Saving Savy by a Future Millionaire

Net Worth Update

2009-02-19T18:12:00.001-05:00

I went back to my last published net worth update from July to compare it to my current net worth. In the last seven months my net worth has grown dramatically - primarily due to a $32,000 bonus I received in September (see I told you it was worth waiting to change jobs until after my bonus from the V-town project was released). The remaining increase in my net worth comes from interest earned on my money in the bank and diligent saving.

	Updated 2/8/09	Change from Previous Month	Updated 7/1/08	Change from Previous Update
Total Net Worth	$151,362.09	$1,747.55	$110,872.13	$40,489.96

Net Worth Comprised of
Retirement Savings:	$31,922.01	-$44.48	$29,881.15	$2,040.86
401k	$25,663.54	$415.56	$23,932.15	$1,731.39
Roth IRA	$6,258.47	-$460.04	$5,949.00	$309.47

House Down Payment	$58,634.87	$58,634.87	$57,401.89	$1,232.98

Future Car Savings	$10,286.27	$271.10	5,458.48	$4,827.79

Future Investment Savings	$0.12	-$36,193.68	$5,458.48	-$5,458.36

Investments	$37,416.97	$37,416.97		$37,416.97

Emergency Fund/Money Market:	$12,416.42	$582.82	$11,435.17	$981.25

"Cash"/Checking:	$685.43	-$464.92	$1,236.96	-$551.53

Investing -- So far this is Awsome!

2009-02-17T17:10:00.000-05:00

I'm sick. I left work early today because I feel absolutely horrible and went to see the doctor turns out I have bronchitis. Lovely, but at least they gave me some good drugs.

On the positive side this means I have time to give you all an update on how it went with my financial adviser, Bob. The appointment went great, I've already met with Bob about 4 other times exluding the inital time visit where I interviewed him. In our appointments we've discussed everything financial under the sun from my tax advantages with a Roth 401k to which banks to put my house down payments and car fund, he's very patient with me which I love since I'm new to the finacial advisor business and am some what secptiacal every time he gives me advise so I quiz him to death about everything. This quizing and his patients have helped me to feel pretty comfortable with Bob. When I arrived for my appointment we spent a little over an hour reviwing the proposal he'd given me on my last visit about how he wanted to invest my investment money and how he'd mitigate my tax exposure with capital gains. After tons of research I'd already decided this was the direction I wanted to go but I still quizzed him with every question I still had and confirmed with myself that I was still in agreement. I then wrote the largest check I've ever written ($37,000) and handed it to him, signed a million papers and left his office feeling wonderful because I'd taken action and was now an investor --- not just a saver.

So far I have to say that this investing business is awsome...

January 27th I handed over my check for $37,000 to be put in a managed account. In less than two weeks my balance has increased to $37,416.97 which is about the same amount of interst I earned on all this money in a year. Don't worry I'm not getting too excited, I know that the actual dollor value of my investments will fluxate and most likely in the next year and maybe even sometime in the future my balance may even dip below my inital investment. But I'm in it for the long haul and have no intention of withdrawing any of this money for at least 30 more years.

I'm BACK

2009-01-25T11:04:00.003-05:00

I kind of checked out for a little while. Between work and all of the other juggling acts I was trying to do I let this slide but I’ve really missed my chats and rambles about finance so I’ve decided its time to resurrect Future Millionaire. To catch up to today I thought I’d give a well over due update on what’s going on in my life.

Career:

I got two job offers back in August but decided against both of them. One job I didn’t accept because the reputation of the company wasn’t very good around town and the second because for some unknown reason I just wasn’t ready to leave my current company. Before turning down the second offer I did a lot of soul searching and decided that even thought I hated my current assignment I wanted to stay put with my current company. Going on the job search really helped me because it allowed me to feel more empowered, I wasn’t being forced into a role I hated and the project from hell…believe it or not I was choosing it because I did have other options.

Looking back with the economic melt down that’s occurred I even more glad I didn’t take either of the two job offers, both of them were with smaller companies and neither has fared well in the current economy. Not that my current company has not been effective, we have been hit pretty hard and there’s been lay offs that amount to almost 20% of our workforce through out the US in 2008 with probably more to come. But despite that I still feel I’m in a better situation at a company that’s “huge” and at a company that I have a good established reputation. And I’ve accepted/resigned myself to my current assignment because – hey its better than not having a job and I did choose it.

I did achieve my goal for last year of receiving a promotion, I was promoted in September. Yay!

I think my goal for this year will be to just stay gainfully employed.

