Monday, October 02, 2006

After nearly four months of blogging, how are my finances doing?

I've been blogging since early June, and I've written a lot about various plans that I have made up for my future financial goals. So how am I doing, really? Well, not as well as I'd hoped - but not as badly as I could have done either.

Credit card debt - I'm in basically the same amount of debt as I was at the start (about $7,900) partially due to a temporary cash crunch. But, all of this is at 0% on the same card, whereas before some of it was at 10% and some was at 3.9%. I need to focus on paying this down, but at 0% it's not my biggest worry. Since I'm really focused on retirement savings, the only reason I'm worried at all about it is because I would like to buy a house eventually. I should actually be MORE worried about this, but again, 0%...

Retirement savings - Big increases here, but this isn't actually my doing since my retirement plan at work forces me to involuntarily contribute $225 a month, and my work contributes about $300. So this number goes up without my doing anything really. However, my Roth IRA now has $1100 in it, which I think I opened in March. Total retirement savings in June? $7900. Total in about 3 days, when this month's contribution hits: About $10,200. I think the big shift here has been in how I think about retirement. It's really become my big priority and I sometimes have difficulty convincing myself that I should pay down my debt when I haven't even come close to maxing out the Roth. I've also set a goal for myself to have $75,000 in retirement-only money by the time I'm 30, and that's really important to me. I just feel a lot more secure about the future knowing that I've got at least something stashed away.

Spending patterns - WAY better since I started reading blogs, probably not much change since I actually started blogging. When I got my job, I also had another side job which was pretty lucrative, so Boyfriend and I spent money like there was no tomorrow. We burned through about $7,000 of saved money and credit in the first four or five months - above and beyond what I brought home. Part of this was due to the fact that Boyfriend didn't get paid till October, but most of it was due to things like going to Olive Garden three times in one week (yes, we did.) Being stressed from a move and new job is NOT an excuse to spend money you don't have. I still feel aghast when I think about how much I wasted the money from that second job - that alone could have maxed out my Roth last year, and I didn't even HAVE one. *shudder* I'm much more responsible with the money that I have now, and examine my own habits much more closely.

For instance, I recently set up new checking accounts so that all the money for bills other than rent is direct deposited into not only a separate account, but one at a separate BANK. This is because I would think to myself, Okay self, we're going to leave $600 in the account this month for general stuff after bills. Then I would pay the bills and the rent and get the check from Boyfriend and then maybe we would go to the grocery store cause we're low on food and maybe we'll go to Whole Foods and buy $100 of meat and maybe we'll go out to eat cause hey I have all this money and maybe I'll buy more pet stuff cause I don't want to run low on supplies.. and suddenly everything would clear my account and I'd have $250 and be baffled. I went from having over $1500 in my bank account to $250, where did it all go? And while all the bills were clearing and we were spending all this money, I'd be paranoid that one of the bills was going to bounce if we got a little too happy at the grocery store. So now, I don't have to worry about the bills clearing since I know the money is there, I know how much is in my spending account, and the savings money has already been deposited. Much better.

I also set up a THIRD checking account which gets about $50 a month which is stashed for Christmas money and an expensive anniversary dinner for Boyfriend and I. I don't have a lot of recurring expenses so this is my version of the Freedom account that Beachgirl wrote about. I'm going to be cutting back a little on presents this year (last year was over $1000 because I thought, hey I'm a real adult with a real job and real money!) but it will be nice to know that I already have some money squirrelled away, and since it's in a checking account I can just take the card with me shopping, and not even use my real bank account.

General savings - I still only have $56 in my house fund, but it's a start! I finally got up to $1000 in my emergency fund, but I want it at $2000 before I start funnelling money into the house fund. At this point, given the outlook on actually buying a house, I might just not bother too much with the actual house fund and just work on reducing my debt and increasing the emergency fund. If I'm going to stay in this city for five more years, I think I can wait an extra six months to buy the house.

I think the biggest change for me after four months of blogging has really been my financial mindset. I know I've started a few posts by saying I'm a "bad blogger" because I now have an ideal in my mind of what I should be doing as a "good blogger" - saving my money, not buying stupid crap, and thinking of the future more than I think of today. That part, I've got down pat.

6 comments:

Matt said...

Your blog is definitely helping me change my mindset too! So thanks and keep up the good work!

Bob said...

Good to see you working on these things. You have a lot on your plate. If you do nothing else, max out that Roth. At your age you will die a rich woman ;)

Henry said...

Just stumbled on your blog from the FreeMoneyFinance site. Do you have any student loans?

-h

Kira said...

Oops, I forgot to include that. Yes, I have plenty of student loans! You can check my NetWorthIQ statement - I have in the neighborhood of $18,900 worth of loans, and $2000 of my credit card debt is actually a student loan that I paid with a lower interest rate check. SO I guess really about $21,000. That's getting paid down $150 a month (minimum of $137) because the rate is fixed at 3.8%, and I feel like the other goals should take precedence. (Also, that's just a ton of money, and if I made that the main goal I would get very discouraged. ;)

Ms. MiniDucky said...

Good blogger! ;)

Anonymous said...

Push $4,000 into your Roth before you pay down 0% debt. If you ever need the Roth cash in an emergency, you can pull out your *contributions* without penalty or tax. You are a bit more secure when you have access to emergency funds. And you are right that the investment will grow faster than 0% debts grow. CD's are good for Roths because the interest is tax-free. CD's and an index fund.