Thursday, June 17, 2021

14-day Plan to Improve Your Finances! (Days 12-14)

 Hello Dear Reader, 

We are continuing the 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly)! 

Again, please note this was originally published January 4, 2016 at 12 pm. 

Last day of posting about this!!

Day 12: Gather your finances and passwords.

I don't actually recommend you do this unless you have children and/or significant assets.

I don't think it's very secure to do this.

However, if you DO have children and/or significant assets, you may want to gather all your financials and passwords and keep them in a safe place that you alert your (trusted) loved ones about in the event that you pass.

Day 13: Insurance! 

Here is the insurance Business Insider recommends:

Starting in your 20s: health, auto, renter's and disability insurance
Starting in your 30s: life, homeowner's and pet insurance
Starting in your 40s: long-term care insurance

So, here is my editorializing: life insurance should really start whenever you have kids (or a spouse who doesn't work). Life insurance is designed to take care of your family in the event you pass. So, if you have a parent or other relative who is dependent on you, you may want life insurance even if you don't have kids or a spouse.

Term life insurance is the way to go. Never get whole. This is my personal opinion.

Homeowner's insurance should start when you own a home. Renter's insurance should start when you rent.

Similarly, don't get auto or pet insurance if you don't have a car or a pet.

End of advice.

Day 14: Plan out your calendar. 

Evaluate your budget once a month (this can be done weekly if you really feel the need).
Check your credit score once a month (again, free through Credit Karma).
Get your credit report, once every four months (or all three once a year if you prefer).
Check the balance on your retirement account(s), once every six months (I actually do this once a month, personally).
Adjust your savings goals, once every six months (this seems fine).
Evaluate your investment accounts, once a year (I check my investments once a month).
Once a year - go through this two-week process again!

They suggest setting reminders on Google Calendar. I don't know about you, but I have enough stuff on my Google Calendar. Instead, I check my finances on the first of every month. That is also the day I use to pay my credit card bill, etc etc.

I hope this was helpful for you!

Into the FIRE

Tuesday, June 15, 2021

14-day Plan to Improve Your Finances! (Days 9-11)

Hello Dear Reader, 

We are continuing the 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly)! 

Again, please note this was originally published January 4, 2016 at 12 pm. 

Day 9: Your investment accounts. 

First, please take a look at this image:
It is from (JP Morgan Asset Management). 

As you can see, due to the magic of compounding, the earlier you invest, the more money you will end up with in the long run - even if you invest less in the beginning. So what is the moral of the story? Invest early, invest consistently. Do not stop investing. But, if you must stop investing - do it later. 

Personally, I recommend you invest in SWPPX. I know some people like SPY. Other people tout Vanguard funds. That's all okay. 

Any index fund will pretty much be good for you (I think). I am not an investment professional, and I do not claim any responsibility if you invest in SWPPX and lose all your money. One note about investing - let's say you put your money in SWPPX (pretend it's $5k) and it goes to $1. In a flash you now have $1. That loss isn't actually locked in until you sell those funds. So, if you don't sell them, and the S and P 500 goes back up, higher than before (which has happened in the past), you will now have "made money". Again, the profit will not be locked in until you actually sell. 

Day 10: Find out your credit score and credit report. 

To find out your credit score, you can use Credit Karma. That is what I use. Please note I ignore all those credit card offers, but it's a good way to check in and see what your number is roughly around. Also - if you haven't gotten your credit report in over a year, you should get your credit report! 

You are entitled to one report from each of the three credit bureaus once a year. Some people like to spread them out throughout the year and some people like to get them all at once so they can see if any one bureau has errors that the other two don't. is the ONLY place to get a free credit report. 

Please - if any other website says your "credit report" is free, it's probably a scam. So be careful! 

Day 11: Look at your bank(s) and subscriptions. 

Remember Day 6 when you looked at bills? Do you have any subscriptions you have been paying for that you forgot about? Maybe you don't really need that snack box subscription anymore? Or that makeup box subscription? 

You don't have to cut everything. I like to think of it like Marie Kondo does - does this subscription bring you joy? If so, maybe you should keep it (but only if you can afford it). 

Next, look at your bank. Is your bank charging you fees every month? Are those fees worth it? 

Personally I like TD Bank. I think they have great hours and great customer service. Why not look around for a bank that you can be satisfied with too? Also - set up a system to avoid fees. Make sure your checking account has no minimum balance, or if it does, set up an alert to make sure you don't go under that balance. 

You can also have multiple bank accounts. Make sure to look over your statements and that have multiple bank accounts is only helping you, not hurting you. 

