My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

What's In Your Financial Diet?

Contributed by mm | April 16, 2005 6:52 AM PST

Starting from next Monday, USA Today will run a six-week series "Financial Diet." The goal? Allow Americans to follow some easy steps to achieve better financial health. I have no doubt that USA Today will be able to deliver it -- I am always an admirer of the newspaper's down-to-earth style.

Take a look of what's ahead:

Week 1: Start by cutting the little expenses
Week 2: Make (and stick to) a budget
Week 3: How to cut credit debt
Week 4: Basic retirement planning
Week 5: Saving for college
Week 6: How did we do on our diet?

Now let's discuss how to cut the little expenses. As a starter, USA Today gave a quick lesson on "latte factor": if you save $3 by skipping a cup of latte every day, and sweep your savings to an retirement account that earns 10% every year, your savings will be worth $1.6M in 50 years, thanks to the power of compouding. (I'm not a coffee person, but I do understand to some people, it's intolerable cruelty to miss latte for 50 straight years.)

Where can you squeeze a few bucks from your daily expenses? While we are waiting for USA Today's Monday issue, let me share a few painless ways to save:

1. Get a (really good) reward card. Don't settle for 1% cashback. If you can get a credit card like Citi Driver's Edge (5% rebate on everything in the first 9 months), or Citi Dividend Platinum (5% cashback on gas, grocery and drugstore purchases, 1% on everything else), you can easily shave $100 off every $2,000 monthly credit card purchase.

2. Mortgage comparison shopping. If you haven't refinanced in the last two years, this is the sure-bet to cut your expenses in one shot for the next several years. Take a look at PFBlog's review on Bankrate vs LendingTree.

3. Insurance comparison shopping. If you haven't done this before, look beyond your current insurer and make sure you are paying a reasonable premium. Plus, get away from whole life insurance -- stick to term life insurance and invest your money elsewhere.

The above steps actually saves month without even requiring you to say good bye to your daily shot(s) of expresso. Sounds good?

This Post Has Received 1 Comment. Share Your Opinions Too.


JAdams Commented on April 24, 2005

My wife and I went on a financial diet 20 years ago, and retired at age 54 due to good financial planning. We approached it differently. We knew how much we spent - all of it. We just had to pick spending priorities. We set up a budget checking account, completely separate from our main checking account. We went through our past bills and listed the annual expenses of the 'necessities':
Mortgage, insurance, taxes, electricity, water, telephone, car payment, day care, school fees, etc. We divided this by 24; I was paid every 2 weeks. We wrote a check every payday to the budget account for this amount. Then paid the bills from the budget account, the money was always there.

We then had to prioritize how to spend the remainder. We eventually added savings to the budget. Everything else was variable. Yes, even food is variable; you don't 'need' pop, candy, cookies, etc. You don't 'need' cable TV. You must live within your income or forget this excerise. If you serious about a budget, you have to be realistic. It's like stopping smoking. The best way is cold turkey. You have to 'stop', not cut down, spending on things you can't afford. Then the credit card balance will start to decrease.

It worked for us.

J Adams


Add Your Comments










Remember personal information?




(It will take a few moments for your comment to be published. Please do not close the window until then.)


Read More ... 50 Posts In The Same Category










This page was last rebuilt at February 09, 2014 08:22 AM PST. (378 Words)
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)