6 financial milestones before 30
Nine months, 17 days, 14 hours and 15 minutes.
That’s how long I have before turning the dreaded 3-0…but who’s counting?
Actually, when I turned 29 last September everyone told me the year before 30 is the hard one because you usually have several personal milestones in your head that you’d hoped to accomplish and suddenly the deadline is looming.
And they were right. I always thought I’d be married and have a kid on the way long before I hit my 30s but I haven’t had the best of luck in the romance department. And call me old-fashioned but I’d like to be married before I have children (although that could change if marriage doesn’t seem to be on the horizon by 35…more on that later).
So anyway, I felt a little better last week when MSN Money published an article entitled “6 financial milestones before 30.” In this respect, at least, I am well on my way to accomplishing everything before 30:
1. Scale back the credit cards
Check – My one experience with debt in college – $4,000 after a year studying abroad followed by an untimely hiring freeze in the PR industry – scared the bejesus out of me and ever since I’ve been paying off the full balance on my cards. I do charge pretty much everything to my credit card for the rewards, but I get hives even thinking about accruing interest on an unpaid balance.
2. Own a home…or have a plan
Check - Thanks to my move to Texas, where home prices are much lower than California, and some help from my parents I was able to buy a house a few years ago when I was 26. Sure, my parents charged me 5.333% interest on the loan but I couldn’t have done it without them and they taught me some valuable lessons in the process.
3. Have skills
Check-ish - I say that because while I have seven years’ experience and I’m confident in my PR skills, my niche is so small that there are not a lot of opportunities out there if I was to ever God-forbid lose my job. I’m trying to diversify by learning more marketing skills and branching out into social media (hello, blog) but I have no idea what I would do if I had to pick something completely unrelated to PR.
4. Give money away
Check - I’m sorry to say most of my progress in this category has been in the last year, although I’m starting to give more of my money away to charitable causes. My Random Acts of Kindness fund is just one of the recent steps I’ve taken in this direction.
5. Know thyself
Check - Over the last few years I’ve definitely started to define what’s important to me and my actions have slowly changed to support these priorities. Sometimes my friends have scoffed at my frugality, but now I shake off the peer pressure by remembering the goals I’m saving toward and reminding myself what I’ve already accomplished through saving. After all, none of them have houses and many are still in debt! That said, five years ago I would have gladly chosen being “cool” and having fun over being fiscally responsible.
6. Know smart people
In progress - I consider both of my parents people I can turn to for sound financial advice, but the article goes further suggesting you have a good tax preparer, financial adviser, attorney and insurance agent, if not on speed dial then at least in your cell phone!
This one may be a toughie for me because I’ve been a little cynical of hiring advisers to help me manage my money/personal affairs ever since a financial adviser friend locked me into a horrible variable annuity.
Of course, one of my 2009 resolutions is to complete a will by the end of March so I’ll need to hire an attorney to make it official. I think the key here is to do my due diligence, interviewing several potential attorneys to find one I’m really comfortable with and one who knows their stuff. Before, I’d always take the easy route, picking the first option out of laziness or a fear of offending someone.
But no longer. After all, I’m turning 30 in just 9 months, 17 days, 13 hours and 45 minutes…
Filed under Finances, Personal | Comments (4)9 resolutions for 2009
Happy New Year! Like many of you, I’ve taken some time these last few weeks to look back on what I’ve accomplished in 2008 and to look forward to what I’d like to achieve in 2009. I never shared last year’s goals so I won’t bore you with the details of what I’ve done, but suffice it to say I’m pretty pleased with the results.
If I’ve learned anything, though, it’s that you can’t rest on your laurels so below are my resolutions – some personal, some career and some financial and all in no particular order – for 2009:
*Workout at least 3 times per week: This was actually one of my resolutions last year and I’m proud to say I succeeded! Most of the time I actually worked out 4-5 times per week but having that minimum threshold kept me to my resolution so I’ve decided to do it again.
