely
For example- "Pay off school loans" isn't SMART- but if you write down "Pay off school loans by 2020" then we're making it more specific, measurable, attainable, relevant, and timely." The Range Rover doesn't really fit into any of these and thus it's in our "Splurges" section.
2) Reassess goals - There is no point in writing down goals if you are not going to go back and reassess them and tweak them. I recommend reassessing these goals quarterly as finances are volatile based upon the economy and your personal financial forecast. Keep your goals in an easily accessible place for review and adjusting as needed.
3) Do something you love -Once you have your goals in order, consider what you want out of life. We all know life is short and our time here on earth is very limited. Because this is the case, if you really hate your job or hate where you are in life, you need to change it. Don't settle for something that doesn't make you happy. You are the only one with the ability to change your own circumstances. One of my favorite quotes that my friend, Kim, shared with me in high school that I have always hung onto is "If you don't like something, change it, and if you can't change it, change the way you think about it." For example, let's say you hate your job- well, don't let your job define you. You may spend 40+ hours there, but your job is not who you are. Find something else outside of your job that makes you happy and pursue it because you enjoy it. Pick up a new hobby or a new sport and do it for you! Think about this: What are the things you do just because you love it and not because it's expected or because you should? What makes you happy? Every day is a new day to recreate yourself and become the person you want to be. Find the thing that you want to pour your labor of love into!
So, I hope that this blog entry has given you some good tips and happy thoughts. I will leave you with this quote from Anthony de Mello's book, The Way to Love, "I leave you free to think your thoughts, indulge your tastes, follow your inclinations, behave in ways that you decide are to your liking."
Happy Labor Day!
I believe emotional wealth aka personal fulfillment is equally as important as monetary wealth. For me, these two things go hand in hand. I know that money doesn't buy happiness, but at the same time, I am a realist and I know that it does buy a lot. I don't need to be a billionaire like Bill Gates to be happy, but I do need to be able to support my family and if I want to splurge once in a while on something- I have to know that when I do this, I'm not building debt or putting my family in a worse off financial position. So, here are my 3 thoughts for balancing being fiscally responsible and finding personal fulfillment.
1) Create Goals- I remember sitting in my 8th grade "Life Skills" class writing goals down such as "Get straight A's" and "Go to college". My goals now have obviously changed, but I have found that this exercise of writing down goals is still a good practice because it makes you put your thoughts on paper and it's not just floating around in your head. Seth and I have an annual goal-writing session where we spend 15 minutes just writing down our following financial goals:
- Short term goals: 1-5 years (i.e. Buy a new laptop, have (insert amount) in savings, pay off (insert amount) in school loans, etc.)
- Long term goals: 5-10 years (i.e. Buy a home, fund (insert amount) of children's college fund, pay off school loans, etc.)
- "Wish List" - These are the items we dream about such as a vacation that involves staying at a luxury hotel or buying a Range Rover
We then compare our lists and discuss the items to see if we are on the same page and what we need to do to reach those goals. Some of these items are obviously more realistic than others, but at the same time, just writing it down allows us to dream and maybe work towards achieving those things if we choose to pursue them. I know that a Range Rover and my beloved 10 year old Toyota Camry can accomplish the same thing which is get me from Point A to Point B; but sometimes it's fun to think about getting from Point A to Point B in style. =) Whether or not we actually get a Range Rover one day doesn't matter- it's not really the point. We're always told as kids to dream and to dream big since we can achieve anything we put our mind to. It seems that we lose sight of that as we get older, but when we stop dreaming, we let ourselves forget that we can always better ourselves and become what we want to be. We become victim to our own short-sightedness.
Another item to consider is when you actually write down your goals, are they SMART? This is an acronym we used to use at E&Y and also discussed in business classes that stands for:
S- Specific
M- Measurable
A- Attainable
R- Relevant
T- Timely
For example- "Pay off school loans" isn't SMART- but if you write down "Pay off school loans by 2020" then we're making it more specific, measurable, attainable, relevant, and timely." The Range Rover doesn't really fit into any of these and thus it's in our "Splurges" section.
2) Reassess goals - There is no point in writing down goals if you are not going to go back and reassess them and tweak them. I recommend reassessing these goals quarterly as finances are volatile based upon the economy and your personal financial forecast. Keep your goals in an easily accessible place for review and adjusting as needed.
