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Reader Money Questions I

Hello Guys, I wanted to start a new series of posts based on you the readers. I added a new questionnaire page under suggestions to give you a guideline as to what questions you guys can answer to help you come to terms with the money issues you are experiencing and how by answering these questions you can improve your finances. At the end of the questionnaire I will give you feedback if it is necessary and I hope you all enjoy this new series we all will embark on.

This first post is by an anonymous reader and you can copy and paste the questions and then email them to me at moneywatch101@gmail.com.

Moneywatch101 Questions:

Do you have any money issues in your life right now?

I wouldn’t say lack of money is an issue for me, however I can say I have money spending issues. I am in the mist of saving for a house, but with my spending habits I have missed out on saving the maximum, making it longer to achieve my goal.

Do you have any Debt?

Yes, the only debt I currently have is a car loan, which I am trying to pay off way before my term ends.

If you do, how do you plan to overcome these issues?

Overcoming my spending issue is hard. I mainly shop out of boredom or too much free time but I am learning to buy the necessities rather than the wants. Every month I realize I’m spending less and less so I must be doing something right and it feels good.

Do you have a written budget you like to follow or do you just wing it?

I have tried several times to follow a written budget, from spreadsheets, to graphs, to reading bank statements, but none of that works for me. I just wing it and try to do my best with estimations. Another thing that is a big help for me is an online bank tool that my bank offers. It’s called “my money map” and it shows your total income versus your spending on a month to month basis. As soon as I see my spending report getting close to my average, I slow down on my purchases.

How much are you currently saving a month for any goals?

I am currently saving 20% of my monthly income for a home. If I used my money more wisely, I could be saving a maximum of 35% a month.

How confident are you with investing your Money?

With all the risks involved in stocks and bonds, I don’t believe I will ever be completely comfortable with investing my money for big growth. I currently have two savings accounts and always have the option to open a CD but that’s as far as it gets for me.

Do you currently want to learn more about investing ideas?

Yes, of course. It’s always good to expand your knowledge on investing.

Do you think about Retirement when you save your Money or other goals?

I think about retirement all the time. Even though I’m 25 years young I contribute 15% into my 401K account and I am saving money aside for possible early retirement.

Moneywatch101 Feedback:

1. By separating your direct deposit into 2 or more accounts you now have an additional barrier to your money which in turn can help you get your hands off your extra dollars. I would recommend that you make one of those direct deposits in an online bank. For example ING or Alley Bank are two highly respectable options for you. In your regular checking account make the direct deposit amount enough to cover your bills and a $150 dollar cushion. Send the rest aka surplus to the online bank and this shall be earmarked for your down payment account.

2. I noticed that you say you save 20% total for your home but that you also stated you save 15% in your 401K account, if this is the case you are either saving 35% in total or only 20% in total . If it is truly 35% that is a great accomplishment, but if you are only saving 5% for the house then you need to ramp it up more or reduce the 401K to 10% and add it to the house down payment. I noticed your primary goal is your buying a house and you should focus more on that now, retirement can wait till later.

3. Granted that the stock market is risky and volatile, but that should not scare you to the point where you stay stagnant with investing. If you reach a higher income one day and reach the maximum you can save in retirement accounts what will you do put the money in a mattress? No you will look into investing in ETF’s, Bonds, Dividend stocks, or non retirement mutual funds. These all have risks, but if you only put your money in products that have been around more than 10+ years then you can reduce risk. Just keep in mind that investing in these is long-term and avoid jumping in and out.

4. If and when you get bored try to focus on an activity you can do that does not involve spending money. For example make a meal that can last you a few days or go to the park and walk / bike for an hour. These little changes to your lifestyle will allow you to save more and avoid spending on useless things because you are bored.

Thanks for answering these questions. I think the amount you are saving is commendable because not many 25 year olds are saving as much or even thinking about buying property. I hope you can use the recommendations as you see fit in your life. We all can use evaluations with money issues from time to time, and it should not hurt you to change things to make your money goals more easily attainable.

RichUncle EL

The Best Personal Finance Tips

This list is a recollection of all my posts and I have selected the best personal finance tips of all time. I am looking back and analyzing those little things that made an impact in my life financially speaking. I want all of my readers to take a second after reading this list, and just pluck out those things that resonate with your life and your money habits. I am really anxious for the next few months as I am looking to expand on my personal finance capacity by reading more and asking for advice from older wiser individuals with greater experience in this field. What does that have to do with the best personal finance tips I will share with you today?