Deadline: ongoing
*Set up a CD ladder for my emergency fund: Okay I lied, I will bore you by talking about one of my accomplishments in 2008 – my $10,000 emergency fund. I didn’t have an emergency fund until last year and right now that money is sitting in a savings account making 2.75% 2.5% (darn ING lowered it again!). I’d love to maximize the return on this while still keeping the fund somewhat liquid but I need to do a little more research on CD laddering before I take the plunge.
Deadline: June 30, 2009
*Make a will: Now that I own a house and my net worth is getting up there, I really should have a will to ensure that my assets aren’t held up in the legal system should anything happen to me. I’ve put this off because 1) it’s kind-of morbid to think about being dead and 2) the cost to hire an attorney to make it legit…both of which are stupid reasons because the cost will be much higher to my parents – in both time and money – if I don’t do this.
Deadline: March 31, 2009
*Blog at least 4 times per week: Right now I’ve been averaging 6 posts per week but I know there will be some weeks that are busier than usual at work or life in general. I’m starting to write more posts in advance but even that is dependent on my schedule so I figure 4 times per week is a reasonable (and doable) goal.
Deadline: ongoing
*Be more social: I know, bad goal because it’s not specific or quantifiable, but I don’t really want to say I have to go out X times per week because that’s not what it’s really about. These last few months I’ve been so focused on saving money that I’ve sometimes turned down social invitations to the detriment of my relationships. I need to be a better friend and to learn to enjoy my time with them without feeling guilty that I’m spending money or that I could use that time to do something else “more productive.”
Deadline: ongoing
*Landscape my yard: My yard is fine as it is, but I’d love to add some flowers and more decorative accents to give it character. I have the money for this so it’s just a matter of getting the quotes, deciding on plants and flowers, researching contractors, hiring a company, setting the schedule…phew, already this is sounding exhausting so I’m giving myself the full year to accomplish this goal.
Deadline: December 31, 2009
*Reach 150 readers on my RSS feed: Honestly I have no idea if this would be considered a gimme or an aggressive goal since I’m so new to the blogging world. But at least it will give me something to work toward and will keep me motivated.
Deadline: December 31, 2009
*Read 6 financial books: I started becoming more interested in personal finance about six months ago when I read my first financial book ever, The Bogleheads Guide to Investing. Much to my surprise, it was an easy read and it taught me some of the things I was doing wrong or could do better. I’d love to continue my learning, not just for personal purposes but also so that I can pass on some of the best tidbits to you!
Deadline: December 31, 2009
*Get over my ex-boyfriend: I kind-of hate using up one of my resolutions on him so I think I’ll re-label this one, “Don’t let/keep toxic people in my life.” He lied, I’m pretty sure he cheated and he was just an unfit boyfriend in general. I broke up with him, so why has this been so hard?
Deadline: As soon as possible
*Move to California: My entire family is in California and every time I visit it is that much harder to return to Texas. I miss my parents, my nieces and nephews, friends and just being in California in general. Texas has been wonderful to me but these past three years I’ve learned that my heart is wherever my family is…
Deadline: December 31, 2009 (although I reserve the right to move it back since this resolution is contingent on finding a job I like at least as much as I like my current job)
Summed up, I basically want to be a better daughter, sister, friend, girlfriend (hopefully!), saver, investor, homeowner, employee and blogger. Piece of cake, right? :-)
Filed under Career, Dating, Finances, Investing, Personal | Comment (1)5 money lessons from mom and dad
My parents divorced when I was seven but I am fortunate to have a great relationship with both my mom and dad, not to mention wonderful step-parents who’ve also contributed to my upbringing. Being home for the holidays got me thinking about the many money lessons mom and dad have taught me over the years.
Sometimes I knew a lesson was being imparted and other times I didn’t know until reflecting on it much later, but regardless each has taught me something that I see at work in my current financial philosophy. So without further ado, below are the top 5 money lessons from my parents:
1. Budgeting and frugality – Right before my freshman year of high school, my mom announced that she was no longer going to randomly dole out money to my sister and me. Instead, she would give us $300 for new clothing, entertainment, eating out, etc. for the school year and we’d be responsible for pretty much all other expenses. At first, we were thrilled because the lump sum sounded so much more impressive than the $5 here or $10 there my mom used to hand out.
