Setting a Course a.k.a. Making a Plan

If I am going to make saving a priority I guess the first step is to decide just what am I saving for? Does age dictate your savings goals? I mean at age 55, being able to retire in 12 years or so is one of my top priorities. If I was a twenty something I would probably have a different goal. Anyway, retirement, hopefully one day in the foreseeable future, is my first goal, followed by paying for healthcare. These two are fairly easy; I signed up for the 401K plan at work, and an HSA for health insurance. As these two items are deducted before taxes I never see the money and don't have to think too much about it.

For several years I have divided any funds for regular savings into one of three accounts. First, I had an emergency fund. This is suppose to have $2500 in it and its for Unplanned, Unexpected expenses like a car repair bill, needing a new washing machine, or a visit from my wealthy plumber. It is NOT for new tires for the car that I have known for months must be replaced before winter, or a new washing machine because I want one.

Next comes my Major Expense account. The goal is $25,000. This is for major expenses like a new roof, or to replace the septic system. I have never even gotten close to the $25,000 goal. This is an area that will need focus 2017.

Then there is my favorite savings account, the Travel Fund. The plan was that I would save money for travel, and when it came time for vacations, rather than picking a spot and using this account to pay for what it could, and the rest be paid by credit cards, the amount in the fund would actually dictate where we went. $5,000 to$7,000? We could go to Europe. $500-$700? Maybe a weekend to a B&B near vineyards (Love the Finger Lake region of New York). $50-$70? A movie at a local theater. At first I was using the account as planned, but as funds dwindled, I found myself relying on credit cards to pay an ever increasing portion of our vacation expenses. In 2017 I need to focus building this account up, and stay away from the credit cards-Sigh! That's a whole other issue!

Last year I started a new account. It doesn't have a name, or even a real purpose as of yet, but I am saving $100 a week. I started the first Friday in 2016, and so far I am on track. In fact after tomorrow I will have $4400 in it. Currently I have this vague idea I will keep doing this until I retire, and add it to my retirement savings. I also think maybe its for those times when money falls a little short (Husband earns straight commission-pay checks have a tendency to be feast or famine). However, I like to think I already plan for that, so maybe this could be for a retirement home, or something special I don't even know what for yet. Anyway, it feels good to see the savings add up each week, and to know this is one goal I haven't faltered on.

So what is my plan? I don't have a clue. I'm making this up as I go along. Retirement and health are biggies and I do need to think more about those, but I am putting them on the back burner for now. My weekly savings is just fine, working perfectly, see no reason to change. My emergency fund is close to being fully funded. I am currently short by $500. My plan is on each of my husband's next four pay checks to divert $125.00 to the fund until its whole.

The Travel Fund is tricky, its my favorite, and gives me the closes thing to instant gratification. I have always used bonus money, Christmas & Birthday money from Dad, and proceeds from yard sales and the like to fund it. but I may need to get a little more creative on my funding sources.

It's the Major Expense Fund that I am most concerned about. I am going to need a new roof within 5 years, the house needs additional updates and repairs, and I am always running scared when it comes to my well and septic. I do need a good plan to cut costs, and funnel more into this account. By New Years Day 2017 I need a plan, and it needs to be in place and active. Two months, just two months.......

.....To be Continued.

Pay Yourself First

What does the term "Pay Yourself First" mean to you? I was probably in my 20's the first time I heard that phrase and of course I thought that meant treat yourself to a mani & a pedi or buy a new pair of earrings before you did something boring with your paycheck, like paying bills. What it actually means, according to most personal financing experts, is that you automatically put part of your paycheck into savings before you ever touch your paycheck, so you won't be tempted to buy those earrings.

The most common way to automatically save is a 401K plan. I am fortunate that my company still offers a dollar for dollar match up to the first 6% of your income saved. And that's exactly what I save-6%. However, according to a web tool that my company offers that allows one to calculate how much is needed to save in order to retire, I find I am very short. Even if I saved 15%, which there is no way I can afford at this time, I will have not nearly enough to retire in 17-20 years. Its a sobering thought.

There are so many demands on ones paycheck. Long before I see a penny I have 401K deductions, Health, dental, and vision insurance premiums, $231 from each check goes to an HSA (Health Savings Account), and that's all pre tax deductions. Then of course Federal and State Income Taxes, FICA (Social Security), and Medicaid. Then comes Long Term Disability insurance, Accidental Death insurance, and a loan re payment from my 401K plan. Its a wonder I have any take home pay! And then come the bills; mortgage, car payment, utilities, and credit cards, as well as money for gas and groceries. And finally I need to put some aside for emergencies, major expenses, and having some fun. I have to admit, writing it all down is depressing.

