The $60K Project

Review: Total Money Makeover Live

noreply@blogger.com (Sarah) — Tue, 09 Oct 2012 15:34:00 +0000

A few months ago, Dave Ramsey had a deal on tickets for his Total Money Makeover Live! show in Long Beach, CA. I scored two tickets for $14.50 each during one of Dave's one-day sales. So yesterday M and I woke up bright and early to make the two hour trip to the Long Beach Convention Center despite gas prices approaching the $5 mark. The event began at 1pm but doors opened at 11:30. We parked the car at 11am and took our place in the already forming long line to get in. When the doors opened we were able to find great floor seats right behind the VIP section (typically priced at $69 each).

Although the official event started at 1pm, the emcee Joe Leavitt (one of Dave's team members) came out on stage around noon and promptly began warming up the crowd by giving out $300 to one person and $500 to another. Nothing like seeing hundred dollar bills being passed out to get you motivated!! Next Rachel Cruze (Dave Ramsey's daughter) came out and talked to the crowd about growing up in the Ramsey household. My favorite story was when she ended up bouncing three checks and was told by Dave to apologize to the head of the bank for what she had done. For some reason, hearing that Dave's kid had been less than perfect with their finances made me feel a little better.

After Rachel wrapped up her story, Jon Acuff of Quitter fame entertained the crowd with his story of eight jobs in eight years and his never ending search for work he could be passionate about. He talked about how this is the "I'm, But" generation - where most people say "I'm a teacher, but I really want to be a ____". Everything he said really hit close to him and seemed to resonate with many in the audience.

Then at exactly 1pm Dave Ramsey came out on stage. And with the exception of two twenty-minute breaks, went through the Baby Steps and his Total Money Makeover philosophy for the next five hours.

The Positives.
Dave is an exceptionally dynamic speaker. Dave is simply an excellent speaker - passionate, intelligent and entertaining. His presentation includes a giant screen so everyone can see him up close, and also a slideshow presentation for all to see. In addition, you are given a workbook with fill-in-the-blanks to complete as he talks. If you are seeking motivation, this is the place to find it.

High energy message. If you want an intense introduction to the Baby Steps and haven't taken Financial Peace University, this is the place for you. Be prepared for a six-hour immersion into Dave's world of finance. Dave's upbeat message would be difficult not to take home with you.

The audience. I found that speaking to the people around me about their financial stories was almost as motivating as listening to Dave speak. People from all walks of life were there to better their lives. A couple in line with me talked about beginning Dave's program and buying tickets to the event, but then ending up with the guy being laid off soon after. But they were still upbeat and hoping for a better financial future. The couple sitting behind me had been working the baby steps and were now focused on paying off their house in the next five years. It was motivating to be surrounded by people with similar goals and know that you're not alone in your successes and failures.

The Negatives.
Sponsors Constantly Pushing Their Wares. If Dave wasn't talking about the Baby Steps, then somebody else was trying to get you to buy a book, open a checking account, or put all your gold into a plastic bag and send it away for some cash. Standing in line, walking around at the breaks, or just sitting in your chair you will be constantly bombarded by some type of sponsor deal. Although some of the items being promoted may help some of the attendees, it just seemed so excessive that many people (including myself) end up feeling irritated rather than motivated.

Session Length. This is a looonnnnggg day so be prepared. I found it a little difficult to focus the last two hours and I could tell the rest of the audience was also a little restless. Needless to say, you will get your money's worth, especially if you can score some of Dave's lower-priced tickets.

Overall Score: B+
Despite the infomercial style and 6-hour long session, I think it was time well spent. Dave lays out a clear and attainable path to debt freedom that has worked for many people. He also may create the spark in you and your family to help you get started on improving your finances.

Dave's next Total Money Makeover Live! events will be held in Denver on October 25th and Seattle on November 7th.

Have you attended a live Dave Ramsey event? What did you think? Would you recommend it to anyone?

Stay tuned,

Remembering Duke

noreply@blogger.com (Sarah) — Wed, 03 Oct 2012 16:10:00 +0000

Today I'm reposting one of my favorites in memory of my best buddy who I still think about and miss every day. He got me through many tough times in my life and I hope he has been rewarded in his next life with endless treats and love.

Duke 9/18/01 - 4/22/12

As many of you know, Duke has been my furry best friend for almost eleven years. He has spent countless hours traveling the country as I roamed from state to state. He greets me at the front door every single day as if he hasn't seen me in months. He barks at the mailman every single day. He eats his dinner in 60 seconds flat every single day. He is definitely a creature of habit who has nothing but love and protection to share with me and the rest of the world. Sometimes this dog is the only thing that can get me through a rough day - especially these past six months. Animals can provide significant insight about living life if you just take the time to listen to them. I have been in an almost constant state of reflection about my life since my Dad passed in August. Here are a few things Duke has helped me learn:

Express your love every time you leave and every time you come home. Every time I leave, I tell Duke to be a good boy and guard the house. In return, he greets me with a wagging tail and a goofy smile as soon as the door is open more than three inches. Someone once told me I needed to ignore him when I walked in the door so he would stop his "nonsense" every time we came home. I feel for this person who can't recognize this tremendous and consistent act of love and devotion. We should all aspire to be like Duke when it comes to important people in your life. You never know if someone will actually walk back through that door at the end of the day so use every opportunity to remind that person how much you love and appreciate them.

Sometimes you just need to stop and take it all in. A few months ago, Duke started to lay down in a particularly sunny area of our neighborhood during our walks. Considering his stubborn attitude and 115 pound stature, there is not much I can do when he goes down. At first, I would just stand there slightly annoyed waiting for the opportunity to coax him home with promises of treats. But one day I decided to just sit down next to him and see what the big deal was. I noticed that Duke didn't particularly want to do anything except watch what was going on - cars driving by, people taking walks, breezes slightly rattling the tree leaves. I began to realize that this is not something I tend to do. Often I am so wrapped up in my thoughts that I don't even notice the beauty surrounding me. Me, me, me is all I can think about. Forty five minutes later I stood up and Duke immediately followed. I felt a sense of calm and clarity just from sitting in the grass with my dog - nothing to accomplish or learn from it, just a need to fully be there at that moment. Duke and I now make this a regular occurrence providing both of us time to just take it all in and be in the moment with each other.

If you want something, ask! I often wake up to Duke shaking his collar and grunting in the morning because he is ready to go on a walk. During the day, he walks right up to me and puts his head in my lap if he wants to be pet. Although he can't speak to me, his actions and needs are surprisingly more clear to me than most human beings I know. Don't beat around the bush - if something is important to you then let people know. Don't just assume they will figure it out.

Get plenty of sleep and exercise. Duke is a champion sleeper (he's laying next to my desk chair as I write) and in his younger days I had to set him loose in the dog park for a few hours to exhaust him. At least three walks a day combined with good sleeping habits (as all dogs have) has helped him stay active even though he is approaching eleven years old. Don't underestimate the importance of sleep - studies show that making up the lack of sleep during the week by sleeping late on the weekends is impossible. You never get that missed sleep back. And stay active if you want to continue to be mobile into your golden years.

If you show affection to others, you will be rewarded with the same. The only people Duke barks at are anyone who comes to our front door. If he meets that same person out on the street (including the mailman), he acts like he just found his long lost owner. There are many people in our neighborhood who can't get enough of him. As a result, Duke has many people walking around with treats in their pockets at all times just in case they see him. Smart dog. His ridiculous affection is always rewarded with attention, love or food - the three most important things in his life. Set a goal tomorrow of zero negativity and focus on the goal of helping others. Pay it forward is a simple rule that can make all the difference in your life. You may even be rewarded for it even if that is not your intention.

Focus on the present rather than worrying about what was or shall be. The only time I see a hint of worry in Duke's face is when I drag out the suitcase. Other than that, he seems to take every moment as it comes and does what feels right at the time. Because we have more developed thought patterns (at least most of us), people tend to get stuck in their head playing certain thoughts over and over like a broken record. What if.....? I should have done..... What do you accomplish by worrying about something that might happen? Pretty much a waste of energy. Instead, acknowledge your worry, allow yourself to really feel the emotion resulting from your thoughts, and then just let it go. There is nothing you can do about it right now. By sitting and worrying about something for a week you have not only wasted energy but also a week of time that you can never get back. Even if the worst does end up happening, are you a better person because you sat and worried about it? Most likely not. Try to quiet those thoughts and just get a sense of what is going on right now in this very moment. Staring at your dog might help.