Finances:

I finally…found a financial adviser and finally acted. I kept dragging my feet for some reason but I decided in October on a guy that my favorite banker, Charlie, recommended and he helped me first with rebalancing my 401k – prior to meeting my adviser, Bob, I had my entire 401k in a target date fund. It was really hard for me to put my trust in someone else to help me make the right decisions. I’m still very shaking on investing, I know how to read morning star and look for decent picks but its still hard for me to just do it which is why I didn’t sign up to put my Roth IRA in his hands until December of this year so starting in 2009 my Roth IRA will be diversified…yay! I’m also very excited about my next step with Bob which is this Tuesday I’m going to his office to write a big $37,000 check to start an actively managed account that’s outside of my maxed out retirement accounts. I’ll have to let you know how it goes.

My one regret with hiring a financial advisor is that I think I pay Bob too much. I pay my advisor a yearly retainer plus now I’m going to be paying him 1.5% to actively manage my non-retirement accounts which will amount to about $1,400. I think I have over paid for his help and will continue to pay more than I should but I’ve decided that I’m okay with that because I finally acted and isn’t it better to pay a little more to gain more than it is to just let everything sit and gain nothing.

My net worth has increased to just shy of $150,000. A lot of that increase is from my regular monthly saving and my bonuses. Don’t get me wrong I was hit by the stock market down turn but fortunately compared to many I’ve only lost about $13,000 because of my fear of investing I kept all but my retirement accounts in the bank. I’ll have to sit down and do a comparison net worth update soon.

Unfortunately, I think this year I won’t have such a significant increase in net worth primarily because I’ll most likely be taking about a 15-20% pay cut this year because I probably won’t be receiving any bonuses with the way the economy is looking. The only good thing about that is that I don’t need the bonuses to live. My bonuses always were stuck straight into savings with maybe a little shaved on the top for a small indulgence.

I’d like to have a net worth goal this year of $175,000 but since the current stock situation will distort my net worth goal in comparison to my savings, especially since I’m going to start investing in the stock market a little more. I think I’d rather have a savings goal for 2009– this just means its going to be harder for me to track but its achievement is 100% in my control. I’m planning this year to again max out my retirement contributions and contribute $21,500 in retirement vehicles, add $3,000 to my new car fund, and contribute at least $2,500 towards my investments – I will increase my investment contributions if I actually receive bonuses this year but I’m doubtful. So in total for 2009 I want to save $27,000.

Personal:

Mr. Be-Mine and I are still going strong, its been nearly two wonderful years. Wow – I can’t believe its only been that long, it feels like he’s always been a big part of my life. In fact, I think he might be the one. Since this is a financial blog, and you don’t want all the gushy girly stuff I’ll stop there.

My brother and I are getting ready to run the ING Half Marathon this March. Opted for the half marathon this year instead of the Marathon because I still don’t have a lot of time due to work and didn’t want to try and squeeze in a super heavy work out schedule, just want to have a fitness goal hard enough to keep me motivated to work out and run every day. One financial thing I’ve been meaning to actually ponder is whether its better to register for these races early like I do to get a price break or if its better to pay full price but save 6+ months of interest on your money. Hmm…sounds like a future post.

I’m still volunteering every week at the Food Bank and donating every month. These are the types of organization that need the help even more now. I even have Mr. Be-Mine going with me to volunteer each week. And one the rare occasions I can’t go because I’m out of town for work, he still goes with out me - that’s my kind of guy.

I’m still living with Fashionista. Our lease is about to expire so we have to renew it before February 9^th in order to stay put. The one nice thing about the current economy is that our rent did not increase like we expected it to after a year. In fact we’re planning to go next weekend to talk to our apartment management company about maybe lowering it some, just to see what happens but we’re both okay with staying put even if they don’t lower rent.

I think that’s about it for updates, let me know if you’re curious about anything else. I’m looking forward to the next post already.

Blogging

2008-07-20T15:11:00.002-04:00

As part of my deep thinking and rejuvenating on the cruise I've made a decision about the blog. Lately its been feeling forced and despite Changing my post schedule my post have still been short and not the quality that I really want to share so I've yet again changed my mind. I'm going to go back to the reason I've

I'm going to blog just for my personal enjoyment and I'm only going to blog when I have the time and when I have something to share. So who knows when my next post will be, maybe some time this week maybe sometime next month, but I can assure you that This Future Millionaire will still be on track financaily and she still wants to share plenty with readers so keep checking back every so often or subscribe to my reader so that you can be sure to find when my next post pops up.

Until then...Happy Personal Finance Thought!

Back from the Cruise and some exciting news to share

2008-07-20T15:01:00.003-04:00

Hey Guys. I'm back from my much needed vacation. I have to say a week of being waited on hand and foot by the cruise line staff sure does help one relax and rejuvenate. I'm happy to say I'm almost back to my normal self before I started working on the Project from hell in April.