But I quickly learned that stretching that money throughout the year was not going to be as easy as expected. After buying one outfit at Wet Seal – including the mandatory matching socks, earrings and scrunchie – my stash of cash was not as large as I’d originally thought. My mom’s move not only taught me how to budget, it showed me the value of money because I was forced to take on extra babysitting jobs to pay for my ever-growing list of wants. Working for my money – rather than having it handed to me without effort – suddenly made that list of wants much shorter since I began to weigh whether I wanted something enough to work for it.
The $300 rule also instilled in me a love for finding a bargain. It became a game of sorts, trying to stretch that money as far as possible by finding high-quality clothing or items at discounted prices. Although I don’t remember my first time shopping at TJ Maxx or Marshalls, I’m sure my love affair with these stores started around the same time my mom cut me off.
2. Money’s not always the most important thing – The summer before my senior year in high school, I found myself shunning babysitting for a more regular job since sporadic babysitting money barely covered my gas and the other things I found important as a teenager. My dad wanted me to look into an internship in journalism since I had expressed an interest in being a writer one day, but all the internships I found were unpaid and I was stubborn.
After I applied for a job at a fast food restaurant, my dad (probably out of desperation) told me he would pay me the same hourly wage if I secured an internship at the local newspaper. Other than that promise, he left it up to me. I had to apply and get the job myself, and luckily after a well-written, creative cover letter to the editor-in-chief, I was offered an internship at the newspaper. Each month, I reported my hours to my dad in memo format and he wrote me a “paycheck.”
Although some people might scoff at the idea of my dad paying me to work, it is because of that first internship that I secured my next internship (at a PR agency), one that was paid. Each subsequent job resulted in a new addition to my resume and a pay increase. As I saw the benefit of hard work and building on my experience, my ambition also increased and gave me the motivation to set new goals for myself.
Now that I’m not a money-hungry teenager, I look back and know without a doubt that – if I had to do it all over – I would take the non-paying internship over a minimum-wage job any day because I understand and appreciate that more experience parlays into better (and higher-paying) jobs in the future.
3. Making mistakes – Although it probably made them cringe, my parents always sat back and let me make my own financial missteps – and deal with the consequences – while growing up. From buying into the Agatha Christie book club because “I’d get five free books” (which ended up costing me $92 when all was said and done) to signing up for a variable annuity IRA because my financial advisor “friend” told me it was a great idea, they’ve let me make my own mistakes.
Although I hate having done these things, they’ve given me a healthy dose of cynicism and curiosity. Instead of taking things at face value, I now look into the true value and the fine print to see if it really works for my needs. I still make mistakes, but I always learn from them and use this knowledge to improve myself and my finances.
4. The power of interest – When I bought my house, my dad loaned me the money for the down payment with a 5-year repayment term. While he charged me interest, he also committed to forgiving half of the loan with the caveat that I had to pay that money to myself via an IRA or my 401k (also due in full in five years).
My dad’s loan arrangement resulted in two lessons. In addition to teaching me the importance of contributing to my retirement (and in the process, the magic of compounding interest) he showed me that something has a higher personal value if you have to work for it. My dad could easily have afforded to give me the down payment outright, but he knew I would have much more of a personal stake if I was required to spend my own hard-earned money. Because of this, I make sure I take care of my house because I’ve already invested so much of my own money and time into it.
5. Diversification – Instead of a new car or a trip around the world, my dad’s present for my college graduation was $2,000 to buy stock in whichever company (or companies) I wanted. To put it mildly, I was underwhelmed. I had always been content putting my money in a savings account and forgetting about it as it slooowwwly grew in value, and I didn’t have the knowledge or the interest in investing. Once I bought stock and saw how its value could rise, though, I wanted to know more. I’ve since read books, signed up for investing newsletters and taken a much more active role in my investing portfolio. Although I’ve also seen how stocks can fall over the years, I recently cashed in that first investment for a 100% profit.
