August Goals

{Image Source}

I know I have a list of financial goals already, but those are more "long term goals."  I have a lot coming up in this next month and I feel like my mental checklist just isn't going to cut it.  So, to get them out of my head and onto "paper," here they are.

1. Pay off Signature Loan for last semester's tuition.
2. Take out another Signature Loan for upcoming semester's tuition.
3. Adjust budget to cut out unnecessary groceries, hair and transportation costs - put towards tuition
4. Don't contribute to Emergency Savings this month - put that money towards tuition
5. Decrease retirement contribution amount - put that money towards tuition
6. Cancel dental appointment until next month
7. Pay my tithing in full, and pray a lot that the Lord will provide!

School was something I completely forgot to factor into the Spending Fast equation!  I don't know how I could have forgotten about it, it is my largest expense by far!  I know it doesn't make sense to get into more debt when I'm trying to save as much as I can.  But as the saying goes, "such is life."  It's not that I can't afford school right now, I can easily factor the costs into my budget, but unfortunately my school only allows students to pay tuition for 3 weeks after the beginning of the semester and then they are kicked out of their classes.  Because registration only lasts a week after the start of the semester, those that are kicked out can consider themselves "Royally Screwed."  I can't come up with that kind money in 6 weeks, so a loan will help me spread out the payments in increments I can afford. 

I'm starting to think that my goal of a house down payment may be a little too lofty...  Ugh, I hate discouragement.

Killing Two Birds

{Image Source}

I got the idea for my "Financial Goals" from the book I'm currently reading: Women & Money Owning the Power to Control Your Destiny.  In it, Suze Orman has what she calls the "Save Yourself Plan."  Geared specifically towards women's finances, each chapter outlines what every woman should do/have financially.  Each set of goals is designed to go in order and can be done in small steps, or conquered all at once.  The book spaces them out by month, so that accomplishing them will only take about 1-3.

Two of my financial goals for the month of July were to check the interest rate my current savings account offers, and look for banks that currently offer higher rates.  I also wanted to check how the interest on that account was compounded.  Next I wanted to set up a money market account where I would put all of my funds saved from the Spending Fast, and eventually turn into my Emergency Savings with eight months of income.

Today, I killed two birds with one stone!

I first checked the Federal Funds Rate.  The Federal Reserve is our government's bank. The big wigs at this bank meet eight times a year and decide if they are going to lower, raise or leave unchanged the key interest rate, the Federal Funds Rate.  All of our country's banking institutions base their interest rates off of the Federal Funds Rate.  Per Suze Orman, any institution offering an interest rate that is less than ¾ of a percent lower than the Federal Fund Rate is not worth banking with.  For example, if the Federal Reserve Rate is 5.0%, don't bank with anyone offering 4.25% or less!  Today, the Federal Funds Rate for general savings and Money Market Accounts is 0.25%.  (Seriously?  That number is tiny!)

Suze is getting my hopes up, because in her books, every interest rate she mentions is upwards of 8.0% (but this book was written back in 2007, before the economic crisis).

I have heard that banks with the highest interest rates are actually online banks, but I still wanted to check as many as I could.  I went to Bank Rate and searched for Money Market Accounts with the highest APY (annual interest rate, not the "Rate Post Intro"), taking into consideration that I also wanted an account with no minimum balance and no fees.  Some banks require that you have a certain amount of money (usually in the $1,000 range) in your account in order to get the interest rate advertised; or in order to avoid banking fees; and some banks charge a yearly fee just for having an account with them.  I say all of that is money WASTED!  You may as well throw your money in a fire if you have an account that charges fees.

DING DING DING!

I found one!  I checked out Sallie Mae's offer.  A few of my student loans are with Sallie Mae, so I am a little familiar with them.  After reading and doing a little more research, I decided to open a money market savings account with them.  I was able to open an account with no fees, no minimum opening deposit, and a 1.15% interest rate that is compounded daily!  (1.15% is almost 5 times the Federal Reserve Rate!)

I am now going to use this as my primary savings account from now on.  I am not closing my current savings account at my credit union however, because I have a student loan who's monthly payments are automatically withdrawn from that account.  Plus, it's always a good idea to bank through a credit union!

I Needed a Little Motivation

{Image Source}

I've been on the Spending Fast for exactly one week today!  {Insert applause and cheers here.}

It really is nothing to write home about, after all, I still have 51 weeks left.  There has been at least once or twice, every day this week, where I have gotten an urge to purchase something.  Chapstick, Naked Juice, Pretzel with Cheese... nothing huge, but you know, the stuff that usually screws me because it adds up.

