My Personal Finance Journey

All posts by Jacob A Irwin

I Don’t Need to Save for Retirement Yet, Right?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $60 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is November 30th, 2012.

The following article is by MPFJ staff writer, Miss T from Prairie Eco-Thrifter. If you want to learn how to live your dream life in a sustainable, healthy, and money savvy way, check out her site here.

 You hear this question a lot – twenty and thirty year olds often cannot see the need for retirement saving. Having finished their education and just started in their first real job, young people think that retirement is such a long way off. 

Surely there’s plenty of time for all that later on, right? The trouble is, it’s this kind of thinking that leaves millions of people without adequate retirement funds. I don’t know about you, but scrimping and going without in my older years isn’t my idea of a fun retirment.

Why Start Saving at an Early Age? 


 When you first start work, you want to go out and have fun after all the long years of getting your education and training. I get that – I felt exactly the same way. Unfortunately, I didn’t have a very good idea about financial management either, so I wasted heaps of my hard-earned cash. I came to my senses when an accident put me off work for a few months, and I realized that living from pay check to pay check had left me without any reserves or savings. This was when I took a hard look at my situation and tried to educate myself about personal finances. This was how I came to understand the importance of starting early with saving for retirement.

 Surveys conducted in different countries in America and Europe show an alarming world-wide trend. One third of workers admitted to having no retirement savings fund at all; another third said they were saving only between one and five percent of their wages. In the US, over 40% of workers admitted to having less than $10,000 in retirement savings; I hope they don’t plan on retiring any time soon! Financial planners recommend saving around 10 to 20% of your salary, depending on your age. As you get older, additional retirement saving is advisable.

 The simple truth is, the sooner you start retirement savings, the more you will have when you finish working. Even small amounts, put aside regularly, can grow to a size able retirement fund. In fact, this is the key to success with saving for retirement; regular amounts saved into a specialized account will give the best results as far as financial security in old age is concerned.

 Just how do the figures stack up? As an example, saving $100 each month from your mid twenties would yield about $380,000 when you are 60. If you didn’t start retirement saving until your mid thirties, this scenario would yield you a bit over $130,000. Now, do you see how starting early is the best strategy?

The Importance of Budgeting


 Before you can decide how much you can save, you need to know where you stand financially, right now. The best way to do this, and be able to track your income and expenditure, is with a personal budget. Yes, I know; you’ve heard it all before, but there’s a really good reason for that – it is important! Trying to manage without a budget is like driving a car without brakes – you have little control and will probably crash.

 So, take the time to sit down and work out a budget that works for you. Make sure everything is included in income and expenditure; leave nothing out. If you find you are spending more than you are earning, it’s time to make some cuts in spending to bring that into line. You must spend less than you earn, and you must make allowances for an emergency fund and savings. Using your budget as a guide, decide on a figure that you can put aside every pay period; increase this figure when you get a pay raise. The best arrangement is an automatic transfer into a specially designated account in order to take human error out of the equation.

Where to Put Your Retirement Savings?


 When you first start work, this may be the simplest form of retirement saving for you. However, many companies offer a retirement account called a 401k to employees. Your contributions are taken directly from your salary, so you don’t have to remember to transfer the money and you don’t miss it because you never see it. The great thing about a 401k is that your employer will also contribute to your retirement account as part of your employment package. This is basically free money, so you would be silly to pass it up. There is often a qualifying or waiting period before these extra contributions start, but check with your own employer as to what is available and what rules apply.

Figure Out a Quick Estimate for How Much You Need for Retirement


 Try this exercise – calculate how much money you think you’ll need in retirement. You’ll need to know how long you expect to be retired. Calculate the total dollars needed at a rate of about 75% of your current living expenses. Take this grand total and divide it by the number of months left in your working life.

 That’s how much you need to be putting aside each month to fund your retirement. Sobering, isn’t it?

How about you all? At what age did you start saving for retirement? What stopped you from starting sooner? 

What percentage of your salary are you currently saving for retirement?

 Share your experiences by commenting below!

    ***Photo courtesy of http://www.flickr.com/photos/68751915@N05/6869770873/sizes/l/in/photostream/

    From Bankrupt to Building Wealth Within 3 Years – A Personal Account

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    Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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    The following post is by MPFJ staff writer Kristina. Kristina has over a decade of experience working in personal finance at a bank branch. She helps people plan their financial lives from college to retirement.  You can follow her on Twitter @TKBlogs.

    In 2006 when the market was strong and I was a 26-year-old professional who was working in the financial services industry; I was earning a 6-figure income and I thought that my life couldn’t be better. 

    I was enjoying my life by filling it with luxurious vacations and expensive electronics.  In 2007, I moved into a luxury apartment building that came fully equipped with underground parking, a fully equipped gym and an indoor pool. I bought a brand new car because that’s what I thought a 27 year old young professional with a six figure income should do. In 2008, I found myself with a car payment and an expensive downtown apartment. I was spending thousands of dollars on my daily living expenses and I thought that I was happy…but then the market crashed.