Lets see some updates in my life that unfortunately due to the job and life I've not been able to post about. I've had several contacts through the grapevine about potential jobs, I've not really hit the real job market because for one thing I started getting cold feet about changing jobs, I really do love my current company its just that I don't love the current assignment. My second reason is I'm a little worried about changing jobs, going into the unknown. I've only ever really worked for one company (sure I have a variety of miscellaneous , but I'm talking career jobs I've only worked for one company) so who knows what other companies might hold out there. I'm also a little nervous because I've not yet received that promotion and I it has to do with politics, so I'm afraid if I change companies now that I might be further delayed in obtaining a promotion. Lets see the list goes on and on. But despite that I've talked to a few close confidants with in the industry to seek there opinion about what I should do and that's lead to several contacts about potential jobs, none of which I've followed up upon too closely. Well the other day (two weeks ago) out the blue I received a call from a rather small GC that wanted to talk to me about an estimating job. I was curious to know how they received my name and it appears that I have a pretty good reputation with in the business. So yay for that! Anyway I have an interview with them towards the end of next week. So we'll see how it goes, I have a ton of reservations about working for a small GC, changing companies etc etc etc etc but I feel I owe it to myself to check them out so I'm going to at least talk to them, I figure they have to sell me at this point not the other way around.

Wish me luck on the interview.

Vacation

2008-07-12T10:34:00.002-04:00

Hey Y'all. In case you were getting worried about where I was, I'm on a much needed vacation and am on a cruise so my internet access is pretty much non existent unless I want to pay ridiculous rates. I'll be back from my cruise on the 21st and I'll chat with ya then.

Guest Post ---- Your Credit Cards Can Save You Money

2008-07-03T07:14:00.001-04:00

Below is a great post from fellow personal finance blogger Miranda who edits for DestroyDebt.com if you enjoy her post be sure to check out Destroy Debt.

It seems counterintuitive that a personal finance writer would advocate the use of credit cards, but that's what I do -- provided that you can use your credit card responsibly and pay it off every month. Just like so much else in this life, credit cards themselves aren't evil. But using them in a way that is detrimental can result in a great deal of trouble. But if you use them the right way, your credit cards can actually save you money.

Choosing the right rewards

First of all, don't just choose any card with any old rewards program. You need to find a rewards program that works well for you -- offering you the rewards that you will actually use. Compare offers and decide what will benefit you the most. Whether you want travel points, cash or consumer goods, you need to pick a rewards program that will provide you with what you need.

Be warned: Too many different cards, with too many different rewards, can dilute the effectiveness of your rewards program. Instead, choose no more than three that you want to work on.

Create a plan for building credit card rewards that can save you money

Any financial planning tool -- including credit cards -- requires, well, a plan. You need to decide how you are going to amass rewards. However, the key here is to only spend money on things you would buy anyway. Here is an example of how I spend my money, and which credit cards I use to pay for them:

Capital One No Hassle card: All grocery store purchases, gas and recurring bills. Receive miles that I can redeem for airfare or other travel. Last year: Free round trip ticket to New York to visit my husband's family. This year: Free round-trip ticket to Phoenix, AZ to see my grandfather. Planning to use the rest of the points for car rental and for hotel while taking a mini-vacation within the trip to New York.
Upromise card: All online purchases. Percentage of purchases goes into an account that is in turn invested into a tax-preferred 529 college savings plan for our son.
Cash back card: Large consumer purchases. Once the reward is $10, a check is sent. Almost every time we make a large purchase (computer, TV, sofa, etc.) we get a check in the mail. That check immediately goes into our emergency fund -- which is a high yield savings account. It's not the only money we put in there, but it gives the fund a periodic boost.

Retirement is our most important goal, but we find that we can work toward our next most important goals (defraying travel costs to see family and helping our son pay for college) without having to spend extra money.

Warnings when using credit cards in this manner

It is important to take heed. Without a plan, you can quickly fall into the trap of not paying off your credit cards each month, and entering the cycle of debt (and the attendant interest). Here are some things to remember when using credit cards to save you money:

Once you start paying interest, the value of your rewards is eroded and can even be destroyed. So pay off your credit cards each month.
Make sure that you have the money before you buy something. That way you will be able to pay off the credit card at the end of the month.
Be aware that going over you limit or paying late can mean being locked out of your rewards. You won't be able to access them until you are back under your limit, or you've made your payment (and paid your late fees).
Late fees and over the limit fees can erode the value of your rewards.

If you plan carefully and use your credit cards in a constructive manner, you will find that your credit card companies are paying you -- instead of you paying them.

Miranda Marquit edits information on debt consolidation for DestroyDebt.com.

Net Worth Update --- Looks Like the Stock Market Is Starting to Impact Me

2008-07-01T07:02:00.001-04:00

Its July 1st which means that the 4th of July Holiday is right around the corner. It also means its time for me to update my net worth. Below is my new update.

