Where do I want to be financially in life

Through my life what I’ve desired and wanted has changed and went back and forth several time. When I was young I used to say I was going to be a millionaire by the time I’m 21, sadly that only leaves a year and at the rate I’m going that’s way off. As I’ve grown older I’ve came to the conclusion of being more practical. Mainly to be more in line with what the average is, or about $42,000 a year. Now does this mean my desire to be one has gone away? No, just coming to conclusion it’s unrealistic.

So when I am old(er) and I look back at all I done here is the main financial goals I want to have accomplished,

  • Own my own house, which is paid off - This is your stereotypical American dream item, only without the mortgage. The greatest thing that could happen in this regard is to pay with cash, but as I’ve said in another post I would really like to pay cash, but that may not be an option.
  • Run a successful Business paying good wages - This is my biggest dream is to have a decent company with several employees that will provide me with income for years, plus I’d be doing what I love.
  • Have rental properties in the Black - This may be pushing it, but if I manage my money right then it could happen. This would only help to safe guard me against slow months.
  •  No Debt - When I am looking back I want to be in no debt, although I know I am in debt right now with my Student Loans I want to be out of debt and besides a house and/or business I don’t see myself getting into any more debt.
  • Fully funded Retirement - I’ve gotten started with a Traditional IRA from ING Direct (now Capital One 360) and if I can just max this out each year and maybe even look into some type of 401(k) or the likes for my company I should be well off in retirement.

If I get those goals in line then I don’t see myself having very much money problems, now those goals coming true is an entirely different thing.

Side projects and Extra Income

Since the last post I have paid $311 on my student loan, of which over $220 was interest. I have also done a few side jobs which should help supplement my income, to the tune of over $300. Which I have yet to decide what I should do with the profits (after I pay taxes). Here are the choices I can do:

  • Throw it into my E Fund - This is actually the most appealing option as I am making efforts to increase the balance. Yet I’m not sure if it’s the most efficient use.
  • Set back for School - I know come December/January I will be needing new books and I want to keep up not taking out a loan. Alternatively I could set it back for my Western expenses. I should be starting in the Fall of 2013, if everything goes the way I want it to.
  • Leave it in my Business – This option would mean I leave the profits in my business as a cushion, for future payments.

The most likely candidates are to set it back for school and as a business cushion. I think I will split it half and half and keep on planing.

On a side note I want to get another one of my goals started, and that is to run several sites for profit, maybe even do an E-book or two. I have a feeling that Western will be more then i can afford and I want to ensure that I can go.

Planning for Big Purchases

As you may know from my earlier articles I am a college student and I was talking about the cost of books in the last post. I have since bought the last text book only to receive my car insurance bill in the mail. Which had me thinking on how I should purchase costly items in the future. Which I consider anything over $150 a costly purchase cause I am paid $500 every month.

Currently when I make a big purchase I look at all my accounts, even my business ones. Then I decide if it’s really worth the cost. Which in most cases I end up paying myself extra to cover the price. Making me wished I didn’t do that or that I would pay myself more. Each time I will get the thought of just being like everyone else and using only what I have personally, only to keep on doing this.

So where I want to be is a point where I have enough money in my (personal) account to cover the purchases I know I will be making. One purchase I know is coming up soon is Christmas gifts, even though there’s still another three months I know now I need to make these changes.

  • Keep to the budget, keep to the budget, keep to the budget – I cannot express how lazy I’ve gotten on budgeting. I used to set one each month but here lately I haven’t set down and actually created one.
  • Have a minimum balance of $100 in my account before I pay myself - I used to have this, until recently. Now by the time I’ve paid myself it seams like half of it is gone since I will delay filling up my tank (~$50/$60) along with funding my E. Fund and other expenses I transfer out. (sometimes $65, other times $25). Which I’m lucky if I have even $20 in my account before payday.
  • Set aside money for fun/gifts - This will be new because I haven’t ever set aside money for gifts. But I have had fun money ($15/mo) but I haven’t had a set amount in months so it back fires now since I no longer track it. So when I see an object I want I just check my accounts like I said above and buy it, without thinking if I have any bills or transfers coming up.
  • Increase my efforts of paying off my Student Loan - This doesn’t fit here but I can’t help but think about it when I see how much interest I have accrued in 2012 that I have yet to pay back. It’s in the $200 range right now, and the last thing I would want is for it to be capitalized.

So these are the things I need to start doing and change to better be ready for big purchases, with a few goals mixed in. I am going to start working extra on projects I subcontract on and divide the differences between the goals I have listed. I figure that having an extra $50 here or $25 there that I can throw at any of the goals will be a start.