    From Six Figures to Almost Bankrupt

    Not only did I lose my income but I also lost my comfy “secure” office job in personal finance.  If anyone has ever lost their job, then you know that not only is it a financial loss, it is also a huge personal loss and a major hit to your ego.

    My six figure income was my safety net, my emergency savings fund, and my lifeline; within a matter of days, I lost them all. One day, I woke up and I realized that I have no money because I spent money carelessly and recklessly because I took my six figure income for granted. I lost my job and I felt worthless; unfortunately, the reality was that not only did I feel worthless but I was actually worth nothing. I had no savings, no safety net and no monthly income.

    During the good market days, I was so excited about my accomplishment of earning a six figure income before I was 30 years old that I didn’t save or plan for my future. I had a great life, but I had no savings and then one day I had no income. This is a little bit ironic since I was working in personal finance.  I didn’t take my own advice and therefore when I lost my job and my income I had to make changes in my lifestyle, my spending habits and my living costs.  I sold my car, I cut my grocery bill, I immediately stopped eating out in restaurants, and I cut my monthly cell phone bill. With the loss of my income, my lifestyle dramatically changed overnight, and it was all because I didn’t take the time to plan and save money for my future.

    Rebuilding Wealth One Step at a Time

    After living through the worst three years of my entire life, I now know that money cannot (and does not) buy happiness. I had to hit rock bottom in order to learn the importance of financial responsibility, but I am happy to say that I have officially learned my lesson. I am happy to say that I finally found a new job. I earn less money than I did three years ago, but now I am a lot happier.  I don’t have the stress or pressure of trying to “keep up with the Jones,” and I like knowing that my bills are paid on time and that there is money in both my checking and savings accounts.

    My new found financial responsibility has taught me to live on a fixed monthly budget because I have a fixed monthly income. I don’t have a very exciting or luxurious life but at least I don’t have the stress of worrying about whether I will be able to pay both my rent and my cable bill in the same month.

    My savings, for both the short term and for retirement, are now included in my monthly budget.  I keep my living expenses to a basic minimum so that I can afford to save.  Some days, I wish I had my old life back, but the truth is that my previous financial lifestyle was careless and irresponsible. I can honestly say that my new financial life is not so bad, and I know that many people who were financially (and personally) affected during the financial crisis have not yet fully recovered; so I guess that I am one of the lucky ones. 

    How about you all? Has the economy from 2008 until now caused any drastic changes to your personal finances?

    Share your experiences by commenting below!

      ***Photo courtesy of http://www.flickr.com/photos/59937401@N07/5929474535/

      Festival of Frugality # 362 – November 13th, 2012 Edition

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      Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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      Click here to enter my free $60 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is November 30th, 2012.

      Welcome frugal personal finance fans! Thanks for stopping by.

      My Personal Finance Journey is very proud to be hosting this week’s edition of the Festival of Frugality. 

      For those of you that are unfamiliar with the Festival, its purpose is to spotlight excellent ideas that are floating around in the blogosphere to help readers squeeze a few extra pennies, nickels, dimes, or quarters out of every dollar. And, in this age, I believe that we all could use some good advice on how to do this!

      So, without further ado, let’s get on with the Festival!

      Shown below are the top 3 picks out of this week’s submissions. Congrats to the winning article from Free From Broke!
      Top 3 Editor Picks

      1.  Glen Craig presents Will a Late Credit Card Payment Affect My Credit Score? posted at Free From Broke.

      2. Teacher Man presents How Much Should I Get In Student Loans? posted at My University Money.

      3. Lance presents What Would You Do?: Should I Refinance My Mortgage? posted at Money Life and More.

      And now, on to the best of the rest! 

      Jim presents Are Penny Auctions Scams? posted at Bargaineering.

      Christina presents How to Deal With Couponing Fatigue posted at Northern Cheapskate.

      Darwin presents Generator Ethics (and costs) Following Hurricane Sandy posted at Darwin’s Money.

      Adrienne presents Shopping for Big Ticket Items on Black Friday posted at My Dollar Plan.

      Glen presents Debt Snowflaking: Using Small Amounts to Reduce Your Debt Faster posted at Credit Card Smarts.

      Donna Freedman presents 13 frugal gift-wrapping tips posted at Frugal Nation.

      Emily presents The Cost of an In-Town Move posted at Evolving Personal Finance.

      Michael presents Did Somebody Say McDonald’s–As a Career? posted at PT Money Personal Finance.

      John S presents Are Rich People Really That Different From the Rest of us? posted at Frugal Rules.

      FMF presents Combining Multiple Savings Offers to Maximize Savings posted at Free Money Finance.

      Paul Vachon presents 5 Things That Must be on Your Moving To Do List posted at The Frugal Toad.

      CF presents Paying off $27,000 in student loans posted at The Outlier Model.

      Penny Thots presents When Food Is Low–Throw a Party posted at Penny Thots.

      Edward presents Saving Money By Making Homemade posted at Modest Money.

      Young presents When You Suck At Democracy It’s No Fun posted at Young And Thrifty.

