Hello Guys, I wanted to start a new series of posts based on you the readers. I added a new questionnaire page under suggestions to give you a guideline as to what questions you guys can answer to help you come to terms with the money issues you are experiencing and how by answering these questions you can improve your finances. At the end of the questionnaire I will give you feedback if it is necessary and I hope you all enjoy this new series we all will embark on.
This first post is by an anonymous reader and you can copy and paste the questions and then email them to me at moneywatch101@gmail.com.
Moneywatch101 Questions:
- Do you have any money issues in your life right now?
I wouldn’t say lack of money is an issue for me, however I can say I have money spending issues. I am in the mist of saving for a house, but with my spending habits I have missed out on saving the maximum, making it longer to achieve my goal.
- Do you have any Debt?
Yes, the only debt I currently have is a car loan, which I am trying to pay off way before my term ends.
- If you do, how do you plan to overcome these issues?
Overcoming my spending issue is hard. I mainly shop out of boredom or too much free time but I am learning to buy the necessities rather than the wants. Every month I realize I’m spending less and less so I must be doing something right and it feels good.
- Do you have a written budget you like to follow or do you just wing it?
I have tried several times to follow a written budget, from spreadsheets, to graphs, to reading bank statements, but none of that works for me. I just wing it and try to do my best with estimations. Another thing that is a big help for me is an online bank tool that my bank offers. It’s called “my money map” and it shows your total income versus your spending on a month to month basis. As soon as I see my spending report getting close to my average, I slow down on my purchases.
- How much are you currently saving a month for any goals?
I am currently saving 20% of my monthly income for a home. If I used my money more wisely, I could be saving a maximum of 35% a month.
- How confident are you with investing your Money?
With all the risks involved in stocks and bonds, I don’t believe I will ever be completely comfortable with investing my money for big growth. I currently have two savings accounts and always have the option to open a CD but that’s as far as it gets for me.
- Do you currently want to learn more about investing ideas?
Yes, of course. It’s always good to expand your knowledge on investing.
- Do you think about Retirement when you save your Money or other goals?
I think about retirement all the time. Even though I’m 25 years young I contribute 15% into my 401K account and I am saving money aside for possible early retirement.
Moneywatch101 Feedback:
1. By separating your direct deposit into 2 or more accounts you now have an additional barrier to your money which in turn can help you get your hands off your extra dollars. I would recommend that you make one of those direct deposits in an online bank. For example ING or Alley Bank are two highly respectable options for you. In your regular checking account make the direct deposit amount enough to cover your bills and a $150 dollar cushion. Send the rest aka surplus to the online bank and this shall be earmarked for your down payment account.
2. I noticed that you say you save 20% total for your home but that you also stated you save 15% in your 401K account, if this is the case you are either saving 35% in total or only 20% in total . If it is truly 35% that is a great accomplishment, but if you are only saving 5% for the house then you need to ramp it up more or reduce the 401K to 10% and add it to the house down payment. I noticed your primary goal is your buying a house and you should focus more on that now, retirement can wait till later.
3. Granted that the stock market is risky and volatile, but that should not scare you to the point where you stay stagnant with investing. If you reach a higher income one day and reach the maximum you can save in retirement accounts what will you do put the money in a mattress? No you will look into investing in ETF’s, Bonds, Dividend stocks, or non retirement mutual funds. These all have risks, but if you only put your money in products that have been around more than 10+ years then you can reduce risk. Just keep in mind that investing in these is long-term and avoid jumping in and out.
4. If and when you get bored try to focus on an activity you can do that does not involve spending money. For example make a meal that can last you a few days or go to the park and walk / bike for an hour. These little changes to your lifestyle will allow you to save more and avoid spending on useless things because you are bored.
Thanks for answering these questions. I think the amount you are saving is commendable because not many 25 year olds are saving as much or even thinking about buying property. I hope you can use the recommendations as you see fit in your life. We all can use evaluations with money issues from time to time, and it should not hurt you to change things to make your money goals more easily attainable.
RichUncle EL