Well it all comes down to what I know regarding Personal finance, and I can either stop learning or continue to learn. That means staying current with the best money management topics. Which in turn will help me share more with all of you guys in the future. If I learn more, then I can reciprocate that back towards you with great content.

See below for The Best list you will ever come across regarding money management and personal finance:

Continue reading The Best Personal Finance Tips

What you Don’t Know?

I recently heard a story of a young person who after working for many years invests a percentage of pay in a 401K, but after all those years never actually cared to look at the pay stub to see how much money was exiting every pay period. Can you believe this? I look at every pay stub and analyze it to a tee. What did I want to find out? Basically to see all the amounts taken away by the government and how much is being deposited by my employer to my 401K, and I can not fathom a person not checking this or even knowing the amount on a monthly basis. This is the premise behind the What you Dont Know topic in the title.

If this is very shocking to all of you as it was to me when I heard the audacity going on in some people’s minds. But can you blame them for not caring or not being on top of this aspect of money in their life. Unfortunately yes they are partially to blame if for years the employer was not contributing the exact amount that should have been deducted from said person’s pay stub into retirement accounts. Maybe hundreds or thousands of dollars left in the laps of the employer because people were too lazy to check a simple pay stub. Do you think the employer will fix the issue voluntarily? Maybe but I wouldn’t leave it in their hands.

There has been countless stories of employer financial mismanagement where the pay stub amounts were incorrect or the stories of retirement money not being deposited. Granted some of those stories involve simple easy to fix payroll errors, but if the employee is not aware of it who will catch those errors? It is a simple fact of life we cannot disregard because of all the other things we have to deal with in life.

Simple Pay stub Research:

-Check your exemptions on the pay stub

-Multiply the weekly or bi-weekly amount and make sure it adds up to annual income.

-See how much is going to the government in taxes

-See how much is going to your retirement accounts.

-Analyze the difference between gross and net ( Amount should be equal to tax deductions and 401K contributions)

-Make sure your Social Security number is accurate. ( Social Security Retirement figures depend on this)

The simple easy check list above will help you avoid major errors with your money later. I know it can be hard to take time out for things that might not be of interest to you, but pay stubs should always be analyzed with every new job you get.

What you Don’t Know can hurt you in the long run.

Become Informed with Finances.

Comment and let us know if you have caught any errors on your pay stub?

RichUncle EL

Friday Quotes XVI

Retirement is a sensitive subject now a days in the media. I recently heard a radio syndication that stated that only 14% of Americans were confident that their current retirement accounts would sustain them in the golden years. What a low figure compared to 86% who are running scared trying to scrap together a few more dollars per pay check to make life better for their future. I tell you, people have to learn to stop playing catch up all the time.

Best Quotes:

– Stocks were made for investors to keep, hold, and reinvest gains to retire early – RichUncle EL

– Social Security is the very foundation of retirement security for millions of Americans.-Sue Kelley

– A whole generation of Americans will retire in poverty instead of prosperity, because they simply are not preparing for retirement now.- Scott Cook

– If retirement were easy then everybody would quit and business / economy would suffer. -RichUncle EL

– I expect that my plan for money growth will exceed my expectations for Social Security – RichUncle EL

– Procrastination towards the future never panned out well for any body – RichUncle EL

What do you take away from these quotes? I think when taking into account that we are only saving about 4% for our retirement it has to be increased or many will be suffering later in life. Either that or those not prepared will have to work till they are 75 years old. Scott Cook said it in his quote with a simple phrase that will touch anybody currently nearing retirement.

What I wanted to convey with my second quote is that finally reaching retirement status is really hard and it takes a great amount of effort to get there. I am not close to being retired but I get how grounded you have to be every day get a step closer to it.

The third quote I came up with has to do with what your plan will dictate it to be. One can not solely base their future on Social Security because many politicians including Mitt Romney are talking about privatizing the plan. (Eliminating it) What will this plan entail? No one really knows, but you can not depend on it as it might be greatly reduced in the next couple of years.

I plan to retire one day but not 100% as I still like to work, but I would work more for myself and my family. Meaning I want to establish a business of some sort that can stay in my family for generations to come. Retirement for me means 50% of my time spent with family and the other 50% dedicated to growing my little empire.

Ok I see the future and because you are now more informed conscience individuals on the facts of retirement, you will now be better prepared to take it on.

Well there you have it my friends. Any of these make your favorite quote list? Please share a quote in the comments below.