      Jen presents Getting The Most Bang For Your Halloween Bucks posted at Master the Art of Saving.

      Ashley presents Just Make More Money posted at Money Talks Coaching.

      MR presents Why I Want Rich People To Buy Things And Spend Money posted at Money Reasons.

      Miss T. presents Eco Friendly Commuting: What Are Some Options? posted at Prairie Eco Thrifter.

      Rachael presents Winter Wardrobe – One for the Ladies posted at Money & I.

      Well, that wraps up this week’s posts! They sure were some great ones and very interesting to read through!

      Get your articles in early for next week’s Festival (Festival of Frugality #362 – host to be determined).

      Also, let Jim (the Festival organizer) know if you are interested in hosting as well. It’s a bit of work, but a great way to get your blog out there and meet new folks in the process! I just took a quick look at the schedule, and it appears that almost all of the hosting dates are open for the rest of this year. So, there is plenty of opportunity!


      If you were included in this list, please don’t forget to link back to the festival here. Thanks!

        ***Photo courtesy of http://www.flickr.com/photos/clonedmilkmen/310563889/sizes/o/in/photostream/

        Easy Tax Breaks That Are Often Overlooked

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        Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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        Click here to enter my free $60 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is November 30th, 2012.

        The following post is by MPFJ staff writer, Kevin Mercadante, who is a professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has a background in both accounting and the mortgage industry.

        There are more than a few tax breaks that most people are not aware of, but using just one or a combination of several could reduce your income tax bill considerably. If any of these apply to you, you may be getting more money back from the IRS than you think.

        Medicare insurance premiums

        If you receive Social Security income, you will get a Form 1099G that reports your income to the IRS. That form will also include the amount of Medicare premiums you paid for the year. That premium is deductible as a medical expense on Form 1040 Schedule A.

        Medical expenses are deductible to the extent they exceed 7.5% of your adjusted gross income (AGI), which means you’ll want to make the medical total as large as possible. Medicare premiums paid will help you get there.

        Even better, if you’re self-employed, you can deduct a portion of them from your gross income even if you don’t itemize.

        Overlooked medical deductions

        Remember that 7.5% of AGI threshold you have to exceed in order to be able to get the benefit of the medical expense deduction? Fortunately, there’s a lot that goes into medical, including insurance premiums paid (and not already deducted on your W2), hospital stays, doctor visits, medical tests and prescriptions—you probably know all about those already.

        But, did you also know that you can deduct dental and vision expenses? In addition, you can deduct the cost of transportation to and from medical facilities, including medical mileage at 23 cents per mile. It will take a lot to get to 7.5% of your AGI, so consider all of these expenses to help you get there.

        Job hunting expenses

        The IRS allows you to deduct job hunting expenses to the extent they exceed 2% of your AGI. The threshold may not be much of a problem if the expenses are incurred in a year when you were unemployed for much of the year. A low AGI will mean that the 2% limit is also low.

        You can deduct the cost of printing, postage, job agency fees, and travel expenses for interviews (only if you paid). If that travel involved driving your own car, you can deduct the IRS per mile expense allowance.

        Tax preparation fees

        Any expenses paid in connection with the preparation of your income tax returns is deductible, also subject to 2% of AGI. You can also include any legal or professional fees incurred in connection with research specifically related to your income tax return, as well as postage fees.

        Investment expenses

        Investment management fees, account maintenance fees, and the costs of books, manuals, and periodicals related to your investment activities can be deducted. This deduction is also subject to the 2% of AGI limitation, but as you can see, if you have enough of these various deductions, you can clear the threshold and get a decent additional deduction, just by reporting expenses you already pay.

        Volunteer expenses

        A lot of people do volunteer work, but did you know that you can also deduct expenses incurred in connection with that effort? The IRS allows a 14 cents per mile deduction on volunteer related driving, and you can also deduct the cost of donated items. This may come about as a result of you purchasing supplies or various sundry items used in connection with the volunteer effort. Keep your receipts—you’ll need to use them at tax time.

        Energy efficient upgrades

        This credit applied through 2011, and allows for a tax credit of up to 30% of the purchase price of certain energy efficient equipment installed in your home, up to a maximum of credit of $1,500. Included are energy efficient equipment like furnaces, air conditioners and water heaters, and even attic insulation, energy efficient windows and doors, and certain new roofs. The credit is only for new equipment installed on an existing owner occupied home.

        This credit was scheduled to expire at the end of 2011. However, save any receipts and documentation for such upgrades purchased and installed in 2012 and 2013. This was established as a temporary credit, but such credits have a history of being resurrected retroactively well after the fact, and even after the tax year to which they apply.

        Additional state income tax assessments

        Have you ever gotten a notice from the state income tax agency informing you that you owe additional tax for a previous year? That notice isn’t good news, but you can recover some of it by deducting it in the year you pay it.