Were you charged a fee and you feel like a fool? Why not try calling the bank and asking if they will waive the fee this time (and then next time, make sure you don't run up that fee again!)? 

Okay, I think that's a lot for today! Further days to come in a following blog post! 

Into the FIRE

Monday, June 14, 2021

14-day Plan to Improve Your Finances! (Days 5-8)

Hello Dear Reader, 

We are continuing the 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly)! 

Again, please note this was originally published January 4, 2016 at 12 pm. 

Day 5: Visualize your goals, and solidify them! 

Figure out your 5-year, 10-year and 30-year goals. Or any time frame you want! 

Maybe you want to save up for a great vacation, and you know you can do it this year. Try putting a financial number to your goals. Maybe your goal has nothing to do with finances and it doesn't cost anything at all. That's great too! 

Some goals that do include costs would be buying a house or apartment, taking a trip, building an emergency fund, buying a car, having a baby, sending your child(ren) to college and retiring early. 

Day 6: Find those savings! 

1: Negotiate your bills like phone, cable, utilities and gym memberships. 
2: Reduce bills like groceries, restaurant spending and clothing. 

The things you really want to focus on saving are your rent/mortgage, your commute (transportation) and your food. Those big three expenses will save you the most money in the long run. 

However, I don't want to dismiss Business Insider's advice. Saving money on recurring bills can be helpful, and it's true that groceries and restaurant spending are included in the food categories. Try meal planning your week, or going through your pantry, refrigerator and freezer to see what food you can eat before buying more food (don't forget to leave reserves for one to three meals in cases of emergencies). 

Day 7: Pay yourself first. 

Make savings automatic. This means setting aside an allocated amount to deduct from your paycheck on the days you get paid. Their theory is that you don't see this money, you won't spend it. This is good and I agree with it. 

However, you will never truly become wealthy unless you invest this money. The steps should go like this: 1) create emergency savings 2) pay off debt 3) invest your extra savings. Ideally, you want to do steps 1 and 2 as soon as possible so you can get to #3! The more time you have in the market, the better it will be for you! 

Day 8: Can you improve your income? 

There are two ways you can improve your savings rate. 

1: Spend less money. 
2: Earn more money. 

This day tackles number 2. 

Here are some ways Business Insider recommends: 
1: Negotiate for a raise. 
2: Look for a higher-paying job. 
3: Freelance through Upwork. 
4: Create a course on Udemy. 
5: Sell your things on eBay, Craigslist, etc. 
6: Sell your services through TaskRabbit or Fiverr. 

Use my Fiverr referral link to get 20% off your first task order (note this is an affiliate link, so I may get some credits if you use this, but your price will actually be lower!): 

Okay, I think that's a lot for today! Further days to come in a following blog post! 

Into the FIRE

Sunday, June 13, 2021

14-day Plan to Improve Your Finances! (Days 1-4)

Hello Dear Reader, 

Back in May I posted some budgeting tips from GreenPath debt solutions. 

Now I have a 14-day plan to improve your finances from Business Insider (with some editorializing by yours truly). Note this was originally published January 4, 2016 at 12 pm. 

Day 1: Get your 90-day number. This means recording all the money you earned (and spent) in the past 90 days (three months). This will help you figure out if you are over-spending and also where your money is going. 

Step 1: Add up your income for the past 90 days. 
Step 2: Add up your expenses for the past 90 days. 

If the number is negative, you are overspending! You should be careful. 
If the number is around zero, you are probably living paycheck to paycheck, which isn't ideal. 
If the number is positive (and not close to zero), congratulations! You are already ahead of the game. 

Day 2: Choose your tracking system. Some people use Mint (I used to, but I don't anymore). Some people use YNAB (You Need A Budget). Some people use Microsoft Excel (expensive, unless you have it through work). Some people use Google Sheets (this is what I use). 

I do not track my spending everyday. Some people do and they find it works for them. Instead, what I do is I record the spending monthly after it has occurred. If I'm worried about spending more than I can afford, I will plug in my expenses and see if it is less or more than my anticipated pay for the next month. 

Day 3: Add up your debt. Debt means anything you owe to anyone else. Some people think there is good debt (low interest rates, mortgage or student loan debt) and bad debt (high interest rates, credit card debt or car loans). The way I look at it is you want to organize it by interest rate. 