Stay tuned,

The Power of Negative Thinking

noreply@blogger.com (Sarah) — Fri, 28 Sep 2012 16:53:00 +0000

I will admit that last week was not a stellar week for me. Sunday I set my alarm to wake up early and ended up sleeping through it. So I missed an event that was very important to me. Later on in the afternoon I had to deal with some "crazy family" issues and that got me really down. And on Monday I started a brand new, and particularly stressful, long-term project at work. So along came Tuesday night - my favorite night of the week because I have my pottery class. My opportunity to get my hands dirty and be creative - a necessity for someone whose day is mostly spent in front of a computer doing some type of non-creative accounting activity.

I walked into class that night, grabbed some clay, wedged it and then headed for the wheel. As I began to try to center the clay I realized I couldn't do it for some reason. Feeling frustrated, I called over the teacher and asked for help. Once the clay was centered, I opened up a hole in the middle and tried to coax the clay to become taller to make my soon-to-be mug. But for some reason my technique was completely off that day and I couldn't figure out why. Try as I might, I couldn't get the clay to do what I wanted that night and ended up completely exasperated and leaving class an hour early.

As I drove home that night, I wondered why I had so much difficulty that night. I typically really enjoy these classes regardless of the quality of my clay outputs. It suddenly hit me. I think I walked into class still carrying the negativity from the past few days and it subconsciously reared its ugly head. Imperfections seemed much more significant and less tolerable that day. It also affected my pottery technique just enough so that I wasn't able to produce my typical results. It's as if the negativity was spewing out of my hands and into the mug itself.

Often negative thoughts can affect your daily life without you even realizing it. Your actions, like the clay I was using, are controlled by you. But when you are channeling negativity into these actions, you will not get the results you expect. And no matter how hard you struggle you may never get where you want to be.

Negativity can especially derail your long-term personal finance goals. It may not be as obvious to you as ending up with a crummy looking mug, but there may be signs to watch out for to prevent sabotaging your financial progress. Do you have a sudden urge to buy, buy, buy? Have you convinced yourself that you have earned a vacation or fancy dinner out? It may be something completely unrelated to money that is affecting your mood and creating the potential for a financial setback. To prevent a money pitfall, consider these tips.

1. Get to know your mood better. Rather than pushing your thoughts to the far reaches of your mind, sit with them for a minute so you can at least have an idea of how you're feeling that day. Once I figured out I was still suffering from happenings earlier in the week, I felt an immediate relief and the negative cloud began to lift.
2. Get to the bottom of the negativity. Before you go out and spend your way to a happier day, try to figure out the cause of your negative thoughts. Fight with your mom last weekend? Guy almost ran into you on the freeway this morning? Stressful day at work?
3. Do something about it! Knowing your negative mood may be sabotaging your goals is just half the battle. Use that awareness to change your course and make positive changes. Rather than perusing the web for a new thing, google around and learn about CD ladders or mutual funds.

Your wallet will thank you for it.

Stay tuned,

Image courtesy of Bill Longshaw / FreeDigitalPhotos.net

Take Ten Goal Technique

noreply@blogger.com (Sarah) — Tue, 25 Sep 2012 16:00:00 +0000

Do you have that list of things you would like to do that you think would be a direct benefit personally? Been meaning to attend a spin class? Has Dave Ramsey's book The Total Money Makeover been sitting unopened on your nightstand for months? Or maybe you just want 30 minutes to sit and meditate?

Most of us are filled with ideas and tasks that we would like to accomplish because we would improve and grow personally. But these same ideas and tasks are generally the first thing to go because of a hectic schedule or just plain life in general. People, especially women, tend to sacrifice certain "wants" in order to make sure the wants and needs of others are fulfilled. Why are we so willing to move these personal benefit items to the bottom of the priority list when ultimately they may lead to a better quality of life in the long run?

1. Selfish and frivolous. Putting our own needs first is often construed as selfish. Society has conditioned us to think that it is a negative thing to try to take care of ourselves every once in a while.
2. No immediate benefit seen. When you've got work to do, dinner to make and kids to drop off at practice, squeezing in 30 minutes of exercise not only seems impossible but also doesn't appear to result in an immediate benefit for anybody.

Enter the Take Ten Technique. At the end of each workday, after you have completed your work but before you head to the car, take ten minutes to make a plan of attack for tomorrow for all those "want to do" items that you would get some personal benefit from. Include personal, professional and even financial goals. I picked the end of your workday to complete this task because it is the time when you are least likely to be interrupted (people just want to leave), and you can apply your full attention since you have wrapped up your work day. And don't wait until morning to Take Ten because you may feel too rushed to truly devote yourself to the Take Ten thought process.

How is this different than a to-do list? The purpose goes beyond just listing out items you need to complete. Ten Minute Technique is a way to get you to be thoughtful about what exactly it is you would like to accomplish during your days. It also changes your thought pattern so that you start thinking of these items as something that shouldn't be sent to the bottom of the priority list.

1. Make a list of your personal benefit items. Quickly jot down some personal benefit ideas that have been swimming around in your head. Take a class at the gym? What about having a no-spend day?
2. Carve out small time slots. While there may not be a large block of free time available, you might be able to find 10-15 minute increments where you may be able to work in some personal benefit items. Doctor or DMV appointment coming up? Make sure you download that investing book you've been wanting to read for the past year so you can read while you wait.
3. Pare down your list. Take Ten isn't about tackling your grocery list or reminding yourself to go to the dry cleaners. It's about being purposeful when planning your day and making sure to include personal benefit tasks in each day. Review your list and make sure you are only including items that you think will benefit you in the long run.
4. Don't overdo it. If you decide that tomorrow you are going to exercise for two hours, write all the than-you letters you never wrote and start that quilt you've been meaning to work on, then you may be setting yourself up for failure. Be okay with adding in one personal benefit item to your next day's schedule - even if it's only for fifteen minutes.

Take Ten forces you to be thoughtful, get it down on paper and make these personal benefits a priority - all behaviors that have proven to help people more successfully accomplish their goals. So why don't you try to Take Ten today?

Stay tuned,

What techniques do you use to ensure that you are fitting in beneficial activities into your schedule - financial or otherwise?

A Need For Basic Finance Education

noreply@blogger.com (Sarah) — Thu, 20 Sep 2012 15:30:00 +0000

source: kimkardashian.celebuzz.com

Last week my Twitter and Facebook friends read my comment about how apparently college students know the exact number of days Kim Kardashian was married but don't know their student loan interest rate. This statistic came from a video created by iGrad where they conduct "A Financial Literacy Experiment". A very eye-opening six minutes. Other interesting facts that came out of this video include:

Less than 40% of students interviewed knew what a "student loan default" meant
80% of students knew how long Kim Kardashian was married (72 days in case you were wondering)
85% of students did not know their credit score
Over 90% of students knew Justin Bieber is dating Selena Gomez

With the uproar about skyrocketing college costs and total outstanding student loan debts exceeding the monumental trillion dollar mark, there has been a cry for change from many Americans. Ideas ranging from debt forgiveness to "pay-as-you-earn" plans to re-structuring the way education is provided have been thrown out to attempt to ease this growing crisis.

But let's not forget our responsibility to ourselves to try to understand exactly what we're getting into when we decide (or need) to use student loans to earn a college degree. Maybe we should attempt to change the status quo by expecting our kids (or ourselves) to know what it means to default on a student loan. Is it too much to ask that a student know the interest rates on their loans and credit cards, and also be able to explain the difference between a subsidized and unsubsidized loan? I think not. Do you think their financial choices might change for the better if they had this knowledge? I hope the answer is yes but I honestly can't say for sure. Regardless of the outcome, I don't see a downside to becoming more financially literate.

