Financial Goals 2008: May Update

I'm afraid my posting is going to be a little erratic this summer. Life's been really busy lately, especially with going on two vacations in three weeks! My husband and I have our weekends booked almost every weekend from now until July. At any rate, I'm definitely going to keep blogging, just at a slower rate through the summer. I hope you'll stick around :)

Anyway, on to the goals update. You can read about my 2008 goals here if you missed it. Here's where we're at as of May 1st:

1. ROTH IRA's. We're pretty well on track with funding our ROTHs. As you can see from the progress bar on the right, we have $2000 out of $8000 contributed. We're funding $250 each month into each ROTH automatically now, and I'll fund extra toward the end of the year.

2. New Car Fund. This one is also on auto-pilot. I just increased the contribution from $125 per paycheck to $150 per paycheck with my recent raise. Now if only the stock market would help us out! We have $1098 added to this account so far this year with a goal of $3900 added by the end of the year.

3. Emergency Fund. We have 36% of our goal completed on this one, so I guess we're a little ahead of schedule! We have increased our balance by $950 so far this year. Our goal is to have an increase of $2600 by year end.

4. New Siding Fund. This one has been interesting. My husband has decided he might want to paint the house instead of putting vinyl siding on. It's still very much up in the air, so I'm still hitting this fund pretty hard with extra money. We have a lot of other home improvement projects we want to do, so if the money doesn't get used for vinyl siding, it will get used for carpeting and bathroom cupboards and paint and a new refrigerator... the list could go on for quite some time! :)
At any rate, we've increased this fund by $2150 with a bare minimum goal of $4000 by the end of the year. Hey! I hadn't realized I was so far ahead of schedule! We've funded over half of our goal and we're only 33% into the year! Awesome :)

How are you doing on your 2008 goals?

Favorite Blog Post 5/2/08

My favorite blog post this week was from That One Caveman and is titled The Key to a Successful Financial Plan: Flexibility. I really liked it because I tend to get frustrated with changes to my financial plans and feel like I have failed. I needed to be reminded that changing your plan is not a failure, it's flexibility!

Carnivals
My story about How NOT to Handle an Inheritance was included in the Carnival of Money Stories this week. Make sure you check out all of the money stories!

Best College Moves

There's another meme going around. This time, bloggers are sharing their best financial moves in college. Here's my story!

When I was a child, I wanted to be a veterinarian when I "grew up". Once the high school teen years hit, so did the hormones and some reality. I realized two things: 1) I wanted to be a stay-at-home mom someday and 2) veterinarians have about 8 years of schooling! Because of a love of organizing things, I settled on becoming an administrative assistant.

The first thing I did right in college was to go to the local technical college instead of a traditional 4-year college. I was near the top of my high school class, so many people thought I should go to a 4-year school and get a degree, even though I just wanted to be a secretary. I stuck to my guns and went into the administrative assistant program at the tech. I'm confident I would have ended up getting a job as a secretary in the end, anyway, so I'm glad I didn't waste my time and money on a college degree. Lesson #1: Go With Your Gut

The second thing I did right was to switch from a 2-year associates degree program to a 1-year technical diploma program after my first semester. At the time I was in college, the economy was booming. Jobs were easy to come by, and I already had a part time secretarial job in the evenings while I was in school. I quickly noticed that secretarial job postings cared just as much, if not more, about experience as education. My evening job was interested in taking me on full time, so I'd have no problem getting experience under my belt. I realized I could do just one year of schooling and very quickly have the 2-year minimum of experience that most employers wanted. That's what I did, and it has worked very well for me. Lesson #2: More schooling doesn't always mean more money and better jobs.

Obviously, a path of little post-high school education doesn't work for everyone. If your career interest only requires a technical school education, though, don't feel like you have to go to a 4-year college. Do what's right for you!

Also check out:
Mrs. Micah's meme
Cash Money Life's meme

Washington DC Trip: The Finances

My husband and I went on a whirlwind tour of our country's capital last weekend. We left late on Thursday for Raleigh, NC, drove to DC on Friday morning, drove back to Raleigh Sunday night, and left Monday morning! We had a blast!

As far as the financial aspect of things, I was actually pretty surprised.

Breakfast was either provided by the friend we were staying with or free at the hotel, but for various reasons, we ate out every single lunch and dinner. I knew that was going to get expensive, but I wasn't sure exactly how it would all come out.