The highest interest rates, you want to pay off first. Let's say you have $10k in mortgage loan debt at 3% interest, $10k in student loan debt at 2% interest, a car loan of $5k at 20% interest, and credit card debt of $5k at 30% interest. In this case, you would want to pay off the credit card debt off first since it has the highest interest rate. You would still need to make all the minimum payments on your other debt. Personally, I think good debt and bad debt should be differentiated by interest rates. 

Student loan debt is an investment in your future, but some types of schooling are more lucrative than others (software engineering vs. studio art, anyone?). Before getting into student loan debt, see if you can get your degree for less (AP credits, summer classes, community college, working for a university and receiving tuition remission, having your employer pay for part or all of your schooling, scholarships, the list goes on and on). 

Don't forget to include any money/loans from friends or family members! 

Day 4: Create a budget. 

How do we do this? Remember that 90-day number? You will take the items you spent money on and categorize it. 

Don't forget expenses like health insurance! After you categorize it, you will want to assign a number you think it reasonable to spend on that category per week, month or year. 

Just remember whichever time frame you choose, you want to be consistent. Let's say I spend $600 on vacations every year, but my budget is monthly. Then I would divide $600 by 12. Or let's say I have a weekly budget. Then it would be $600/52. You get the picture. All units of measurements must match, or it won't work. 

Okay, I think that's a lot for today!!! Further days to come in a following blog post! 

Into the FIRE

Wednesday, May 19, 2021

Budgeting Tips

Hello Dear Reader, 

Back in March I posted a Monthly Budget Template. 

Now I have some budgeting tips from GreenPath debt solutions (with some editorializing by yours truly):

1) Estimate each monthly expense (be as accurate as you can, since this will help you later!) 

If you are unable to do accurate estimates of your monthly expenses, try tracking your expenses for as long as you can (a year is good). Then you can use the previous year's expenses to set up your monthly budget. 

2) Put in how much money you get each month (if this is variable, try tracking your income for a year as well. 

Do you see a pattern? Do you get paid more consistently in certain months? If you have variable income, it's even more important to have a savings fund to help you cover those lean months so you don't go into credit card debt!). 

3) Add up your total monthly expenses. 

4) Subtract that from your total income. 

5) If you have a surplus - great! You can build up those savings, invest, or pay off debt. 

6) If you have a deficit - you either need to cut back on spending or get more income. Your goal is that you want to have a surplus. They call this "living within your means". They advise you to "pay yourself first" by saving 10% (or more, I think!) of your income. You should prioritize and consider what your family's most important goals are (Food? Safer/better living conditions? Education?) 

Think about what you want versus what you need. Could this be considered a business expense or investment? Savings play an important role to cover you when your expenses are too high. However, you won't build real wealth without investing/paying down debt - especially if your debt has a high interest rate. So please, be aware. 

I keep track of my actual spending by recording the previous month's spending in a Google Sheet. They advise you to hold meetings with your family and talk about adjusting the spending so you're still living within your means. 

Some advice they give for saving money: turning off lights, using energystar appliances, unplugging appliances when not in use (I think that's dumb), turning down heat (impossible in our apartment), turning up air conditioning (I think it's cheaper to just not use air conditioning in the first place) and insulating. 

More advice: shop around for vehicle insurance (does your work offer vehicle insurance or telephone/cell phone discounts?), keep proper air pressure in tires, car pooling, public transportation, combining errands, walking, and (I don't do this but I know it's popular in the FIRE community) biking? 

Third round: keep your debt low (or non-existent), make arrangements to pay off old debt, carefully evaluate taking on new debt. Finally, buy sale items (but do you need them? 

If you don't need them in the first place, you will save much more money by not even buying them!), take your lunch to work, limit entertainment and dining out expenses (I would advise thinking about what you want to splurge on. Whatever's important to you, save up for that and then spend on it! Don't be afraid to spend, but only if you can afford it!). 

Honestly, you should think about saving on the big three expenses: food, rent/mortgage and transportation. 

Well, thank you for reading! :) 

Into the FIRE

Tuesday, March 9, 2021

Monthly Cash Flow Plan (Example)

Dear, dear Reader:

How have you been?

I thought I'd do something new today and post a Monthly Cash Flow Plan Example.