3) Do something you love -Once you have your goals in order, consider what you want out of life. We all know life is short and our time here on earth is very limited. Because this is the case, if you really hate your job or hate where you are in life, you need to change it. Don't settle for something that doesn't make you happy. You are the only one with the ability to change your own circumstances. One of my favorite quotes that my friend, Kim, shared with me in high school that I have always hung onto is "If you don't like something, change it, and if you can't change it, change the way you think about it." For example, let's say you hate your job- well, don't let your job define you. You may spend 40+ hours there, but your job is not who you are. Find something else outside of your job that makes you happy and pursue it because you enjoy it. Pick up a new hobby or a new sport and do it for you! Think about this: What are the things you do just because you love it and not because it's expected or because you should? What makes you happy? Every day is a new day to recreate yourself and become the person you want to be. Find the thing that you want to pour your labor of love into!
So, I hope that this blog entry has given you some good tips and happy thoughts. I will leave you with this quote from Anthony de Mello's book, The Way to Love, "I leave you free to think your thoughts, indulge your tastes, follow your inclinations, behave in ways that you decide are to your liking."
Happy Labor Day!
Sunday, August 28, 2011
Another 40 years to go...maybe more?
It's a known fact that there have been some amazing medical advancements in the past 50 years. Medicine has come leaps and bounds from where it used to be. Seth tells me about babies in the Neonatal Intensive Care Unit (NICU) that can be saved at 23 weeks..that's crazy when you consider that full term is 40 weeks. Had these babies been born during the caveman era..let's just say they wouldn't be a hunter or a gatherer, they would be 6 feet under..if caveman could dig that far. But this blog entry isn't about small babies born during the time of the wooly mammoths- it's going to be about retirement. :)
Everytime I turn on the TV to watch a financial show I hear: "People are living longer and longer." and along with this sentiment, we keep hearing that Social Security is a broke system and that that it's going to run out sooner rather than later. It's totally depressing knowing that I'm probably paying into a system that I won't benefit from. However, I can't let the unknowns of the future distract me from focusing on how I can prepare for our future retirement. If I stick with the conventional retirement age of 65, I have 40 years to go before I retire. But as you can see from my title, who knows...it might be even longer that I'm in the workforce. Forty years may be a blip or a speck in the large spectrum of time, but it's quite a long period to invest in something and watch it grow due to compounding interest and earnings.
If your workplace offers a 401k match of any sort, it's important to make the effort to to contribute enough to at least get the maximum company match account. My finance professor once said that if there is one investment to make, it would be contributing to the 401k match since there is a guaranteed 100% return. A typical match is along the lines of the company matching 100% of the first 3% you contribute and 50% of next 1% you contribute. This is the equivalent of 3.5% by doing the following: (1 x 3%) + (0.5 x 1%) = 3.5%. I'm not sure why they have to make 3.5% sound so fancy, but that's the way it is. Let's use a nice round figure of $100,000 for an example:
Sally Beri Gather earns $100,000 a year. In order to maximize her match, she would contribute $3500 a year, or $291 per month and her company would automatically match that by depositing $3500 over the course of the year.
Anything that she contributes over $3500 would not be matched, but just because it's not matched doesn't mean that it's not a good idea to keep contribute. The more you contribute now, the more you potentially have for the future. Another conventional breakdown that I have heard is the 80-10-10 rule in which you live off of 80% of what you make, put 10% into savings, and put 10% in to retirement. Of course, this formula may not be a good fit for everyone and it just depends on your situation. For example, you may be saving up to buy a home, thus you may try to live off of 60% of your income and trying to save 30% and putting 10% into investments/retirement. In our household, our goal is to pay off Seth's student loans in the next 10 years so we are putting less towards savings and more towards the loans. By keeping in mind how your finances are broken down, you get the big picture which will help you in achieving your financial goals.
In the situation that your company doesn't offer a company match or you are looking to compliment your retirement- you should definitely look into opening up a Roth IRA (Individual Retirement Account). Named after Senator William Roth of Delaware, a Roth IRA is a popular retirement vehicle because the money that you put it into is after-taxes. Since you're putting away money that has already been taxed, when you take out the money at age 65, you don't have to pay any taxes on it. You get it free and clear at the end. The Roth is also subject to income eligibility limitations. For single filers, the modified adjusted gross income (MAGI) on your income taxes must be less than $105,000 and for married filing jointly, the MAGI limit is $169,000. Thus, for individuals with high earning potential, they may only have a few years where they are eligible for a Roth.