        Non-cash charitable deductions

        Most of us are aware that cash contributions to charities are deductible, but you can also deduct non-cash contributions of used clothing and household goods. You’re probably familiar with these from the pick-up services from the various charities that call looking for donations of goods. Keep a record of what you contribute and who it was you gave them to. The pick up service usually provides a card to confirm the pick up and you can enter the contents and estimated value when you get it.

        Don’t overlook this deduction. Several pick-ups per year can provide you with hundreds of dollars of extra charitable deductions. Just be aware that any single donation valued at over $500 will require additional documentation.

        Mortgage points

        If you pay mortgage points (one point is one percent of the mortgage loan amount) when you buy a house, you can deduct the full amount in the year you bought the home. The rules are more involved for refinances.

        When you pay points in connection with the refinance of an existing mortgage, you can amortize the cost of the points over the life of the loan. For example, if you paid points to refinance your old mortgage into a new 30 year mortgage, you can deduct 1/30th of the amount of the points paid for each year.

        If you pay the loan off at any time during the term of the mortgage, you can deduct the full amount of the remaining, amortized refinance points in the year of the payoff.

        Please note that any of the above deductions and credits may change by tax filing time. Some are the result of “Bush-era tax cuts” that may or not apply in 2012 or 2013, and are currently subject to review. Please check with your tax advisor for the rules specific to your circumstances.

        How about you all? What tax deductions do you take advantage of the most and which do you often find yourself overlooking?

         Share your experiences by commenting below!

          ***Photo courtesy of http://www.flickr.com/photos/68751915@N05/6355404323/sizes/l/in/photostream/

          What My Debt Has Taught Me About Receiving Gifts

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          Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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          Click here to enter my free $60 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is November 30th, 2012.

          The following post is by MPFJ staff writer Travis. Travis is a customer blogger for CareOne Debt Relief Services, and also appears weekly at Enemy of Debt. Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband, he provides a unique perspective on balancing debt, finances, and family.

          Imagine it’s a Friday night, you and a friend enter a bar, sit down, and each order a beer.  The bartender places two glasses on the counter.  You reach for your wallet to pay for yours, but you hear your friend say, “I’ll get both,” as he picks up the tab..  What do you say? 
          If you’re like I was that Friday night, you respond with, “Thanks, buddy, I’ll get the next one!”
          However, we never got to the “next one,” as I ended up leaving before he was ready for another one.  Having a chance to think about it later that night, I felt bad that I never got  the chance to return the favor.  I hoped my friend hadn’t thought I skipped out early on purpose so I didn’t have to pay for anything that night. 
          Over the last few years, my mother-in-law has made a habit of paying for both my wife and I when we go out for dinner together, even if it was at our invitation.  That made me uncomfortable because it makes me wonder if she buys only because she happens to know our debt situation.  It made me even more uncomfortable when she would tell the server before we order to put it all on one check because then I over analyze everything I order to make sure it doesn’t seem like I’m taking advantage of the situation.
          A few months ago, we got together with a friend from out of state that we don’t see very often.  We wanted to go to an Italian festival, but circumstances required we use a cab for transportation.  I attempted to take care of the fare when we arrived at our destination, to which our friend jokingly asked, “What do you think you’re doing?” and paid.  No problem, I thought, I’ll pick up the tab for the return trip.  That didn’t work out either, as she quickly handed the cab driver her card, and wouldn’t allow me to reimburse her.   This friend also knows our debt situation, and I again wondered if this was the reason for her refusing to allow me to help take care of the bill.
          Maybe it’s because I’m embarrassed about our debt and I think I walk through life with “I’m In Debt” tattooed on my forehead.  Or, maybe it’s because I feel a little bit guilty about the fact that these gifts end up actually helping our real life financial picture.  I hate myself for thinking about how to use the money I just saved because my mother-in-law just bought our dinner.

          Looking back, I have been a horrible gift receiver.
          But, something happened this week that really changed my perspective.  My parents came to where I live because my mom had an appointment at the Mayo Clinic regarding potential back surgery.  She asked me to attend if possible to listen to the doctor to know what was going on, ask any questions I could think of, and help decide a course of action.  When the appointment was over, she handed me money telling me it was to pay for parking.
          I’m 38 years old, and am gainfully employed.  I may be in debt but I can certainly pay for two hours worth of parking.  I was about to give it back to her and tell her just that, but she had this look in her eyes that made me realize that this wasn’t about three one dollar bills folded into a crisp rectangle.  This was her way of showing me beyond words her appreciation for taking time off of work, coming to her appointment and being a part of a very difficult decision.
          I slipped the money into my pocket, smiled, and thanked her.

          I had suddenly gained a very different view of the reason people give gifts.  The friend at the bar, my mother-in-law, and our friend from out of town weren’t expecting me to buy the next round, the next meal, or for pay for the next cab ride.  People give gifts to simply let you know that they appreciate who you are, what you do, and what you add to their life. 