Removing Clutter

As I type this post I sit at a desk with papers covering it. I look across my room and see a table with junk in it. Then past the table is a stack of magazines that’s been there since 2008. Lots of junk that needs to be stored or thrown out. I debated on attaching a picture but felt like we could envision that instead.

Often when one thinks about clutter we visualize just physical clutter. All those receipts in my “to file” box and all those papers and empty containers just laying everywhere. Even my significant other has commented on it. But what about clutter elsewhere in our life? Let me give a few examples:

  • Money Clutter - I consider this to be when your money and financial life isn’t in order and it’s over complicated. I.e. you have no idea where all your money is going or how money flows in and out. Kinda like where you spend a lot and you do not track it and you get a bunch of bills in and they just accumulate.
  • Task Clutter - I have several items on my to do list and it seams crowded. Instead of just setting one project a week to do, I try to fit in several. Which I hardly manage to get just the one done. But had I just set the one project to be done I could have focused all my attention on it and marked it off my list. Else it’s just “cluttering” my list up.
  • Emotional Clutter - We should all have a good idea on what this is. We commonly refer to it as “emotional baggage” or some other term that just means past feelings that were bad or painful for us. This one is a bit harder to get rid of, but never the less it holds us down.

I’m sure you get the where I’m going with this. It is very important that you keep your life uncluttered as much as you can. This week my to do list is to remove some physical clutter and hopefully remove the table that sits in the middle of my room.

Off-topic:

Just an update on the trying to only use $20 cash for the weekend, it failed since I went out to eat with family. But it was less then $40 so at least it wasn’t double.

Progress on Emergency Fund

If you remember from my 2012 Money Goals article and from the first quarter update I stated that I wanted to start saving back in my Emergency Fund. Since I have posted that I have yet to re-start the “E Fund” as it is labeled. The question I ask myself is why?

Is it because I’m to lazy or because of money issues? Do I not worry about if something bad happens what am I to do? Yes, and no, it is actually a mixture of all these. When I first started the E Fund I would put every little bit of extra money in my account. I had hardly any work to do and time was on my side. When I would go out to eat I would round up all transactions and move the “change” to my E Fund. I would get an extra check for my birthday or etc and I’d go put it into my E Fund. So what happened to the great progress?

At that point over a year ago I got a car, work reached a slow period and I just stopped rounding up and moving the excess. I started to use my extra money to buy myself a new monitor, a new cell phone, and more. I just let the account sit idle not even throwing a single penny into the account since I last touched it. Instead I started to take from the fund to pay my bills, while wasting my real income on unneeded expenses such as going to the movies and eating out.

So starting today I am going to change that, I just signed up for automated transfers on the 15th and end of the month. I will start out with just $10 each time. I would like to eventually increase this amount, but for now this is better then nothing. I am also setting one up for $15/mo just as a start for a place to live.

Which reminds me, I should start working more to increase my income which will let me bump it up. Which I have a week and a half before my summer classes start. Lets see where I stand in the next few weeks.

2012 Money Goals, 1st Quarter Savings, Debt, & Income

Savings

  • Emergency Fund – As I said earlier I have yet to start back on saving in my Emergency Fund. It currently sits at five dollars.
  • Taxes – I just recently paid Estimated taxes to the tune of 450, with about another hundred still in the account. Only time will tell if this was enough.
  • Slush Fund – Need to set this up. By next quarter I hope to have an account established.
  • Place to live – here’s the really dumb part on my move. I have 3,750 but it’s mostly from Student Aid that I have managed not to spend.

Debt

  • Student Loans – The original loan was for $5,500. The current principal is  $5,299.77. Which mean $200 is paid off of the $750 goal. The only bad part is I have about $60 in interest that I have not paid yet.
  • Credit Card – I only have a $200 credit limit and my last bill was for $0 and currently I only have a $3 balance from Saturday. So on using it less I am making progress.

Income

  • My business which is Computer Repair and Programming seams to be on track. After doing the quarterly book work it’s at $4,505.67. Which my goal is $20,000. So it’s almost a quarter of what I expected. Yet the last two/three weeks have been slow and may explain why it’s not $5,000. But I can live with that.
  • Passive Income – Have yet to establish any, I have been reading blogs, books, and listening to shows on that topic. Lets see if I can get this going soon.

Noticeable Quarter Events

This quarter has been an interesting one. First time I’ve installed a security camera system, which was a good learning experience. Always wear dust masks when working with ceilings and walls. But onto some bad events. The beginning of March there was a bad storm which busted out three windows on my Ford Explorer. The repair bill was around $700 but my parents chipped in, which helped a lot. Had my parents not chipped in and with virtually no Emergency Fund this could have been much worst.