For 2011, the contribution limit for a Roth IRA is $5000 and $6000 for individuals over 60 years of age. The contribution deadline is before the tax filing deadline which is April 15th, 2012. The other great benefit of a Roth IRA is that if something were to happen to you, your beneficiaries also get the payout tax free.
Then of course, there's the Roth IRA vs. traditional IRA discussion in which people may say that it's a disadvantage to put your money in a Roth IRA if you think that you will be in a lower tax bracket when you retire. This means that you are paying more taxes on it now than you would be paying when you retire. With a traditional IRA, your contributions are deductible in the current tax year, but you have to pay taxes on it when you take the money out. My personal thought on this issue though is that if I set myself up right through 401k contributions and all other income sources, I will probably be in the same tax bracket. In addition, with the debt situation, the move towards universal healthcare, and the general direction our country is heading, who knows where taxes will end up by the time I retire. With a Roth, I will know that I paid my dues and I get the money free and clear.
Setting up a Roth IRA literally takes 2 minutes. I set up my husband's Roth IRA at Fidelity today and the form is simple & straightforward. There are also other licensed brokers out there such as Schwab, Scottrade, T.Rowe Price. You can look around and see who who is the best match. I actually have mine through Bank of America/Merrill Lynch and that makes it easy to link it to my checking account to make contributions. I think the trading fees are all comparable - between 7.95 and 9.95. You can choose to purchase stocks, mutual funds, bonds, etc. with your Roth IRA and with each trade, there is a fee.
So, look around and educate yourself on what fits your retirement goals! Happy retirement thoughts!
Everytime I turn on the TV to watch a financial show I hear: "People are living longer and longer." and along with this sentiment, we keep hearing that Social Security is a broke system and that that it's going to run out sooner rather than later. It's totally depressing knowing that I'm probably paying into a system that I won't benefit from. However, I can't let the unknowns of the future distract me from focusing on how I can prepare for our future retirement. If I stick with the conventional retirement age of 65, I have 40 years to go before I retire. But as you can see from my title, who knows...it might be even longer that I'm in the workforce. Forty years may be a blip or a speck in the large spectrum of time, but it's quite a long period to invest in something and watch it grow due to compounding interest and earnings.
If your workplace offers a 401k match of any sort, it's important to make the effort to to contribute enough to at least get the maximum company match account. My finance professor once said that if there is one investment to make, it would be contributing to the 401k match since there is a guaranteed 100% return. A typical match is along the lines of the company matching 100% of the first 3% you contribute and 50% of next 1% you contribute. This is the equivalent of 3.5% by doing the following: (1 x 3%) + (0.5 x 1%) = 3.5%. I'm not sure why they have to make 3.5% sound so fancy, but that's the way it is. Let's use a nice round figure of $100,000 for an example:
Sally Beri Gather earns $100,000 a year. In order to maximize her match, she would contribute $3500 a year, or $291 per month and her company would automatically match that by depositing $3500 over the course of the year.
Anything that she contributes over $3500 would not be matched, but just because it's not matched doesn't mean that it's not a good idea to keep contribute. The more you contribute now, the more you potentially have for the future. Another conventional breakdown that I have heard is the 80-10-10 rule in which you live off of 80% of what you make, put 10% into savings, and put 10% in to retirement. Of course, this formula may not be a good fit for everyone and it just depends on your situation. For example, you may be saving up to buy a home, thus you may try to live off of 60% of your income and trying to save 30% and putting 10% into investments/retirement. In our household, our goal is to pay off Seth's student loans in the next 10 years so we are putting less towards savings and more towards the loans. By keeping in mind how your finances are broken down, you get the big picture which will help you in achieving your financial goals.
In the situation that your company doesn't offer a company match or you are looking to compliment your retirement- you should definitely look into opening up a Roth IRA (Individual Retirement Account). Named after Senator William Roth of Delaware, a Roth IRA is a popular retirement vehicle because the money that you put it into is after-taxes. Since you're putting away money that has already been taxed, when you take out the money at age 65, you don't have to pay any taxes on it. You get it free and clear at the end. The Roth is also subject to income eligibility limitations. For single filers, the modified adjusted gross income (MAGI) on your income taxes must be less than $105,000 and for married filing jointly, the MAGI limit is $169,000. Thus, for individuals with high earning potential, they may only have a few years where they are eligible for a Roth.