          It truly is the thought behind the gift that counts.
          I’ve said before that as I’ve traveled along my journey out of debt that I’ve learned to value the wonderful people in my life, and the relationships I have with them.  This new appreciation of the meaning behind a gift only magnifies that perspective.  To the people reading this that have given me a gift of any kind, I offer you a heartfelt and sincere “Thank You.”
          I now truly understand the value of what you have given me, because I truly value you being in my life as well.  I would also like to tell you that someday, I may give you a gift.  Not in repayment, but as a token of my appreciation and gratitude of the very special place that you occupy in my life. 
          I ask you all to keep this in mind as we enter the holidays and we receive gifts from our loved ones. It may be a $5 drink, a $50 cab ride, a $75 dinner, or $3 to pay for parking. The dollar value doesn’t matter. Look deeply for the meaning behind the gift, hold it close to your heart, and treasure it.
          How about you all? Has being in debt made you view gifts differently? How so?

          Share your experiences by commenting below!

            ***Photo courtesy of http://www.freedigitalphotos.net/images/Birthday_g169-Red_Gift_Box_In_Human_Hand_p35472.html

            Saving Money by Thinning Milk

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            Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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             The following is a guest post from fellow Yakezie member, Edward Antrobus. Edward is a construction worker, blogger, tinkerer, and a househusband. He writes about frugality and occasionally rants about what he thinks the personal finance community gets wrong.


            Recently, I embarked on a quest. Instead of getting ideas from other personal finance bloggers, I wanted to get the opinions of average people on the topic of frugality. I started asking friends and coworkers one simple question: what is your favorite way of saving money? When I asked Angie, she responded that she thins the milk with water.

            I’ve talked to about a dozen people so far, but Angie easily had the most extreme answer of the bunch. But after I stopped to think about it, the answer isn’t as extreme as it sounds. I’m sure everyone has heard stories of grandmothers who made room at the table for unexpected company by adding more water to the soup. Angie just does the same thing to the milk to her grand children’s cereal.

            That got me thinking. What other ways could I stretch my food with free or cheap additions. Could I even be doing it already without realizing it? It turns out, there were a few examples that I was already performing without thinking about saving money.

            Meat

            When I buy discrete cuts of meat, such as chicken breasts I look for the smallest net weight I can find for a specific number of pieces in the package. For instance, the family size package of chicken breasts at my local supermarket always come with 5 breasts. The total weight of the meat can vary by as much as half a pound. Since I’m always eating 1 breast for a meal, I’m not going to notice an ounce and a half missing. So I get the smallest package with 5 breasts and save myself a couple dollars per month on meat.

            Milk and Water

            Adding a little extra milk or water to a dish that already calls for those ingredients will not be noticed, but can add an extra serving to a meal. I actually have a humorous story about Hamburger Helper and added milk.
            Back in high school, my cousin and I were left on our own for dinner one night and we decided to make some hamburger helper. When it was done cooking, it seemed awfully thin (because it thickens as it cools, oops!), so we mixed in some corn starch to thicken the sauce. Of course, by the time we served ourselves, it was thick enough to hold the spoon upright. Back in the pot it went with some added milk to thin it out. We added too much and were back to thin sauce. More corn starch. Too much. More milk. By the time we ate, we had turned one box of Cheeseburger Macaroni into half a gallon of food!

            Vegetables

            Speaking of hamburger helper, I always add frozen veggies to mine. Adding a cup of peas to the dish and you can feed another person. Sometimes, I’ll substitute the meat in a one pot dish entirely with vegetables. Frozen broccoli costs HALF as much as ground beef!


             For more posts from Edward’s Saving Money Series, check out – http://www.edwardantrobus.com/saving-money-series

            How about you all? What tricks do you use to help stretch your food purchases a little further? At what point would you draw the line between wise-frugality and being too cheap?

            Share your experiences by commenting below!

              ***Photo courtesy of http://www.flickr.com/photos/tillwe/60825340/sizes/l/in/photostream/

              Would the Envelope Method of Budgeting Work for You?

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              Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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              Click here to enter my free $60 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is November 30th, 2012.

              The following post is by MPFJ staff writer, Kelly Gurnett. Kelly runs the blog Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. You can also follow her on Twitter and Facebook.


              The dreaded “B” word. Budgeting.

              Even the most gung-ho savers among us can loathe it. Because no matter how carefully you crunch the numbers—no matter how iron-clad your budget categories are—reality always seems to run away from you. Your perfect numbers and what you really wind up spending end up miles apart.


               It’s not surprising. In today’s easy-swipe world, we hardly think twice about the money we’re spending. Even if you’re careful with the credit cards and only use a debit card linked straight to your checking account, plastic is still plastic—and it never quite registers as concretely as real money does.


               Not to mention all those “little” expenses that hardly seem worth tracking, but eventually add up: a 99 cent convenience store coffee here, a $7 fast food lunch there. It’s just so very easy for your spending to get away from you.


               If you find yourself nodding your head ruefully at this, then the envelope method of budgeting may be just what you need to get yourself back on track.

              What the Envelope Method Is and How It Works

              The envelope method of budgeting solves the “where did all my money go???” dilemma by making your monthly allotments undeniably real to you. How? By giving you actual wads of cash to use for the month—and the knowledge that once those bills are gone, they’re gone.


