2019 Savings Goals

Since 2018 was the year of decimating my car loan, I've fallen a bit behind on putting money into my Roth IRA.  According to my mint.com account, I am nearly on track to retire at the age of 70.  Sure, that's great, but also, I'm pretty sure I can do better than that.  I do love my job, and thankfully it's not physically demanding in a way where I won't be able to do it at age 70, but I also would like to have options.  Having money means having options.

Despite the fact that I didn't put any money into my Roth IRA in 2018, I was still saving for retirement.  I have a TIAA Cref plan through my work, and my monthly contribution is pretty aggressive, since until literally this month, I've been behind on saving for retirement.  My employer also has a very, very good match (10%), so that helps significantly.

So, the plan for 2019 is as  follows:

1. Contribute as much as I comfortably can to my Roth IRA for tax year 2018, which I can do until April 15.  I'm not getting much of a tax refund, but what I do get will go into my Roth for 2018.
2. Contribute as much as I comfortably can to my Roth for tax year 2019. I don't think I'll be able to max it out, but I'll certainly do my best. It helps that I can contribute for tax year 2019 until April 2020.
3. I will pay off the credit card that has the balance of my car loan on it in July, but I should still have $10,000 in my emergency fund at that time.  $10,000 is my low threshold for my emergency fund, since I need to have at least that much to get the interest rate of 2%.  I'd like to have at least $12,000 in my emergency fund, so I will still be putting some money in there each month, but the Roth is the priority.
4. Look into micro-finance loans.  This is something I'll write an entire post about, but in a nutshell, micro-finance loans are loans that you give to people in developing countries to help them grow their small businesses.  It's not something that will make me money, but it's a very low cost way to give people a hand up.  I'm still investigating this, so I will report back in the future!
5. Get our household emergency fund over the $10,000 threshold.  My husband and I have a shared emergency fund, and I really want to get that over the $10k mark so we can move it to a Money Market and double our interest rate.  We're close, but that goal is a few months away.

That's it for now!  I have a couple other things percolating in my mind, but I think five goals is a very reasonable batch to write down.  

What are your annual financial goals?

2018 Savings Goals

Every year I set a new savings/ financial goal, but since I wasn't blogging in 2018, I didn't write that one down even though I'm particularly proud of it.  So, better late than never.

2018, I bought a new-to-me car for the first time in years.  I started commuting about 90 miles a day to work, and after buying gas for my 2005 Malibu three times in one week, I snapped and went to get a more fuel efficient car.  Because this decision was somewhat impulsive, I did not do my homework beforehand and ended up financing through the dealership.  Despite my exemplary credit rating, they got me a loan at 5% interest, which seriously filled me with rage.  I tapped into savings and threw a few thousand dollars at it, but interest was accruing on my eight thousand dollar balance much faster than I liked, so I came up with a different plan.

This was around November, which is apparently when credit card companies start aggressively sending out 0% balance transfer letters.  I got one from my Capital One card that offered me 0% interest for 18 months, with a one-time 2% fee.  I decided to take an $8500 cash advance ($190 fee)  and pay off that stupid loan right away.  Then, since the interest rate on that card was 0%, I made the minimum payment on the card, and redirected the rest of my payment into a Money Market savings account that earned me 2% interest.  I'll pay off the card in full in July, before the 18 month period runs out, and for the year 2018, I made $150 in interest.

A few things I had to consider before doing this:

1. I had to do a bit of math to determine if I would have the money to pay that card off in full before the 18 month period runs out.  If I don't pay it off, anything on that card will be assessed something like 25% interest, which I do not want to pay.
2. I had to take that card out of my payment rotation completely.  I disconnected it from any automatic payments, and physically took the card out of my wallet and stashed it in my office at home.
3. My credit score took a bit of a pummelling.  My credit limit on that card is $10,000, and I put $8500 on it and paid it down by only about $100 per month.  That looks really bad on a credit report, but since my score was already excellent, it didn't matter too much.  I got a bit of a bump when I paid off the car loan, but not enough to compensate for carrying such a high balance for so long.

Despite those few drawbacks and minor inconveniences, I am 100% glad I did this.  I saved myself hundreds of dollars in interest on that stupid bank loan, and the balance transfer fee is a non-issue since I'll more than make that back in accrued interest on my Money Market savings account.  I had almost enough money in my emergency fund to pay the bank loan in full without involving my credit card, but that would have obliterated my savings, which makes me deeply uncomfortable.  This way, I was able to keep some liquid cash on hand for emergencies (which I did end up needing).