For 2011, the contribution limit for a Roth IRA is $5000 and $6000 for individuals over 60 years of age. The contribution deadline is before the tax filing deadline which is April 15th, 2012. The other great benefit of a Roth IRA is that if something were to happen to you, your beneficiaries also get the payout tax free.
Then of course, there's the Roth IRA vs. traditional IRA discussion in which people may say that it's a disadvantage to put your money in a Roth IRA if you think that you will be in a lower tax bracket when you retire. This means that you are paying more taxes on it now than you would be paying when you retire. With a traditional IRA, your contributions are deductible in the current tax year, but you have to pay taxes on it when you take the money out. My personal thought on this issue though is that if I set myself up right through 401k contributions and all other income sources, I will probably be in the same tax bracket. In addition, with the debt situation, the move towards universal healthcare, and the general direction our country is heading, who knows where taxes will end up by the time I retire. With a Roth, I will know that I paid my dues and I get the money free and clear.
Setting up a Roth IRA literally takes 2 minutes. I set up my husband's Roth IRA at Fidelity today and the form is simple & straightforward. There are also other licensed brokers out there such as Schwab, Scottrade, T.Rowe Price. You can look around and see who who is the best match. I actually have mine through Bank of America/Merrill Lynch and that makes it easy to link it to my checking account to make contributions. I think the trading fees are all comparable - between 7.95 and 9.95. You can choose to purchase stocks, mutual funds, bonds, etc. with your Roth IRA and with each trade, there is a fee.
So, look around and educate yourself on what fits your retirement goals! Happy retirement thoughts!
Sunday, August 21, 2011
Will the Real Slim Shady Please Stand Up..Identity Theft Sucks!
The morning of June 6, 2011 was a regular morning for me. Seth woke up at his typical 4:56 am (gives us a 4 minute snooze and then he gets out of bed at 5:00 am) and I woke up to walk him to the door to give him a kiss and lock the door. I then got back into bed and woke up at a more humane hour of 5:30 am to go to the gym. At the gym, I was listening to my pop music and had a great workout. Afterwards, I walked to my mail box and got my mail. Flipping through, I had some junk mail, some ads, and then a piece of mail from Chase, saying "Immediate Attention Required". I am always weary of credit card mailings since I just assume that it's another ploy wanting me to open up another card. However, when I opened the letter, it stated, "We have attempted to contact you by phone, but have been unsuccessful. There are potential fraudulent charges on your card. Please contact us immediately." It was brief, but sounded serious!
My first thought was that I never got a phone call. So, I jogged home, logged onto my Chase credit card site and realized that my phone number never updated properly in their system so that's probably why I never got a phone call. Then, I looked at the number provided on the letter and realized that it didn't match the number on the back of my card so that made me a little suspicious thinking that it may not have even been Chase that contacted me in the first place. But, just to be sure, I called the number on the back of my credit card for 24 hour customer service. Immediately, the first automated message that came up was, "Please verify the following charges. $606.21 from Home Depot Warehouse. If these charges are not correct, please press 1." My first thought was "Holy F***! I did not go to Home Depot and spend that amount of money." So, Chase transferred me to a representative who read off the last 5 transactions that were made on my card. There were two charges for a Home Depot store in New Jersey and when I told her that they were not my charges and that I never left Tucson over the weekend, she was incredibly nice and said that they would be removed and that they would close this account. She then said that she would send new cards immediately and that I should get them the next day and I would have to sign for them.
In the end, everything turned out just fine. I got my new cards the next day and life resumed to normal. However, this experience made me feel incredibly violated and taken advantage of. I kept telling myself- I am a good person! Why did this happen to me? I don't lie, cheat, or steal, and I help old ladies cross the street! But of course, credit card thieves aren't Robin Hood..they don't just target the extremely rich to give to the poor. They target anyone and everyone they can. I also had to wonder how my card number got stolen in the first place. I rarely use my credit card online and I still had the physical card with me so the card number had gotten stolen somewhere during my physical use. Credit card skimming is the term used to describe how thieves steal credit card numbers and information with a piece of equipment called a skimmer. I google'd an image of credit card skimmer and there are lots of pictures that come up. Skimmers can come in all shapes & sizes and can also be tacked on ATMs, but no matter what they look like, it's really hard to detect with the naked eye. Here is an image that I pulled of a skimmer on an ATM- nothing is really obvious, which makes it so scary! (no copyright infringement intended)
The place that I use my credit card most often is restaurants when dining out. After this experience, it made me think about how when your server leaves with your card to run it, you never really see them again and they can just be in the back writing down all the information on your card: name, expiration date, security code, etc. Then, they have all the information they need to go online and buy anything they want. Of course, not all servers in the world are going to do that and I truly believe that there are more ethical people than not in this world. This experience also made me realize that identity theft occurs everyday and everywhere. The 2009 Federal Trade Commission Report provides the amount of $1.7 billion dollars paid in fraudulent charges paid in 2009 alone. No doubt that number has increased as credit card use is more prevalent than ever before. In my case, I only had a credit card number stolen, but in the case of identity theft, you have someone opening up credit cards and setting up accounts using your name and all your personal information. When this happens, you have to place a fraud alert on your account for SEVEN years. In those 7 years, you have to jump through many more hoops in order to open any sort of account because companies have to verify you really are who you say you are.
