dcsimg The Get Rich Slowly Forums • View topic - Neil's Fiscal Fitness Plan

  GRS Home  Forum Home
Bank Rates Center
   Savings Account Rates
   Money Market Rates
   Highest CD Rates
Insurance Rates Center
  Auto           Health
   Life              Home
Mortgage Rates Center
  Mortgage Rates
  Mortgage Quotes

Last visit was:
A place for Get Rich Slowly readers to ask questions
and exchange ideas
It is currently Wed Oct 22, 2014 2:41 am




Post new topic Reply to topic  [ 7 posts ] 
Author Message
 Post subject: Neil's Fiscal Fitness Plan
PostPosted: Sat Sep 22, 2012 7:00 pm 

Joined: Sat Sep 22, 2012 5:19 pm
Posts: 5
Hello all!

I've been lurking around GRS for the past few months and have fallen in love. Your community is awesome: interesting, motivating, knowledge building. I thought I was doing a good job before I found GRS because I used mint and was aware of my current state. I now realize I have a lot of work to do if I would like to reach my financial goals.

I thought this would be a great place to hold myself accountable, organize my thoughts and track my progress. Hopefully I'll be able to bounce some ideas off others as well.

I am 24, single, and a bit over a year into my career. I am finally settling into my permanent assignment and will be relocating for it next month. I'm very excited to re-do my fixed expenses because I fell victim to lifestyle inflation with my previous move as you will see with my breakdown below.


Current State:
Assets:
Efund: $5K
Freedom Fund: $935 (cash savings for vacation, etc)
Roth IRA: ~$1500
401K: ~$10K
Mutual Fund: ~$3500 (hopefully this will be for a down payment on a home)

My Roth and Mutual fund are both set up through an Edward Jones broker and are in the american funds mutual funds. I haven't touched them since they were set up when I was 18. I would like to transfer them over to fidelity accounts where my employer has our 401K plan. I would like to get the money out of actively managed mutual funds(american funds) and put them into either ETF's or funds that just track indexes and are not actively managed.

Liabilities:
Student Loan balance: $2381 @ 6.8% (actively working to assassinate this bugger)
Credit Card: $400 - Paid of in full each month. I use my card for day to day expenses for points and I get paid monthly so I'm able distribute my savings/expenses when I get my check without having a large balance after I'm done.

Budget:
Income: $3250/mo after tax, 401k contributions and insurance
401K Contribution: $666 - woah, never did the math on that one not a nice number to come out to ($476+$190 match)

Rent: $1260
Utilities: $60
Cable: $110
Food: $420 (includes groceries, restaurants, and lunches)
Gas: $120 A large part of my job includes driving so work gas is reimbursed so I struggle to keep track of this number
Misc/Fun: $450 (Includes bar, entertainment, clothes, etc)
S-Loans: $250

Remaining Monthly Balance: $580

I have been breaking even or having small surpluses (<$100) each month so my budget needs to be re-worked and after I get settled in my new job and home it will be. Right now it seems the extra money goes to gas, food, beer, and weekend activities.

Now I know I am paying waaay to much for rent, I would like to get that number down below $1000 and I need to figure out something else for cable. However, being young, single and moving to a town where I know very few people I put a lot of priority on location of apartments. I want to be around lots of people like me in a hip part of town where I do not have to drive if I go out to the bar(DUI = fired). I think the only way I'm going to be able to accomplish this is either finding a steal on criagslist or getting a roommate.

Future State:

I will get some money with my relocation which I plan to use to kill my student loan, get some second hand bedroom furniture (time to get my box spring off the floor and get a proper dresser). After that I should have some money left over to kickstart refunding my mutual fund, IRA, and freedom fund. Which brings me to my future state goals...

Goals:
Build E-fund to 10K - $150/month
Begin funding Roth IRA - $100/month to start
Build freedom fund to 2K - $100/ month
Build 30k down payment for house in 3 years - $100/month to start

All that totals $450/ month so after I kill my student loan and if I reduce my rent to under $1000 this is a feasible plan which I will automate.

