If you are new here, you may want to subscribe to the site RSS feed or visit the site map. Thank you for visiting!

Increasing your 401K contribution up to 17% of your salary not difficult if you follow a few simple steps. These same steps could also be applied to paying off debt or other savings plans.

My wife and I both save 17% of of our pay to our 401K plans not including the employer match. Additionally, that does not include Roth IRA contributions or any other savings. You don’t have to eat Ramen noodles to make save this percentage of your salary.

My goal is 20% and I will achieve that within a few years. We both started saving 5% of our salary and slowly increased it at every opportunity. However, we did lower the percentage at one point along the way as explained below.

How we increased or 401K savings without breaking our budget: Read the rest of this entry »

I was speaking with my coworker about general financial topics and the discussion came up of selling a car. He immediately became animated and started discussing CarFax.

Personally, I know CarFax as a service that helps prevent me from being scammed by a fraudulent car title or an unscrupulous seller. Maybe the car was wrecked, retitled in another state, or the mileage was changed. It is nearly impossible to know without CarFax, but there are warning signs to look for such as overspray from a repair job, uneven tire wear, rust around the edges, or a mildew smell from the air conditioning system.

My coworker changed my thoughts somewhat on CarFax because Read the rest of this entry »

That is right… I am proposing raiding your emergency savings to fund your 2007 Roth IRA if you have not fully funded last year’s contribution. The deadline to fund your 2007 Roth IRA is approaching — April 15th 2008. If you miss that deadline you can never fund your Roth IRA for 2007. The limit is $4,000 for 2007 and of course you must be within the income limits.

Reduce your risk

Withdraw some of your emergency savings if you must to fully fund your Roth. However, I strongly advise Read the rest of this entry »

Although not specifically listed as one of my 2008 financial goals, I plan to keep a full budget and track expenses versus income. My cash or envelope budget covers part of the budget but not all of it. Many expenses are not worth controlling with a cash budget because some expenses remain relatively stable and you have little control over them.

I have been great about investing — I started my first IRA account at age 17 — but I have rarely been able to stay with a budget for long. I decided that I needed to change that to better control costs in order to meet other financial goals.

Link to Read the rest of this entry »

As a part of my 2008 financial goals, I plan to fully fund two Roth IRAs - both mine and my wife’s. The Roth IRA is one of the best investment options available. You can pay taxes now and owe zero taxes when you withdraw funds in retirement. Plus, there is no penalty to withdraw the funds in case of emergency up to the amount that you have invested. I also invest 12% of my pay (my wife invests 15%) not including matches in my 401K plan. The 401K has the opposite tax features — pay no tax now and taxes are deferred until you withdraw the money.

There are two catches to my Roth IRA goal — we have not funded my wife’s 2007 Roth IRA. That is $4,000 that we must catch up. Plus the limit for 2008 contribution increased to $5,000 each, so we need to invest $14,000 for this year. The good news is that there are two deadlines — The 2007 Roth IRA can be funded until April 15th, 2008 and the 2008 Roth IRA until the same day in 2009.

Beating the 2007 Roth IRA Deadline

The plan to catch up the 2007 Roth IRA is to use my bonus which will come in February. I am expecting somewhere between $4,000 and $5,000 after taxes.

And now the 2008 Roth goal… Read the rest of this entry »

We relocated to be closer to my work about two years ago. I should post the details of that decision some time, but in the mean time I need to finish relocating. This is one of my 2008 financial goals.

I reduced my commute by 40 miles each way, but the calculation is not as simple as stating that I now save 400 miles per week. This is because my original commute was always only five days per week. I now drive back to the area where I used to live approximately three times per month for various reasons. So I have only cut about 340 miles per week from my commute.

My haircut is a great example. I regularly drive back to have my haircut by a lady who does a great job and includes a great neck massage which is always appreciated. I decided to see how much my last haircut actually cost. My results Read the rest of this entry »

In my 2008 Financial Goals, my first item listed is creating a cash budget. Sometimes people call this envelope budgeting. Although cash budgeting is often considered budgeting for those without spending control or budgeting for people in debt. I disagree. My wife disagrees even stronger. We earn a reasonable income. We have never been out of control in our family spending. Although we would occasionally run up a credit card balance, it has never been unmanageable.

2008 Financial Goals: Envelope Budgeting
We are not in need of money, but we are in need of a budget — an easy budget. For us, cash budgeting seems like the right path. We sat down and budgeted approximately what we think that we will spend each month in several categories:

• Gasoline = $500 - That is a large sum of money, but my wife has a long commute for her work so it is not unreasonable.
• Clothes - $250 per month Read the rest of this entry »

I’ll would like to share with you a personal story of finding the best price on Money Magazine and give specific tips on how to save money on magazine subscriptions. You’ll miss out on a few details, but you may want to skip ahead to the saving tips.

My quick recommendation for cheaper magazine subscriptions is Magazine Price Search.

My Money Magazine Subscription Story

I was a loyal subscriber to Money Magazine until recently. Their expiration mailers and cover notifications said the renewal was $40 per year. I decided to let my subscription expire at that price.

By chance, I followed Nickel’s link to Amazon in the post about the Consumer Reports Finance newsletter. I was surprised to see in the related suggested items, Money Magazine was available for $20. It is also available for $30 for two years. So a loyal reader of seven years is asked to pay double (or more) the price available on Amazon.

I tried to find my old Money magazines to scan in proof of the $40 per year offer, but my wife runs a clean house and they have already landed in file 13. I did find a copy of Money Magazine that my parents gave me recently. I was shocked to see that Money Magazine was offering my parents a subscription for $10 per year for up to three years. Below is Read the rest of this entry »

I have several 2008 financial goals to share. Some are easy, measurable, and necessary. Others are more difficult to achieve and track. I will make each line item a link to the detailed posting about that financial goal as I write up my plans, thoughts, and progress around each specific goal:

1. Financial Goal #1: Use Cash/Envelope Budgeting - Many say that this is the is poor man’s form of budgeting or for those without control. I have other reasons. I’ll let you know how it works for me and then make recommendations.
2. Financial Goal #2: Finish relocating: No more $40 Haircuts
3. Financial Goal #3: Fully fund the Roth IRAs - My wife and I plan to fully fund our 2008 Roth IRAs.
4. Financial Goal #4: Save 20% of Gross Pay in 401K (including company match) - self explanatory.
   
5. Financial Goal #5: Reduce Read the rest of this entry »

Lazy Man’s post on the silly Lexus commercial that Lexus repeats around the holidays reminded me of the true cost of switching from a Toyota Camry XLE V6 to a Lexus ES350. Both are nice cars which are similar, but the Lexus has the luxury badge on the grill and a few amenities.

The cost difference between the Camry and the base Lexus is not large if you look at the sticker prices. According to my favorite car website, Edmunds, you should be able to pick a Toyota Camry for about $28,117 (price picture). The Lexus ES350, which is the sister model to the Camry, can be purchased for about $33,976 (price picture). A difference of just $5,869. If you plan to own the car for five years, the cost difference is just $1,174 per year. You work hard, so you deserve this little luxury, right? Read the rest of this entry »