So, based on this experience, these are my tips to protect yourself:
1) Make sure all your contact information on your credit cards are up-to-date- I have moved multiple times and also changed phone numbers. Each time, I try to update my information, but as it happened in this case, my old phone number was on file. If anything does happen to your account, you want to make sure that the credit card company or bank can reach you as soon as possible.
2) Set alerts on your debit/credit cards- Most debit/credit cards allow you to set alerts on the usage of your card. I currently have mine set to notify me via email everytime a purchase of greater than $200 is made, any purchase made at a gas station, and any online purchases. My card also allows me the option of receiving text messages.
3) Check credit card activity consistently- In addition to the alerts, it helps to check your credit card transactions consistently because the amounts that may get charged through may not always be the large amounts. I personally have the Chase app on my phone so that I can check activity consistently and make sure that there are not any shady charges. The sooner you report fraudulent activity, the easier it is to deal with. If you are reporting fraud on a debit card, the general rule of thumb is that you have to report fraud within 30 days to recover your funds. This is not true at all banks, but it is much riskier when fraud occurs on your debit card since you actually are losing cold hard cash. Under federal law, your maximum liability for credit card fraud is $50 if reported at the right time (source: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre04.shtm)
4) Don't give credit card numbers over the phone, if possible- Often times, it's convenient to give a credit card number over the phone when you are ordering items. However, in order to protect yourself from having your card number stolen, try not to give credit card numbers over the phone if possible. You don't know who is on the other end and if they really are putting your information into the system or if they are also writing it down on a piece of paper for later use.
5) Choose to Opt-Out- I get tons of junk mail asking me to sign up for credit card companies. Everything from airline & hotel credit cards to grocery store credit cards. The three credit bureaus make money by selling lists that have your name on them if you meet certain criteria. These pre-approved offers clutter my mail box and make me weary of what would happen if someone stole my mail and tried to open a card in my name. In order to prevent this, you can put your name on an opt-out list. You can do so by going to optoutprescreen.com or calling 1-888-5-OPT-OUT. (Source: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt063.shtm). It takes about 60 days or so for it to go into effect. I opted out and I can say that I receive significantly less mail than I did before.
6) Request credit reports regularly- Continuing on the theme of my previous post, it's important to request credit reports to make sure that information is correct. Chase told me that it takes them about 30 days to report to the credit agencies the closed account and new account number. I waited about 3 months just to be sure that all the information would migrate and I pulled a free credit report just to make sure that I didn't have any negative issues on my credit report.
Prevention and detection is the best tool in dealing with fraud so be vigilant and happy spending!
My first thought was that I never got a phone call. So, I jogged home, logged onto my Chase credit card site and realized that my phone number never updated properly in their system so that's probably why I never got a phone call. Then, I looked at the number provided on the letter and realized that it didn't match the number on the back of my card so that made me a little suspicious thinking that it may not have even been Chase that contacted me in the first place. But, just to be sure, I called the number on the back of my credit card for 24 hour customer service. Immediately, the first automated message that came up was, "Please verify the following charges. $606.21 from Home Depot Warehouse. If these charges are not correct, please press 1." My first thought was "Holy F***! I did not go to Home Depot and spend that amount of money." So, Chase transferred me to a representative who read off the last 5 transactions that were made on my card. There were two charges for a Home Depot store in New Jersey and when I told her that they were not my charges and that I never left Tucson over the weekend, she was incredibly nice and said that they would be removed and that they would close this account. She then said that she would send new cards immediately and that I should get them the next day and I would have to sign for them.