I don’t have children now and quite frankly it is daunting to think that one day I will be responsible for instilling in my children so many important values, from money management to work ethics to personal accountability. I only hope I do half as good a job as my parents.
Filed under Career, Finances, Investing, Personal | Comments (2)Flying home…a little bit heavier
I think the most annoying new invention of 2008 has got to be airline bag fees. I love all the presents I received from my family in California, but unfortunately many of them are heavier than the items I brought out here. When I left home my bag was 39 pounds…today (two bottles of wine, a knife set, new sheets and various other items later) it weighed in at a healthy 49.1 pounds, at least on my parents home scale.
Before I could get too excited my step-mom told me she always weighs a little more at Weight Watchers meetings than she does on her home scale, so now I’m wondering if the scale is actually incorrect. The difference between being right and being wrong is a whopping $35 dollars since a regular checked bag is $15 dollars and an 0verweight bag is $50!
It may be close so hopefully the person at the airport is in a good mood – unlikely considering today is the second busiest day at airports following the Sunday after Thanksgiving – and she’ll let me pass even if it’s just a few ounces over. Safe travels to everyone flying or driving (or any other form of transportation) home today!
Filed under Finances, Personal | Comment (0)Christmas thank you notes made easy
As a kid I loved getting presents, but the experience was always a bit dampened by the requisite mass of thank you notes my mom would make me write afterwards. I still love getting presents but I’d like to think I’ve matured a bit over the years and that I now understand the pleasure a well-written thank you note can bring to the gifter.
Still, writing thank you notes can be time-consuming and monotonous so I’ve provided some tips below to help make this after-Christmas task less of a chore:
*Make a List: If you haven’t kept track throughout the holidays, take 10 minutes to sit down and write out the gifts you’ve received and who gave them to you. Draw a checkbox next to each name so you can cross off names as you complete each note.
*Pick a Stationery: Unless you want to write a novel, stick with notecard sized stationery in a design that won’t detract from the message. One of my favorite gifts was a very nice stationery set with a brown/pink border and my name engraved in pink calligraphy at the top. Plain, elegant and there’ll never be any confusion who sent it. You’ll be surprised how much more fun writing thank you notes is when you actually like your stationery.
*Write the note: And by write, I mean NO email and NO print outs (unless your handwriting is so illegible doctors can’t even read it). A handwritten note not only conveys a personal touch, it also shows the receiver that you spent precious time and energy crafting it.
Pick a pen you enjoy writing with – ideally in blue or black ink – and then start to draft your note. There are six elements you should include in a note:
- Salutation – Address the note the way you would refer to the person normally i.e. “Dear Uncle Bill”
- Sincere Gratitude – Express thanks for the item or gesture i.e. “Thank you so much for the No More Ouch Bikini Waxing Kit.”
- Suggest Use- Say something complimentary about the item and then describe how you will use it i.e. “I used to dread this activity but now it’s as easy and painless as brushing my teeth. Your gift will especially come in handy for my trip to Brazil in March.”
- Speak of the Past, Look to the Future – If applicable, make a comment about the last time you saw them and when you hope to see them again i.e. “I enjoyed seeing you at Gran’s house for Christmas, and I hope to see you again in February at Aunt Patty’s retirement party.”
- Say it Again – Round-out the note and signal you’re close to the end by expressing your gratitude again i.e. “Thank you again for your wonderful present.”
- Sign-off and Signature - End your note with an appropriate sign-off and your signature i.e. “Love, Saver”
*Send your notes: Generally, thank you notes should be sent within a week of receiving the gift. Double-check that you have the correct address, print it legibly and make sure you have correct postage to prevent any delays.
BONUS: Although standard thank you notes are perfectly acceptable, if you really want to impress include a photo of the present being put to use. For example, did they give you a sweatshirt from your alma mater? Take a picture of you wearing it with a big smile on your face. Get a new fishing rod? Stage a photo of you with the fishing rod holding a “just-caught” trout (buy it at the store if you have to). Seeing the gift being put to use and bringing obvious joy is, in my opinion, the best thank you a person can get.
Filed under Personal | Comment (0)