Now you may be asking me, where’s the expenses? I haven’t had much time to analyse my expenses yet but I can say more was spent on my Explorer then any other category. I will make a new post when I’ve done that.

And as always, feel free to comment below. I want to hear your comments and suggestions. If you like this post make sure to subscribe to the feed at the bottom of the site. Thanks and I hope to hear from you soon.

- Zack

Also, on a side note, today I’m 19. With the extra money from gifts I hope to not blow them. I would really like to pay off some debt and/or save but I need to at least make sure I don’t blow it on food and stuff I never use. Finally I am expecting a slight increase in one of my Subcontracting Job and I plan on using half of the excess to pay debt and the other half to fund savings. Which should amount to about $50 for each category per month.

Goals derailment, what if

Even though I set money goals earlier this week, if I wasn’t to meet them I wouldn’t get to upset. I even expect a few to not be achieved this year. All it would mean is to try harder. Case in point, on debt I have been trying to not use my credit card, well I used it today at Subway.

The point of goals isn’t to set in stone events that must happen. Rather it is what I would like to happen. One goal I made was to have $20,000 in gross income from my business and after doing my quarterly Sales Tax return I can say I’m on progress. I was at the $4,500 mark which isn’t half bad in my opinion. It means I must try to beat that the next three quarters, but more on that later on in April.

Some goals I set for myself as a person I end up rolling over into a new year. Take the goal  of loosing weight, which is also related to spending less on junk food. I have had this goal on my plate for a few years now. Yet I will stick to the goal for a few days then I go talk myself out of it. I will say I don’t have the time and/or energy to and will slowly stop.

This is one area I need to change. I should start to care about my goals and not push them off. I need to hold myself more accountable and reward myself for meeting goals. The Subway today was a reward for progress toward the weight loss goal. I went on several small walks, ate fewer snacks, and drank less Mountain Dew. This is a personal weakness, I used to carry cash and would spend it all on Mountain Dew, leading me to stop using cash. As part of starting Staying out of Debt I will start using cash again, slowly.

Time will only tell if changing how I view goals will help. I am only a human with weakness, but if I am successful I will come out stronger and less in debt. I would like to hear from you what you do to stay on track. Just leave a comment below.

2012 Money Goals

With the first quarter of 2012 coming to a close, I will be sharing with you my financial progress report. But first, I should explain what my goals are. Listed below are my simple goals for 2012 organized by category.

Savings

  • Have two months living expenses in a savings account. I.e. an Emergency Fund. For me this would be about $1000. In the past I’ve had a much smaller E. Fund, but my income was to low one month and I have yet to build it back up.
  • Make sure I am setting back money for Taxes, I am learning this the hard way on my 2011 Taxes. My goal on this for 2012 is to owe less then $100.
  • Have a slush fund of sorts – I have a few expenses I always forget to plan for (Oil changes, web hosting, etc) My goal for 2012 is to get the big offenders out of a slush fund.
  • Finally, I want to have money saved up for a place to live. From my last post you can tell I would much rather start small and pay for the house outright. But at the moment it looks like I may have to rent until I get enough saved.

Debt

  • The only debt I have currently is a student loan. I hope to have at least $750 of the principal paid off by the end of 2012. I really wish it would be paid off by December, so I may throw some extra money into it.
  • I do have a credit card, but it’s a secured credit card with a $200 limit. It gets paid off every month if I use it and in 2012 I hope to use this card less. When I first got the card I placed $120 on it and since the start of 2012 it hasn’t been over $60.

Income

  • I own a business and I really hope to have it take off this year. In 2012 my business grossed about 10k or 11k. Almost half of that is from subcontracted services. In 2012 I want to see my business pass the $20,000 in gross sales mark.
  • I also want to diversify my income and for 2012 I want to start having passive income. I am not sure what I’ll do yet, but I would like to set a goal of having $250/mo by the end of 2012.

Expenses

  • I plan to sit down at the end of this quarter and examine all the money that I paid out and find ways to reduce it and to make a budget. I used to follow a budget but then I got a car and it just went out the window.
  • This is in relation to savings also. But the money I don’t spend on an Item I want to start saving away. I used to buy snacks and pop often and I would like to add to my savings every time I get the temptation, instead of buying.

Well that’s my 2012 Money Goals as of right now. Make sure you check back in Mid April for my first quarter financial report to see how much or little progress I have made.