Fri, September, 4, 2009 at 01:10 PM What program would you advise for a newly married couple to manage their finances? Also, is there a cheaper alternative than purchasing the product from the store?
Wed, February, 6, 2008 at 11:42 AM I am often asked what things people should be doing and why when it comes to personal finance. Everything seems to come at you at once, and taking care of your finances can be a lot of work – work that most people do not want to do. As a result, people tend to do nothing because everything seems so daunting. So, here we go on a list of things to get you started.
Mon, January, 28, 2008 at 11:49 AM If you read my budget you may be lamenting on how excruciatingly slow it seems to make any progress. It's true, but after one month on the program I have seen significant savings gains and have controlled my impulse spending on electronics items and games!
As of 24 Jan. 2008
$101,375.00 net worth
My net worth is actually reduced by $9,100.00 since I still owe that amount of money to my savings accounts. I charge myself 4.00% APY which must come out of my discretionary funds. In this way, I can fund my IRA and keep my savings goals intact for the long run.
Budget, Retirement, Savings Mon, January, 28, 2008 at 11:41 AM $821.60 per week is my gross pay ($42,723.20/year)
-$82.16 per week goes to 401(k) (Rockwell matches 75% up to 8% of your pay and I contribute a little more) ($4,272.32/yr)
After taxes, medical insurance, dental, optical, Social Security, Medicare, etc. My take home pay is:
$535.22 ($27831.44/yr)
-$8.22 per week goes to my Employee Stock Savings Plan (ESSP) ($427.23/yr)
-$40.00 per week goes to a down payment on a house ($2,080.00/yr)
-$8.25 per week is set aside for any additional income tax I might have to pay in the future ($427.23/yr)
-$96.25 per week is set aside for a Roth IRA ($5000/yr)
-$17.75 per week is set aside for an emergency cash fund ($910.62/yr)
-$126.75 per week is set aside for rent and homeowners insurance ($6,580.00/yr)
-$42.00 per week is set aside for car care ($1450 insurance, $500 repair, $125 registration/smog, $90 AAA) ($2165.00/yr)
-$81.00 per week is set aside for all bills (necessary and unecessary) ($4150.00/yr)
-$31.75 per week for food (this REALLY forces me to control my eating out habits) ($-1651.00/yr)
After all this, I have approximately $2,200 of income to spend on whatever I want to. I seperated it into the following categories:
My budget does not take into account:
Mon, January, 28, 2008 at 11:33 AM After reading Rich Dad Poor Dad I felt one thing in particular: entertained. At best the information "gets you to think about your money" and at worst the more advanced information Kiyosaki presents is just downright dangerous and/or useless to the average person. I would think seeing a huge credit card statement or a paycheck "gets you to think about your money." The one thing I did notice about the book is that people who rave about the book have not really done anything to change their lives and habits. They are still in the same (or worse) financial situation six months after reading the book than just before reading the book.
Keep 10% of everything you make for yourself. PAY YOURSELF FIRST. Why should you be paying other people with your hard earned money. Pay yourself first. Take the amount of money you receive in your paycheck (the part after taxes and insurance and Medicare and Social Security) and keep 10% of that for yourself. 10% means move the decimal point to the left. If your paycheck is $528.23 then keep $52.82 for yourself.
Take advantage of the easy stuff! This step also takes advantage of tax breaks and free money. Max out your employer matching to your 401(k). Let's say your employer matches 50% of your contributions up to 6% of your pay. You put 6% of your pay into the 401(k) and you get an additional 3% free for your retirement! (Often you must work for the same company a certain number of years before you get to keep the company's matching funds - this is called being "vested.") Second, take advantage of our current federal tax situation by contributing funds to a Roth IRA. Any earnings, dividends, interest, and gains you make will be withdrawn TAX FREE when you retire. Taxable accounts can be taxed between 15% to 33% when you withdraw them.
Do not spend more money than you have. That is my bedrock advice. Take the amount you have left after keeping 10% for yourself, funding your 401(k), and funding your IRA. This is the money you have for living. If you get paid monthly, multiply your average take home paycheck by 12. If you get paid weekly multiply your average take home paycheck by 52. This is how much money you have to spend in a year.
This is a first step and you can add more categories if you want. Make your "simple" budget today. It takes about 30 minutes. I have employed this very scheme and I seperate my paycheck as soon as I receive it. Anything that's left is mine to spend however I want or put towards my savings goals.