	Updated 7/1/08	Change from Previous Update	Updated 5/30/08
Total Net Worth	$105,413.65	$559.93	$104,853.72

Net Worth Comprised of
Retirement Savings:	$29,881.15	$321.37	$29,559.78
401k	$23,932.15	$361.08	$23,571.07
Roth IRA	$5,949.00	-$39.71	$5,988.71

House Down Payment/CD's:	$57,401.89	$157.06	$57,244.83

Future Car Savings	$5,458.48	$157.76	$5,300.72

Emergency Fund/Money Market:	$11,435.17	$227.89	$11,207.28

"Cash"/Checking:	$1,236.96	-$304.15	$1,541.11

At first I was really concerned that I'd only increase my net worth by less than $560 because that's much less than my typical $2,000. There's two main reasons for this less than normal net worth increase, the first is that my Money Market decreased because I paid for part of my vacation that I'm taking in July the other main reason that my net worth decreased is that despite contributions of over $1700 to my retirement accounts they only increased by $321. I guess the current stock market and economy is finally taking its toll on me.

Monday's Money Funny

2008-06-30T06:19:00.000-04:00

No Monday Funny this week. With the project from Hell and my worse than normal hours (that unfortunately will last the duration of this project) I've not been keeping as abreast of financial news as I like to and sadly didn't open a paper, magazine or website last week.

If you're fortunate enough to keep up with the news give me a shout if you find any good Money Funnies.

Weekend Round Up

2008-06-29T18:30:00.003-04:00

Its been an exciting week around in the PF Bloggers World this past week. A few highlights include:

Living Almost Large explains all about IRA's.
Penelope @ Our Fourpence Worth gave tips on how to Resist the Urge to Slurge.
Master Your Card's Kristy gave a great test to determine if you're smarter than a 5th Grader when it comes to Credit Cards. (I love that TV show!)
Ashley from Wide Open Wallet shared a great story about a play it forward for coupons. Such a great idea.
Girls Just Wanna have Fund's Ginger shared tips on saving money when Vacationing.
And Seb from Pinching Copper wrote another great letter to Mr. Bernake.

Budget

2008-06-25T18:07:00.004-04:00

I recently received a reader request from Allison (shout out to Allison --- Thanks for reading!). She suggested that I share my budget as she felt readers might be interested. So here it goes…in addition to sharing my budget numbers I thought I’d take it a step further and share my philosophy on budgets which is that is has to be stretchy like a rubber band or it will never work.

My monthly budget is $1800, excluding savings and automatic withdraws from my paycheck*. This increases several months a year when I have irregular expenses like car maintenance, vacation, taxes etc. To account for these irregular expenses I save monthly so in reality I still stay with in my budget. My budget line items are pretty simple – I like to keep it easy as can be. Big Expenses include Rent ($620), Charity ($500), Dinning/Entertainment ($230), Utilities ($150), Gas ($100), Groceries/Sundries ($100), Misc-clothing, memberships, gifts etc ($100). Any left over from the month I roll over to my irregular expenses savings in addition to my normal savings.

* My health insurance, flexible spending account, renters insurance, retirement contributions etc is automatically deducted from my paycheck

While my monthly budget is $1800, I don’t hold strictly to my line item budgets. Each month is slightly different for me – one month I might eat out more often but buy less Groceries, another months I might splurge a little big more on gifts (especially around June when I have three birthdays in a row) but I’m so busy at Birthday parties that I don’t drive as much. I don’t beat myself up over this if I go over my targeted line item budget, I simply adjust for it from another category. If you don’t adjust for it then its like you’re on a really strict diet and I don’t know about you but I can never seem to follow those because eventually you just can’t take it anymore and have to splurge so I allow myself that splurging. It also allows you to do last minutes items that aren’t planned for – if my friends are going out and I don’t have to say no just because I’ve reached the $230 limit, I can just “borrow” a little for another category or if I absolutely need some toilet paper but I’ve used up my $100 groceries/sundries budget I can still get the items I need and “borrow” it from gas etc. The only two that I don’t borrow from are Rent because I prefer not to get evicted and I don’t borrow from Charity because I make that a priority. But all the rest are adjustable.

To help ensure that I’m staying on track with my budget, at least once a week I check on my total expenses for the month (excluding the irregular expenses) and calculate how much remaining money I have – this helps me to adjust my spending and help me remember my goal with my budget. I also check on each of my line items to make sure I’m in the ballpark and if I notice a trend over several months I adjust accordingly as well.

That’s my take on budgets --- how do you manage your budget and what does your budget look like?

Carnival of Personal Finance #158

2008-06-24T00:14:00.001-04:00

The Carnival of Personal Finance #158 Hosted by Mrs. Micahis up and running.

There's a tone of great posts by fellow bloggers, but sure to check them out and while you're there check out my article which is post under Assorted Instruments.

Monday's Money Funny - Tipping

2008-06-23T07:07:00.001-04:00

One of the regular features on my blog is "Monday's Money Funny" which are humorous (at least to me) articles/jokes/just about anything that I've discovered over the weekend when I catch up on all my on line reading that spark a need for knowledge. For example the previous Monday Money Funny was about how People that are too Happy to be Rich.