I am a good example of what not to do. I ended up with $50,000 in undergraduate loans, $30,000 in graduate school loans and six or seven different credit cards during that same time frame. I would have been one of the students in the video who couldn't answer any of the financial questions. All I knew was that the only way I could attend college (at least in my naive little world) was to take out these loans. Could I have attended college without loans? Probably not. Were there better financial options that I could have used? Most definitely.

When you take out a loan your are essentially borrowing against future income. Let's say you take out $50,000 in student loans and get a job out of college making $40,000 per year. In essence you have already leveraged (paid out in a way) three years of take home pay (assuming a 4% fixed rate 20 year loan compounded monthly and take home pay equaling 65% of gross salary). And it just gets worse as your student loan balance goes up.

So where is the disconnect in terms of basic finance education? Are parents unaware of the effect of owing large amounts of student loans after graduating? Or should students be held responsible for figuring out how all of this student loan stuff works? Regardless, we owe it to our future selves to realize that if we over-leverage our future income there is no happy ending to this story

Stay tuned,

Do you think a lack of basic finance education is a contributing factor to the student loan madness occurring these days?

Financial Change Management or...... Dollars and Change

noreply@blogger.com (Sarah) — Tue, 18 Sep 2012 15:30:00 +0000

Image: FreeDigitalPhotos.net

"It is never too late to be what you might have been" ~ George Eliot

Human beings are generally resistant to change. Remember a few months back when Facebook's new Timeline format was introduced? I have never seen so many angry status updates!! All because the format in which you receive information on your Facebook page (a free service, I might add) would be altered. So why were people so opposed to the new Facebook look? I believe it was mainly because people didn't see any immediate need or purpose for a new way to view status updates. They were completely satisfied with the way things currently worked. Or basically.....if it ain't broke, don't fix it.

Resistance to Financial Change
If a change to Facebook can instill anger in the hearts of many, imagine what a financial overhaul can do to the average American family. The decision to pay off debt rather than take the family vacation or eat out is a HUGE change for many, including myself. It wasn't until Day 93 of our $60,000 debt payoff before I could finally say that "eating in more and spending less is starting to feel more like a habit rather than a sacrifice". Three entire months before I could say I was accepting of our lifestyle change!! Getting rid of cable was even more awkward and uncomfortable, resulting in one night where "Mike and I pretty much sat and stared at each other because we hadn't quite figured out what to do with our time" now that there wasn't a TV to watch. What can you do to minimize the perceived negative impact of financial change on you and your family?

Dollars and Change......Management
What's the first thing you do when you decide to make a significant change to your personal finance habits? Make a budget? Although this may be most people's answer, I say wrong!! Before you even get to the numbers part, you've got to prepare yourself and your family for the major changes ahead. To try to figure out the best way to do this, I have been reading up on the concept of change management - defined by Wikipedia as an "an approach to shifting/transitioning individuals, teams and organizations from a current state to a desired future state". One change management book I found particularly interesting was John Kotter's The Heart of Change. The basic premise of this book is that people are going about implementing change all wrong. Acceptance of change doesn't happen by getting people to think differently. Rather, acceptance comes when you can get people to feel differently. Kotter believes people will change what they do when they are shown a truth that influences their feelings. See, feel, change.

My favorite example of "see, feel change" is the Gloves on the Boardroom Table story in the book (full story here). To summarize: an executive believed that a large amount of money was being wasted because each of the organization's factories handled their own purchases (rather than having a centralized procurement process). He thought that a tremendous amount of savings could be realized by consolidating procurement and put together a "business case" analyzing the issue, but nobody seemed to think it was a problem. So the executive took a different approach and gathered up all 424 different kinds of gloves the different factories purchased and marked each one with the supplier and price charged. He dumped the pile of gloves on the boardroom table in the middle of a senior executive meeting. The executives were speechless at the image before them - so many different gloves, some appearing to be the same glove purchased at vastly different price points. People were suddenly very interested and demanding a change in the procurement process. By creating a compelling physical display (as opposed to a typical Powerpoint presentation that includes a bunch of numbers on spreadsheets), the executive was able to "shock" the senior executives into feeling an urgent need for change.

So how can you create a see, feel, change scenario when it comes to your personal finances?

Generate a sense of urgency. Rather than getting the family to think differently, get them to feel differently about money and how it affects them. Rather than appealing to their intellect or logically trying to convince them that a financial change is needed, appeal to their emotions. Because just like exercise and eating healthy, we all already know we should be doing it but we often still don't. By appealing to their emotions, you may be able to bridge the gap between "should" and "want to".

Create a dynamic example. Maybe a bank statement or Excel spreadsheet isn't the way to get people to want to change their money habits. There might be a better and more dynamic way, like Gloves on the Boardroom Table, where you get your family to say "Oh wow, we've got to do something about our finances right now!". When you can see, touch or hear something it becomes more tangible and real.

Walk the Walk. As the leader of this financial change initiative, it is your responsibility to lead by example. If you fold on Wednesday night and take the family out for burritos because you are too tired to cook, you are sending the message that this kind of behavior is all right.If you aren't fully committed to your financial goals, don't expect any more from your family.

I'm not saying any of this will be easy but it's critical to achieving your family's financial goals. Give it a shot!

Stay tuned,

Creating that "see, feel, change" sense of urgency for your family is imperative if you want to meet your long-term financial goals. What kinds of dynamic examples have you used that helped convince your family that a financial change was urgently needed?

Financial Update - September 2012

noreply@blogger.com (Sarah) — Thu, 13 Sep 2012 15:44:00 +0000

I have a lot of catching up to do since my blog hiatus. My first order of business is to provide an update on my financial progress. After all, how can you determine the amount of progress you have made without having something to compare against?

Even though I wasn't writing about it, we were still plugging away at our finances these past months. As I mentioned in my 2012 Goals, we decided to switch our focus in 2012 to saving rather then continuing to pay off debt. While I'm still not convinced this was the right decision, I consider it an experiment in financial philosophy. Compared to our financial update from September of 2011, we have increased our net worth by about $81,000. Most of that increase is due to general savings, an increase in our retirement contributions and fairly decent earnings in our retirement account. Currently our total assets have topped $200,000. Not too shabby!!

What really stands out in this update is not our increase in net worth, but how little our
student loan principal amount has decreased in one year. We have paid the minimum payment of $315 for the past year yet the principal balance has only decreased by $1700. That means almost $2,000 went towards interest payments on this loan in the past year. For some reason the idea that less than 50% of my payments are going towards principal is surprising to me. Without consistently tracking my finances I may not have noticed this result that could end up changing my financial behavior.

So my advice to you? It might seem like a waste of time but you should really make an attempt to track your financial progress over the long term for the following reasons:

Easily Track Progress. It's great to see see savings balances increase or debt balances decrease but do you know if they are changing at a rate you find reasonable? A quarterly and/or annual comparison will help give you a sense of accomplishment throughout your financial process. If you don't feel like you made progress then you may give up. To keep up morale, make sure you create a clear sense of progress that your whole family can easily see and understand.

Reframe Your Expectations. Which statement has more impact?

A good portion of my monthly student loan payment goes towards interest.
For every dollar I put towards my student loan debt in the past year, only 45 cents goes towards paying down the principal.

For me it's clearly statement #2. Say what? Only 45 cents? Something's got to change.....Although I logically know that a lot of my payment goes towards interest, it doesn't really hit home until I know exactly how much (or how little). Don't you feel just a bit more sense of urgency to get rid of that debt?? I know I do.

Stay tuned,

I'm Baaaaaaaaaccckkkkk!!!!!

noreply@blogger.com (Sarah) — Tue, 11 Sep 2012 22:05:00 +0000

Conquered Avalanche Lake Trail - Glacier National Park

Is anyone out there? Remember me? (It's ok if you say no because I can't hear you)

So I have been on hiatus from my personal finance blog for almost exactly 9 months. When I wrote my last post in December 2011, I had successfully paid off $60,000 in debt and had built up a significant following on my blog. So what happened? Let's just say I am the Michael Jordan of blogging. Well, maybe not exactly like MJ. Ok, maybe just in my head.