But writing it down is what I need to do if I am going to cut expenses, and make saving a priority I need to keep this subject at the forefront of my brain.

 

Extreme Couponing by Frugal Kitty

If I am going to be successful in saving money I am going to have to figure out ways to cut costs, without resorting to living on bread and water. What better way to save money at the grocery store then by using coupons? Now I have to admit, I am terrible at using coupons; far to lazy to spend hours searching for coupons and 90% of the time I am more likely to forget my coupons, leaving them on the kitchen counter when I go shopping.

Have you ever watched one of those Extreme Couponing shows on TLC? I have to admit, some of the episodes are very impressive; a shopper buying hundreds of dollars worth of groceries for a few dollars. In some cases, the store actually owes the shopper money! But some things to keep in mind before you think you too can buy a months worth of groceries for $5.00:

• The shoppers on these shows have been planning for this particular trip (The one being filmed) for months, saving their very best coupons for this trip.

• They spend HOURS dumpster diving for Sunday Morning Newspaper coupon inserts, or time on the internet searching for coupons. Then they spend additional time cutting, sorting and filing said coupons. Most admit they spend up to 40 hours a week on this.

• You need to have a grocery store in your area that doubles or even triples the value of coupons. Most don't. Where I live the grocery stores normally double manufacture coupons up to .50 cents, but if a coupon is over .50 it is face value only. This is why you will find many coupons for .55 off on two items. So you are actually only saving .27 per item. 

• Have you watched what the shoppers are actually buying? 50 toothbrushes, 100 boxes of Kleenex. Most common are bottles and bottles of liquid soap, or bodywash.

• The shopper has called the store manager ahead of time, to ensure that large qualities of the items they are buying are in stock.

• On these shopping trips they will spend hours in the store (Who has that kind of time?)

• For many its more about the thrill of the deal, rather than saving money on the day to day items.

 
So for us normal people using some coupons, and finding items that you were normally buy on sale are good bets for saving money. My favorite grocery store does several things I really like; once a month they send me coupons based on my purchase habits, and I earn points for every dollar I spend. For $100 I spend I earn 100 points, and every 100 points = .10 off a gallon of gas, up to 25 gallons.

Today I had some excellent coupons. About 2 weeks ago I had been sent weekly coupons that included $4 off if I spent over $40, and a free 1.5 quart of ice cream. I also had some good coupons on pet food and supplies (We have 4 cats and a dog), as well as a few others. This time I remembered my coupons and off I went.

Now I did spend about an hour at the grocery store, but I am rather pleased with my savings. I had $14.06 in coupons, and I saved another $53.10 in Bonus Buys (Items on sale). My bill started at $210.54, but after savings I spent $148.73. I also earned 157 points towards gas (That's .15 per gallon), BUT I had a coupon for an extra 200 points, so I actually earned .35 off per gallon. My car takes about 15 gallons, so I will save on my next fill up $5.25. It doesn't sound like much, but $5.25 savings in gas, and $67.16 at the store (All on stuff I needed and will use) adds up to $72.41. Almost enough to pay by garbage collection for 3-months. Its a start.

What Would You Do If You "Found" $500?

A few weeks ago my bank posted the following question on their web site "What would you do if you found $500?" At first I thought that meant if you found $500 at the ATM, would you turn it in? But no, what they were actually asking was, if you had an extra $500; maybe an unexpected bonus at work, a gift from your Great-Aunt Prudence. or a winning lottery scratch-off ticket, what would you do with that $500? I of course said Save It! After all I knew the chances of me getting an unexpected $500 were pretty slim, so it was easy to give the "right" answer.

So image my surprise when I got the mail this evening and there it was, a check for $500! It appears that a medical bill I had paid had actually been covered by insurance, and I got a refund. So now I have an unexpected $500. Such a delicious feeling. But it does pose a dilemma. $500 is such an in-between amount. Any lower, and I could spend it on that great handbag I had been eyeing or concert tickets with no guilty feelings. Any higher amount and I almost have to use it to pay off debt, or save it. For me, temptation has arrived in the form of a cruise.

You see, I love to travel, and I especially love to travel by cruise ship. Last night I saw a cruise for next June, Rome to Venice with stops in Naples, Sicily, Malta, Kotor, and Dubrovnik, and its at a great price, only $849pp! But the deposit was a whopping $950-Rather high for a cruise deposit this far out. However, today I saw an online cruise travel agency that is offering this very trip, same price, and a much lower deposit, only $425. Hello, we are a go.  But wait, I said I would save. What is a Paltry Saver to do?

Right now I am leaning towards a compromise; I will put it in savings, but in my travel fund....and sleep on it, and decide tomorrow.