This week's Money Funny is To Tip or Not to Tip from Do the Right Thing advice column on CNN Money.

Below are the highlights. You can check out the full column by clicking here.

Question: I was at standing on a pier recently when my hat blew into the lake. A nice kid, maybe 9 or 10 years old, swam out and got it for me. I thanked him appreciatively and also thanked his mother, who was nearby. A friend says a “thank you” wasn’t enough - that I should have given the boy ten bucks, or maybe treated him and his friends to ice cream cones. What do you think?

When should you tip? I know when I'm out with my mom she is always asking me should I give him a tip, how much? Well I've scored all of Emily Post's Guidelines, Encyclopedias, and just about every resource I know and have found the best all inclusive guidelines for you at Findalink. It covers everything from tipping at restaurant to tipping at a funeral and all things in between so all of your bases are covered.

Personally I try and follow common courtesy but in general I tip when I feel its appropriate and I tend to "over tip". I'm an extremely generous tipping when I receive good service. It just makes sense to appreciate job well done. For example I tip my hair dresser around 30% despite the guide calling for 10-20%, I do this because this the the woman who controls whether I have a good hair day or bad hair day for the next 4 months, so when she does a great job I let her know. Plus when I come back she remembers (although I've been going to Leslie since I was in elementary school so I think she remembers me, but the large tips help her remember to take good care of me). The same is true of a waiter or waitress, I tip large when I've had really good service, not because I think I'm going to get the same server the next time but by tipping large I'm reinforcing the good service that they offered so they will continue this habit. That's just my two cents on tipping.

Stay tuned for next week's Monday's Money Funny. If you run across any Money Funnies please email them to me at future.millionaire.blog@gmail.com and if I use them I will give you credit and link to your blog.

Weekend Round Up -- The Neglected Edition

2008-06-22T13:51:00.003-04:00

Ugh -- this past week has been exceptionally rough on the Project from Hell. This week we were trying to top out the building so it meant even more exceptionally long hours (Thursday I was at the job site for a solid 20 hours yuck!) -- I think I'm still sleep walking trying to catch up on sleep. I'm now trying to spend a lazy Sunday on the sofa sleeping and catching up on the PF Bloggers World -- while I was sleep walking my peers on PF Blogger were busy keeping up informed.

A few highlights from this past were include:

Ashley from Wide Open Wallet featured another guest post from Bruce the Tax Guy about how to hire a professional. Very good advice - especially since I've started thinking I might want to hire a professional financial adviser but that discussion is for another post.

Kevin from No Debt Plan discusses Target Date Retirement Funds. This is what the bulk of my retirement is housed in because its really easy to manage.

Master Your Card's Kristy shared how to Get Perfect Credit -- looks like no matter what I'm going to have to wait another 20 years before I can potentially have perfect credit, I guess I'm okay settling for near perfect credit ;)

Penelope from Our Four Pence Worth shared an interesting twist on Monopoly with accounts.

Living Almost Large raised some interesting questions about are Credit Cards really the cause of debt or is it simply the people using them. Personally I use a credit card for every purchase, I think for the last month I've had the same $12 in my wallet. I'd be in real trouble if I could only use cash. Until Mr. Be Mine I'd never met anyone who was a strickly cash person, to me it seems a lot more difficult and more expense - always having to drive to the bank plus you have to keep all of your receipts to keep track of your spending. Are you a cash or credit person?

Weekdend Round Up - Happy Dad's Day Ya'll

2008-06-15T16:31:00.003-04:00

Hope everyone's having a wonderful Sunday with their Dad's.

This past week in the PF Bloggers World was most exciting a few highlights to check out are:

This week Ashley from Wide Open Wallet and I exchanged financial data and posted Millionaire in the Making Stories about each other.

Kristy from Master Your Card posted about how young is too young to have a credit card. I have to say I got my first card that I was responsible for when I was 18 however I listed as an authorized user on one of my mom's credit cards since I was 12. About a year ago I had to ask my mom to take me off of as being an authorized user because it was great when I was younger to have a long credit history but the balance my mom carried on that card was hurting my debt to credit limit since she was close to maxed out on the credit card.

No Debt Plan's Kevin shared about do-it-your-self projects. I think I'm like Kevin a lot in that my DIY project end up taking forever and a day longer than planned. About 4 months ago I bought an unfinished side table and you guessed it - it only have one coat on it right now. Maybe Kevin's success story will help motivate me to finish it up.

Living Almost Large posted about Medical Costs in Retirement. I know that's a big concern for a lot of retirees. I guess I'll have to make sure my mortgage is paid off so I can afford medical care in retirement.

Congrats go out to Ginger from Girls Just Wanna Have Funds for being featured on Good Morning America. -- You go girl!