Post Government Shutdown Budgeting

Thankfully, I was not personally affected by the recent government shutdown, but like most people, I was avidly following the news stories about the affected workers struggles to pay basic living expenses after missing more than one paycheck.  If nothing else good comes from this, at least its (possibly) created a bit of a dialogue about personal finance and forced people to examine their saving and spending.  At least, that's what it did for me.

I'm a saver, and always have been.  But when I looked at my accounts and tried to calculate how many months we could last if both of us lost our income, it was surprising.  We live in a very expensive city, and have been primarily focused on reducing debt (which is a good thing!) for the past year or so.  What that means, however, is that our rate of savings has slowed a bit, which is alarming.

By my calculations, it should cost us $3000/month to cover our basic costs.  This includes:

1. Rent ($2300)
2. Electricity (~$120)
3. Gas bill (home $50)
4. Food (~$250)
5. Household (things like toilet paper, etc. $50)
6. Phones ($100)
7. Misc-- ($100) Things like home internet, Netflix/Hulu.  This is an area that we could cut if things get desperate, but there's always hidden costs with doing that as well.  For example, we could cut home internet since we're lucky enough to have a great public library less than a mile away that's open 12 hours a day.  But, reinstalling internet comes with additional fees.  Also, if we were aggressively trying to find new jobs, it would be inconvenient to have to camp out at the library all day, though I recognize that plenty of people do that.

Thankfully, both our cars are paid off, and if we weren't driving to work every day, we'd save about $200/month on gas.  Our car insurance bill is due 2/15 though, so that's a $900 expense that's unavoidable and would really pummel our savings.  Probably my first impulse, if we were in a lost income situation, would be to put that on a credit card to try to buy some time.  I imagine that's what a lot of people had to do.

Because we have a chest freezer, and I have a tendency (compulsion?) to stock up on food when it's on sale, we could probably go more than a month buying very minimal groceries. That number in my calculations is our average food budget. In fact, I'm going to do a pantry challenge in February and March to try to eat down some of my stores of food before we go on an extended vacation in April.

Student loan payments are a bit tricky.  I'm on the Public Service Loan Forgiveness plan (assuming it still exists when my time finally comes), which means that I pay a prescribed amount of money every month, and I can't deviate from it.  I could put my loans into forebearance, if I was really hard up, but my interest rates are so high that that would really cost me a lot of extra money and time down the road, so it's not a very appealing option.  My student loan payment is $440/month, which is almost double our monthly food budget.  It seems incredibly backward to be mulling over whether I would pay my student loans or buy food, but that's a real problem facing plenty of people.

Over all, we're certainly in a better position than many, but not a comfortable position by any stretch.  I've been trying to build up our emergency fund, and doing this audit is making me realize that that needs to be more of a priority.

Where to save:

I have several Capital One online bank accounts, and I LOVE them.  Their accounts are fee free, and have the best rates I've found.  The traditional savings account has a 1% interest rate, which means that we're earning somewhere around $6/month on our current balance of $8600.  That's not amazing, but it's still quite good.  I'll take free money wherever I can get it.  

Their Money Market savings account, which requires a minimum balance of $10,000 has a rate of 2% interest at the time of this writing.  Compare that to my bricks and mortar bank, which has an interest rate of .02%, and earns me about $.20 per year, this is a no-brainer.

Our plan is to keep about $15,000 in a Money Market account so that we have easy access to liquid cash, should we need it.  At the current 2% interest rate, that will earn us about $25 per month in interest. Above and beyond that, I've got my eye on some of Capital One's CDs, that currently have a rate of 2.85% for the three year.  That's a ways down the road, but I want to have a plan in mind for when that day comes!  Plus, it's pretty fun to shop for low stakes investments, and makes me feel very virtuous.

We're going to be feeling the fallout from the government shutdown for a long time, but I really encourage people to take this is a wake-up call to really examine your finances and make a plan.  It's cold outside, and a good time to hunker down with your bank balance.

Random Thoughts

--I don't know why it took me so long to realize that instead of trekking all the way out to Ikea for jars to store pastas, lentils and other things that I like to have but that may potentially get bugs in them, I can re-use old glass jars from pasta sauce, salsa or other things like that!  It's kind of shameful to admit  had never thought of that before (especially since I compulsively save yogurt containers), but I hadn't and now I have.  If there's anyone else out there who never made that connection--do not feel ashamed!  I just put that bulk nutritional yeast I got at the food co-op in Albany into an old Trader Joe's marinara jar--brilliant!