Here goes:

Monthly Take Home PayN/A2358.32
Saving (Emergency)20
Saving (Retirement - Pre-tax)1625
Saving (Retirement Match)514.75
Saving (Custodial)5
Housing (Mortgage)1309.97
Housing (Bank Fee)3
Housing (Real Estate Taxes)0Included
Housing (Maintenance)0Mr. ItF
Housing (Repairs)69.62
Housing (Association Dues)0N/A
Housing (Supers Holiday Tip)0Mr. ItF
Utilities (Electricty)0Mr. ItF
Utilities (Gas)0Mr. ItF
Utilities (Water)0Mr. ItF
Utilities (Trash)0N/A
Utilities (Phone)39.43
Utilities (Internet)0Mr. ItF
Utilities (Cable/Netflix/Hulu/Amazon Prime)0Mr. ItF
Food (Groceries)226.3
Food (Restaurants)163.94
Food (Fast Food)106.55
Food (Snacks)89.99
Food (Alcohol)8.48
Clothing (Adults)25.96
Clothing (Children)0Not yet
Clothing (Cleaning/Laundry)0Mr. ItF
Transportation (Gas and Oil)0N/A
Transportation (Repairs and Tires)0N/A
Transportation (License and Taxes)0N/A
Transportation (Car Replacement)0N/A
Transportation (Mass Transit)127Typically $127 pre-tax but with working from home it's not being taken out
Transportation (Taxis/Lyft)107.21Increased due to COVID.
Medical/Health (Medications)76.39
$229.17 gets taken out pre-tax every month, and I just split it between prescriptions, doctor bills and dentist evenly. Optometrist should also be included but I don't think I went last year. I try to get vitamins prescribed where possible.
Medical/Health (Doctor Bills)76.39
Medical/Health (Dentist)76.39
Medical/Health (Optometrist)0
Medical/Health (Vitamins)0
Medical/Health (Gym)40.23This is $22.98 for me and $10.45 for Mr. ItF, Additionally, there is a $40.76 annual fee for each of us
Medical/Health (Miscellaneous)1.98This is a rough estimate. I'm actually not sure what this is spent on.
Insurance (Life)28.67This is $15.86 for me and $12.81 for Mr. ItF
Insurance (Lawyer Option)16.5
Insurance (Health)363
Insurance (Dental)56
Insurance (Vision)14.12
Insurance (Homeowner/Renter)0Mr. ItF
Insurance (Auto)0N/A
Insurance (Disability)4.59
Insurance (Identity Theft)0I got this free somehow.
Insurance (Long-Term Care)0We researched this and it was incredibly expensive.
Personal (Child Care/Sitter)0We haven't budgeted for this yet.
Personal (Toiletries/Grooming)7.93
Personal (Cosmetics/Hair Care)0I place this under "Toiletries/Grooming"
Personal (Education/Tuition)0Surprisingly I didn't spend any money on this last year.
Personal (Books/Supplies)0I place this under "Education/Tuition"
Personal (Child Support)0None, luckily.
Personal (Alimony)0None, luckily.
Personal (Subscriptions)0We have some but I put them under the appropriate categories.
Personal (Organization Dues)0None (fortunately?)
Personal (Gifts)190.76
Personal (Anniversaries)7
Personal (Holidays)31.94
Personal (Replace Furniture)0I place this under "Housing - Repairs"
Personal (Pocket Money - His)0Mr. ItF takes care of his own.
Personal (Pocket Money - Hers)0I don't budget any for myself. Like Ari says, "I want it, I got it"
Personal (Baby Supplies)0We luckily haven't had to buy any yet.
Personal (Pet Supplies)0Sadly no pet currently.
Personal (Electronics)22.2
Personal (Music/Technology)0I place this under "Electronics"
Personal (Miscellaneous)0I don't have a "Miscellaneous" currently just for Personal
Recreation (Entertainment)52.2
Recreation (Vacation/Travel)474.25I think we usually spend more than this, but because of COVID, we travelled less.
Recreation (Travel Insurance)42.43See COVID note above.
Debts (Credit Card Renewal Fee)13.33I pay a yearly credit card fee instead of having an APR.
Debts (Car Payment)0No car (luckily?)
Debts (Credit Card)0I pay off the credit card in full every month
Debts (Student Loan)0I paid off my student loan.
Debts (Medical)0I paid off my medical debts (thank goodness)
Business (Business Expenses)5.92
Total Spent per Month in 2020 (Roughly)3116.38
Amount over each month:758.06
Amount over for the year:9096.72

I've included some categories I don't personally use in case you find them helpful when compiling your own Monthly Cash Flow Plan.

Long story short, I really overspent in 2020! Luckily I had some buffer so I could, but something has got to give. I've really got to cut back!

Probably the most obvious place I could cut back is "Travel" and "Food". I know I've been spending a lot on Food lately. It's a real weakness of mine.

Hope you enjoyed this post. 

I've got another post planned but not sure when I'll be able to put it together since I've got a few different projects going on right now.


Into the FIRE