Achieved a major goal, now what? After achieving my goal of paying off $60,000 in one year, I found myself floundering and wondering what my next big goal should be. I was also a little exhausted - it was hard work! Also, my Jekyll & Hyde personality has me either putting 110% into my vision or sitting on the couch doing nothing but still stressing about the fact that I don't have a vision. And I was fully enjoying the couch towards the end. After Jordan's 3-peat, he retired abruptly from the Bulls - maybe he wasn't sure of his continuing vision. What else does you strive for after all that? Or are you just plain tired of striving?
Self-induced pressure. Now that I was getting more readers and attending Financial Blogger Conferences, I felt this overwhelming need to monetize and make a huge side business out of my blog. Something that started as a hobby and creative outlet suddenly became a stress-filled burden. I have a habit of doing this to myself and then ending up quitting something I once really enjoyed. I have no one to blame for that but myself. But I'm also the person who can fix it.
Health before all. I was also dealing with some pretty major health issues at the time I quit writing. Sometimes you just have to cut back on your obligations and work on surviving. Financial health never trumps physical or mental health.

There are clearly some lessons learned within these three statements. Maybe I'll write about it one of these days. But I don't particularly think my situation is unique. Most of you might identify with at least one, if not all, of these statements when it comes to dealing with life's struggles. More important than what I've learned is..........

How to become the Michael Jordan of Financial Blogging

Retire from financial blogging after a 3-peat (or paying off a bunch of debt)
Attempt major league career in other "sport". Realize that just because you can pay off a credit card like nobody's business does not mean you can also swing a baseball bat.
Come back to your original team blog
Retire again (after three more successes I might add)
Come back (for Pete's sake) again (maybe move to Washington this time)
Yep, you guessed it. Realize you're getting too old for this ~~shit~~ stuff and retire again
Despite all this, still be considered the best at what you do (No, LeBron. Just no.)
Never give up

I'm currently on step 3. But if this is what it takes to make it to steps 7 and 8, then I'll take it.

So...what's next? To be honest, I'm not sure yet. I know that I am passionate about helping people realize that they REALLY can pay off their debt, but only if they want to. I've also still got my own personal financial goals to reach and, based on my past success, I think I can better reach them by writing about it and sharing the process.

Thanks to those of you who sent me messages of encouragement while I was on hiatus. Your kind words and belief that I actually have made a difference in your financial lives is the reason I'm back. You know who you are.

So let's get this party started!!!

Stay tuned,

P.S. - Be patient. I've got 9 months of catching up to do!!

Soooo....what did I miss? Any great success stories? Silly blunders? Get me up to speed!!

So Long.....For Now

noreply@blogger.com (Sarah) — Tue, 06 Dec 2011 05:22:00 +0000

Friends and Family,

I have decided to take a break indefinitely from blogging and focus on some personal matters for a while. I feel like I haven't had as much time or energy to devote to my blog as I would like. Plus this site is a lot of work to keep up and at this point something I can't keep up with. So right now I think it's better to focus on some other aspects of my life and take a hiatus from writing. Don't worry, I won't be take a hiatus from budgeting or attempting to spend less and save more!!

I want to thank all of my readers, especially those of you who have been with me since the beginning. This has been a truly great experience that I would highly recommend to anyone trying to reach what appears to be an unreachable goal. I'll still be skulking around the Interwebs checking up on my fellow personal finance bloggers and making sure they stay on track.

Take care and stay tuned!
Sarah

Why We Switched To PerkStreet

noreply@blogger.com (Sarah) — Mon, 14 Nov 2011 12:34:00 +0000

We recently decided to switch to a PerkStreet checking account even though we were fairly satisfied with our current checking accounts. Why? Rather than have our money sitting in an ING savings account earning 0.9% interest annually, we decided it was worth it to move part of our money to PerkStreet so that we could earn cash back rewards worth more than the 0.9% we are currently earning at ING.

The Details
In order to earn 2% cash back rewards on debit card purchases (without a PIN), you must maintain a minimum $5,000 balance in your checking account at all times. If your account falls below $5,000 you will earn 1% cash back (which is still pretty decent). In addition, there are certain rotating retailers that allow you to earn 5% cash back (limited to $250 a year). To use PerkStreet's example, if you maintain a $5K balance and spend $2,500 a month on your debit card, you can earn $600 in annual rewards.

ING vs. PerkStreet
Here is why we decided to take the plunge. Beware, Math Nerd logic ahead.......I compared my annual rate of return on $5,000 using an ING savings account and Perkstreet checking account rewards.

ING annual rate of return on $5,000 = $45 ($5,000 * 0.9%) If you want to get technical and include compound interest, then add a whopping 19 cents.
Annual debit card spend to equal ING rate of return = $2,250 ($45 / 2%) If you look at these numbers, in order to earn the same amount of money as ING using PerkStreet, I will need to spend
$187.50 a month using my debit card (assuming I maintain a $5,000 checking account balance). Since I clearly spend more than that each month on groceries alone, I will end up earning more rewards with the PerkStreet checking account than with my ING savings account. If I play my cards right, I could end up adding $45 a MONTH (not a year) to my savings account by leveraging my PerkStreet rewards. Although there is one more slightly difficult piece to this equation - actually adding to the savings account!

The Catch
When you earn interest on your ING account, the amount is automatically deposited into your ING account every month. The result is an automatic increase in your savings. When you earn cash back for debit card purchases through PerkStreet, you are able to redeem amounts in the form of gift cards including MasterCard, Target or Amazon. If you are using PerkStreet rewards to supplement your savings, you will need to make sure you are transferring money into your savings account as you earn your rewards. For example, if you redeem your rewards for a $50 Mastercard gift card, you can use that gift card to pay for your daily living expenses while transferring $50 into your savings account. An extra step to be sure, but if you are committed to the process you can add a lot more to your savings account balance than it would earn just sitting there all year.

As an alternative, you can earmark PerkStreet rewards for gift buying or traveling expenses (or some other expense) and then completely remove this item from your monthly budget. That way, travel costs will in a sense be "outside your budget". As long as you make the commitment that all travel will be paid for through PerkStreet rewards and none of your monthly income will be used towards this expense, then you can earmark an additional amount to put in your savings each month.

This Idea Is Not For.....
Those people who are trying to get their spending habits in order or think that these rewards might encourage them to actually spend more. If you are working Dave Ramsey's Total Money Makeover plan and using those envelopes stuffed with cash, then keep on doing what you're doing! If based on your current level of debit card spending you might earn significant rewards, then you might want to think about signing up.

The Best Part
This is the first time EVER in my life that I've had the option of maintaining a minimum checking account balance of $5,000. I've lived most of my life with a very small amount of money (if any) left at the end of the month. Yet another reward for all of the hard work I have put into my finances this past year.

Stay tuned,

Did you decide to participate in National Bank Transfer Day? Are you considering leaving your big bank? What are the reasons that will make you switch?

Shot of Happiness Week 2: Accountability

noreply@blogger.com (Sarah) — Fri, 11 Nov 2011 12:34:00 +0000


www.choosetobehappy.com

This is the second in a series discussing the book How We Choose to Be Happy: The 9 Choices of Extremely Happy People--Their Secrets, Their Stories.Last week we discussed Intention as the first step in choosing happiness. This week we move on to

Choice 2: Accountability

"If intention is an inner-driven desire to play in the ball game of happiness, accountability is its natural outcome - the urge to step up to the plate and hit the ball."

No Victims Here

The kind of accountability that Foster & Hicks are talking about is the ability to be in control of our lives, the ability to move ahead no matter what life throws at you. A big part of the message in this chapter is that happy people don't see themselves as victims. Rather, happy people focus on finding solutions and looking for what they can do to make their lives better.

"Happiness depends on ourselves." - Aristotle

The authors' research shows that blame along with greed, envy and jealousy are some of the biggest indicators of unhappiness. So how do you overcome the "blame game" and move closer to accountability. Always consider your part in a situation and ask yourself what you can change and what you have learned from this experience. By addressing the one thing that you can change (yourself), you will get yourself out of the useless cycle of trying to change others.

"Let me listen to me and not to them" - Gertrude Stein

Defensiveness and blame are defense strategies that we use to protect ourselves from criticism, hurt or even accountability. But when we assume control over ourselves and our situation, we feel most competent, and feelings of competency and control lead us back to that sense of accountability.