              Here’s how it works:

              • Pay your non-cash bills first. We all have monthly bills we don’t pay in cash—mortgage payments, car loans, utility bills. Anything you pay by check or online payment, pay as soon as your paycheck comes in. That way, that money is effectively “gone” and can’t be spent.
              • Make envelopes for all your other budget categories. Even if they’re things you’d normally use a debit card for (like groceries), you are now operating on a cash-only system. So make an envelope for eating out, clothes, miscellaneous purchases (like gifts for those birthdays you always forget are coming that month).  Label each one clearly, along with the amount you have budgeted for that category.
              • Put your allotment into those envelopes. It’s up to you whether you have monthly envelopes or weekly envelopes, although weekly can make things a bit easier for you, because if you have an unfortunate lapse and spend too much, at least you’ve only wiped out the week’s grocery budget and not the entire month’s.
              • Be conscious of how much is in the envelopes as you spend. When you are literally holding the whole week’s entertainment budget in your hands, it can make it a lot easier to decide if you want to blow the whole wad on an IMAX showing of the latest B-movie or if you’d rather spread it out over several Redbox rentals. The ability to physically see how much you have to spend for that period—and how much will be left after you spend it—can be a fantastic way to make you think twice about your purchases.
              • Once your envelope is depleted, you’re done. It doesn’t matter if there are three more days in the week and you’ve blown your grocery budget—time to get creative with leftovers. It doesn’t matter if you really wanted to see that concert at the beginning of the month, but now your monthly entertainment envelope is empty—time to start enjoying all those DVDs you already own but have never gotten around to watching.

              It will take a little getting used to, but this is one accountability method that is very tangible, and therefore very hard to evade. Try it yourself for a month or two and see how your spending overages suddenly start disappearing.


              Have you ever tried the envelope method?  What did you like or dislike about it?

              ***Photo courtesy of http://www.flickr.com/photos/kgnixer/7941841432/

              Financial Habits to Increase Your Financial Security

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              Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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              The following is a post by MPFJ staff writer, Toi Williams, who is a professional personal finance blogger of Fine Tuned Finances. She has backgrounds in personal finance, sales, and real estate.
              All of us have habits that we have established when it comes to spending money.  Some of these habits can save us a considerable amount of money, while some others can result in us wasting more money than we realize.

              By changing our wasteful spending habits and adopting some habits that help us control our expenses, we can increase our financial security and hold onto more of our wealth.

              Here are some of the best financial habits to adopt for a secure financial future.

              Limit Credit Card Spending To Emergencies

              Many people get into financial trouble because they use their credit cards to pay for everything, and then only pay the minimum amount when the bill is due.  This allows them to build large balances that are subject to interest and fees, making the balance difficult to pay off.

              In order to avoid this debt trap, limit your use of your credit card to true emergencies, such as repairs to your home that need to be made immediately, car repairs needed to keep your car running, or items that are needed quickly but can be paid off within one or two months.  Remember, every time you use your credit card but you do not pay in full by the due date, you could be paying interest on that purchase for months or years to come.

              Comparison Shop Before You Buy

              In many cases, the first price that you see for an item that you want is not the best price available in your area for that item.  By taking a few minutes of your time to search prices online before heading out to the stores, you may find that another retailer has the item for a lower price or currently has the item that you want listed as being on sale.  If you are looking for a large ticket item or something that you do not need to purchase right away, you may want to monitor the sales flyers for the retailers in your area to see when the item will be on sale and which retailer consistently has the lowest prices.

              Document Your Spending

              The best way to see where your money is going is to document the amounts that you are spending and what you are spending your money on.  Having a running total of the amount that you are spending each month will help you limit your spending to what you can afford and prevent you from getting too deeply into debt.  A list of your spending will also help you see where spending could be cut to save more money for the future.  There are a number of different computer programs and online tools that can help you track your spending, but many people are just fine using a notebook or checking account ledger for writing everything down.

              Focus On The Debt With The Highest Interest Rate

              If you are already facing more debt than you are comfortable with, make a plan for paying off those debts by focusing on the highest interest rate first.  The debt with the highest interest rate is costing you more per dollar, so you are paying more to borrow that balance from the lender.  Remember to pay at least the minimum amount for all of your other debt accounts and pay as much as you can towards the balance with the highest interest rate.  Once that balance has been eliminated, focus on the debt with the next highest interest rate and so on until all of your debts have been paid off.

              Pay Your Bills As Soon As They Arrive

              Paying your bills late is one of the worst things you can do when it comes to finances because of the number of negative consequences that can occur from the action.  Paying a bill late can result in expensive late fees, a reduction in your credit line, an increase in the interest rate for the account, and a decrease in your credit score.  In order to insure that none of your bills are ever paid late, pay each of them as they arrive in the mail.  This virtually eliminates the chance that you will forget to pay them and increases the chances that your bills will be paid before the money is spent on other items.

