Monday, February 25, 2008

My 2008 and 2009 Money Goals

I have two types of readers that come to my blog. Those who are part of the adoption world that come to check in on Natalie, and those from my frugal blogroll. I post a lot about the baby so let's visit the frugal part for just a minute :)

I know a lot of times it seems like I buy a stuff that doesn't make me frugal at all lol But I do a lot of things that DO make me frugal :) The big thing I do (no not CVS) is to make money goals. Do you have money goals? Money goals are easy to figure out. What do you want to accomplish by the end of the year? Write it down (if it's on paper, it's more real!) then think to yourself, what do I need to do in order to meet these goals? Write those down too. Make copies if you need to. Tape them to your credit card, put it on your computer monitor.

I find it easier to think about my finances and money goals in the current year and the next year. I like to break my budget down into two categories, things I can't control and things I can. Things I can't control are my student loan payment, utilities, insurance and daycare. The things I can control are groceries, get the idea.

To help me stay on track, I use an excel spreadsheet. For the things I can control, each category gets a column with a maximum amount that I'd like to spend. As I go through the month I assign everything I buy into a column and excel calculates how much I have left to spend in that category for the rest of the month. Do I always stay within the guidelines? Heck no... but at least I am holding myself accountable for my spending!

There are some big ticket items that I can't categorize because they are unexpected. Things like medical bills or car repairs. Year to date I've had three nice dings to my budget, $500 baby copay, $200 baby copay and about $350 in car repairs. I knew the car piece was coming but I forgot to put it in the list for 2008 ...oops! But I have "Found Money" for 2008 includes my tax refund of $730 (I left that out of my incoming money for 2008 but that is a good thing), my extra tax check of $600 (I didn't have Natalie long enough to get $300 for her too) and all the stuff I'll be selling this year. So I should be ok. Whew!

I am a good saver but I am not good about tagging money for what it is to be used for. I just throw it all into one account. A lot of times I keep it in my second checking account earning practically nothing. As of today all that is going to change! My ING account allows me to create sub accounts and earn 4%. Plus I can get to it, but not as easy as my regular savings account! This is how I am breaking down my ING account:

Main account - adoption funds. $70 a month is going into this fund for pay for travel expenses. Plus I deposited $250 and earned a $25 bonus (more on that later, that is a post in itself). There will be $1955 plus interest in my main account by the end of 2009 plus anything I earn from Pay Per Post :)

Sub account #1 - property taxes. Another thing that just sits in checking earning zero $. My property taxes are $650ish a year so starting with my Feb 29th paycheck, I'll be depositing $27 per pay period.

Sub account #2 - 2008 Vacations. I have prepaid some of my cruise expenses and my beach trip is cheap, like $300 for the week. I am going to deposit $25 per pay period for the cruises. That $450 will pay for tips, gas and parking for the trip. After the cruises this will be my
2010 savings account for vacations yet to be determined.

Sub Account #3 - 2009 Vacations. I know we'll go back t the beach in the off season for $300. Disney will be $800 for my share. I am depositing $20 per pay period for these trips since I have so much time to save for them.

Sub Account #4 - new car fund. My car has 93K miles on it. I hope it lasts forever but it won't. I am going to deposit $30 per pay period to help with a down payment. I know that doesn't seem like much but if I keep it another 5 years you are talking about $3500 plus interest.

Organizing my savings will help me reach my money goal of 2008/2009 which is to save $22,000. That is about half of my take home pay for two years after I pay daycare, insurance and make a nice contribution to my 401K. The $22,000 is going into my Etrade savings account to keep it separate, plus I like the layout of Etrade savings better than ING. Any extra money I can make day trading will go towards the $22K.

So there you have it, I think if I am good (and frugal ha) I can reach my money goals. Too keep myself accountable for my spending, starting in March I am going to start sharing every penny I spend every day. I know its boring, but I use my blog as a journal and I think this will help :)

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