"Take your life in your own hands and what happens? A terrible thing: no one to blame." - Erica Jong

Action Items

1) Consider the types of defense mechanisms you frequently use. Is there a payoff in using your defensive strategies?

2) Be mindful of your reaction to tough situations. Try to minimize the blaming and maximize your reactions. Think about what you can do to help the situtation.

Money Crashers

noreply@blogger.com (Sarah) — Wed, 09 Nov 2011 12:34:00 +0000

I stumbled upon Money Crashers last month during one of my many periods of web surfing procrastination. Money Crashers is a comprehensive personal finance site that discusses pretty much anything and everything on the finance sphere. Budgeting, extreme coupons, finance book reviews? They're all there. How about learning about winterizing your home or getting out of your T-Mobile contract without a fee? Check and check. Even better, you can find a listing of the top personal finance blogs out there on the Internets (even The $60K Project is on the list!) - all the great personal finance bloggers you could ever want!

Some Great Money Crashers Articles
How To Make An Efficient Weekly House Cleaning Schedule Template & Checklist Chart
14 Unique & Inexpensive Host and Hostess Gift Ideas
How to Find a Job Online Using Craigslist - 16 Step Process
U.S. Securities and Exchange Commission (SEC) History & Fraud Cases
Give Better Gifts This Holiday Season

The 11 Indispensable Principles of Money Crashers - Wise words of wisdom to live by. The information you will find on this site is created based on these principles.

Always spend less than you make.
Do not believe in money myths.
Get out of debt and stay out of debt.
Save money for the unexpected.
Student loans are not the only answer. Be resourceful and open-minded.
Find creative ways to boost your income.
Invest for the long-term and keep it simple.
Educate yourself about real estate, cars, and financial products.
Avoid scams and financial predators.
If you have a spouse or partner, treat this person as a teammate!
If you achieve financial success, give back. It helps others and feels great.

*Note: This is not a paid endorsement. I just really like this site! Enjoy!

Financial Update - October 2011

noreply@blogger.com (Sarah) — Mon, 07 Nov 2011 12:34:00 +0000

So somehow our October net worth is about $20,000 more than September's update. Here are my two guesses as to why:
1) Kelly Blue Book increased our car values by about $2,000 each. Not really sure why because I went through the same process as last month and even made sure to note wear and tear where applicable. I'll take it but am not really convinced.
2) Our retirement funds had big gains - partly because we significantly increased our contributions but also because there have been some decent gains since the last time I looked at our net worth.

Challenges: We spent quite a bit on medical expenses and travel in recent weeks so our checking account is a bit slim this pay period. Fortunately, we just got checks in the mail for some of our side hustles and will be using that money to catch up and get back on track. Until then, beans, rice and veggies will be a part of our diet.

The upcoming holidays also mean spending a little more than a typical month due to gift giving, travel, holiday parties, etc. We already have most of our travel paid for so we're in pretty good shape. As far as gifts, I find the best thing to do is make sure you communicate with your family and friends in terms of gift buying. Some years my family has enforced a spending limit, and other years we have only purchased gifts for the kids. Depending on your financial situation, it might be in your best interest to start the gift buying conversation. You may find that others have financial concerns as well but may not want to speak up about it.

2011 Goals: Two of our goals this year include creating a $15,000 emergency fund and maxing out our 401(k) contributions. Unless some sort of miracle occurs in the next month or so, we won't be accomplishing these goals during 2011. But that's okay. Considering we just started saving in September we are still doing pretty well - halfway to our $15,000 emergency fund and a significant increase in our retirement contributions. I think it is safe to say that we will complete our emergency fund in early 2012 and will also be able to fully max our retirement next year.

What's Ahead: We are still annoyed at our last student loan and have been thinking about starting up our debt payoff program again so we can finally get rid of it and be debt free! Maybe after our emergency fund is fully funded? We'll see!

Stay tuned,

Your Shot of Happiness

noreply@blogger.com (Sarah) — Fri, 04 Nov 2011 11:34:00 +0000

I have been thinking about the concept of happiness a lot lately and even wrote about it in a blog post a few weeks ago. I decided to read the book "How We Choose To Be Happy" and write a series discussing the 9 choices of extremely happy people.

www.choosetobehappy.com

Formerly consultants who solved personnel issues, authors Rick Foster & Greg Hicks decided to turn their attention towards happy people. As part of an extensive research campaign, they set out to talk to happy people and learn their secrets. What they discovered was that these people all seemed to create happiness by making the same nine choices. This blog series will explore each of these 9 choices as discussed in the book. Why am I doing this? Because I think a lot of us tie up money with the concept of happiness and one of these does not necessarily precede the other. I also believe that many of us are always searching for something to make us happy when maybe all we need to do is choose to be happy.

Choice #1: Intention - "the active desire and commitment to be happy, and the fully conscious decision to choose happiness over unhappiness"

According to Foster & Hicks, the intention to be happy is what drives us towards living as happily as we can while also driving us toward the other 8 choices of happy people. This is why intention is at the center of the wheel (see above). If we don't intend to make happiness a reality in our lives, then we have by default chosen something other than happiness. In addition, the authors believe that we do have control over our happiness - just as I can "make myself miserable," I can also do the opposite.

"Those who wish to sing always find a song" - Swedish Proverb

How To Create Intention

Rather than just trying to get through your day, create a story each morning about the day you intend to have. Through these stories you will create your own realities which ultimately drive your feelings and actions. The most important take away from this chapter is that you can learn to be happy and intention is the first step in that direction - "at the heart of happiness is the realization that we can always choose our reaction."

"Why not seize the pleasure at once?

How often is happiness destroyed by preparation, foolish preparation?" - Jane Austen

Action Items

1) Set your intention and revisit it throughout the day

2) Make a list of your most important intentions. Evaluate your list and eliminate the items that are responses to other people's expectations or what you feel you "should" do

3) After every item write the following phrase "...and I intend to feel happy doing it."

"Joy has nothing to do with material things, or with a man's outward circumstance. A man living in the lap of luxury can be wretched, and a man in the depths of poverty can overflow with joy"

- William Barclay

Stay tuned,

What do you do in your everyday life to make sure you live with the intention of being happy? What struggles have you encountered when trying to remember this intention?

October Budget Review

noreply@blogger.com (Sarah) — Wed, 02 Nov 2011 11:34:00 +0000

Did you listen to The $60K Project podcast interview at The Consumerism Commentary? Download episode 131 to your iTunes and take it with you wherever you go! And don't forget to tell your friends!

Have you reviewed your budget to actual spend for October yet? You can learn a lot from looking at a past month's spending habits. Action: Find one category where you feel you could have spent or budgeted better in October and incorporate that change into your November budget.

Recurring Budget Items

October was a rough month for us. Our recurring expenses came on track when taken as a whole, but a trip to the vet for Duke and the addition of another monthly medication put our projected vet expenses over by $165. Luckily we were under budget in some other areas so it evened out.. Note to readers: Pets are expensive, especially as they get older.

As a general rule of thumb, your recurring expense section shouldn't see too much variance each month since these should be expenses you can reasonably estimate

Non-Recurring Expenses

No complicated Excel spreadsheet necessary - we paid a boatload of medical and travel expenses in October. Mike and I both have recurring doctor appointments at this point so we are just going to have to tough it out. Travel expenses were related to my trip to Chicago to the Financial Blogger Conference so at least I will get a business deduction on my taxes. The toughest part of the month was when we decided to transfer money from our savings back to our checking account. This is the first time we have had to do this and it almost feels like we failed in some way.. But it's tough to stay within budget with such a large amount going towards medical bills. On the bright side - at least we have savings to dip into when we need it!!

November Budgeting Process Changes
One major change to the November budgeting process - Mike is taking over the budgeting/bill paying process for the time being. I have been in charge of documenting our progress for the past year (with Mike's input) so I thought it would be a good idea to get Mike more involved. Last time I checked he had turned my 4-column Excel spreadsheet into a 10-column and counting, but he swears he's "simplifying" the process. Can't wait to see how simple it is!!