I put a post-it note on my debit card that warns me against spending money, and it seems to be helping.  I also think the fact that I've told EVERYONE.I.KNOW that I'm doing this has been a positive thing.  No one is asking to borrow money, and when someone wants to do something, they are the ones coming up with ideas of things to do for free!  Everyone is being very supportive.  Still, I have an urge to spend. 

My usual mentality would be, "OK, the bills are paid, so now what can I buy?!?"  It honestly never occured to me until last night that just because there is money in my account, doesn't mean I need to spend it.  Still, when bordem hits I find myself looking for motivation to keep going; something to tell me that this is all going to be worth it.  Up til now (and it might last longer), the challenge of saving every.single.penny has been a good motivator.  I almost feel like one of the extreme couponers on TV, actively making a conscious effort to save.  To be honest, it's kind of a rush.  Yesterday, however, I got a huge kick in the pants! HUGE! I'm talking solid gold motivation that I hope will last a while...

I went to the bank to apply for a credit card (again, not to use, but simply to increase my debit to credit ratio).  While I was waiting to be helped, I picked up the FORECLOSURE binder that was on the table and flipped through it.  There were so many houses listed in the community where I someday plan to buy a home!  I stumbled upon a photo of a house I liked and read the details:

2,100 sq. ft.

3 bedrooms

2 ½ baths
$170K

Hmmm.  I asked the teller if this was a set price, or if the bank negotiated foreclosures.  He told me that they negotiate, and whle most of the foreclosures in that area were marked at $170,000, they were actually being bought for just over $130K!  I couldn't believe it!  Compared to the almost $1,000,000 this house would have cost just a few years ago (during the crazy housing boom), this was practically free!  It was a big number, but small enough to where I thought, "Yep, in one year, I can afford that!" 

Because the neightborhood was so close by, I drove over to take a look.  It was gorgeous!  The house is a two story located on a corner lot that was beautifully landscaped with grass, tress and flowers (you don't see grass in Las Vegas)... Because it is on a corner lot, the backyard is gi-normous and did I mention it has a pool!?!?  I didn't get to go inside, but I was sold on the outside alone (plus I have friends that grew up in that neighborhood so I am familiar with the floor plans). 

My goal at the end of this year is to have saved enough to put a down payment on a house.  While I know that that house probably won't be around by then, it was enough motivation to get me EXCITED, genuinely excited about saving!

Financial Goals

{Image Source}

I'm not usually one for setting goals, but lately I have all of these ideas that just float around my head. I think, "Oh yea, I'd like to do that," or "I should really look into doing that."  But I never get around to it and then the idea gets lost to the universe.  I heard it once said that people who write down their goals are 75% (or some crazy number like that) more likely to achieve them than someone who doesn't!  Seriously! 

I wrote down some personal goals the other day, but I can't help but feel like I should have some financial goals while I'm doing the Spending Fast.  I'm in my mid-late twenties, and have no financial backbone, and it scares me! 

This will be a working list, and change periodically.  I'll check in on it from time to time, and maybe in six months do a review.  But for now, here it goes:

1. Enroll in my company's 401K retirement plan.  I am actually more interested in a Roth IRA plan at this point in my life, so research mutual funds I would like to invest in, and sign up!
2. Call my bank and talk to them about my checking account's fees.  I've read that for other banks the monthly fee can be waived if you sign up for direct deposit - which I already have.  If they won't waive the monthly fee, find a new bank that will. (I also do not want a bank that requires me to have a minimum amount in my account  to have a fee waived, this usually-four-digit-dollar-amount would better serve me in a savings account). 
3. Call my Credit Union, where I have a savings account, and ask if the interest is compounded daily, montlhly, annually or quartly... Find a bank that has daily compounded interest...  While I'm at it, find out what my interest rate is...  and, if I need to, check around for banks that have higher interest rates.
4. Set up a Money Market Account.  This is where I'm going to be putting all of the extra savings I have from my Spending Fast.  Ideally, find one with no monthly/yearly fee, no minimum balance requirement, and has the highest annual percentage rate (the interest they'll give me every year) I can get.
5. Get a Credit Card.  I don't have one.  I was one of those people who closed the accounts as soon as I paid them off- RULE #1 OF CREDIT CARDS: Never close them!  I'm going to get a card, not to use, but to increase my debt to credit ratio.