In the end, everything turned out just fine. I got my new cards the next day and life resumed to normal. However, this experience made me feel incredibly violated and taken advantage of. I kept telling myself- I am a good person! Why did this happen to me? I don't lie, cheat, or steal, and I help old ladies cross the street! But of course, credit card thieves aren't Robin Hood..they don't just target the extremely rich to give to the poor. They target anyone and everyone they can. I also had to wonder how my card number got stolen in the first place. I rarely use my credit card online and I still had the physical card with me so the card number had gotten stolen somewhere during my physical use. Credit card skimming is the term used to describe how thieves steal credit card numbers and information with a piece of equipment called a skimmer. I google'd an image of credit card skimmer and there are lots of pictures that come up. Skimmers can come in all shapes & sizes and can also be tacked on ATMs, but no matter what they look like, it's really hard to detect with the naked eye. Here is an image that I pulled of a skimmer on an ATM- nothing is really obvious, which makes it so scary! (no copyright infringement intended)
So, based on this experience, these are my tips to protect yourself:
1) Make sure all your contact information on your credit cards are up-to-date- I have moved multiple times and also changed phone numbers. Each time, I try to update my information, but as it happened in this case, my old phone number was on file. If anything does happen to your account, you want to make sure that the credit card company or bank can reach you as soon as possible.
2) Set alerts on your debit/credit cards- Most debit/credit cards allow you to set alerts on the usage of your card. I currently have mine set to notify me via email everytime a purchase of greater than $200 is made, any purchase made at a gas station, and any online purchases. My card also allows me the option of receiving text messages.
3) Check credit card activity consistently- In addition to the alerts, it helps to check your credit card transactions consistently because the amounts that may get charged through may not always be the large amounts. I personally have the Chase app on my phone so that I can check activity consistently and make sure that there are not any shady charges. The sooner you report fraudulent activity, the easier it is to deal with. If you are reporting fraud on a debit card, the general rule of thumb is that you have to report fraud within 30 days to recover your funds. This is not true at all banks, but it is much riskier when fraud occurs on your debit card since you actually are losing cold hard cash. Under federal law, your maximum liability for credit card fraud is $50 if reported at the right time (source: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre04.shtm)
4) Don't give credit card numbers over the phone, if possible- Often times, it's convenient to give a credit card number over the phone when you are ordering items. However, in order to protect yourself from having your card number stolen, try not to give credit card numbers over the phone if possible. You don't know who is on the other end and if they really are putting your information into the system or if they are also writing it down on a piece of paper for later use.
5) Choose to Opt-Out- I get tons of junk mail asking me to sign up for credit card companies. Everything from airline & hotel credit cards to grocery store credit cards. The three credit bureaus make money by selling lists that have your name on them if you meet certain criteria. These pre-approved offers clutter my mail box and make me weary of what would happen if someone stole my mail and tried to open a card in my name. In order to prevent this, you can put your name on an opt-out list. You can do so by going to optoutprescreen.com or calling 1-888-5-OPT-OUT. (Source: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt063.shtm). It takes about 60 days or so for it to go into effect. I opted out and I can say that I receive significantly less mail than I did before.
6) Request credit reports regularly- Continuing on the theme of my previous post, it's important to request credit reports to make sure that information is correct. Chase told me that it takes them about 30 days to report to the credit agencies the closed account and new account number. I waited about 3 months just to be sure that all the information would migrate and I pulled a free credit report just to make sure that I didn't have any negative issues on my credit report.
Prevention and detection is the best tool in dealing with fraud so be vigilant and happy spending!
Sunday, August 14, 2011
Planning meals
Anyone who knows me knows that I love planning. If it involves spreadsheets, making lists, or event planning, I love it! Therefore, I am a huge planner when it comes to weekly meals because if I plan ahead, these following things can be avoided:
1) My crankiness from being hungry because I don't know what I'm going to eat
2) Eating non-nutritious foods as a meal such as boxes of girlscout cookies that are in my freezer
3) Wasting money on eating out multiple times a week.
Since my life is so exciting, one of the highlights of the week is when I get the mail on Wednesday since that's when the weekly grocery circulars come! I like to look through and see exactly what is on sale that week and to see if there are any corresponding coupons that I have. I know what you're thinking...I sound like one of those crazy people on TLC's Extreme Couponing. But really--I'm not. I just like to plan ahead and save money while I am at it. Extreme couponing may have to be another blog entry on another day. =)
A typical meal out at a national chain like Applebee's or Chili's for two people may cost between $40 and $50 after a tip. If you do a simple meal like Subway- even that is going to be about $11 after buying two sub sandwiches & taxes. Say you eat out/purchase take out twice a week....