Stay tuned,

Does your partner in crime understand your budgeting process and bills that need to be paid? It's important that everyone involved understands the process and goals that you want to achieve.

$60K Project On Vacation

noreply@blogger.com (Sarah) — Wed, 19 Oct 2011 11:34:00 +0000

Did you listen to The $60K Project podcast interview at The Consumerism Commentary? Download episode 131 to your iTunes and take it with you wherever you go! And don't forget to tell your friends!

Hi everybody!

The $60K Project has decided to take a two week vacation - after all, it's been a year since this site started and I need some time to relax, unwind and figure out what the future holds for us. Don't fret because we will be back in full force on November 1.

Content Requests?
Do you have any specific types of content you would like to see in the coming months? Be sure to leave a comment with any suggestions you have.

What Should I Read?
There are so many good reads on this website. While I'm away, keep yourself busy with:

The 12 Steps To Debt Freedom: My 12-step method for successfully paying off debt.
How The $60K Project Started: Check out Day 0 and Day 1 of our project and find out how all the madness started.
The Salary Myth: Income vs. Debt: One of my favorite posts. It taught me that bringing in a decent income doesn't necessarily mean you are in good financial shape.
Word of the Day: Another one of my favorites purely because of the word Awesomesauce.
Lessons Learned From Duke: My dog has taught me more about living life than most humans I know. Let Duke impart his wisdom on you in this post.
The Hidden Cost of Cheap Gas: A lesson learned personally - the gas grade doesn't matter (87 vs. 91) as much as the brand. Certain brands of gas just have gunk in it that will choke up your fuel line.
Keeping Up With The Joneses: The infamous Mr. $60K Project (aka Mike) wrote a really good guest post about the pressure to keep up with the Joneses and how it can impair your financial health.
5 Money Tips From My Nephew: I interviewed my 11-year-old nephew about money and I'm pretty sure he knows more about fiscal responsibility than I do.
June is Myasthenia Gravis Awareness Month: Something I am all too familiar with as I have been recently diagnosed.
Lowering Your Cost For Medical Procedures: Did you know it's possible to pay less for certain medical procedures? This is something I have recently found out.
Smashing Debt With A Snowball: Challenging the economic notion that we are rational beings when it comes to the purchases we make.
How I Paid off $60,000 in Ten Months: And how you can do it, too!

Thanks for your patience and understanding. It's hard to believe but, yes, there are other things going on besides working on this blog!

Stay tuned,

You Can Choose To Be Happy

noreply@blogger.com (Sarah) — Fri, 14 Oct 2011 11:34:00 +0000

Image: FreeDigitalPhotos.net

I am a closet philosopher. My undergraduate degree was Philosophy, Politics & Economics (aka pre-law) only because I thought a straight philosophy degree wouldn't be as practical in the real world. I think about the meaning of life - and any and all related tangents - on a more than regular basis.

Lately my random thoughts have turned towards the concept of happiness. A lot of financial decisions are made to achieve a certain level of happiness. But can you find happiness by seeking/searching/accomplishing? Or could it be that happiness is simply a choice - something that you don't actively seek out but just need to accept into your life?

Think about it - there are so many situations in life that are going to be unpleasant. Work, relationships, money, social pressures, family. You can't control these situations so what are your options? The only thing you CAN control is how you react to these unpleasant situations. Let's use that guy who cut you off on the freeway this morning as an example: how many minutes after you laid on on the horn, shook your fist (or your finger) at the window and screamed an obscenity did it take before you let go of the situation? Did you mention it to your coworkers or to your family when you got home? Did it alter your mood for the rest of the day? Or do you just shake your head and move on while singing the Zac Brown Band at the top of your lungs?

Choose Happy
Happiness doesn't seem to be something that can be obtained. It exists and is within your grasp at all times. You just need to let go and allow it in
1. Start your day with thoughts of gratitude
2. Smile
3. Hang out with people who bring happiness
4. Make other people happy - it will probably make you pretty happy too
5. Try to figure out how you can get something good out of your crummy work/relationship situation until you have the means to move on. My dad wrote an entire book at work!! Shh...don't tell anybody!
6. Say it out loud - I choose to be happy

I can wake up everyday and focus on what it is that I don't have yet, where I should be in life, how awful I feel, horrible I look, how dirty the house is, tired I am......the list goes on - negatives seem to be so easy to find. Or I can wake up and make a concerted effort to be thankful for what I have accomplished, where I am and the people who surround me.

Next Steps
As I congratulated myself on my AHA! moment, I Googled 'Choose To Be Happy' and figured out I'm actually late to the game when it comes to this concept. So check out these additional resources to help you decide whether you agree with this philosophy..

Some Happiness Resources
How We Choose to Be Happy: The 9 Choices of Extremely Happy People--Their Secrets, Their Stories
WebMD: 7 Steps to Becoming a Happier Person
The Happiness Project: Or, Why I Spent a Year Trying to Sing in the Morning, Clean My Closets, Fight Right, Read Aristotle, and Generally Have More Fun

Do you consciously choose happiness? What do you do to promote happy thoughts and feelings in your life?

Stay tuned,

September Budget Review

noreply@blogger.com (Sarah) — Mon, 10 Oct 2011 11:34:00 +0000

After you create your budget, do you take the time to go back and review to see where you actually ended up compared to where you wanted to be? It's a good idea to do this on a regular (monthly) basis so that 1) you can see whether you are sticking with your budgeted goals, and 2) determine if any of your budget line items need to be altered. Let's take a look at our September 16-30 budget to give you a bit of practice.

Recurring Budget Items
First up are the recurring expenses - these are expenses we pay every month and can reasonably estimate what the cost will be (rent, utilities, food, gas). As you can see, we overspent in the food category by quite a bit but were way under for gas (yay working from home!). Overall we were about $55 under budget on recurring expense items. If you find yourself way over or way under on an expense item that should have little to no variance in cost every month, think about changing your budget to better reflect these recurring items It may free up some money that you could put towards another budget item.

Non-Recurring Budget Items

Non-recurring expense items are a little more difficult to deal with. They may include unexpected expenses such as a car repair, one-time expenses such as your dog's birthday present (guilty), or any "splurge" items you buy during the month that shouldn't be included as a recurring item (Groupons). As you can see we had quite a few non-recurring items in September. Both car registrations were due and we decided to splurge on a Groupon for a bartending class for Mike (potential career move???). We also transferred my post-tax bonus amount to our savings account. Finally, we had some personal expenses (haircut) and some medically related expenses (that parking money is because Mike has to pay to park when he goes to physical therapy- which just seems lame to me).

How Did We Do?
Overall, we were right in line with our recurring expense budge, but one area we need to try to keep more in check is the food line item. This period we did go out to eat a few times when we felt busy and hadn't properly prepared for food during the work week. To reduce our expense, we really need to plan our meals for the week and create a Sunday shopping list for these meals. We have found that when we go to the grocery store multiple times during the week we end up not shopping with a list, buying "extras" and spending more.

As far as the one-off non-recurring items, we need to better determine if the purchase is truly necessary - wants vs. needs. We definitely had a few items we could have done without or tried to spend less on. Duke's $25 toy wasn't too necessary even though he did turn 10 this year which is a huge milestone!!!

Overall Budget Grade - B

Upcoming Challenges: We are swimming in medical expenses right now with one of use recovering from surgery and the other trying to find alternatives to surgery but most likely preparing for it in the near future. This is one of the reasons we have started an emergency fund because we are aware that medical expenses could be a large part of our budget over the next 3-6 months.

Successes: Despite some unexpected and pricey vet bills in early September and some one-off expenses that couldn't be avoided, we are happy to report that we are paying cash for everything. We don't really feel like we have very much money right now since it is being eaten up by these one-offs. But a few years ago many of these items would have gone right on the credit card. Progress!!

Stay tuned,

Do you do a monthly review of your budget and compare it to what you actually spent? Do you get any value out of an exercise like this? Do you use any more automated ways (like Mint) to do your analysis? Send your suggestions our way!!