Also out side of the PF Bloggers World Banker Girl posted 6 Secrets for Fast-Tracking your climb up the corporate ladder. Very useful to me since I'm aiming to make it to the next rung this year.

Millionaire in the Making

2008-06-13T07:08:00.001-04:00

I’m a huge fan of the Millionaire in the Making stories that CNN Money publishes. Ashley from Wide Open Wallet and I decided to swap financial data and write each other’s Millionaire in the Makings stories. You can view my story written by Ashley at her blog Wide Open Wallet, below is her story.

Millionaires in the Making:

Ashley and her Dear Husband (DH)

Ages: Ashley 31, DH 42
Occupations: SAHM and Telecommunications Installer
Salary: Approximately $91,000 combined
Home and Land Value: $110,000 estimated equity
Retirement: $17,200
Cash on Hand: Approx $20,000
Monthly Expenses: $4,000 - $5,000
Debt: $34,732 outside of mortgage

Ashley started her blog, Wide Open Wallet, because she wanted an outlet to share her financial views since according to Ashley her friends grew tired of listening to her talk about personal finance. So you know this couple has to have their head on straight when it comes to money.

The couple has two young children, a girl and a boy. Ashley’s DH works in telecommunication as a telephone system installer and she stays home with the children. Ashley plans to eventually return to work after their youngest goes back to school but that won’t be for a few more years. However, she had tried a few part time jobs such as elder care but it’s not really worked out for the time and energy involved.

Currently the household earns around $91,000 a year. This is great considering the household expenses are between $4,000 and $5,000 each month. They have minimum debt out side of their mortgage. Their total non-mortgage debt is $34,732, which is comprised mainly of car loans.

The couple bought their current home in 2004 for $184,000. The home is in a great location in Arizona and has appreciated in value since purchasing. Currently the house is appraised at over $250,000 despite the current housing crisis.

Unfortunately, the couple got a late start saving for retirement. Currently DH has $2,700 in an IRA and is contributing $100 a month. Ashley has a retirement plan that’s currently valued at $14,500 and is saving $50 a month towards her retirement.

The couple’s financial goals include providing for their children and one day retiring.

Future Millionaire’s Take

With their current savings and home value Mom and her DH are well on their way to becoming millionaires – it’s just a matter of when. Calculating a modest return of 7% they will become millionaires in 43 years.

But the even bigger question for this couple will be “Is a Million Dollars Enough for Retirement?” This is a big question for Mom and her DH that needs to be investigated. I recommend they review their current spending and determine which expenses they will still have in retirement and any future expenses, including medical, they might have. Then develop an approximate monthly budget for retirement and add at least a 10% safety net. This will give Ashley and her DH a goal amount and can adjust their savings accordingly. Then determine what monthly contribution is needed to reach this goal. One can determine this by using Bankrate’s calculator for saving goal.

While they are starting to work towards their retirement goal Ashley and her DH should tackle some other financial objectives. Priority number one should be building up their emergency fund to have between 8 – 12 months of living expenses. Even at their bare minimum expenses of $4,000 they only have 5 months and that includes liquidating all sources of cash on hand, not just their emergency fund. The other piece of securing their emergency fund is to make sure it’s earning some money, put it in a high yield Money Market or On-line savings account where they still have easy access but are gaining some interest at the same time.

Ashley and her DH should also look into starting to plan for their kid’s college. As young as their children are who knows if Daughter or Son will go to college but by starting to save for them now will save their children from the burden of working full time while in college or having to take out student loans. (I fully support kids being responsible for a portion of their education, it will make them value it more but if possible it’s nice if parents are able to help them out). The best way to start saving for their children’s college expenses is via a state 529 plan. This allows for tax exempt dollars to be saved and grow to be used towards college expenses much like a 401k except you’re not taxed on the money at the time of withdraw if its used for college expenses. If they are not sure if Daughter or Son will attend college they can still save because they can change the beneficiary to another qualifying family member at any time in order to keep the account going and avoid taking non-qualified withdrawals when the original beneficiary doesn't need those funds. And even if all else fails 529 Federal law only imposed a 10% penalty on the earnings from this plan.

Once their Emergency Fund contains between 8-12 months of living expenses and college savings has been started for their children Mom and her DH should look into accelerating their debt pay off and then establish a future car savings account so that any future car purchases can be paid in full and avoid paying interest. After that Ashley and her DH should just focus on enjoying a good financial future.

All in all Ashley and her DH are right on track to be Millionaires in the Making.

Monday Money's Funny -- Too Happy to be Rich

2008-06-09T07:10:00.001-04:00

Weekend Round Up

2008-06-08T14:20:00.002-04:00

I had a lovely weekend. We celebrated my mom's Birthday and I baked a storm. I spend all of Saturday in the kitchen but it was well worth it to see my mom so appreciative. So times in life the best presents are the ones that are of your time and energy.

