Sharing insights since 2007 on carefully saving money, investing, frugal living, coupons, promo codes because the little things matter in achieving financial freedom!
In life, we need to take action. Today, I need everyone to start saving immediately if you haven’t yet. How many of us have always thought about saving but think that we can always do it tomorrow? We always think that we can wait, but you will be waiting forever to be financially free too.
We can’t wait until we buy the next big screen TV but we can always wait to setup your 401k accounts.
We can’t wait to go on a vacation but we can always wait to pay down our mortgages.
We can’t wait to get rich quick but we can always wait to learn how to get rich through time.
We can’t wait to leave work but we can always wait to learn how to increase our wealth.
We can’t wait for early retirement but we will have to wait.
If it is you, change.
If you want to feel financially secure, save.
If you give yourself excuses, stop.
Trim down your spending and start saving. Otherwise, I guarantee you will regret it.
One of the reasons why we don’t like to go to work is because there seems to be so much we need to do. Endless deadlines that need to be met and we just want to throw our hands up and say “That’s it. I give up.”. Sometimes I feel very unmotivated because it doesn’t seem like I will ever get everything done on time as there are just so many tasks piled up.
However, I realized that it is likely because I don’t do everything right away. This “I will get to it later” attitude is the root cause of this problem. As I wait for everything to pile up, I become inefficient because part of my energy is spent worrying about how to complete the tasks instead of actually doing it.
I know I’m not alone because people I know always wait till the last minute to finish projects. For example, if the deadline is this Friday, most people will do it late Thursday night (if not on Friday) even if the task takes 15 minutes. This way of doing things has got to change. If we just do the 15 minute task right away, then we don’t need to think about it ever again. I bet that by waiting till Friday, we’ve spent 3-5 minutes of the week just thinking about the task.
So, let’s start taking action immediately and get things done as soon as possible. Once we don’t feel the frustration of having too much on our plate, we will indirectly be more motivated to work on Mondays, and perhaps this weekly piece can seize to exist.
Every year, I analyze my spending during the past year to spot irrational behavior and see where my money went. By doing this, I’m able to help myself find ways to save more in the future because I’m aware of where I like to splurge. I also use this opportunity to improve my personal budget for the next year by readjusting the categories to better track spending effectively.
I’m sure the benefits of analyzing spending are pretty obvious so let’s dive into the actual charts.
Housing expense is a necessity and its pretty stable so it is nothing exciting. Even though it’s steadily going up, it is still relatively cheap compared to other places that I am thinking about moving to.
Food expense is quite steady at roughly $150 – $200 a month. It is very interesting to note that the three big months (February, July and December) are all related to having a very nice dinner as follows:
February – Valentine’s Day
July – Fiancee’s Birthday
December – Christmas Dinner
I wonder if my fiancee will see this and ask me to spend less money on those three big dinners. 🙂
Goods represent my slurge money on gifts for myself. As you can see, there are many months that I don’t buy anything at all. The biggest slurging month by far is July when I bought an iPhone. However, I don’t regret the purchase one bit since it helped me be much more responsive to my customers by letting me check my emails while I’m on the road. Overall, I’m quite happy with my spending habits in 2007 because I rarely bought anything the entire year.
Entertainment expense was surprisingly sporadic and I spent the most money on entertainment in December. I drilled down further and golf expense was by far the number one entertainment expense. Normally, I would tell myself to spend less money if something dominates a category but if I don’t even golf anymore, I wouldn’t have any motivation to save money since I would have no entertainment whatsoever. Furthermore, this level of spending is acceptable so I will continue to watch this but not try to adjust at all.
I definitely need to tweak this category since everything is falling under miscellaneous. Actually, there are basically three months with big spikes in money outflow and they are as follows:
April – Prepay 6 months car insurance
August – $4,000 deposit for wedding
October – Prepay 6 months car insurance
As you can see, these were big ticket items that could explain the big jump for the month. I expect my car insurance to drop significantly next year as I get married and as my speeding tickets are erased from DMV’s record (it’s finally been 3 years). I will have even higher wedding expenses next year but that is to be expected and I would consider that a special case.
Overall, I’m quite happy with my spending for the year. As you can see, I usually keep everything under $2,000 a month including rent which is half of the total amount. In the future, I expect the 3 highest spending months to be drastically lower as my wedding expense and my car insurance premiums will be reduced. This thesis hinges on the fact that I do not move though. If I move after I get married, then my total spending will go up at least a couple hundred dollars per month.