Is it Time For Us to Buy a House?

noreply@blogger.com (Sarah) — Fri, 07 Oct 2011 11:34:00 +0000

When do you decide that it's time to buy instead of rent? This is a conversation Mike and I have been having recently. We currently pay $1,250 a month to rent our 2 bedroom, 1 bath townhome. We pay for water and electricity, and the yard is taken care of by the Homeowners Association (the HOA fee is paid by the landlord). Any major repairs are also paid for by our landlord. If we bought a house, we would potentially be paying more for utilities (assuming we buy a bigger place) and would be responsible for basically any home-related expenses including utilities, yardwork and home repairs.

Admittedly, there are so many different ways to determine whether it is a good time to buy. I am taking a relatively simple approach at this early stage in the game and just trying to determine how much house we could purchase and still maintain a similar monthly expense budget. So below I look at what amount of loan we could afford that would be equal to our current rent payment of $1,250. Based on the mortgage calculator below (you can upload this Excel spreadsheet to your computer if you like and mess around with it), Mike and I could take on a $231,000 home loan assuming a 3% interest rate, 30 year loan term and taxes estimated at approximately 1% of the total value of the home. If we can put 20% down when we buy, we can afford a purchase price of about $289,000 and still pay $1,250 a month in mortgage and taxes.

Front-End Ratio is Hooey (IMHO)
Do you know the rule of thumb that you should apparently use to figure out how much house you can afford? As a general rule, your monthly housing expenses - including mortgage principal, interest, real estate taxes and homeowner's insurance - should not exceed 28% of your gross monthly income. If I followed this rule, then my total monthly housing expense would be more than 50% of my take home pay!! This doesn't seem anywhere near reasonable to me. How did I get to 50% of my take home? Taxes, health insurance and 401(k) deductions take a big chunk out of my paycheck each period. It seems more reasonable to base the calculation on monthly take home pay as opposed to gross monthly income. Otherwise, there is the potential to become house poor real quick.

So if we can find a house we like in that price range, then it might be reasonable to consider buying given that our monthly mortgage payment would equal what we currently pay in rent. Rather than that amount going towards someone else's investment, why not pay it to ourselves?

So should we consider buying? Mike and I are considering it if we can buy a home and keep our expenses close to where they are currently. But we will not be using the front end ratio rule to determine what we can afford.

Stay tuned,

Finance Lessons Learned - FINCON11

noreply@blogger.com (Sarah) — Tue, 04 Oct 2011 11:34:00 +0000

I was lucky to be able to spend three days with some of the most influential personal finance bloggers at the Financial Blogger Conference this past weekend. I brought home a notebook completely filled with notes from presentations and inspirational quotes from the big hitters to help me improve my blog content, design and reach. My action list is now a mile long after the great ideas that came from both impromptu conversations and formal presentations. Even though these bloggers didn't specifically discuss strategies for improving personal finances, I thought I would share a few snippets of wisdom with you that can provide essential advice for those of us trying to get our financial act together.

"What does your dream look like? How do you get there?"
~ Kelly Whalen, The Centsible Life
If you are reading this, you most likely know that you want to pay off debt and get your finances in order, but do you know what it is you are working towards?
Telling yourself you want to fix your finances but not having a very clear vision of what success means is a little like hopping in your car and planning to drive to Penny Hill, Delaware without any type of GPS or map to help you out. You have a general idea where it is and you may get there eventually, but it's going to take a lot longer, and once you do arrive there is no guarantee that Penny Hill is the right place for you.

As you create your finance plan, make sure to take into account your end destination to help steer you down the right path. And make sure you have thought through your options - Money Island Beach, North Carolina might be a better fit than Penny Hill.

"Perfect is the enemy of the good."
~ Adam Baker, Man vs. Debt
Ok, so Voltaire actually said it first but this is a very important point to understand. Perfectionism is a disease I have struggled with most of my life. What I have come to realize is that as you strive to move closer and closer to perfect, the results achieved by that extra amount of effort you put forth quickly begin to diminish at a certain point in the process. If you feel like your effort expended still achieves worthy results, then keep going!! But at some point, the law of diminishing returns kicks in and the extra 12 hours you spent on that work assignment goes mostly unnoticed by your boss (who always ends up making changes no matter how perfect your finished product).

If you strive for financial perfection you will never feel success when you accomplish a major milestone. If you don't feel successful you will eventually give up. Trust me. Be great with your financial efforts but don't strive for perfection at your own detriment.

"Personal finance is more than just frugality."
~ Ramit Sethi, I Will Teach You to be Rich
Extreme couponing, making your own laundry detergent, cutting your cable - we've all heard the suggestions for cutting back on your budget. But there is so much more to your finances than creating a budget and cutting costs. You also need to ask yourself why. Why do I continue to spend on unnecessary items when I know I don't have the money? Why do I need the fancier and more expensive version of [insert anything here]? Why do I care what people think about my house/car/clothes when most of those same people are probably swimming in debt?

Yes, look at the numbers. But also look at yourself and try to figure out why you got into this predicament in the first place. Otherwise you will find yourself achieving your financial goals one day, and then right back in the very same financial place the next.

What inspirational messages do you keep in mind while trying to stay on track with your finances? What lessons have you gotten out of these messages?

Stay tuned,

Financial Blogger Conference - Here I Come!

noreply@blogger.com (Sarah) — Fri, 30 Sep 2011 11:34:00 +0000

As The $60K Project jets off to Chicago for the Financial Blogger Conference - better known as #FINCON11 in the Twitterverse - I find myself super excited and also super nervous at the same time. Super excited to meet the faces behind many of the tweets/words/comments I receive on my blog. Super nervous because I'm human and can't imagine not being nervous about meeting a bunch of new people, trying to keep names straight, speed networking and trying to think of interesting things to say. I won't even get into my minor freak out about what to wear (yep, I'm shoe shopping tomorrow morning before my flight). Let me just say I had to take my winter clothes down from the attic because 50 degree weather is considered winter in San Diego. Oh, what a tough life I lead!

Despite the pre-game jitters, I feel like this will be a great opportunity to learn some great skills to apply to my blog. Here is some knowledge I would like to come away with this weekend:

Figure out how to switch my blog from Blogger to Wordpress (although I'm holding out that Google revamps and majorly improves Blogger - come on!!)
Implement 5 new design tips for my home page (it looks a little messy to me and I definitely need a new header)
Learn monetization strategies so that I can start producing more consistent streams of income
Get some advertising advice from fellow bloggers so I can create an Advertise page (see previous bullet)

Aside from these goals, I think it will be really great to be in a room filled with so much blogging knowledge and experience. Blogging is such a solo sport that I think it's good for us (me) to get out from behind the computer and just talk to people. Although I'm beginning to think bloggers are really social personalities when given the chance. Kind of like accountants - secret partiers.

Thanks to all of the people who have read my blog in the last (almost) year. I wouldn't be here without you. Hope to bring you even better content in the months to come. Stick with me - you won't be disappointed!

Stay tuned,

Financial Update - September 2011

noreply@blogger.com (Sarah) — Wed, 28 Sep 2011 11:34:00 +0000

I haven't been so good about financial updates since we switched our focus from paying off debt to building up savings. I decided that once a month I want to update you on our current financial goals and also provide a snapshot of our net worth. I'm hoping that this additional analysis will help us figure out where our financial focus needs to be.

The Goal Tracker (the thing with all the colorful bars over on the side) keeps track of the goals we have accomplished and the goals we are currently working on. As you can see, the $60,000 in debt we paid off shows up as the maroon bars. Our remaining debt, fondly nicknamed Albatross, is the bright yellow bar, and the green bars depict our current savings goals which are:

Create $15,000 Emergency Fund. Since we just started saving about a month ago, it feels good to be
a third of the way to this goal. My annual bonus helped us out but we expect to be able to put about $3,000 a month in savings from this point forward and meet our goal by December 2011.

Max Retirement Savings. For tax year 2011, the elective deferral limit for 401(k) plans is $16,500. Although we won't come near reaching the limit in 2011 since we were focused on paying off debt for most of the year, I still wanted to track how much money we contributed to our 401(k)s in 2011. As you can see, we contributed about $12,000 to retirement this year. Pretty good but I wonder how much more debt we could have paid off if we didn't make those contributions!!