Here is the part where I hold myself accountable:

Action Items
-Find out more about edward Jones Fee's and cancel if they are unreasonable
-Find out if I can set up Roth and mutual funds with fidelity for free or small fee
-Find perfect apartment for under 1k per month


Wow, that is long winded and disorganized! I hope you guys made it all the way through... and those that did THANKS!

I appreciate any and all comments/input. Feel free to be brutally honest with me... I do better with harsh realities and things that aren't sugarcoated. :)


Top
Offline Profile E-mail   
 Post subject: Re: Neil's Fiscal Fitness Plan
PostPosted: Sun Sep 23, 2012 12:20 pm 

Joined: Sat Feb 12, 2011 5:47 pm
Posts: 90
Location: Ontario, Canada
It is great that you are thinking about this now, and that you have realized the income inflation. Once you get settled in your new place, you will obviously have a better idea of where you are, and where you can cut to increase savings. You might want to break out your misc/fun budget to set some limits. For example, you can give yourself $X for bar per month and switch to something non-alcoholic as the evening goes on. That way you still get to have fun, but don't break the bank.

Good luck with the relocation.

_________________
Kate


Top
Offline Profile E-mail   
 Post subject: Re: Neil's Fiscal Fitness Plan
PostPosted: Mon Sep 24, 2012 5:27 am 
User avatar

Joined: Thu May 17, 2012 10:05 am
Posts: 1114
jesselne wrote:
Hello all!

I've been lurking around GRS for the past few months and have fallen in love. Your community is awesome: interesting, motivating, knowledge building. I thought I was doing a good job before I found GRS because I used mint and was aware of my current state. I now realize I have a lot of work to do if I would like to reach my financial goals.

I appreciate any and all comments/input. Feel free to be brutally honest with me... I do better with harsh realities and things that aren't sugarcoated. :)


Welcome to the board Jesselne! You are doing fantastic financially! Keep up the good work. GRS is a great resource as you mentioned. That is awesome that you pay off your credit card every month. I treat my credit cards as debit cards as well. My thought is if I’m going to spend the money anyway on everyday expenses why not get mileage or some cash back while I’m at it?

I) A Few Preliminary Questions:

A) How old is your vehicle? What is the mileage on it? Are you given a company vehicle?

B) Do you not have a cell phone bill? Is this covered by your employer? Or perhaps you are on a family plan?

C) Do you have an internet bill?

D) Have you heard of mint.com? It is a great tool to track all your expenses.

E) When is the relocation? Will you be able to save some of the relocation funds or will it cost the full amount your company has promised to give you? Will the relocation include an increase in your income? This would affect your budget…

F) Have you considered keeping a receipt of everything you spend money on? That way you can track your expenses and reconcile your budget every month.

Debt:
$2381 @ 6.8%

This should be easy to knock out. If you pay $830 ($250+580) for 3 months (Oct, Nov, Dec) you can knock out your SL and be debt free going into 2013!

II) Observations/Questions:

Budget

A) Rent – a roommate might be a good idea. Then perhaps you can get an apartment for $1400/mo and by splitting rent still pay less than your goal of $1000. Craiglist is a good place to start. Where are you moving to?

B) Cable – Perhaps give up cable until the end of the year? Or if you get a roommate agree to split this half way. Is this HD service?

C) Food – I agree with Kate1 it would be a good idea to go into further details on several categories. This category in particular is a good place to start. Perhaps splitting it up into Groceries, Eating Out, & Lunch might be a good idea to see where you’re spending your money. Is it possible to take sandwiches (brown bagging it) or frozen meals to work instead of eating out or ordering in?

D) Entertainment/Fun – I’d brake this category down into sub-categories.

So something like this...

Income: $3,250

Expenses:

Rent: $1,260
Utilities: $60
Cable: $110
Groceries: $200
Eating Out: $200
Lunch: $120
Gas: $120
Entertainment: $150
Fun/Beer: $150
Clothes: $150
S-Loans: $830
Cell Phone?
Internet?