$60 (two meals) x 2 times per week x 52 weeks per year = $6,240.
When I think of it in terms of actual numbers instead of seeing the transactions on my credit or debit card, 6 grand is actually quite a bit of money. In my mind, that's pretty good spending money for my dream Italian trip that I'd like to take. Don't get me wrong, I do love eating out and trying out restaurants, but I like to try to save it for the special occasions like a date night with my husband or a celebratory dinner. I don't like to eat out so much that I don't really savor the food and I'm only eating out because I'm too lazy to cook. On a regular basis, I create a list of the weekly meals. Using that list as my template for grocery shopping helps me to not buy snack foods and junk foods. I then post that list on my refrigerator so that I know what I'm going to make for dinner. Knowing ahead of time, I can also prep foods the night before such as marinating items or prepping a casserole and just knowing that I have to put it in the oven when I get home.
I think about the positive effect I have on my diet by planning ahead and buying something healthy at the grocery store. One of my favorite things to buy is broccoli because you get a lot of bang for your buck when it comes to nutrition. Brocolli has a ton of Vitamin C and calcium. Therefore, I love it when it goes on sale for $99 a pound because it's a steal!
I am an old-school girl. I enjoy cooking for my husband and then having a sit-down meal with him to hear about his day and just have a conversation. We spend so much time apart during the day that any quality time we spend together with good communication is something I treasure. Therefore, when I plan my meals ahead of time, I don't have to ponder what I am going to cook that night and can either make it ahead of time or prep it right when I get home. There isn't a bigger investment that you can make on your future than your own health and what you eat plays a huge role in it.
Wishing you happy and healthy eating!
1) My crankiness from being hungry because I don't know what I'm going to eat
2) Eating non-nutritious foods as a meal such as boxes of girlscout cookies that are in my freezer
3) Wasting money on eating out multiple times a week.
Since my life is so exciting, one of the highlights of the week is when I get the mail on Wednesday since that's when the weekly grocery circulars come! I like to look through and see exactly what is on sale that week and to see if there are any corresponding coupons that I have. I know what you're thinking...I sound like one of those crazy people on TLC's Extreme Couponing. But really--I'm not. I just like to plan ahead and save money while I am at it. Extreme couponing may have to be another blog entry on another day. =)
A typical meal out at a national chain like Applebee's or Chili's for two people may cost between $40 and $50 after a tip. If you do a simple meal like Subway- even that is going to be about $11 after buying two sub sandwiches & taxes. Say you eat out/purchase take out twice a week....
$60 (two meals) x 2 times per week x 52 weeks per year = $6,240.
When I think of it in terms of actual numbers instead of seeing the transactions on my credit or debit card, 6 grand is actually quite a bit of money. In my mind, that's pretty good spending money for my dream Italian trip that I'd like to take. Don't get me wrong, I do love eating out and trying out restaurants, but I like to try to save it for the special occasions like a date night with my husband or a celebratory dinner. I don't like to eat out so much that I don't really savor the food and I'm only eating out because I'm too lazy to cook. On a regular basis, I create a list of the weekly meals. Using that list as my template for grocery shopping helps me to not buy snack foods and junk foods. I then post that list on my refrigerator so that I know what I'm going to make for dinner. Knowing ahead of time, I can also prep foods the night before such as marinating items or prepping a casserole and just knowing that I have to put it in the oven when I get home.
I think about the positive effect I have on my diet by planning ahead and buying something healthy at the grocery store. One of my favorite things to buy is broccoli because you get a lot of bang for your buck when it comes to nutrition. Brocolli has a ton of Vitamin C and calcium. Therefore, I love it when it goes on sale for $99 a pound because it's a steal!
I am an old-school girl. I enjoy cooking for my husband and then having a sit-down meal with him to hear about his day and just have a conversation. We spend so much time apart during the day that any quality time we spend together with good communication is something I treasure. Therefore, when I plan my meals ahead of time, I don't have to ponder what I am going to cook that night and can either make it ahead of time or prep it right when I get home. There isn't a bigger investment that you can make on your future than your own health and what you eat plays a huge role in it.
Wishing you happy and healthy eating!