There are two changes that I intend to make:
I’m changing housing expense to be called “necessary expense”. This means that my gas expense will be moved from miscellaneous to this category as will rent.
I contemplated a bit but I also plan to put all car related expense in necessary expenses since I really can’t function in Southern California without a car.
My entertainment expense includes outings where I treated my friends out to golf. I plan to separate this from entertainment. Starting in 2008, only expenses from my fiancee and I will be included here.
The separated entertainment expense and also all gifts will be under a new section called Gifts. In 2008, I want to see how generous I am with gifts to others.
2007’s goods expense included goods for only myself. 2008 will also include Emma’s goods that I pay for. As we get married, expenses for her will be considered as my own so this will include all my gifts for her such as flowers, birthday presents etc.
What do you think? Do you have any suggestions on what I should look more into? Are you impressed with my spending habits or do you think it downright sucks? I’d love to hear from you so I can see if I can save more money in 2008.
Most people look at their 401k and examine how much they have contributed during year end. We know this because most people talk about it during November and December when everything is set and done. Some think a little further ahead and try to plan for the next 12 months during year end but unfortunately most don’t. Therefore, I suggestion today that we all log into our 401k account to increase our contribution rate.
The beginning of the year is a great time to increase our contribution rate because the change will be reflected the entire year. Unless you are already at the contribution maximum, I suggest contributing an additional 2% this year. 2% won’t be much off each paycheck, especially since taxes won’t be charged immediately on the 2%. Furthermore, 2% is a lot of money if you keep on contributing your career earnings into it, especially since compound interest will work in our favor through the years.
Speaking of 401k contribution rates, many plans offer a way to automatically increase the contribution rate each year. This is a great feature for those that always put things off as it will automatically increase our savings each year. Remember, automatic savings is always good. I know that it’s always hard to decide to invest more money into our retirement when the stock market is down. Trust me on this one though, because everyone will thank me years down the road when we are wealthy.
This is developing into a Monday series where I will discuss motivation and inspiration to counter our Monday blues. Hopefully, this will help everyone start off the week right. Let me know what you think so I can continue to improve this blog.
When was the last time you bought something on impulse? Next time you really want to get something, why don’t you try to set it up as a reward? By doing this, you can motivate yourself to accomplish that task while giving yourself time to think about whether you really want it at all.
This past weekend, I really wanted a golf range finder just because my colleague bought one for my boss. Instantly, I felt like I had to have one. The device just felt like it was the next most important thing that I needed to get to improve my game. I chatted with my friend in Canada and of course he has to tell me that he’s always had one and would highly recommend it.
Even though the device seemed like a must-have, it wasn’t a necessity since I’ve been fine without one for the past 27 years. So, instead of trying to resist of getting it altogether, I am going to set up the reward system I talked about. I told myself that if I can save $8000 in Q1 of 2008, then I will get one.
This way, it will help motivate me to save more. Sure the range finder is quite expensive at $400. However, if I can save $8000 instead of $7000 for instance, then I’m still ahead by $600 after 3 months. I know $8000 sound like quite a bit of money to save in 3 months, especially since I’m not going to count the increases in my own investments. However, I’m counting all 401k contributions on top of savings for this so I believe it is doable.
For this system to work, I’ve got to be serious about the goal. So, I wrote it down on a piece of paper and even told my fiancee about it. Giving myself 3 months will also give me some time to think about whether I even want the range finder that badly. This will be much needed for my impulses to cool off so I can reevaluate based on logic and not emotions.
Next time you really really want to get something, maybe you can try it.
How many of us have to work today and feel really bad? How many of us are complaining that someone we know don’t have to work while we are grinding away? Why do we even care what other people have or don’t have to do? I’m working right now while my wife is sleeping in bed. If we think about it, our work day isn’t better or worst no matter what our friends are doing. Some of your friends may be playing golf now, while some evil friend might even call you during the day to rub it in. However, these are the times when our true character show.
Think of the positives. Whether we are home or at work, we would be reading MoneyNing anyway right? 🙂 In addition, we won’t be spending any money while we are working. On another note, would anyone be working that hard today anyway, given that it’s the day before Christmas? Let’s spend some time chatting with our colleagues and get to know them. The holidays are a great time to work on our relationship with our co-workers because it will for sure come in handy when arguments arise later.
Look. I’m not saying that we are better off working than having a day off. I’m just saying to stop comparing ourselves to someone else. In every situation, many people are better off than us but just as many people are worst off. Those who don’t have a job but need one probably wished they weren’t staying at home after the holidays.
Think of the positives and let’s have a great day. Merry Pre-Christmas.
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