Total Expenses $3,350

Hope this helps. ;)

_________________
~ Eagle


Top
Offline Profile E-mail   
 Post subject: Re: Neil's Fiscal Fitness Plan
PostPosted: Mon Sep 24, 2012 7:47 pm 

Joined: Sat Sep 22, 2012 5:19 pm
Posts: 5
Thanks for the responses and insight Kate and Eagle!

In my initial post I combined my food/fun budgets to try and simplify my current state.

Here is how I have it broken down in mint:
Groceries: $200/mo
Restaurants: $150/mo
Lunches: $80/mo
Fast Food: $20/mo
Bars/Alcohol: $150/mo
Entertainment: $200/ mo (Movies, Concerts, Physical Music, Netflix, Outdoor activities, etc)
Shopping: $100/mo

Kate, that is a great idea about switching to non-alcoholic beverages throughout the night, would be much more cost effective and make the next day much more productive!

As for Eagles questions:

I)
A) I am very fortunate that my company provides a vehicle and all of the expenses included with it except for personal fuel.

B) I currently use 2 cell phones a company provided phone and a personal phone($50/mo unlimited data plan). I know it doesn’t make sense fiscally but I am uncomfortable with my company having the ability to monitor all of my communications. I am getting more and more trusting and will likely drop my personal phone and port over the number using google voice.

C) Just realized that I forgot to account for that in my original post. My internet bill is lumped in with cable. So 110/mo for HD cable w/HBO and high speed internet. Sorry for the miscommunication.

D) I love mint! I have been using it for 3 or so years although I managed to lose all but the past 18 months worth of data when I was fooling around with it a while back.

E) I will likely be moving mid to late October for a Nov 1st start date. It all depends how quickly my boss gets in the paperwork and when the moving company is able to schedule me in. I am not receiving a raise in my salary, however, I am now eligible for quarterly performance based bonus that have the potential to be substantial. Based on the previous relocation I will likely be able to pay off my student loan, purchase some second hand furniture, and still have some left over to kick off my savings plan.

F) I would be screwed without mint! I am far too disorganized to pull off organizing my receipts. My ineptitude in organization is astounding.

II)
A) I’ve been scouring craigslist for steals on 1 bedrooms and will be out to my new home to check out places later this week. I have one of 3 days booked looking at places so far. I’ve also been looking at the room/shares section and there are some good deals, however, I have quite a bit of furniture that I am not quite willing to part ways with yet and not sure if I want to put it in storage. I put in an ad this afternoon seeking a roommate who is light on furniture… we’ll see how that goes. As far as where I am moving to I don’t want to get too specific since I’ve already revealed lots of personal information for anyone to read, so I’ll give you a regional idea. I’m moving from the Mid-Atlantic to the Mountain West. The cost of living index is nearly identical except for housing.

B) I really should cut the cord and have seriously considered it many times especially since I’ve enrolled in Netflix. I just wish I could get HBOgo without cable and it would be a done deal!

C) I think I addressed some of this up above with my detailed breakdown. I try to cook myself dinner 5 or so days a week but in reality it ends up being 3-4 if that. For lunches, I am often with customers so I can expense them but when I know I’m going to be home a few days in a row, I pick up lunch meat for sammiches and fruit.

D) I broke this down above too. A bit embarrassing how much money I spend at the bar… especially because I almost always go over budget!

Thanks again for all of your help Kate and Eagle. Just asking me questions makes me type out the responses and think them over again and see how much I am really spending and rethink my rationale.

And some good news this evening, I was able to open up a ROTH IRA managed by fidelity and transfer over my Edward jones mutual fund. I’ve set up a $150/mo automatic transfer and once everything is settled I’ll be able to put the funds into an index fund. Simplify + Automate!

One quick question: For a mid term (3 years) investment what type of account should I invest it in? Index mutual fund? Set up a Smartypig account? Ladder a few CD’s? This will be for a down payment for my future home. I will read up on this, but the thought was in my head so I wanted to get it down on "paper"

Wow again a long winded post, but it got me thinking quite a bit about how I am doing things so THANKS!

Oh and one more thing. I also learned to write these long posts in word since my first draft was lost to the login page when I tried to post it!