Wednesday, August 10, 2011
The beast named "Credit"
Once upon a time, there was a terrible monster named Credit. He made his home in the town of Interest right in front of mouth of the river, which was the town's only source of water. If people wanted to go and get fresh water for their family, they would have to go through Credit. He denied people access to the water based on his historical experience with them. If people brought him his favorite fruit, a prickly juicy fruit called, fico, he would allow them access, but people had to bring this fruit consistently. If they sometimes offered him the fruit and other times not, he found them fickle and would now allow them access to the water. His favorite townspeople were the ones that were reliable and he always rewarded these townspeople with access. People who had access to the water lived happily ever after. The end.
The story of Credit the Beast is how I would explain to my future progeny how important credit is--but let's start at the beginning....The concept of credit was probably invented way back in the day of the caveman when a caveman would say to his hunter-gatherer friend, "I have faith in your berry picking abilities, but you do not have enough berries to buy my saber tooth tiger fur coat. But--since you seem to be reliable, I will allow you to have my coat for now and you can pay me more berries later."
Credit is quite the ingenious concept and without individuals, organizations, or governments extending credit to others, a lot of things wouldn't be possible in today's world. Credit is how people afford to buy things like homes and cars without actually having all the money to pay for it all upfront. In general, people who are reliable payers of their debts and pay consistently are the ones who have higher credit scores. Fair Issac Corporation also known as FICO is the main credit scoring entity in our country, but it gets confusing because there are 3 large credit bureaus and you can have a different FICO score at each one because of their different formulas of calculating a score. The funny thing is that there's an idea of how FICO scores are calculated and what causes the score to increase or decrease, but no one knows the exact formula except for the scorers themselves.
So, I don't have the secret to your FICO score or your personal credit rating, but my tip of the day is to understand what makes up your credit. The government now mandates that all consumers have access to an annual free credit report. The free credit report does not provide you a FICO score, but does provide you a snapshot of all the credit items that have been sent to the credit bureau with your name on it. It will list all your open credit cards, mortgages, car payments, and anything you were extended credit on for which the people chose to send to the credit bureaus. If you see something wrong with your credit report, you can submit a request to the respective credit bureau to resolve the issue. This can be a lengthy process so it's best to review your reports on a consistent basis.
The website to go to in order to review your credit report is: www.annualcreditreport.com
You can get one free credit report from each of the 3 credit bureaus: Experian, TransUnion, Equifax. The best technique to use is to not request all of them at once. I stagger mine throughout the year so that I am able to see what's being reported at different times of the year. I'll order my Experian report in April, the TransUnion one in September, and Equifax in December. This way, I can get a snapshot of my credit throughout the year and assume that if there's one with a mistake, the other ones might and I can order them at that point. If you really would like your actual score, that can be purchased also for a nominal fee. However, some credit unions do provide you your score for free from one of the bureaus so if you are interested in credit monitoring, you can seek out that option.
That's all I have for this entry...but more to follow in the future!
The story of Credit the Beast is how I would explain to my future progeny how important credit is--but let's start at the beginning....The concept of credit was probably invented way back in the day of the caveman when a caveman would say to his hunter-gatherer friend, "I have faith in your berry picking abilities, but you do not have enough berries to buy my saber tooth tiger fur coat. But--since you seem to be reliable, I will allow you to have my coat for now and you can pay me more berries later."
 |
| Saber tooth tiger..see the pretty coat! |
So, I don't have the secret to your FICO score or your personal credit rating, but my tip of the day is to understand what makes up your credit. The government now mandates that all consumers have access to an annual free credit report. The free credit report does not provide you a FICO score, but does provide you a snapshot of all the credit items that have been sent to the credit bureau with your name on it. It will list all your open credit cards, mortgages, car payments, and anything you were extended credit on for which the people chose to send to the credit bureaus. If you see something wrong with your credit report, you can submit a request to the respective credit bureau to resolve the issue. This can be a lengthy process so it's best to review your reports on a consistent basis.
The website to go to in order to review your credit report is: www.annualcreditreport.com
You can get one free credit report from each of the 3 credit bureaus: Experian, TransUnion, Equifax. The best technique to use is to not request all of them at once. I stagger mine throughout the year so that I am able to see what's being reported at different times of the year. I'll order my Experian report in April, the TransUnion one in September, and Equifax in December. This way, I can get a snapshot of my credit throughout the year and assume that if there's one with a mistake, the other ones might and I can order them at that point. If you really would like your actual score, that can be purchased also for a nominal fee. However, some credit unions do provide you your score for free from one of the bureaus so if you are interested in credit monitoring, you can seek out that option.
That's all I have for this entry...but more to follow in the future!
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