              Review Your Credit Reports Regularly

              It is very important to know what has been added to your credit report, as the information in your credit report affects your life in many different ways.  The information in your credit report is used to calculate your credit score, which determines the interest rate you receive for various financial products.  The information is also used by property owners and employers to determine your suitability for their location after you have submitted your application.

              Every person is entitled to one free copy of their credit report each year from each of the three main credit bureaus, so reviewing one of your credit reports every four months will give you a good picture of your creditworthiness without costing you a dime.

              Pay Yourself First

              Many people do not have any savings available because, by the time they are done spending on everything else during the month there is little money left.  If you want to make sure that you are saving money for your future, put the money into your savings account as soon as you are paid and before you begin to pay your bills.  This removes the money from your available funds, decreasing the chance that you will spend it on something else.  Many employers now allow their employees to direct deposit their paychecks into multiple bank accounts, so set up an automatic deposit of a portion of your paycheck into your savings account each pay period.  This allows you to save money without having to think about it.
              How about you all? What habits have you adopted to help you save money? 

               Share your experiences by commenting below!

                ***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/3/33/Money_555.jpg

                The Money is in the Kitchen – Save Yourself Money and Time by Cooking at Home

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                Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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                The following post is by MPFJ staff writer, Melissa Batai. Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

                Scour the Internet or read books about frugality, and you will learn hundreds of ways to save money, from the practical such as air drying your clothes and cutting your family members’ hair at home, to more ridiculous methods such as splitting a 2 ply roll of toilet paper into two one ply roles or taking the condiments from a restaurant so you don’t have to buy your own mustard and ketchup.
                However, in my experience, one of the quickest ways you can save a substantial amount of money is to cook at home and make a weekly meal plan.
                I know, cooking at home isn’t glamorous, and it takes time.  Yet, it doesn’t have to take a lot of time.  If you have 10 to 20 minutes extra a day, you can get a hot meal on the table in no time.

                How to Maximize Your Savings

                If you just decide to shop at home and only make quick cooking foods such as boxed mixes and frozen foods, you will save money over dining out every day. 
                However, if you instead commit to making your own food from scratch, you will save even more money, and your health will also benefit.

                Methods to Make Quick Meals

                You don’t have to spend an hour over a hot stove after work to make a nice meal at home.  Here are some strategies you can use to reduce your cooking time:

                1.  Use a slow cooker.  Simply prep your vegetables and meats, put them in the slow cooker, and turn it on and go.  When you come home, you will come home to a hot meal.  There are many books that are slow cooker only, but two of my favorites are Fix It and Forget It and Holiday Slow Cooker (which has recipes that are good for any time, not just holidays).
                If you don’t want to spend the money to buy the books, check them out from the library or look at some websites.  The blog, A Year of Slow Cooking, contains hundreds of slow cooker recipes.

                2.  Make your meals for the week in one day.  Spend an hour or two Sunday afternoon making your meals for the week, and you won’t have to do any cooking for the rest of the week.  Rachael Ray has a television show about creating 5 meals in a day, and she also has a sample menu on her website.  I like this method because you get all of the cooking dishes dirty once, and you only have to clean up once.

                3.  Freeze extra meals.  If you are making a slow cooker recipe, simply double the ingredients.  Then, put one half of the meal in a freezer bag, squeeze out the air, and freeze.  The morning you would like to serve it, simply put it in the refrigerator to defrost and reheat when you get home from work.  You can do this each night over a period of two weeks, and you will have another two weeks’ worth of meals in the freezer.  It really doesn’t take any longer when prepping, and you save yourself  time and money.

                4.  Make meal components.  Another way to save money and time is to make meal components.  Instead of buying little packets of oatmeal, buy a tub of oatmeal, and add your own flavorings like cinnamon and brown sugar.  Divide the mix into several single serve containers and use them as you would the packets in the morning.  If you eat oatmeal every morning, over the course of a year, you could save a hundred dollars or more depending on the size of your family.
                If you buy frozen chicken breasts at the store, why not put a few pieces in a freezer bag with sauce and cut up veggies?  Then, just dump it all in the slow cooker before you leave for work, saving yourself prep time in the morning.

                Make a Weekly Meal Plan

                Now that you are pumped to start cooking more at home, make sure to make a weekly meal plan.  You don’t have to be married to the meal plan, but when the week gets hectic and you’re tempted to eat out, having your meal plan ready will take away the burden of deciding what to make for dinner that night.  Also, if you shop with a meal plan, you can save yourself from buying all of those impulse purchases because you will be shopping from a list.
                We all say that going out to eat saves us time, but when you consider the travel time as well as the wait time at the restaurant, you can easily make your own meals at home for half the cost or less of the restaurant meal.  Plus, your body will thank you.  I’ll take eating at home over separating toilet paper rolls any day.

                How about you all? What steps do you take to optimize both the your time and monetary resources involved when cooking at home?

                 Share your experiences by commenting below!

                  ***Photo courtesy of http://www.flickr.com/photos/greencolander/1087828804/sizes/l/in/photostream/

                  $60 Giveaway – Community and Charity 10% Monthly Blog Income Give Back # 14 – November 2012 Edition

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                  Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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                  The 10% give back giveaway fun rolls on for the month of November! So far, it’s been a beautiful fall here in my small corner of the world, and I hope things are treating you well also. 