Top
Offline Profile E-mail   
 Post subject: Re: Neil's Fiscal Fitness Plan
PostPosted: Sat Nov 17, 2012 5:51 pm 

Joined: Sat Sep 22, 2012 5:19 pm
Posts: 5
Hello again!

My financial situation is finally coming together after my move and I have decided to update my financial situation. I’ll start off with the positives first.

The Good:
1) I paid off my student loan with the lump sum of money I got for my move for a savings of $250/month.
2) I have officially cut the cord and won’t be looking back anytime soon, so my total bill for internet and cable goes from 110 to 20 for a savings of $90 per month.
3) I’ve upgraded to a company smartphone and decided to drop my personal phone for a savings of $50/month starting in December.
4) I started an account at Lending Club to put some of my home down payment money in. Once my primary bank account and lending club account are linked I will be transferring over $2000 and I’ll set up automatic transfers of $150 per month.
5) I opened an Ally account for my efund and once my accounts are linked I’ll set up an automatic transfer of $100 per month. The interest rate goes from 0.05% APR at my old bank to 0.95%APR at Ally.
6) Set up auto transfers for $100/month to my FU fund.
7) I already mentioned my auto transfers of $150/month for my Roth, but I thought I would put it here again.

My savings will be going from whatever was left over at the end of the month (not much usually) to $500 per month and by paying off my loan and canceling unnecessary things my cashflow is only taking a $110/month hit.

The bad:
1) I didn’t stick to my guns when apartment searching and settled on a place for 1281/month, utilities will be roughly the same at $60/month making rent + utilities $1341/month compared to $1320/month in my previous city.
2) I’ve bought/sold a fair number of things the past couple of months with my moving “bonus”. I traded my old snowboard(~10 years old, beat up, and too small for me) plus some cash for an old road bike in great shape and a small patio set for my balcony. Then after moving I decided to buy a snowboard off craigslist that was better suited for the mountains as well as a season pass that covers a few of the resorts in my area. Total cost: ~$850.

I should have planned better and maybe I would have been able to find a cheaper apartment, but have already signed all the paperwork so I'm just going to have to live with it for a year.

I don’t feel too bad about my craigslist spending; I think I got some killer deals on what I did buy, plus my bike will be used for transportation(read:savings) and my snowboard is a great although expensive hobby. Next year I will look into teaching snowboarding part time on the weekends to get a pass for free and a bit of extra income as well, but this year there are just too many changes and unknowns in my life to make that kind of commitment.

Still working on my budget and balance sheet I’ll get that posted once things shake out a bit. I’d expect it to stay pretty much the same except I think I’ll be reducing my fuel budget by quite a bit.

Action Items:
1) Look into some index funds for my Roth.
2) Look into switching to Vanguard’s Target date fund instead of Fidelity’s since Vanguard’s fund has lower fees.
3) Put together budget and balance sheet.

Thanks for reading!


Top
Offline Profile E-mail   
 Post subject: Re: Neil's Fiscal Fitness Plan
PostPosted: Sun Nov 18, 2012 8:22 am 
Moderator

Joined: Wed Sep 23, 2009 9:01 am
Posts: 5395
jesselne wrote:
I started an account at Lending Club to put some of my home down payment money in. Once my primary bank account and lending club account are linked I will be transferring over $2000 and I’ll set up automatic transfers of $150 per month.


Peer-to-peer lending is a very high risk activity. It really is not appropriate for a house fund!

Other than that your plan sounds great.

And where you I sign up for snowboard lessons? jk


Top
Offline Profile E-mail   
 Post subject: Re: Neil's Fiscal Fitness Plan
PostPosted: Sun Nov 18, 2012 8:43 am 

Joined: Tue Jun 30, 2009 9:44 pm
Posts: 308
Location: Atlanta, Georgia
DoingHomework wrote:
Peer-to-peer lending is a very high risk activity. It really is not appropriate for a house fund!

I agree with this 100%.


Top
Offline Profile   
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 7 posts ]  Moderators: kombat, bpgui, JerichoHill, Fiscal Fitness Moderator


Who is online

Users browsing this forum: Exabot [Bot] and 6 guests


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group
Theme created StylerBB.net & kodeki