Mike and I both increased our 401(k) contributions this month. Based on the current limit and what we have started to contribute, we will be able to easily reach $16,500 (or a revised limit) in 2012 if we can maintain this contribution level.

Net Worth
Based on the snapshot you see above - as September 24, 2011, we have a positive net worth of approximately $70,000. I immediately noticed that most of our assets are not very liquid so it makes me feel better that we are working on creating an emergency fund. Also, the value of our retirement fund has been all over the place these past few months and will likely continue to be all over the place. Finally, I included both of our cars based on the Kelly Blue Book value. I was pleasantly surprised to see that both cars are worth more than I expected (private sale value) but also know that these values will continue to decrease.

I would love to get an investment account going but I've got a lot of learning to do before delving into that category. As for the liability side, we have one student loan left and it has a large balance. Luckily the interest rate is only 3.625%.

Stay tuned,

So that's our September update! What do you think?

Side Hustle: How to Make Money Pet Sitting

noreply@blogger.com (Sarah) — Mon, 26 Sep 2011 16:40:00 +0000

Vlado / FreeDigitalPhotos.net

In need of some extra cash? Love animals? Why don't you consider becoming a pet sitter? More specifically, a pet sitter who house-sits at the same time. As a dog owner, making sure Duke is well taken care of while I am out of town is a high priority. At one point, I had a dog sitter who would come over three times a day to walk him and feed him, but I stopped using her when Duke ended up with a $1,500 ear surgery after we got home. A second dog sitter I know is pretty good but she is so busy that I can't even consider her unless I know months in advance when I'll be gone. Plus although she is great, she also only visits three times a day and leaves Duke home alone at night. Our top choice in dog sitters is actually the front desk woman at my company who dog sits on the side to pay for her vacations. Joanne is awesome - she stays at our house while we're away and is one of those people who truly loves animals. Plus she only charges $25 a day which is ridiculously low for the level of service she provides (compare that to $60 a day for the two previous sitters mentioned who only visit three times a day). But she is also reaching the too busy point - last time I saw her she told me she hadn't slept at home in 6 weeks.

The ideal and least stressful situation for a pet and its owner (in my opinion) is to have someone stay at your house with your furry friend. That likely means a pet sitter is super flexible and has no family relying on them to take care of them every day. A pet sitter also needs to establish a level of trust with a person to be let into their home. How do you get to this level?

When you first start out, offer to take care of Fido at a reduced rate in exchange for a recommendation in the future.
Once you start building a rapport with people, referrals will start to trickle in. Encourage word of mouth to spread faster by offering referral bonuses (discounts on future sittings, commission, etc)
Don't forget the little things: text or email pictures to Spot's owner while they are away; keep a written schedule of what your dog did while they were away; send a thank you note.
Offer to take care of the plants and bring in the mail as "free extras"

How Much Should I Charge?
The best way to figure out an answer to this question is to first see what your competitors charge. In San Diego, I have a difficult time paying $60 a day for someone to come over three times a day to see Duke. I would be more willing to pay $60 if I knew this person was willing to come over after work and stay overnight - even if they still needed to work from 8 to 5 during the day. But $25 is way too low (are you reading Joanne?) Other areas of the country may have a much higher or lower price point. See what other dog walkers/sitters and doggie day cares charge in your area and, depending on your service offerings, choose an amount that feels right.

What's My Earning Potential?
If you provided pet sitting services 15 days a month at $50 per day, that is an extra $9,000 in your pocket during the year. That amount could put a severe dent in your debt!! Raise your rate to $60 a day and you will be bringing almost $11,000 a year.

Am I The Right Person for the Job?
Do you like dogs and cats? Do you have allergy attacks just thinking about a slobbery Bulldog waddling up next to you? Do you have too many commitments outside of work that would interfere? Would your family be upset that you deserted them? There is no question that this type of side hustle is a significant commitment and would require giving up some of your personal freedoms. But you can also make your own hours and say 'no' if there is a commitment you just can't miss.

From what I can tell, there is still some room in the pet sitting market for new business. As I mentioned before, the two sitters I rely on the most are becoming so busy that I am having a difficult time booking them. So what are you waiting for?

Stay tuned,

Have any of you tried pet sitting to make extra money on the side? Share your experiences here - the good AND the bad.

Weekly Roundup Cocktail Party Edition

noreply@blogger.com (Sarah) — Thu, 22 Sep 2011 11:34:00 +0000

I usually like to do reading round ups on Friday so you readers will have some nice material to read and talk about at your fabulous cocktail and dinner parties over the weekend. Since I am sitting here wishing it was Friday, I decided to give you some excellent reading material a day early. Skim through the categories that interest you, impress your friends with your wit and wisdom while delicately balancing an extra dirty martini. And most important - enjoy your weekend!!

Investing
20's Finance: Is It Hard to Time the Market in a Recession?

Barbara Friedberg Personal Finance: Predicting Stock Returns for Fun and Profit

101 Centavos: Caffe' Corto: A Short Take on Gold Mining Companies and Valuations

Investorz' Blog: How I Lost 10% of My Investment Portfolio in 3 Months, and What You Can Learn From My Loss

University of Money: Ways to Save Money and How to Invest Money

The College Investor: The College Investor 2 Year Anniversary

Blogging/Working From Home
So Over Debt: Why PF Bloggers Should Never Date Each Other

Cash Flow Mantra: Bloggers that Make $1,000 per Month

Money Talks: Co-Working

Saving/Making Money
Money Reasons: Finding Opportunities in Unusual Places

MoneyGreenLife: 5 Security Factors Than Can Lower Your Car Insurance

My Personal Finance Journey: Why Now is the Time to Save and Not Spend

The Penny Hoarder: 5 Weird Ways to Make Money Recycling

Spruce Up Your Finances: Why You Should Fight for Every Percent You Can Get on Your Finances

The Saved Quarter: $100 Holiday September Update

Debt
The Debt Myth: Debt is Not a Safety Net

Fat Guy, Skinny Wallet: Why I Chose Not to Use Debt Consolidation

My Multiple Incomes: Can't Sleep? Mind Racing With Ideas? Take My Advice!

Potpourri for $500, Alex
Everything Finance: Platinum Card from American Express Review

Prairie Eco Thrifter: My 'Free' Kitten Cost US Over $9,000

The Ultimate Juggle: Huggies Slip-On Diapers

Invest With Passion: Halle Berry Home Market

Nickel by Nickel: A Quick Update from the Road, to Denmark and Back Again

Tying Up Some Link Love & Loose Ends

noreply@blogger.com (Sarah) — Thu, 15 Sep 2011 11:34:00 +0000

First - an important clarification.

We are not debt free.

Although we just kicked $60,000 of debt to the curb, we still owe $50,000 towards our last student loan. Mike and I decided to start focusing on saving rather than paying off this last debt for multiple reasons. Initially I did not include our last student loan in our debt payoff tracker - mainly because it would then become the $110K Project which just doesn't roll off the tongue as easy as $60K Project. Plus paing off $110,000 in debt would be pretty much impossible for us to do in a year.

I want to make sure I'm not misrepresenting myself to my readers so I have decided to add the $50,000 to the Financial Goal Tracker. Although it will depressingly sit there with a gigantic balance to be paid, I want to make sure there is full disclosure for everyone that visits my site. So check out that bright yellow bar on the left side of the screen - that's our albatross.

Switching Gears
I am lucky to have some really great blogs that have mentioned my site and sent readers my way. Today I want to say thanks to a few of those sites. I hope to pay it forward and make this a regular thing. Grab a glass of wine and your iPad and enjoy some great reads.

According to my good buddy, Google Analytics......

Top 5 All Time Referring Sites
1. So Over Debt
2. Blonde And Balanced
3. No More Spending
4. Young And Thrifty
5. Minting Nickels

Top 5 August Referring Sites
1. So Over Debt
2. Young and Thrifty
3. Minting Nickels
4. Prairie Eco Thrifter
5. Blonde and Balanced

Special thanks to Canadian Dream Free At 45 for including me in the Carnival of Personal Finance #326 - I am honored to be included among a lot of great writers. This carnival is like a "Who's Who" of personal finance blogs so make sure you add this to your reading to-do list.

Stay tuned,