We ended up spending a lot eating out, but almost nothing for entertainment (since all of the DC museums are FREE!). I think it came out as a pretty decent wash. Here's the breakdown:

Food: $175
Entertainment: $39
Parking: $44
Lodging: $100
Transportation: $415

The transportation costs were just the plane tickets. Our friend graciously paid all of the gasoline costs. We tried to make up for it by paying for some of his meals, but I think we got the better end of that deal :) (Thanks, Tom!)

I highly recommend vacationing in Washington DC. A lot of the awesome things to do there are free, and you could have a very frugal vacation if you were to buy your food at a grocery store instead of eating out like we did.

What's your favorite frugal vacation spot?

Favorite Blog Post 4/25/08

Since I took a little vacation to Washington DC last weekend, it's been tough getting caught up around here. I haven't been able to read and comment on as many blogs as I usually do. I did come across a few good articles this week, including a post from Cash Money Life about improving your computer's performance. It's not directing related to finances, but if you can keep your current computer longer, you will definitely save money!

Milk and Miscellaneous

Milk
I wrote a post last week mentioning how much milk my husband and I go through. I received a couple of good comments about it. I thought I would mention that I do drink water, as well, though not as much as I should. I tend to drink more water in the summer when I often have an actual craving for it. In the winter, I crave the creaminess of milk. Still, I should work on this one!

Also, someone mentioned mixing half real milk with half powdered milk. I'm a little leery of liking that since skim milk is already so watered down. The comment did make me think, though, about mixing up powdered milk for baking. Does anyone do this? Can you taste the difference? Is powdered milk a lot less expensive than real milk?

Miscellaneous
The CVS and Walgreens rebates are finally paying off. I felt like I was spending a lot of money during the first month, but now I'm reaping the rewards by paying for everything with Extra Care Bucks and my Walgreens gift card. Check out the stuff I got today! I paid about $1 out of pocket, the rest was paid for with coupons, ECB and my gift card!

How NOT to Handle an Inheritance

After four years, she's finally done it. She's spent her entire inheritance.

Let me explain. I work at a financial services firm. A client of ours, let's call her Eunice, managed her finances well and left an inheritance of about $272,000 to her two children when she passed away four years ago. Both children were in their 40's and each received $136,000 when Eunice died. Both children also immediately began taking distributions from their inheritance.

The son started spending his inheritance money like it was going out of style. He passed away about a year after Eunice died. His wife received the inheritance and hasn't spent a dime more of it. She's saving it for her own retirement (very smart woman!).

Eunice's daughter, let's call her Jane, also began spending her inheritance immediately upon receiving it. About once a month, Jane calls us and says that she needs $2,000 (it varies every time she called, but probably averages out to monthly and $2,000 each time).

Jane also declares each time she calls that she needs the money "as soon as possible" for some bill or another that's due in 4 days. Because she needs the money so quickly, we have to wire it to her (costing her an extra $15 wire fee each time), and the process starts all over again in about a month. Jane never would agree to an automatic monthly withdrawal, which would have saved her the $15 wire fees.

Some of the inheritance money was in an IRA, so Jane has also had to pay taxes and early withdrawal penalties to the government on her withdrawals.

Well, Jane made her last withdrawal last week, just under four years after her first withdrawal. She's managed to blow through about $136,000 in four years, which averages out to $34,000 per year. Since Jane makes about $40,000 per year in her career, she has almost doubled her spending each of these past 4 years. And now it is gone. I have no idea how she plans on continuing her spendy lifestyle with the extra money.

Every time Jane has called "needing" more money over these last four years, I've wanted to grab her by the shoulders and shake her. Didn't she realize that if she kept the money untouched, she'd have a really nice addition to her (probably nonexistent) retirement funds ($633,000 at age 65 with an 8% return)? Didn't she ever think that Eunice would be rolling over in her grave if she knew how fast her daughter went through Eunice's life savings?

I was actually glad when Jane called last week to take that last distribution (wired to her, of course). I'll no longer feel that frustration every month at her poor management skills, knowing what "might have been".

I don't know what the message in this post is, besides encouraging people to think about the future and not be idiots ;)

Do you know people like this, people whom you want to scream at for their stupid money decisions? I'd love to hear about them!