--I'm super into beets right now, but I'm still scared to actually dismantle them myself.  Thankfully, a friend told me that Trader Joe's has pre-prepared beets that are ready to eat.

I've beet eating beets almost daily, and I am unlikely to stop.  Bed of arugula topped with sliced beets, bit of feta and some vinagrette--OMG.  Plus, they're such a pretty color!

--I had an epiphany the other day while riding my bike.  There's a summertime farmer's market in the park at the far end of my street.  Even though it's a very reasonable distance to run to (2.5 miles), it's always seemed just slightly too far away to walk to knowing that I'll have to walk back laden with heavy groceries.  But I won't be bummed out to put all that fresh produce in my bike basket!  Plus, now I actually have Saturdays off!

--I have barely worn my winter coat this winter, and I've spent more time outside than probably any other winter since I was a kid.  That's weird.  I also haven't worn my new boots yet, which makes me a bit sad just because they're so stylish.

--I'm going through an expensive time right now--one of those phases where the money seems to just vanish.  First it was car repair, then I needed a haircut, then Nike was having a mega sale on the shoes I really like plus I had a 20% off code (this may seem frivolous, but I need good running shoes, and if I can get them 1/2 price--that's a winner), taxes are due soon and I owe, etc.  Just a lot of things to pay for right now. I'm going to try to reign it in without sacrificing fun (I've sacrificed for too long!).  I'm going to whip up some super cheap meals, and drive to work no more than one day a week (unless it's downpouring or snowing).

--My new job comes complete with a very active Friends of the Library group consisting mostly of older, retired people who just love the library.  I had forgotten how much I love hanging around older people.  Every one of them seems to have led a crazy interesting life, and for a bunch of senior citizens, they're lively and highly entertaining.  I was telling one the other day at the Leap Year Potluck about riding my bike to work, "Oh, that's so European of you!" she exclaimed.  This from a woman who is actually from Europe!  Score!

--My goal for the year, now, is to be more European.  I imagine that this will include eating more fatty cheese, drinking more wine, riding my bike more often and living life at a more leisurely pace.  I was kind of hoping to incorporate all those things in my life anyway, but now I have a hashtag for it #moreeuropean. Speaking of being more European, I was telling my stylist (who used to live in Milan) about my new Friends, and she totally wants me to invite her to our next party! 

--This weekend, I'm going to the ballet on Friday, out for crepes on Saturday, and on Sunday, I'm taking a fencing class (Inigo Montoya!).  Even though I just made this new 'be more European' goal like yesterday, I'm totally a success!

Happy weekend, everyone!

2010--not too shabby

I began 2010 with a diminished savings account and one 19-hour-a-week job plus freelance work, and end it with an almost replenished savings account in a better bank (I actually earn interest now!) and a second 15-to-19-hour-per-week job allowing me that savings replenishment.

Looking back over my budget, I underspent for the year in the food column by $43, but overspent on both alcohol and clothes. I don't set spending limits in my other columns, but my misc column was higher than I would have liked. I spent $1110 on gas for my car or about $93 per month. That figure makes me feel physically ill, but there's not much I can really do about it as I now have two commutes.

Despite spending an obscene amount of money on gas, I have saved quite a bit and also put some toward my student loans, though that money is just going toward interest at this point, but interest is tax-deductible!

Goals for 2011 are as follows:

1. Replenish savings account completely. I want to have a minimum balance of $10,000 in my savings. This the amount of money that it would take to keep me financially afloat for a year if something should happen to both of my jobs. Once I hit $10,000, I will continue to save, but less aggressively, turning my focus instead to...
2. Those blasted student loans. I'm in deferment right now, but will come into repayment in May or June (I should really figure that out). I intend to keep making the small payments I have been while focusing on savings until I'm in repayment, then I will most likely be putting every spare cent toward that large, scary number. Should be a superfun.
3. Keep looking for tweaks to save money and keep socking money into the old travel fund. Just because I owe direct loans a limb doesn't mean I can't have some (responsible) fun (within reason).
4. And my perennial goal--remember that I have pretty much everything I need and don't get caught up in the yearning for stuff. I have stuff--I'm running out of places for it.

How about you, what are your goals?