Personal Finance Thoughts: May 27, 2008

Gosh why am I getting worried about this???

I will be done with teaching at the end of the week, and I have been a little concerned that with all of the extra free time I will have that I will start spending more money (going out to eat, hobbies, etc). I was considering not investing into my Roth for the summer just to have my checking account seem on a safe level.

But I know that this would be a bad long term idea... Anything I invest now will double approximately every 8 years (at 9% interest). Also, money I put into a Roth can be taken out at any time with no penalties, so it is almost like a second emergency fund if anything.

I know I should just stay the course and max out the Roth and put the rest into debt payments, I am just wondering why this new plan came up in my head. Maybe I will work a little in the summer (subbing for summer school teachers pays well).

Raises, what to do with them?

This is more of a personal posting but Id just like some thoughts.

So I found out today that our school district is getting a $1000 pay raise next year. I will also get a $1000 bonus in December.

I am trying to figure out how much more per month I will get and I think that since I am in a 25% tax bracket I will get about $700 from each. Per month the raise and bonus comes out to about $120 more a month.

Since I am done with my certification and I will be getting paid on a 12 month schedule starting in September (I was paid in a 13 month schedule last year), including everything I will make about $700 more a month than I am now. I also will have my car paid off in 2 months which is an extra $870. An extra $870 a month when Im already putting $500 into debt and maxed out my Roth is balling (Save that for retirement and in 40 years and 8% interest is $2.9 million)

Crazy budgeting me, I will still max out my Roth and put the rest into debt. (I was seriously considering putting $2,000 into a 403b with no tax difference, but debt is more important right now). I just need to stop eating chinese buffet...

Good article from Kiplingers

Here is a really good article on how to become a millionaire if you are 30. If you are younger than 30 it would be even more than a million.

If you're 30 years old, you need to set aside $448 per month for next 35 years to become a millionaire -- if you earn a reasonable 8% annualized return in a retirement account. Don’t have $448 to spare -- or even $248? Maybe you do and don't realize it. Let's take a look at how you can come up with the cash.

Save $219 Per Month on Taxes

Here’s How: The average refund for the 2008 filing season so far is about $2,500. If you received an average refund and you are in the 25% federal tax bracket, you could be entitled to three extra exemptions worth $3,500 each. That would boost your take-home pay by $219 a month. A couple of reasons you might be eligible for more exemptions: becoming a new parent or buying a house.

More from Kiplinger.com:

• Save More Money on Transportation

• Easy Ways to Lower Your Food Bill

• Simple Tips to Save on Entertainment

Save $100 Per Month on Food

Here’s How: Bring your lunch and snacks to work. Considering that the average meal at McDonald’s costs $5 and Dunkin’ Donuts charges $2 for a large cup of coffee, the brown-bag windfall can be substantial.

Save $80 Per Month on Entertainment

Here’s How: We're talking about one fewer dinner-and-a-movie night every month. That assumes you and your significant other pay the average $33 per person for a restaurant meal (according to a recent Zagat survey) and that you spend $7 per ticket, the average price at the movies (according to the Motion Picture Association of America).

Save $28 Per Month on Health Care

Here’s How: The typical family spends $1,321 on out-of-pocket health expenses each year, says the U.S. Department of Health and Human Serv­ices. You can pay those costs with a flexible spending account, which lets you set aside pretax dollars.

Save $10 Per Month on Auto Insurance

Here’s How: The average consumer pays $829 annually for car insurance, according to the National Association of Insurance Commissioners. Raising your deductible from $250 to $1,000 can save you 15% or more.

More from Yahoo! Finance:

• Credit Card Debt: The Next Possible Implosion

• Shift Your Savings Strategy for Inflation

• Stock Up on Food for Rich Returns
Visit the Banking & Budgeting Center

Save $8 Per Month on a Well Maintained Car

Here’s How: Keep your car’s engine tuned and tires inflated to the proper air pressure. Those minor improvements can save you up to $100 on gas each year.

Save $6 Per Month on Generic Non-Prescription Medicines

Here’s How: The average American spends $185 annually on over-the-counter medications. Generics cost up to 40% less than their brand-name counterparts and work just as well.

$451 Saved in Total!

Invest the found money every month in a retirement account that earns an average of 8% return over the next 35 years, and you'll have $1 million. That wasn't too hard, right?
Copyrighted, Kiplinger Washington Editors, Inc.

Cool chart

The New York Times recently posted a cool chart showing the average spending costs for Americans. You can even look at individual items in a category.

http://www.nytimes.com/interactive/2008/05/03/business/20080403_SPENDING_GRAPHIC.html

Budgeting for my trip

Ill be going to Florida and New York this summer to visit my friends and family. I will continue to record my expenses, and I will be showing both fun and informative video blogs while Im there.

Im wondering how much more I will spend during these 3 weeks, it might not be as bad as I think, but I did spend almost $400 on flights.

Im on a Low Budget

...and its a pretty good solo in the beginning.



Low budget sure keeps me on my toes
I count every penny and I watch where it goes
Were all on our uppers were all going skint
I used to smoke cigars but now I suck polo mints

Saving Money grocery Shopping

I think I am going to make a video blog concerning how to save money grocery shopping when I get my video camera back. You can save quite a bit from generic brands, and Ill show you how.