RichUncle EL

Brands that I love Series II

I wanted to keep this series going and let all my readers know what are the brands that I love? How would this help any of you? Maybe you can support them if a credible source recommends them and by word of mouth they are known as providers of quality products and or services. This is the second post on this topic and I am not going to repeat the brands, but if a brand does a turn for the worse, then I shall put them in the brands that I hate list.

Continue reading Brands that I love Series II

Save 30% for Retirement

If you are one of the lucky few who can save a large portion of your income applaud yourself, because it is a great opportunity for you to set yourself up for the future. But many of you are thinking how can anybody save that much with all the numerous bills in our lives? I have known personally a few people who actually save 30% for retirement and still been able to live life happily. Granted their situation might have been better than the average person and it might take you a while to inch up to that savings level, but believe me you can do it to.

Listed the below are the reasons I feel individuals with certain money scenarios can manage to save 30% or more for retirement or emergency savings. See below for a list of examples how one can save 30% for retirement.

Continue reading Save 30% for Retirement

Frugal Tips

OK I have read everywhere that people all of a sudden think it’s cool to be frugal. What they do not know is that many people have been living the frugal life for a long time. I understand why those individuals are finally taking a different perspective with money management, because of the current state of the economy. Basically we are on the cliff and about to enter another recession in addition to experiencing high unemployment. This has inevitably sparked a changed in peoples way of thinking. But for me I have always been frugal and I am here to share with you a few of my cool frugal tips to saving those dimes, nickels, and pennies.

Frugal Tips:

Eating out as less as possible.
Combine errands in two or more stops when you have to drive.
Search for online discount codes for those necessary purchases, like shoes or clothes.
Avoid upgrading your cell phone every two years, just switch companies to save dollars.
Eat less processed food at home, learn how to make things from scratch.
Always get more than 1 price Quote for service repairs.
If you buy a grocery product often, buy it in bulk size and pay wholesale price.*
Save up for large purchases, but if you get 0% financing, take it and save the money.
Getting together with family/ friends have a potluck dinner gathering.

Definition of Frugal: prudently saving or sparing; not wasteful.

These are some of the many ways you can save a few dollars. If you just stop and ask yourself a simple question before any financially related task; what alternative way can I do this while saving some dollars? This is what many people who are well off do, but the secret is they will never show it publicly. Once you master this sort of thinking you can do it subconsciously and be as efficient as possible. I believe using frugal tips is not being cheap, but rather being smart money wise. I think the definition should be, how a person finds alternative ways to master watching your money. This is what I want you to do so that you can spend the majority of your dollars on investing opportunities and living life.

RichUncle EL

*Be mindful of expiration dates when buying in bulk.

Friday Quotes XV

OK this week I will like to focus on debt as the theme for this post. I have been listening to Dave Ramsey on IHeartRadio and so far I have heard ridiculous stories of people overextending themselves and taking on way too much debt. He gives them a slap in the face type of advice with a southern accent to boot. Overall I enjoy the way he engages with the audience and basically solidifies how being debt free and following a plan will help you win in the money game.

Do you have a unique plan on how to get out of debt? If you have been out of debt for sometime now how hard or easy is it to stay debt free? People everyday call in on Dave Ramsey’s radio show and yell We are Debt Free. They share the amount they paid off and how many months it took them to become free.

Best Quotes:

-Never give up control by taking on unnecessary debt in your life- RichUncle EL

-Be mature to delay the satisfaction of giving when your life is not in financial order. – Dave Ramsey

-Debt buys things now but your conscience will pay it back with constant worries. – RichUncle EL

-You cannot spend your way out of recession or borrow your way out of debt. -Daniel Hannan

What do you take away from these quotes? I hope you understand what I am trying to convey with these debt motivated quotes today. Do Not Borrow! It leads you down a path of a thousand months while being hand cuffed to the banks will. Dave Ramsey stated in his quote for you to delay the satisfaction of giving during those special holidays when you yourself are in debt, it just doesn’t make sense.

Granted some debts take over 5 years to pay off like a car or student loans. So would you not give any gifts to your loved ones for all that time? Obviously that would be ludicrous, but as long as it is a manageable debt, you are current on it, have paid off a good amount in the last year, and have a set date when it will be paid off, then you can give minimally to those you care about. But if you have 12 credit cards, a car loan, and student loans then you should not be playing the role of Santa Claus this Christmas.

STAY OUT OF DEBT!

Well there you have it my friends. Any of these make your favorite quote list? Please share a quote in the comments below.

RichUncle EL

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