About me
-
I've decided to chronicle my financial journey. I am a young professional who moved from Washington, DC to Sacramento, Ca. I'm far from family and trying to get my finances in order. My main goals are debt reduction, short term savings and retirement increase. You can follow me on twitter @kiera181. If you would like an RSS feed of my blog, you can use this link: http://feeds.feedburner.com/Kiera181sDollarish
Tuesday, 06 September 2011
-
Taking some off the top
So, a friend of mine mentioned that she takes off a certain amount off the top for her goal and spends the rest but as I was trying to say (in a conversation that was about to become uncomfortable) is that sometimes, in an effort to take it off the top, you wind up chopping off the knees. Below is a graphic:
Let's say you feel like tithing or donating is important so you take that off the top, then you take some off for your 401K, then you want to max out your roth IRA and you want to put some money away in savings. Next thing you know, you've taken $1500 off the top.
What do you think is the best way to take a little off the top, meet your goals and still be able to live?
Tuesday, 30 August 2011
-
What do I do with my money?
I was having a conversation last night with a few friends. One asked if we could all go out to dinner and each of them said something different.
- One said, "I'm working on my budget."
- Another said, "I'm challenging myself not to eat out this month."
- The other said, "I'm about to go grocery shopping and I'm making dinner tonight." (Which was a sandwich
!!!)
Then we started talking about tithing, investing and budgeting.
One girl said that she takes tithe, retirement and investing money off the top and does whatever she wants to with the rest. Another said that she rights out a budget so she knows where all her funds are going. Neither one is wrong as long as you are achieving your goals.
I do think that budgeting ensures that you are making the most of your money because its easy to overspend on eating out (for example) if you aren't keeping track of your spending.
What is your preferred method? Do you think one method is better than the other? Why?
Tuesday, 23 August 2011
-
APY vs. APR
Have you ever wondered about that? Why some companies use APY and others use APR? Well,
- APY is the percentage of interest on a quantity of money in a year
- APR is the percentage of interest on a quantity of money in a period (which could be monthly, quarterly, semi-annually, etc.)
APR usually appears to be lower and APY usually appears to be higher.
When getting a loan, you want a lower interest rate and when making an investment, you want a higher interest rate. Watch out for these terms because that is what these financial institutions use to try to get you and if you know what you are getting, then you know you can get what you want.
Monday, 08 August 2011
-
How much is enough for retirement?
So, I've been thinking about retirement a lot lately. And I have two questions:
- What do I need to do to prepare for retirement?
- How much is enough to retire?
For the first question, the advice we are often given, is to:
- Fund your 401k up to the company match
- Fully fund your Roth IRA up to the max limit ($5000 in most situations.)
- If you can't put money into a Roth IRA because you make too much or you have more money you want to put away, you can open an IRA. There are other investment vehicles that are available for this purpose as well.
For the second question, there are several answers to this question but I will refer to Chris Ferrel for CBS MoneyWatch.com who says that you should have 12 times your income by the time you retire.
What major keys do you think people miss when working towards there retirement goals?
Sunday, 30 January 2011
-
Why is debt dangerous?
Taming debt is like taming a tiger. There are a lot of people with pet tigers but that doesn't mean they are any less wild. Just because its cute and fun today, one wrong move tomorrow and it could be a bad situation. What's so bad about debt?
- You are not exercising self control. Saving up for a purchase and own an item doesn't seem like much of an option these days.
- You are buying with money you do not have. I know, this is obvious to some but to others, it seems like you have access to it so you have it.
- You are paying for something that would otherwise be free. Your own hard earned money is free, by borrowing for a purchase rather than purchasing with cash, you just paid someone for something that would otherwise be free.
- You are making presumptions about the future. With the last few financial busts, these types of presumptions are dangerous.
- Things can really get out of control. How much borrowing is too much borrowing? Different people have different calculations. ex. "0 is the optimal amount to borrow." "A certain percentage of your paycheck." "A certain percentage of your annual salary." "A certain percentage of what you have in savings."
- Makes it easier to not be honest about your finances.
Do you think debt is manageable or something dangerous that shouldn't be messed with?