                  In case you missed the first 13 editions of the 10% Blog Income Give Back, after doing some thinking at the beginning of October 2011 about what direction I want this blog to grow and evolve towards in the future, I decided that any income made from this blog would have more significance to me at a personal life values level if I knew that a portion were being given back to the following places:

                  • 1) The readers – Obviously, without you here to read my articles and interact with my ideas, there would be no blog in the first place (let alone blog income). As such, it is only fitting that you receive a portion of any blog income.
                  • 2) Charitable organizations – If you’ve read my blog before, you know that I’m a big believer in donating a portion of my money to charity. Each year, I donate between 5-10% of my income to the National Multiple Sclerosis Society as part of the Bike for MS fundraiser that I do. Beyond the good that is done by donating your money, getting used to contributing to charity is also a good practice to emulate the actions of affluent individuals (T. Harv Eker discusses this in his book, Secrets of the Millionaire Mind, which I would definitely recommend reading if you have a few hours).

                  Because of these considerations, I’ve decided that each month going forward, I’m going to give away 10% of my net (after-tax) blogging income/profit to My Personal Finance Journey readers (5%) and to charity (5%). Listed below is how the process will work:

                  • After each calendar month passes, I’ll tally up my net blog income and determine what Dollar value correlates to 10%.
                  • I’ll post the giveaway (similar to this post you’re reading now), and you’ll have approximately 2-3+ weeks to enter.
                  • Once the giveaway is over, a grand prize winner will be announced, and that winner will then select what charity they’d like to have 5% of my blog income sent to. Once the giveaway entry window ends, I’ll send out the money to the blog reader winner(s) and personally drop off the charity donation.  
                  • So far, I’ve been very happy with the success of the October 2011 – October 2012 give backs. Listed below is a summary of what we’ve accomplished so far with the give backs. 
                    • Current total given to 10 different charities = $730
                    • Current total given to blog readers = $740 

                  So, that’s the overall flow of things and a brief recap of what’s happened so far with the give back initiative. Now, let’s get in to the specific details for this month’s (November 2012) giveaway. 

                  Details of November 2012 10% Blog Income Giveaway
                  • $60 total blog income to give away – $30 to a My Personal Finance Journey reader and $30 to the charity selected by the giveaway grand prize winner (see bullet point below for additional details on how the charity selection will work this month).
                    • $30 in the form of one prize available to one reader as follows – 
                      • 1) Grand Prize = $30 Amazon Gift Card or $30 cash via PayPal.
                    • Because of the success experienced in the October 2011-October 2012 give backs with building relationships with local charitable organizations, I’ve decided that for November we’ll keep how we select the charity that receives the 5% blog income donation the same as last month. Continue reading below for more details:
                      • Instead of having each entrant specify any charity in the world, the goal for this month will be for My Personal Finance Journey to develop a relationship with one of the 5 charities listed below. The Grand Prize winner will select which of these 5 organizations receives the donation on behalf of the blog.
                      • All of these charities were selected because 1) they are high quality organizations who do very good things and 2) they all have a significant presence/office in the area in which I live and operate this website (Central Virginia). 
                      • I have contacted the local offices of these organizations and told them that they are part of the 10% blog income give back. After the Grand Prize winner is selected and the selected charity announced, I hope to be able to visit the local office of the organization, meet their staff, and present them with the money personally.
                      • It’s been very fulfilling developing a relationship with the local chapter of the National Multiple Sclerosis Society through the MS150 fundraising bike ride I do each year, and I’m hoping that this experience will be just as awesome! I look forward to seeing which organization is selected.

                    How to Enter the Giveaway – Deadline to Enter is 11:59 PM, November 30th, 2012


                    Like last month, I’ve decided to use the RaffleCopter giveaway management tool to handle sign-up facilitation for the November giveaway, so simply go through the steps listed in the widget below to enter the running for the prize and accumulate entry points.

                    There is no limit to the amount of points you can earn. If you refer 10 subscribers – your name will have accumulated 170 entry points! Or, if you link to the giveaway more than once, you can accumulate those 10 entry points multiple times. You can also retweet the giveaway and/or share other My Personal Finance Journey articles via social media sites once per day. In the event of a tie, I will be using a random number generator to select the winner.

                    Important instructions: After you complete an entry method, make sure to click and fill out the “I Did This” or “Enter” button in the widget so that I have a record of your points.  

                    a Rafflecopter giveaway

                    Remember, the deadline for entries will end at 11:59 PM, November 30th, 2012 (a little over 3 weeks from today – the start of the give back). Good luck to you all! Please contact me if you have any questions. After the deadline for entries passes, the winner (one with the most points accumulated) will be contacted via email to receive their prize and select this month’s charity organization for the donation.

                      ***Photo courtesy of http://www.flickr.com/photos/seriousbri/6293591130/sizes/l/in/photostream/

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