Now for some highlights from this week in the PF Blogger World:

Our Four Pence Worth's Penelope Pince posted Simple Solutions to Staying out of Debt.
Kristy from Master Your Card posted about the Modern "Necessities" that Drain your Cash. (Althought I have to say I love my cable TV)
Girls Just Wanna have Fund's Ginger provide a great link for the Ultimate Graduation Resource List. Good luck to all of your recent Graduates!
Mom @ Wide Open Wallet posted about the Opportunity Cost of Having a Baby. Its very interesting read for any one especially a career woman.
No Debt Plan's Kevin post about Portion Control and your Finances. I'm always worried about portion control for food and finances as a Marathon Runner and as a Future Millionaire.
Living Almost Large posted Food Inflation. No wonder my grocery bill keeps going up.
And Seb from Pinching Copper with is humorously truthful posted posted the death of the SUV with rising gas prices.

Carnival of Personal Finance #155

2008-06-04T07:08:00.001-04:00

The Carnival of Personal Finance #155 Hosted by Pinyo @ Moolanomy is up and running.

Check out my article which is post #4 under Money Management.

There's a ton of great articles (a total of 98), I know what I'll be doing this weekend in addition to celebrating my mom's B-day.

While you're reading all of the great articles - the ones I scanned so far seem to be very useful (especially the career ones in my case) don't forget to check out fellow PF Bloggers posts by Our Four Pence and Living Almost Large that were included in the Carnival.

My Annual Review is coming up

2008-06-03T07:03:00.000-04:00

My annual performance review is coming up and one of my financial goals for this year is to obtain a promotion.

I'm a little worried that my goal of a promotion might not happen this year, not because of a lack of performance on my part but because my role in the company has changed. The new role which is on a difference career ladder I've only been performing for about 6 weeks now, definitly not enough to prove myself in to obtain a promotion but I definitly deserved in my old role.

I feel like a promotion was coming if I had been able to stay in my old role or go back to preconstruction, especially since on Monday my old boss, who's doing my review, called to make sure I was going to fill out a skills assessment that he was going to email me. I said I'd never heard of it before and he said it was a tool that he liked to use to prove to the brass that someone was ready for a promotion.

I've filled that form out and have all of my other ducks in a row to prove I'm ready for a promotion so we'll see how it all goes - unfortunately I won't find out anything until late August.

So we'll see how it all turns out - wish me luck.

Monday's Money Funny --- Can't Afford Mortgage

2008-06-02T07:24:00.000-04:00

"This is my bed, my dogs," she said. "This is my life in this car right now."

Harvey was forced into homelessness this year after being laid off. She said that three-quarters of her income went to paying rent in Santa Barbara, where the median house in the scenic oceanfront city costs more than $1 million. She lost her condo two months ago and had little savings as backup.

"It went to hell in a handbasket," she said. "I didn't think this would happen to me. It's just something that I don't think that people think is going to happen to them, is what it amounts to. It happens very quickly, too."

Harvey now works part time for $8 an hour, and she draws Social Security to help make ends meet. But she still cannot afford an apartment, and so every night she pulls into a gated parking lot to sleep in her car, along with other women who find themselves in a similar predicament.

If you find your self in a situation where you can't afford your mortgage payments, my advice would be to get out as soon as you discover this problem because its not going to get better only worse. Since I'm not a trained professional that's only my gut instinct but I've found many reputable sources with similar suggestions as well as step by step methods.
New York States Guide to When You Can't Afford Your Mortgage
Non-Profit Neighborhood Works' Mortgage Solutions
HUD's Tips for Avoiding Foreclosure

I hope no one is facing this problem but I know with the current housing market problems and US economy this could be a very real problem for many.

Stay tuned for next week's Monday's Money Funny. If you run across any Money Funnies please email them to me at future.millionaire.blog@gmail.com and if I use them I will give you credit and link to your blog.

Weekend Round Up

2008-06-01T18:49:00.002-04:00

I was sick most of last week so I had plenty of time to read blogs. Here's some of the highlights from this last week in the PF Blogger world.

Living Almost Large posted about Money Personalities. I checked out the quiz and discovered I'm 38% Saver, 25% Empire Builder, and 13% Guardian.

Jonathan from Master Your Card posted 7 Ways to Curb Overspending. I think I do/will try all of them except I probably won't be freezing my credit cards any time.

Our For Pence Worth's Penelope posted a Vacation Checklist. Which is perfect for me since I'll be leaving for my cruise on July 11th.

Seb at Pinching Copper wrote a very interesting post about Pennies, especially since his blog name is about saving pennies.

Wide Open Wallet's Mom pulled out her budget from last year to check her personal inflation. I love the idea, now I need to go dig around and bull my budget from last year to compare.

Don't forget to check out all of the PF Blogger's blogs and posts by visiting the left tool bar for the links. Hope everyone has a great week.

Net Worth Update -- June 2008

2008-05-31T07:11:00.000-04:00

	Updated 5/31/08	Change from Previous Update	Updated 4/29/08
Total Net Worth	$104,853.72	$4,777.40	$100,076.32

Net Worth Comprised of
Retirement Savings:	$29,559.78	$1,728.25	$27,831.53
401k	$23,571.07	$1,347.39	$22,223.68
Roth IRA	$5,988.71	$380.86	$5,607.85

House Down Payment/CD's:	$57,244.83	$163.70	$57,081.13

Future Car Savings	$5,300.72	$5,100.45	$200.27

Emergency Fund/Money Market:	$11,207.28	-$3,738.37	$14,945.65

"Cash"/Checking:	$1,541.11	$1,523.37	$17.74

I'm less than $150 away from my goal net worth for 2008 and the year is only half way over. YAY! This means I need to reevaluate my net worth goal. I have increased my net worth goal to $127,000. I came up with this number based upon my current net worth plus what I anticipate contributing to retirement via my 401k and Roth IRA ($10,250), plus what I anticipate receiving as a bonus after taxes from the project I just completed ($10,000), plus my monthly car savings for the next 6 months ($900), and then I added saving an extra $100/month and rounded up.

I think this new goal is definitely achievable but I will have to push myself to achieve it because it extends beyond my automatic savings.

The Cost of Getting Sick

2008-05-30T07:30:00.003-04:00

I have a viral infection...oh the joy. At first I thought it might just be a cold but then Wednesday I woke up with a fever and knew I couldn't go to work and I needed to go visit the doctor. I've since spend the last few days laying in bed trying to get better.

Fortunately my fever finally broke today and I'm starting to feel much better, I started thinking about the finances involved in being sick.

Doctors Visit Co-Pay: $20
Soar Throat Drops: $3.00
Nose Spray: $3.50
Sudafed PE: $6.00
Box of Kleenex: $1.50
Prescription Co-Pay: $40
Special Sick/Comfort Food: $15
"Vacation Days" from Work: Loss of real vacation since vacation day had to be used for sick days

All in all the damage from being sick is $89 -- its a good thing this is the first time I've been sick in about 4 years. Fortunately I also have a flexible spending account that allows me to get reimbursed for most of these expenses with pre-tax dollars.

What to do with $5,000?

2008-05-29T07:12:00.003-04:00

I've struggling with a rather good personal finance dilemma since updating my net worth last month.

From the left side bar you can see that my Money Market for my Emergency Fund is nearing $15,000. I've made a rule of keeping at least $10,000 in my emergency fund which equates to a little over 5 months worth of expenses at my current spending. However, if a real emergency occurred I most likely would cut back on spending including eating out, entertainment, and savings which would extend my emergency fund to over 9 months worth of expenses. All in all I feel very comfortable with having an emergency fund of $10,000 even given my current work situation.

I have my pay checks and expense reimbursements direct deposited into my Money Market and then only transfer the funds I need into my checking to pay bills, this allows all of my savings to gather in my Money Market, plus earn a little extra interest. In the past when I reached $15,000 I would then take $5,000 and transfer it into a higher interest earning CD ear marked for my future house down payment.

I continued this method even after reaching my House Down Payment goal. I now have over $57,000 for a down payment which is over the 20% needed for any house I would choose -- the price range of houses I'd feel comfortable buying would be around (most likely less than) $250,000. So there's not a real need to put the $5,000 from my money market towards my house down payment funds.

So what do I do with this $5,000? (See I told you it was a good dilemma to have).

My options they way I look at it are:
- Earmark it for additional money towards a house
- Add it to my car savings pot so that I'm closer to achieving that goal
- Set it aside and forget about it until I really need/want to use it for something
- Invest this money in the stock market, since I don't really need it for anything it won't actually hurt me if its all lost
- Blow it --- but I can't think of anything that would really be worth $5,000, plus the saver in me really struggles to part with even a penny

I've basically ruled out blowing it, and I'm am just too overwhelmed by the stock market right now so I've ruled that out. That pretty much leaves my options as house, car, or hold on to it. Since I couldn't make up my mind I've opted to combine the three. I'm going to officially earmark the $5,000 towards my future car and add it to my emigrant direct savings account. I have decided to add $5,000 to my car savings, primarily so that my monthly contribution does not have to increase and now I have a reasonable chance of achieving $20,000 in the next 6 years when I would start thinking about purchasing a new car. And since all of this money is in a saving account its easily movable so I can always change my mind at a later date since most likely I'll be buying a house before I buy a new car plus I can always transfer the $5,000 to something else if I finally decide a reason to hang on to it.

I've also decided to increase my monthly car savings contribution to $150 in an effort to achieve the $20,000 with in 6 years. Hmm....now I have another financial dilemma, what should my next savings goal/plan be since I think I'm on track with everything else. I know I probably should start investing outside of my retirement accounts but to be honest it just plain scares me.